Episode 28 – Real Estate Success Principles

Youtube Link: Real Estate Success Principles – Episode 28


The biggest issue when an Agency starts using NPS is that they go and ask everyone at the same time….and they are not ready to manage the responses!


Michael Furlong: Hey guys, Michael Furlong here from Rent Roll Maximiser, and I am chatting with 2021 Small Agency of the Year Award Winner – Michelle Watt. That’s going to be on your business card, but it’ll be about that long. Congratulations! 


Michelle Watt: Thank you!


Michael Furlong: How are you?


Michelle Watt: I’m well, thanks! How are you?


Michael Furlong: Really, really well. It’s the PPM Awards, 2021 Small Agency of the Year


Michelle Watt: Yep, small and growing. And we’ve grown past where we needed to be, where the cutoff was. So, that’s really cool.


Michael Furlong: Yeah. So, you were saying before, that when you submitted the Awards, it was sub-400. You’re now 450?


Michelle Watt: Nearly 450, yep


Michael Furlong:  450, thereabouts. Okay that’s a decent Rent Roll


Michelle Watt: It is, yep. Ya’ think?


Michael Furlong: So, we want to talk a little bit about, today, systems, tech, how you manage, how do you do the stuff? Yeah, we’ll talk about that. So, are you all cloud-based? Do you have any philosophies on working from home, working remote? Because you’re in Brisbane, so you’re still actually allowed to go to the Office.


Michelle Watt: Yeah, we can get drinking, we can go walking, we can do a lot of things, but we weren’t going to talk about that were we? 


Michael Furlong: Thanks, Michelle. We’ll, actually, I wasn’t and I’m not. So, not being on lockdown, I can go to the letterbox and back, and anything outside of that – were restricted


Michelle Watt: Yes, that’s amazing


Michael Furlong: Woohoo! Living in paradise in Victoria. So, let’s bring this back. So, talk to me. What’s your Office structure like? Do you run end-to-end? Do the Staff run end-to-end Property Management? Do you have a layered approach where it’s task-based? How have you set the business up?


Michelle Watt: It’s a little bit of a hybrid. So, we we’ve set it up so that our Property Managers largely just deal with the Owners and the Tenants and the Trades. Yep. Our Admin Team take care of most of the Admin tasks. So, the Property Managers will, for instance, they’ll do the work orders out, they’ll do leases out, and obviously prepare their entries and exits. I’ll take care of all that, but like any invoicing, processing the leases back into the system, that sort of thing is done by our Admin Team. Our Property Managers don’t undertake any Trust Accounting. That, again, is done by our Office Manager.


Michael Furlong: Can we go back a second. When you say processing, so you’re using the REIQ–


Michelle Watt: the Realworks? Yep


Michael Furlong: documents, and that they’re all cloud-based or electronic signatures?


Michelle Watt: Yep


Michael Furlong: so they’re populated straight out. Do you use PropertyMe or Tree?


Michelle Watt: Yes


Michael Furlong: PropertyMe?


Michelle Watt: PropertyMe


Michael Furlong: Okay. So, does it have an API link direct or do you have to manually input the information?


Michelle Watt: We manually put it back in to the system


Michael Furlong: and then you send it out to the Tenants?


Michelle Watt: Oh, sorry. Yeah, it automatically sends to the Tenants, but once they’ve signed it, it comes back into us for signing


Michael Furlong: Yes


Michelle Watt: So, it comes back in, we run our wire, and make sure that everything is, you know, as it should have been when it went out. But of course, you know, sometimes things go wrong, we check it, make sure everything’s spot on. And then they will update all the figures, numbers, dates, and so on into the system


Michael Furlong: So, who does the data entry then back into PropertyMe, is it Admin?


Michelle Watt: Admin


Michael Furlong: Admin do that. So, are you using Virtual Assistants? 


Michelle Watt: Nope


Michael Furlong: Virtual Staff? Don’t have any VAs?


Michelle Watt: No


Michael Furlong: Okay


Michelle Watt: No. Because Dee is, I yell at her from here. That’s kind of virtual


Michael Furlong: Not quite what I meant


Michelle Watt: No, no. I kind of think we might down the track. I don’t know. I don’t feel the need for it just now.


Michael Furlong: I was speaking to an Office yesterday, out of Sydney, 85 properties, and we’re going to put a VA in there. So, you might definitely be ready at 400 plus. So, I’ll chat to you about that at a later stage, because some of the stuff, they can take away from your PMs. But it’s in Admin – process, and the PMs are more Customer-facing. Is that what I get?


Michelle Watt: Correct, yes. And it works really well


Michael Furlong: And Trust Accounting is done by?


