Myths vs facts: How old thinking is holding the property management industry back
09 January 2019
There are so many myths in property management that are so pervasive they can be hard to recognise. They’re holding our industry back and we can’t move forward unless we debunk them once and for all.
When I joined the industry, I was sat down and told the way things worked. From how your team should work, the role of standardised procedures to why landlords choose a particular property management company. I was told this is how you grow a rent roll, what causes lost managements, the economics of property management businesses, how property management businesses and sales teams interact to create value, and so on.
The indoctrination starts early.
Fifteen years later, I’ve come to realise most of the things we tell ourselves are wrong. Yet, we continue to operate as an industry assuming they’re right.
“Unlike many other service industries, our thinking hasn’t changed in decades.”
For the past two years, we’ve assembled the largest set of property management data and gained significant insights into property management. We’ve analysed close to one million tenancies and gathered more than 3TB of data. We now have solid research into the real drivers of rent roll growth, profitability, what causes lost business, the role of relative performance compared to competitors and the true drivers of customer satisfaction.
Our research disproves many of the myths the industry operated by. Old thinking is costing businesses money and growth. The myths are holding back the development of better ways of doing things. We’ll be sharing our findings here at Ailo over the next few months.
To start, there's one myth I’d like to address because I believe it’s at the heart of the rest. The myth that property management is simple. Not easy, but a simple process business. All we need to do is standardise everything to control what happens in the business. This suggests that property management only gets messy because we don’t have enough checklists. If we create enough checklists and get people to follow them, then most of our problems will disappear. I call this the “McDonald’s myth.” I used to be a paid-up member of the McDonald’s myth.
What we’ve found is that so many bad ideas flow from this. It disempowers staff members, disconnects the business from its service offering, creates a terrible culture, condemns property managers to spends days in useless training and misdirects management resources, among other things.
If property management were simple, surely we’d have mastered it by now? We’ve spent so much effort and investment in innovation over the past 20 years yet have little to show for it. The role is essentially unchanged, yet client satisfaction is decreasing. How long will we persist with a failed way of thinking before we recognise our core thinking needs to change?
Accepting that property management is complex is the first step to breaking the rest of the myths. Once we recognise we shouldn’t be looking for just another checklist, but for ways to develop our teams to provide outstanding service to our customers, a whole new field of innovation opens up.
This is where data comes in. We can use data to help understand what our customers want, what their experiences with our companies are, and what we need to do to increase their satisfaction. We can use data to empower property managers on the front lines of service delivery and help them experiment with new ways of creating value.
“Our data shows the connection between all of these factors and points to a new way of thinking for customer service in property management”
— Ben White, Ailo Co-Founder
The data shows how we can create and deliver services to our clients that are more profitable, valuable and supportive.
This is all achievable if we replace myths with truths. Our industry has a bright future if we focus on creating better experiences for customers.
Our goal at Ailo is to break the myths holding back our industry so we can deliver outstanding outcomes to their customers. We believe this path leads to a better future for our industry.