Sales volumes are well and truly down. Most agencies aren't writing the numbers they were six months ago, and that hurts, because for a lot of principals it's sales that covers the costs. Property management has usually been the bolt-on.
But the costs on the sales side haven't moved. You've still got sales admin, a VA, and agents on a debit-credit or base-plus-commission package who aren't hitting the numbers they used to. So the pinch gets tighter.
With fewer sales coming through, the pressure on principals to cut costs, in both software and property management staff, is only going to grow as sales numbers keep slowing.
What happens to your renters when you cut back
When the PM team loses a person, the people left behind pick up the extra work. And one of the first things to slip is the rental enquiry.
I wanted to know how bad that slip already is, so I'm mystery shopping 100 agencies around Australia. I've done 36 so far, with the rest coming over the next four weeks. Each time I enquired on a rental through the portal and asked two simple questions: is there aircon in the master bedroom, and is the cooking gas or electric? No follow-ups. I just sent the enquiry and waited.
Here's what came back:
19% (7 agencies) never replied · 42% (15 agencies) sent an auto-reply only, no answer · 39% (14 agencies) answered the questions
So 61% of renters didn't get an answer. That's before any of these agencies cut staff.
The auto-responder illusion
Here's the bit that should worry principals most. The median time to a first reply was basically zero, because most first replies were auto-responders. The system ticks a box and it looks like service is happening. Meanwhile the renter still doesn't know if they'll be sweating through summer in the main bedroom.
If you're thinking "that's probably not us," it's worth a quick check. Most of the agencies I tested had some version of this gap, and it's rarely because PMs don't care. They're stretched, and answering every enquiry by hand would leave them little time for anything else.
It's also worth remembering that an enquiry isn't always from a renter. Sometimes it's a landlord quietly checking how you look after people before handing over their property.
How to check where your agency sits
Before you cut anything, find out what your renters are actually experiencing. Five things you can do this week:
- Mystery shop yourself. Enquire on one of your own listings through the portal like REA/DOMAIN and ask a simple question. Time how long it takes to get a real answer, not just an acknowledgement.
- Count your enquiries. How many come in each week, and through which channels: portal, email, phone, SMS? Most principals underestimate this badly.
- Find out who answers them. Is it a PM, reception, or nobody in particular? If no one owns it, it's not getting done.
- Read your auto-responder like a renter would. Does it answer anything, or does it just say "thanks, we'll be in touch"? An auto-reply isn't service.
- Put a cost on the phone time. We calculated that during busy periods one agency with approx. 350 properties under management were getting 47 phone calls a week from prospective tenants asking the exact same questions over and over again. Multiply your number by a few minutes each, then by your PM's hourly cost. That's what repetitive questions are costing you.
Fixing it without adding cost
If that audit shows a gap, you've got three options: put more staff on it, pay for software, or automate the answers.
With Crayons Leasing, we've solved both the service and cost problems. It takes the pressure off your property management team, who are no longer stuck on the phone answering the same questions over and over, and it saves you between $300 and $500 a month in subscription costs. In my mystery shop, Crayons answered in an average of 9 seconds, for $15 a month plus text messages.
Elite Agent covered how Crayons started, from those 47 calls a week to winning People's Choice at REACH's Top of the Props. Read the feature here.
The bottom line
When sales slow down, your rent roll is what keeps the lights on. You can't afford to have 61% of renters going unanswered.
Hit me us if you'd like us to mystery shop your agency and see where you sit.