Michelle Watt: our Office Manager


Michael Furlong: Okay


Michelle Watt: And me, when she’s on holidays – and no one likes that


Michael Furlong: I’ll leave that. I’ll leave that. So, you’ve got PropertyMe, Realworks. Is that what you said? Do you use Inspection Express or Manager? What do you use?


Michelle Watt: PropertyMe


Michael Furlong: Using the PropertyMe app for routines?


Michelle Watt: Yeah. So, we’re looking at Inspection Express. We also use Inspect Real Estate for just about everything else. Again, we’re just doing a little bit of a review on, on the efficiencies there, and the costs


Michael Furlong: Yeah, absolutely. Because sometimes we can get a little bit fooled in the way that we’re just bringing in more apps, more tech


Michelle Watt: Oh, a 100%


Michael Furlong: and we ended up app stacking, but not necessarily saving any more time


Michelle Watt: Exactly! And you’ve got to be mindful of the look and feel of what you’re using and how it’s being projected outwards as well. And I’m not loving some of it, so it’s kind of time and it’s been good and it’s served its purpose. But there are a few things that I think when we can look at and you know, there’s lots of cool stuff coming out that warrants some exploration


Michael Furlong: Now you’ve spoken a couple of times through, we’ve been chatting this afternoon, you spoke a little bit about checklists. You use that a lot, and you want to get stuff out of your head. Where does it go to? Is it written down, documented? Are you using a Project Management system? Are you using anything?


Michelle Watt: Nope. So, all about all of our processes are paper checklists


Michael Furlong: Okay


Michelle Watt: I have two Staff members that are slowly dragging us, kicking and screaming, into a paperless Office


Michael Furlong: Sure


Michelle Watt: We are, at the moment, doing Nina Sutton’s, what’s it called…


Michael Furlong: PM Revive?


Michelle Watt: PM Revive, which I’m loving and, you know, the fabulous Jodie Stainton was talking the other day. I know Jodie quite well, and she was talking about, you know, working remotely and some different pieces of software that she’s found useful. And so, I am looking at – we easily go remote when we need to, that’s not a problem there, but I’d like to get everything on Teams, you know, use Trello or something like that, that we actually have everything digital. It’s certainly the way to go. But for me, I’m not technologically savvy. So, it’s always kind of like it, “Eh, no. Not for me.” Not to say it’s never for me, it’s just, I haven’t had the headspace. I just haven’t been where I needed to do it, but I know where I am right now is the right time to take us to the next level


Michael Furlong: maybe outside of this all, I’ll show you, go through some stuff with Trello. I actually worked with Jodie for two years at LPMA, she’s a good value. So, Teams are something which a lot of the Offices use and I’m looking at it. Now, one of the Offices I’m involved in consulting use Teams or Skype or Slack. They’re all communication tools. But Trello, I’ll show you some Trello stuff and you’ll be blown away


Michelle Watt: I probably looked at it 12 months ago and, I just kind of glazed over. I was like, “Oh no”


Michael Furlong: “Where do I start?”


Michelle Watt: Yeah, “Where do I start?” And in fact, there was myself and another couple of Property Managers in Jodie’s session the other day, and we figured we’d probably need a wine night on Zoom. And she can just run us through a bit of stuff and I think she would be fairly okay with that


Michael Furlong: Well, prior to this afternoon, us catching up Michelle, I was recording some Trello training, online training stuff. Because it’s easy


Michelle Watt: I’m sure it is


Michael Furlong: But you’ve got to know that the point that I made this afternoon was if you don’t have a methodology behind your structure, all it is, is just a program. It doesn’t make any sense. So, do you follow somebody? You’re following Jodie, you’re saying that. You’re going to Nina’s program. What sort of podcasts or learning or conferences do you go to? Where do you pick up your ideas? Because as a leader of a business, that Team are looking for you for inspiration, I think


Michelle Watt: No, I thought they were looking for me for wine. I’ve been very fortunate in that I’ve had several, you know, three great mentors. So obviously, or four, Gay and Kristie Matthews, they were my Harcourts Principals


Michael Furlong: And where is their Office?


