Protect your rent roll from poaching and theft as a result of a property manager leaving your business.

The property management side of the real estate industry is known for having a high turnover, either as PMs look to rise through the ranks or seek agencies which suit their style of working. 

When a property manager leaves your real estate or property management agency, it leaves your rent roll data vulnerable to theft. The outgoing employee may take property owner data with them and encourage clients to ‘follow’ them to a new agency. If the PM has been a star performer, you could stand to lose a decent percentage of your rent roll. 

It is as easy as copying an excel spreadsheet and saving it to a thumb-drive.

There are a couple of ways to prevent departing property managers from poaching your clients.

Incorporate an exit strategy into a contract of employment 

When a new PM first joins your business, ensure they sign a contract detailing what will happen when they leave. For example, ask them to agree not to reach out to your agency’s clients for six to twelve months after they leave. Be clear on the consequences of what will happen if they breach this agreement.

Ask your lawyers to draw up this legal document so you know you are fully protected and there are no loopholes. 

In the past, there have been examples where agencies have successfully sued outgoing property managers for misuse of confidential information and poaching clients. This is good to know, however it is difficult to quantify the exact value of a ‘stolen’ rental property. If you make things clear from the start, you will be less likely to end up with a tricky court case to deal with. 

As well as preventing your PMs from immediately taking rent roll properties with them, consider adding a clause about their post-employment social media interactions. This may help to minimise the problem of property owners following your exiting PMs to their new agency of their own volition, although you should always make sure the clause has the support of your lawyer. 

Build goodwill

Of course, to prevent the issue of losing properties as you lose PMs, it makes sense to try to prevent them from wanting to leave in the first place. 

In the court case example where a PM was sued, it is mentioned how tension developed due to a lack of administrative support as the property manager grew the rent roll. This PM became “disenchanted and decided to go it alone.” 

Prevent a similar situation by having realistic expectations about how many properties your PMs can manage without having additional headcount or support. Give your team training and offer incentives which make it worth their while to stay. 

Your agency should also be clear on its values. If integrity and good ethics are held in high regard, you will attract and maintain people who value both on a personal level. These property managers will be less likely to do the wrong thing when the time comes for them to move on. 

Think of your clients too

Your clients need to be aware of your agency, not only their property manager. If they only ever have contact with one individual, they may be tempted to follow them, even if it is unsolicited. 

How can your agency add value to the property owner experience? It may be through regular newsletters, free valuations or by offering them incentives to remain with you for the long term. Branded merchandise is another option which will boost familiarity and help strengthen connections. 

Things like automated ‘anniversary’ text messages or even birthday cards can be scheduled without adding to your PM’s ongoing workload. You can ensure they come from your agency, not the individual property manager. 

Be sure to create marketing and communications which share the message of your entire agency, not only the property manager who comes into contact with the client. This can act as insurance and encourage loyalty. 

Finally, send out client satisfaction surveys. Make sure the rental property investors you work with are happy with your entire agency as well as their property manager. 

Building a rent roll can be hard work so don’t let your efforts go to waste by failing to ensure your clients stay with you for the long term.

BDH Solutions are rent-roll agents with over 40 years experience in connecting the right vendor with the right purchaser. Download our information booklet on the new Victorian Minimum Living Standards Legislation