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Discover the secrets of successful property management and investing on "The Property Investors Handbook" podcast. Join Colleen Sutherland as she shares expert insights and strategies for acquiring, managing, and maximising returns on real estate investments. Whether you're a beginner or seasoned investor, this podcast is your essential guide to navigating the world of property investment. Tune in and unlock the keys to financial success in real estate.
Produced by Pod Pro Australia
Hello and welcome to another edition of the Property Manager's Handbook. My name is Colleen Sutherland and I am the Principal and the Director of Sutherland's Property Management.
Hi Aaron. Hi. How are you doing? Good, thank you. We were talking on the last podcast about how we met, and you know, what you were able to do for me. Just diving in a little bit. more for what you did for my business. What was one of the strategies that you implemented for me?
Sure. So I think, if we go back to when we first met, we carried out an operational prognosis audit, which I've always said, is, akin to having an MRI on your body.
All right. I'm going deep into the business. Yes. I'm looking at, the good,
the bad and the ugly.
Exactly. What's working, what's not working. I'm looking at your processes because, you know, those processes may lead to different outcomes. One example I might give there would be days on market. You know, if you have a leasing process that's not quite up to scratch with what's happening out there.
It might mean that your client's property is vacant for two weeks longer than it needs to be. So we looked at your processes. We obviously went through all of the management agreements. We went through and checked that you had a lease agreement and an entry condition report and a bond lodgment and all those things for every property.
Yeah, like all businesses, there's no shame in it. You had a few little issues that we had to work through. I think that I opened your eyes to it a little bit too because as business owners, we often get so bogged down in working, in the business that we don't get to work on it and we don't get to have that helicopter view of the business where we have the time to go through and check.
Did I sign that Form 6? I can't remember if I signed that Form 6. I know that we got it back, but did I sign it? Or did we just file it, you know? I know that we got the lease back, but did I sign it, or did we just file it? And, or I've signed it, but maybe the tenant hasn't signed it. It's those little things that, you know, We just don't always have the time to do it.
So that
forms part of working on the business instead of always working in the business. Correct.
Yeah, having the time to go through and, dot your Rs and cross your Ts to make sure that everything has been done correctly. And, you know, we have checklists in a lot of property management businesses.
Your checklists are very thorough, they're very detailed, and I have found that you actually complete them in full. Other offices that I've been into either don't use them, there's a lot of inconsistencies in them, or they don't, you know, they don't even complete them. They might have, say they might have 15 checkboxes, 3 might be ticked to say that things are done, and the rest are not, you know, ticked, and it's not signed off, and it's scanned in.
So you don't actually know if the process has been completed in full until it's too late. And it's usually until you are looking to sell your business and then you need to go through and well someone else will go through and do due diligence and pull your business apart. And then you're kind of going in red face going, I wasn't aware of that.
And I'm really embarrassed about that. I didn't know that was the problem. So yeah, so we did that. We did the operational prognosis audit, we delivered the results. And I suppose one of the things that, that helped you to understand is It is important every now and again just to take a step back and really go through, it might only be once a month, it might be once a quarter, it might be once every six months that you do it, but the more regularly you do it, the less chance there is that there's going to be a problem because you are more regularly, having a look at those things and checking off to make sure that everything is in order.
Yes.
And it's not to say that. If you have a couple of errors that you're a totally terrible property management business owner or a property management business, it's just reality. Well, I
think I found sometimes, and when we met was I was being pulled from pillar to post. So as we got busier and then as we got into the pandemic and that sort of thing, it was impossible to keep up.
all the balls in the air, which is why I, you know, I got engaged you just so that I didn't make those major errors. And yes, it's very humbling. So I think that I'm going great guns cause you know, I know what I'm doing, but it's not until you drop one or two of the little balls and you come in and go, well, there's this, and this, And it's very humbling because it has been my business since 2004.
And it's very humbling, but if I can put that ego part aside and listen to what you're telling me to do, one, that'll make my business better, but it will make me more aware and a little bit more foolproof for some of the, Checklist that you've introduced for me, not even just the property management department.