Michelle Watt: Well, they were Burpengary, they merged with the Redcliffe Office and become a new entity. So, those ladies, you know, Gay is a very strong, both of them are actually, really strong women, great work ethic. And both of those ladies taught me very early in the pace when I would, you know, consider that I couldn’t do something or I wasn’t capable of it, that was just not an option


Michael Furlong: Sure


Michelle Watt: “You can do this,” you know, and they made me really just rise to whatever was put in front of me. And it was the same with Laura Valenti at Solutions. You know, again, a really strong woman, taught me a lot. And of course, I had Jo-Anne Oliveri as my mentor for a few years. So, you know, I learned a lot from Jo as well. So been very fortunate there. Who do I follow? Look, I’m just on a lot of forums, you know. I don’t follow any one person, particularly. I’m a real scanner. I see stuff and I’m like, “Oh, I like Hailey Mitchell. I love Haley. I love Nina.” I love what Nina is doing in the industry. So, I think what she’s doing is so badly needed


Michael Furlong: Yeah


Michelle Watt: In terms of training out our Property Managers coming through. Podcasts, I listen to a lot of BNI stuff, which has been a really interesting process. As I said, I’m only new to BNI and for people that aren’t, there’s a couple of online learning courses that you need to do when you first get started. And it’s been really interesting because a lot of that, I was sitting there going, “Oh!” Like heaps of light bulb moments. “I can take that into my business, or this is applicable to my business. We do the same thing.” So, I listened to lots of BNI stuff


Michael Furlong: Which is all personal development


Michelle Watt: Personal development. I read a lot of books, you know, like there’s always someone saying, “Oh, what’s a great book to read?” Julie Davis is great at it, you know. She’ll often say “Here’s a great book.” I go straight out and buy it or grab it as an audio book 


Michael Furlong: have you listened to Purple Cow?


Michelle Watt: No


Michael Furlong: Jot that one down. It’s a very good, it’s an audio book. You can get that one. Very, very good positioning for separating your business. So, we spoke before about points of difference and Purple Cow is a good one. And I’ve actually got Blue Ocean Strategy up there. Have you read that one?


Michelle Watt: No


Michael Furlong: Blue Ocean Strategy is another really, really good one. They’re two easy ones to, either on Audible or something like that. I use Scribd. Do you listen to audio books? 


Michelle Watt: I do, not as much as I probably could. I actually like paper, so I like to just grab a book. I have a fabulous rooftop where I live. So, you know, I’ll go and curl up on a couch there on a nice day, you know, on a sun bed and just read. So, you know, I’ve always got a stack of books that I’m trying to get through and then people keep suggesting great reads, so I just buy them and just add them to the pile


Michael Furlong: So, not that I wish to bring this up, but you’ve brought up the fact that you’re allowed to drink, go out to a bar. Now you’re rubbing it in that you actually have sun


Michelle Watt: Look out to the sky today


Michael Furlong: In Melbourne we’re not allowed either of those


Michelle Watt: Oh, I know. That’s why I left there. You’ll never get me south of the border again


Michael Furlong: The sun has been stopped as well. We’re not allowed to have sun, it’s just rain


Michelle Watt: He’s not really a nice man, that Dan, is he?


Michael Furlong: So, what about NPS? Do you do Net Promoter Score?


Michelle Watt: No, I’m not brave enough


Michael Furlong: Okay. Why is that?


Michelle Watt: Well, I don’t want to hear anything yucky about us. It’s on my to-do list for early next year. I think I’ll be brave enough by then


Michael Furlong: Yeah


Michelle Watt: That’s all it comes down to. I just don’t want to hear anything. I just didn’t want to get a negative score or a bad score or anything else. I didn’t even want a good score


Michael Furlong: Set the expectations low, and then build up to them. Because what you’ll find is, and I don’t mean that because of your business, but it’s more, the Owners have never been asked. So as a result, often, what will happen, you might ask a hundred Owners – and batch it. Don’t go and do 400 Owners at once. Because the biggest issue with people who roll that NPS to start off with, is they’re going to ask everyone. And then they’re inundated with all the surveys and they get a little bit anxious and they think, “Well, what am I…”. If you don’t respond to each of the negatives, you should never have asked


Michelle Watt: Yes


Michael Furlong: So, be prepared. So, do it with 50. Do 50, and then the next month do another 50, then do another 50, another 50. And then at least you can manage those negatives, but always pick up. I’ve got a Brand or a Franchise that I deal with now and all their negatives or any issues, Team Leaders ring and Directors ring. So, they’re the things you want to jump onto real quick


Michelle Watt: Yep, and I know we’ve got to do it. And again, that’s probably an excuse. I just haven’t had the headspace or I haven’t allowed the headspace to tackle it


Michael Furlong: Yep. And I noticed you’re doing really well with your Google reviews. You’re sitting at around 90 thereabouts, just under the hundred mark. Is there a strategy there, Michelle, with Google?


