4 minute read
Management styles – Portfolio or Pod based
There are two main management styles used in the property management sector.
Portfolio has historically been the most common type of property management style, and it works well for smaller businesses right through to very large portfolios. Each property manager manages all aspects of their portfolio. It means that the property owner, tenant and contractors will generally only deal with one person from the property management department.
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Pod based systems sees two to three property managers working together as a team. Communication is vital in this type of structure. Each team member needs to know what the others are doing, to avoid property owner and tenant frustrations.
In the past, most property management offices have operated on a portfolio basis. Over the years, additional layers of complexity have been added to a property manager’s role through changes in legislation, but also expectations from landlords and tenants have increased. A property manager may have been able to manage larger portfolios in the past and manage them well, but unless the number of properties they now manage reduces to allow for the additional demands of the role, it is often the service level and/or communication that reduces, or they may face burnout trying to maintain the same service levels of the past.
Jodine Clark, Property Management Operations Manager at Harcourts New Zealand notes that if the same expectations are maintained without acknowledging the industry has changed, albeit for the better, then the industry may lose some top-level property managers. Many businesses that continue to maintain the highest service levels have recognised this and have changed their structure to support their property managers by reducing the size of their portfolios or adopting the pod structure.
The pod structure supports property managers and businesses well and is worth considering when changes occur within a business, rather than simply replacing a property manager with another. The benefits of this are many, as Nigel Bowden from Harcourts Grenadier Accommodation Centre explains: “When growth demands that you look at your operating structures, the pod system brings some real advantages. From the business perspective it is cost-effective; it allows for mentoring and in-house training, and a degree of specialisation with in-built succession planning if needed.
For property owners and tenants, it can provide easier contact, and for tenants a greater sense of advocacy and a richer experience. As for the team, when it works well the shared knowledge reduces burnout, helps with stress, provides a personal growth path, and when someone in the pod goes on holiday, the work still gets done.
Having run the pod system now for about 18 years, we see it delivers better statistical results, while also bringing consistency and a boost to maintain service standards across the whole team.”
REINZ also spoke to Samantha Arnold, General Manager of the Barfoot & Thompson property management team. As a company who has run offices as both portfolio structure and a pod structure, they have seen pros and cons for both.
Pods work well for offices running smaller portfolios of up to 180 properties, with quick service for clients. This may involve one person dedicated to inspections who knows exactly what they are looking for and perhaps has the time to be more thorough; a property manager who is the main contact and will be managing the day-to-day maintenance and rental income; and a letting agent who would be matching tenants to properties.
Jodine Clark, Property Management Operations Manager at Harcourts NZ
Costs are kept relatively low with this structure, as you tend to have less staff, each employee knows exactly what their role will be, which means they are often able to plan their day in an industry that is well known for its daily variety.
Pods can, however, lose their balance when the portfolio increases. When you are looking for growth, you cannot expect the same one person to be able to cope with the workload.
Where you have a group of property managers all equally accountable for their own administration, banking, letting and maintenance (in this case, portfolio managers), and a property manager or team leader who is able to oversee the department, you are left with more time for other activities.
This structure gives individuals the ability to spend more time on building relationships and business externally and internally, or train brand new people to the industry with little experience. The key is having the right person manage the team and thinking strategically about where the department is headed.
Sam’s team chose to move to the portfolio structure in most of their branches, and they have seen both client engagement and tenant engagement increase. Their testimonials are much more positive than they had previously been, and their staff are feeling more motivated as they have a career path if they want it.
Simply having that one person to look after all aspects of the property has proven to be the right move for them. Stronger relationships have been built with contractors, landlords and tenants, and there is more accountability on the property manager to ensure they match the best tenants to the property that they are ultimately going to be managing.
This is, however, a costly exercise and one that cannot be changed quickly. If that property manager leaves, it is possible that some relationships fall down a little, this is an area of focus going forward for Sam’s team, but one they feel they can rectify in a short period of time.
With the property management industry changing, business models need to evolve in recognition of this. Our focus must be on the retention and health and wellbeing of our property managers, and by creating structures to support them. This will ultimately help to grow and sustain businesses.