Yes. For me as the business owner and making sure all the I's are dotted and T's are crossed for the landlords. Yes. To minimize that risk.
Well, I think following, engaging me to carry that out, you're now a little bit more aware of what to actually look out for. Yes, absolutely. And you know, you can be in property management for five years, five months or 35 years.
And sometimes you just don't know really where to look or what to look for.
Well, you've got blinkers on and you're just so busy running the business that you've missed that latest technology or that update in legislation or that change in, the property management forms. You know, you're just so busy that those are the things that you don't think about.
Because you feel like you're running blind.
This is probably, this is definitely not relevant to your specific office, but what I always say, Colleen, is that a lot of times in a property management agency, you do have a principal licensee that is not directly involved. They probably have never worked a day in property management.
And because of that, they are the classic case that they don't know what to look for, and they heavily rely on the information that the property manager or property management team is providing them. So if you're having a weekly meeting and the property manager is telling you that all the leases are up to date, all the smoke alarm compliances have been done, there's no vacancies, there's no vacates to be done, there's nothing like that, and you're taking that information on board.
Verbatim and not actually fact checking because you probably don't know where to look to have a look at the vacate list or to check where the vacate dates are entered. That's where things go wrong because, you know, those property managers are potentially leading the business owner up a garden path that is incorrect because If they told them the reality, it would expose that there are probably some issues.
They might have vacant properties. They might have lost a management that they're trying to hide, and not tell the owner, you know, the business owner. So but I never found that in your office. And that is very evident with the fact that you have that little bit more of a smaller hands on, hands on, close knit team.
Yeah. Yeah. Yeah. Yeah. When you talk about they, the property manager, you know, hides things or whatever. Do you think that sometimes a property manager, well a lot of times, a property manager is there to manage the tenancies? not to understand the KPIs and the business side of it, which is why it needs somebody separate to the actual property manager to, look at those things and analyse those things and then go back to the property manager and tell her, okay, you need to look at it.
Absolutely. Yeah. Yeah, absolutely. Because I'll give you lease renewals as an example to your question there. In my experience, I often see property managers will print out the lease renewal list. There might be 15 properties on there that are due for a renewal. And they'll say, you know, 5, 10, 15, zero, zero, no, that one can't go up, that one can't go up, that one can't go up.
I like that person, I don't want them to have to pay any more money. Correct, I like that tenant, I've got a good relationship with them, I don't want to put their rent up. But, in reality, they will then go back and tell the property owner, they're a really good tenant, they look after the place, they pay the rent on time.
If that's what defines a really good tenant, that's quite. surprising because that's just the tenant adhering to the conditions of their tenancy and their lease agreement. But the point I'm getting to is property managers will tell the owners don't, you know, they don't, don't kick them out. Let them stay because in reality, if they vacate, that creates more work for the property manager.
They don't want to go and have to do those open homes. They don't want to have to do the exit condition report. They don't want to have to do the new entry condition report. So they'll look at it and go, No, just leave them. They've been really great tenants. Don't rock the boat. Don't rock the boat.
Because if you rock the boat, you're going to increase my workload. Yeah. So, yeah. So I think, From a KPI aspect, absolutely, it's imperative to have an external person, be it a business coach, a mentor, a consultant, who can help you to, craft those KPIs so that they are really suited to your individual business because they are all slightly different.
And then go back to the property manager and deliver that to them and explain why they're being implemented, what their goals are for them to achieve and what, they're, you know, what they need to work towards because those KPIs should be based around what your business hopes to achieve and what your business goals are in terms of growth, in terms of, you know, increasing management revenue in terms of reducing days on market and those kind of things.
And if you leave that up to a property manager to decide, they will create KPIs that suit their workload and make them less busy, not what might benefit your business.
Now you're talking from experience. So you were a property management business owner. Yes. And you sold your business.
So I've been in the industry almost 20 years, it'll be 20 years in April next year.
And I had my own property management business. I started in 2016. I grew that to just under, 120 doors and, I sold that at the end of 2022.
