It’s every property manager’s worst nightmare: losing clients to cut-price operators. You can’t match their fee structures—and you wouldn’t want to—but there’s more than one way to take them on.
Competing on price is a race to the bottom. Even if you keep your clients, there’s only one way to go from there, and that’s down.
The possibilities for promotions seem endless: a 2% introductory rate for 12 months, three months of free management, or $0 letting fees. But constantly offering discounts and price drops can backfire. Your landlords may even begin to think of you as a cheap service instead of a valued asset.
And that’s not all. Price wars can lead to all sorts of difficult questions for your property management business:
- How do you pay, train and retain an A-grade team on ever-tightening margins?
- Can you offer your clients consistently high-quality service while still cutting costs?
- What happens when your landlords are conditioned to always chase the next cheap deal?
Delivering a high-value property management service
Lowering your prices might net you some quick wins, but short-term success is never worth sacrificing the sustainability of your business. Instead, your best bet is to add value wherever you can.
Demonstrate your worth
If your clients believe they’re getting good value for money, there’s little incentive for them to look elsewhere. Landlords are sometimes portrayed as overly sensitive to pricing, but take that opinion with a grain of salt. Especially if you can demonstrate that compared to the other costs of owning an investment property—insurance, for instance—you’re providing exceptional value for what you charge.
Listen to your landlords
Make your landlords’ problems your problems. Do they often complain about not having money in their accounts in time for mortgage payments? Our research with landlords across Australia shows that a staggering 30% experience rent arrears, either frequently or always. Such delays can play havoc with a landlord’s cash flow, especially if they’re taking advantage of negative gearing. Talk to your landlords and find out what their mortgage payment schedule looks like. Letting them know that you understand the pressure that late payments cause is a clear demonstration of your professional skill.
Offer innovative solutions
Take this attentiveness to the next level by offering additional capabilities that set you apart from your competition. In 2017, we surveyed over 300 landlords nationally and discovered that over 70% of them would be interested in receiving rent payments via direct debit. In addition, landlords were also much more likely to think that they get the most benefit out of direct debit payment (72%), compared to property managers (43%) or tenants (33%).
How Console can help
Console Pay for Gateway, powered by Ezidebit, is the only integrated direct debit payment solution in the industry. It empowers you to take control of rent payments, and demonstrate to your landlords that delivering their rent on time is your main priority.
Even better, Console Pay provides cleared funds into your trust account in just two days, allowing you to assist cash flow-sensitive landlords with speedier disbursements. And since Console Pay saves you time on reversing receipts for dishonoured payments and chasing tenants for arrears, you gain more time in your day to ensure superior service for your clients.
The old adage 'you get what you pay for' has never been truer than it is in the property management industry right now.
Show your clients that you’re more than worth their money.
Need even more of an edge? Check out Property Management: the next 12 months, and get planning for the future.