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NEWS ANALYSIS PMs DIVIDED OVER OUTSOURCING Outsourcing maintenance is an issue that has divided property managers. While some see its value in improving efficiency, others see it as a loss of control Story / Brendan Wong
NATIONAL TRADE service provider Tradebusters recently conducted research that found many real estate offices were decentralised and operating inefficiently. “Specific operational issues that were identified included high property management personnel turnover and costs due to the pressures associated with managing large portfolios, staff shortages and poorly managed rentals,” CEO Laorence Nohra said. Ms Nohra, whose clients include LJ Hooker, Raine&Horne, McGrath and Belle Property, said outsourcing maintenance could help agencies save significant personnel costs and reduce the risks associated with staff management and service delivery. Agents would also be able to maximise property values before and after sales through repairs or major renovations, which added speed, expertise and supplier leveraging power to the process. “Finally, agents’ time is being freed up, thereby allowing them to focus on the growth
aspects of their business, with an enhanced service offering to existing and new clients,” she said. Chairman of CENTURY 21 Australasia Charles Tarbey supports the use of outsourcing, if property managers are willing to relinquish some control over their properties. “Real estate practitioners guard their data very strongly,” he said. “They often feel they are losing control by outsourcing. “In my view, outsourcing is probably a more efficient manner to do it, but not outsourcing the entire operation.” Director of Stockdale&Leggo Albury Philip Bell sees both pros and cons when it comes to outsourcing maintenance. “We find that using our contact base of tradespeople to carry out repairs, renovations and maintenance is beneficial to our landlord clients, as well as simplifying the communication process between property managers, tenants, trades, and landlord clients,” Mr Bell said.
“By utilising the services of familiar tradespeople – the people we use often – we find that property managers gain knowledge of how the trades charge their time, organise their priorities for jobs, the quality of workmanship and so on. “It also enables property managers to call on their relationship with the trades to return to a job quickly and without fuss if, for some reason, a repair didn’t work out as planned or needed fine tuning.” However, Mr Bell considered the loss of control as a drawback to outsourcing. “By outsourcing maintenance, our property managers would lose control of the maintenance process, as well as not being as informed as they should be of the progress of some works in order to enable adequate reporting to their client or a tenant,” he said. At a recent Purple Emperors Club meeting, property managers concluded that outsourcing maintenance would not provide consumers with the consistency and level of service they were demanding and could potentially damage the profession. “Outsourcing may appear like the ‘easy path’ to cutting costs, but agencies are not looking at the long-term problems,” said Place Newmarket property manager and Real Estate Institute of Australia Property Manager of the Year Ranita Patel. “Giving away control means property managers lose touch with their clients and properties, resulting in relationship breakdowns,” she said. Business development manager at Thomson Real Estate Marcel Dybner added it was the role of property managers to look after and know everything about a property. “By outsourcing any key task of a property manager, you’re wiping your hands clean and you can’t provide the owner with the service they need,” he said. Ms Nohra, however, said there was a misconception that outsourcing maintenance meant property managers would lose control. “Good outsourcing is about how you gain control,” she said. “You may only be outsourcing parts of a process, but the property manager still has a role in overseeing … recognising that in certain aspects of it – where it makes sense and where it adds value – a service provider is involved.”
06 / July 2013 / rpmonline.com.au
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1/07/2013 3:39:48 PM
NEWS ANALYSIS PMs DIVIDED OVER OUTSOURCING Outsourcing maintenance is an issue that has divided property managers. While some see its value in improving efficiency, others see it as a loss of control Story / Brendan Wong
NATIONAL TRADE service provider Tradebusters recently conducted research that found many real estate offices were decentralised and operating inefficiently. “Specific operational issues that were identified included high property management personnel turnover and costs due to the pressures associated with managing large portfolios, staff shortages and poorly managed rentals,” CEO Laorence Nohra said. Ms Nohra, whose clients include LJ Hooker, Raine&Horne, McGrath and Belle Property, said outsourcing maintenance could help agencies save significant personnel costs and reduce the risks associated with staff management and service delivery. Agents would also be able to maximise property values before and after sales through repairs or major renovations, which added speed, expertise and supplier leveraging power to the process. “Finally, agents’ time is being freed up, thereby allowing them to focus on the growth
aspects of their business, with an enhanced service offering to existing and new clients,” she said. Chairman of CENTURY 21 Australasia Charles Tarbey supports the use of outsourcing, if property managers are willing to relinquish some control over their properties. “Real estate practitioners guard their data very strongly,” he said. “They often feel they are losing control by outsourcing. “In my view, outsourcing is probably a more efficient manner to do it, but not outsourcing the entire operation.” Director of Stockdale&Leggo Albury Philip Bell sees both pros and cons when it comes to outsourcing maintenance. “We find that using our contact base of tradespeople to carry out repairs, renovations and maintenance is beneficial to our landlord clients, as well as simplifying the communication process between property managers, tenants, trades, and landlord clients,” Mr Bell said.
“By utilising the services of familiar tradespeople – the people we use often – we find that property managers gain knowledge of how the trades charge their time, organise their priorities for jobs, the quality of workmanship and so on. “It also enables property managers to call on their relationship with the trades to return to a job quickly and without fuss if, for some reason, a repair didn’t work out as planned or needed fine tuning.” However, Mr Bell considered the loss of control as a drawback to outsourcing. “By outsourcing maintenance, our property managers would lose control of the maintenance process, as well as not being as informed as they should be of the progress of some works in order to enable adequate reporting to their client or a tenant,” he said. At a recent Purple Emperors Club meeting, property managers concluded that outsourcing maintenance would not provide consumers with the consistency and level of service they were demanding and could potentially damage the profession. “Outsourcing may appear like the ‘easy path’ to cutting costs, but agencies are not looking at the long-term problems,” said Place Newmarket property manager and Real Estate Institute of Australia Property Manager of the Year Ranita Patel. “Giving away control means property managers lose touch with their clients and properties, resulting in relationship breakdowns,” she said. Business development manager at Thomson Real Estate Marcel Dybner added it was the role of property managers to look after and know everything about a property. “By outsourcing any key task of a property manager, you’re wiping your hands clean and you can’t provide the owner with the service they need,” he said. Ms Nohra, however, said there was a misconception that outsourcing maintenance meant property managers would lose control. “Good outsourcing is about how you gain control,” she said. “You may only be outsourcing parts of a process, but the property manager still has a role in overseeing … recognising that in certain aspects of it – where it makes sense and where it adds value – a service provider is involved.”
06 / July 2013 / rpmonline.com.au
News Analysis_LA_S.indd 6
1/07/2013 3:39:48 PM