Wow, okay. Yeah. And the reason that you sold it, now that's unique, is the reason you, moved on from being a property manager to what you do today.
Sure, yeah.
So, I mean, for me, I never set out to have the biggest agency. I never set out to have the biggest property management. That might be why we align. Yeah. Potentially there. Yeah, exactly. Because we're both boutique. No, look, I set out to do it because I worked for a very sales focused principal, in 2011.
I can't say, and won't say which brand it was, but it was a franchise agency. And when I started with that. I was his 24th property manager in 18 months.
Stop it.
Now I didn't realize
it was that many.
Yes. Now at the time, I didn't have as much wits about me back then, and had I have known what I know now back then, I probably would have gone red flag, red flag.
But I stuck it out and I lasted with him for about 17 months and then I identified in that time that obviously, you know, it was not the property manager's issues, but it was his business and the way he ran things and the way he treated his staff. And so I resigned from that and his final departing words to me were, you're crap, you're a useless property manager, you'll never equate to anything, good luck, not sure what you're going to do for your career.
And don't let the door hit you in the back on the way out. Yes. And so that was kind of like a, I guess from that day on, he has been my biggest motivator in terms of F you, I'm going to do this and I'm going to do it because you don't think I can do it. And I'm quite capable of doing it. And so I went off and I had other roles as a property manager and, head of department general manager.
I moved into onsite. Residential management, on site management for a few years. So I've seen the best of both working in an agency, working in an on site management building. And then in 2016, I went. You know what? I'm going to do this for myself. So, I built up some Dutch courage and, Because it takes a lot.
It definitely does. And I am not going to lie. I was scared. You know, of course I had nerves that what am I doing? I'm not getting a regular pay packet. Yes. Where am I going to get the money from? And I'll be very honest in that for the first 12 months of growing that business, I was also temping. I was working as a contract temp in other property management businesses just so that I could continue to have some kind of consistent income coming in.
And I did that until I reached the point where I think I gained, I got to about 25, 000. Properties under management and that was not enough to make me rich. And I certainly wasn't, you know, pulling in millions, but it was enough that I was covering my costs and I could, you know, draw a bit of an income from that.
And then it just kind of grew from there. So. But my reasons for selling was because I never wanted to be a big office. And I, I started doing coaching and consulting in 2018. And I did that simultaneously side by side doing coaching and consulting and building my rent roll business at the same time, which was perfect because I think that gave me a lot of,
Familiarity. Yep. And relevancy for business owners like yourself, where I was in the trenches like you and like others. So I knew what was going on, I knew what you were experiencing and dealing with changes in legislation, with all the things that were coming out. But I was also.
Strategically, positioned that I had I say now I have a property management skill set But a business owner acumen and mindset. Very clever. So I can look at it from both angles And so it was either that point that I had enough properties that it was either time to scale it and bring in staff and keep growing.
But that meant that I would then be going against what I actually set out to do. And it was just to grow it because someone told me I couldn't. I grew it beyond the numbers that I expected to do anyway. And I didn't want to then bring on staff and get bigger and bigger. So I also realized though, that my skillset was better directed and teaching and helping other property management business owners.
Then it was just trying to help 100, 200, 300 landlords that I was working with because I am a landlord advocate. I knew that if I changed focus and went to work with business owners through doing that coaching and consulting and helping them be a better version of themselves and have a better business, it would help the landlord as well in the long run.
So I was kind of killing two birds with one stone. And your love and life. Loving life. Yeah, I'm very happy with what I'm doing now and where I'm at, and I think it was the best decision that I've made. I took some time off after I sold the rent roll, had six months off and traveled the world a little bit with my husband.
But I am busier than ever. I've got Clients, you know, that want to work with me and I can't always work with all of them at the same time. But I am just about to scale up a little bit. I'm bringing in a part time VA to take some pressure off and I hope to have them full time by the beginning of 2025.
And that will really help me go to that next level of freeing up my time a little bit too. To work with some more clients. To help others.
Yeah, exactly. Thank you so much for joining me today, Aaron. It is so interesting. And, we'll do another podcast soon. Great. Thanks for having me.