Australian companies have been outsourcing services for years, especially big brands and large corporations.

In recent years, small business has jumped on the band wagon to use onshore and offshore outsourcing with the aim to reduce costs and improve efficiencies.

Outsourcing is now common across many industries and increasingly in the real estate sector, particularly property management. Some real estate industry insiders suggest it’s the ‘way of the future’.

While the property management sector may well be heading this way, is it necessarily good for the end-customers? You, the landlord and your tenants?

First, let’s look at what outsourcing is

Outsourcing involves a business hiring an external party – individual or company – or using an application to provide services or manage operations that were typically performed in-house. Sometimes this includes engaging the services of an overseas provider or a party closer to home.

Many property management outsourcing companies promise back office support that takes care of the time intensive tasks and frees up the property managers to focus on growing the business.

But outsourcing is not a silver bullet for business pain points. Professional property management requires more than just back office and administrative support. It involves communication to build relationships and trust.

The main concern with outsourcing property management services

Landlords entrust property managers with the upkeep of their investments. For this reason, it’s essential they know who is actually managing their property – the main concern with the increase in agents turning to outsourcing is the lack of transparency.

I’m a property manager, and I’m also a landlord. Recently, I discovered that the property manager for one of my properties located interstate was outsourcing repairs and maintenance services to a third party and using freelance trades to make repairs.

As the property owner, I want to decide who looks after my best interests and that of my tenant’s. It’s the landlord’s decision, so it’s our right to know.

If you’re unsure who is actually managing your property, raise it with your property manager.

If you discover that your property manager outsources or offshores services to a third party, understand what this means to you and know the impacts:

• Your information may be passed on to a third party – make sure you know who has your information and how it is being used.
• Your tenants may not know who is managing the property – they may be at a loss to know who to call when they have a question or concern.
• Your tenant’s repairs and maintenance requests may not be carried out accurately or at the best rate, costing you time and money.
• The third party may be carrying out non-back-office and non-administrative services such as tenant screening, lease negotiation and inspections. If so, the decisions made by the third party, such as maximising rent, may not be in your best interest.
• Your property manager may not be properly overseeing the performance of the third party.
• Your property manager may not be nurturing the relationship with the tenant which may result in shorter tenancies.

Need more information?

Stills Properties has been managing investment properties for Sydney landlords for over 30 years, contact us to discuss your investment property management needs.