Do we get the management we deserve?

At a BPF Conference more than ten years ago I heard an argument made by senior industry figures in a lecture entitled ‘Do we get the Management we Deserve?’, that build to rent would never take off.

The argument was, essentially, that whilst residential management was a cottage industry largely populated by lesser beings, there was little or no chance of getting expert management of the quality that institutional investors require. Considerable consolidation and modernisation of the industry would need to take place before this could be seriously contemplated. The reluctance of institutions to invest in quality rented stock could be, in part, attributed to these factors.

Imagine my surprise then to hear the exact same arguments being trotted out last year at various conferences as one of the explanations for the slow start to the build to rent revolution promised the year before! 

The headlines in our industry have been dominated by service failures and concerns about transparency. But don’t be fooled into believing that there are not huge changes that have taken place and continue to take place in residential management.

I am aware of a good number of expert, transparent, cost effective, national and local providers of just such services who would have no difficulty meeting the complex requirements and cost constraints of such portfolios. Indeed some are already doing it for the student sector, for private owner landlords and for letting agents who only wish to provide front of shop retail services. Many work to highly incentivised contracts that reward the best returns and lowest costs.

So what has changed in the last ten years? Well, more legislation and regulation of course, but also recognition of the real opportunity that the provision of high quality services can offer.  The growth of new, independent, professional, customer focussed agents and an increase in the private rented and purpose built student sectors, creating with it some real portfolio management expertise.  Perhaps we are even witnessing the lifting of the miserable, backwater image of management in this sector? Well maybe.

Mostly however there has been recognition of the need to provide better, more accountable and performance driven services. This has resulted in portable specialist qualifications (there are over 2000 qualified leasehold managers for example), a massive increase in corporate members of ARMA (the residential block management trade body) and huge investment in technology and specialist management systems.  In our business we can now provide, at the touch of a button, instant snapshot balancing accounts, aged debt reports, property inspection reports, responsiveness and complaints measures and complaints procedures giving customers proper redress through independent mediation.

All this wrapped in 24/7 service with a smile, not given grudgingly, because volume management in the residential sector can be genuinely rewarding.

So what is it that portfolio managers want from their agents? Here is my list of essentials:

1. Expertise – dealing with residential leasehold and portfolio rented is not like other property management and the amount and variety of statute and regulation applicable is significant.
2. Systemisation – dependable, flexible, technologically driven reporting and efficient credit control.
3. Compliance – health and safety, regulatory and legal – in house is more efficient.
4. Flexibility – things change fast and managers need the ability to adapt. Clients’ priorities change.
5. Responsiveness – if you can’t answer the phones and emails then give up now.  You need to be first and foremost experts in customer service and then property experts. If you do not want your team dealing with constant calls and high volume email, then this is not your sector.
6. Reporting – clear, simple, accurate and regular, with the agent’s recommendations appended.
7. Access to the senior people in the organisation and regular communication from them.
8. Track record - What do they do, for whom and for how long? Are they independent and debt free? What is their story?
9. Transparency
10. Results – Good practice almost always means better returns.

Not perhaps as difficult as we like to imagine.