Michelle Watt: Yeah. So, as we finish a process, whether it’s onboarding a new Owner or a new Tenant we email them and just ask them to share their thoughts with us good, bad or otherwise. And, with 90 and 400 odd properties, we’re obviously not getting a great takeup


Michael Furlong: Sure


Michelle Watt: but we are looking at different days. I’m going to be looking at different days of the week. I’ve heard that some days are better than others to ask the question. So yeah, we’ll just do that


Michael Furlong: There’s an Office that I’m doing a lot of work with at the moment where we make Google reviews as part of the testimonials. And we’ve put as part of that as part of their KPI, sorry Google reviews and testimonials. So, we have a KPI structure where we have points and dollar values for certain things, but every positive KPI, every positive Google review is worth five points. So, we’ve now developed that. And on a Tuesday, they put out “It’s testimonial Tuesday”. So, it’s on Facebook, Instagram and we’re getting a lot of traction from that. The good thing about it is that it was always in the back of someone’s mind to get them, but now it’s a focus because it’s a KPI. And that every month we’re looking for five from each Property Manager. So, it just becomes part of it. If you don’t focus on, it’s just not going to happen


Michelle Watt: Yeah


Michael Furlong: Do you pick up work from Google reviews or is it not really part of your business plan?


Michelle Watt: It’s not really part of my business plan. We have picked up work from it, or an Owner will let us know “Your Google reviews are really good.” But yeah, I don’t think it’s a driving force for people to come to us


Michael Furlong: but being an Award winner will now, now that you’ve won the PPM Awards


Michelle Watt: as soon as I start telling people, it will be a thing, won’t it?


Michael Furlong: I want to wrap up, I want to take you back a little bit. How long have you been in Real Estate?


Michelle Watt: 16 years


Michael Furlong: Can you remember what it was like? Well, you weren’t always in Property Management. You’ve dabbled in different areas, but that the role of a Property Manager has changed significantly in that period from what Property Management was. Then I reckon maybe 16 years ago, we probably would have still been going to the bank and doing banking each day. Someone would have been leaving in about so 3:30 – 4 o’clock to get the mail out every day, and then receptionist would be up. So, things have changed a lot. Do you think the expectation on Property Managers now is vastly different and is enhanced by technology or we’re just doing more?


Michelle Watt: Well, I don’t know because I wasn’t a Property Manager back when I started. But I think the responsibility and the expectations from Owners and Tenants is significant when more now than what it ever has been. We’re expected to be so many different things. I had to do a presentation on my business the other day, and I said, you know, in one of my slides, I said, “We just collect rent, right?” 


Michael Furlong: that’s a Dorothy Dix question, yeah?


Michelle Watt: Yeah, that’s right. And so, then I did like a word cloud up, you know, and I said, “well, you know, we’re mediators, we’re counselors, we’re this, we’re that, we collect rent, we do insurances, we organize this, we organize that. We drink, we dance, we cry.” We walked around the Office, like, “What is it we do?” and people were just throwing words at me. And, so when we did that word cloud, I thought it was crazy. Just everything that we do do and, you know, looking around the room when I put that slide up, it was like everyone was just like, “Oh, well, so that’s why as an industry we need to be charging the fees that we do.” And, you know. Anyway, let’s not go down that rabbit hole


Michael Furlong: We haven’t really spoken about that. Because the fees haven’t really changed too much now, 2021, to what they were – same, 2005


Michelle Watt: No, not at all


Michael Furlong: Are you in that 7% bracket?


Michelle Watt: No, I’m more than that


Michael Furlong: Okay. So, 7% is typical down here. But I get Agents, and we spoke before about not focusing on Competitors. I get Agents where I’ll go and I’ve got a client just recently I’ve started working with are in that 4% bracket. And they were not wanting to push further because everyone else in that same market was 4%. So, there was just trying to compete. And I said, “You will never compete. Someone will come in at three and two, and then you’ve got three months free rent and six months free rent for Management. So, you’re better off going in setting your own race.” Is that what you’ve done with your business?


Michelle Watt: Yeah, I do. And as I said before, I am happy to adjust my fees here and there, but I do also have other fees built into my schedule that I’m happy to waive


Michael Furlong: Sure


Michelle Watt: My Management fee, I’ll like that to stay at 8.5%. So, we average around about 8.3% to 8.4%


Michael Furlong: Yep


Michelle Watt: And I love it when people, you know, we get into a conversation and someone will say to me, you know, “Are you willing to negotiate your fees?” I’m like, “Absolutely. What were you thinking, like 10% or 12%?”


Michael Furlong: “How can it to go up? Why would you want to pay off? I’m happy to do it this. I’m happy to go up. What do you want?”


Michelle Watt: I just love the silence. It’s like, “No, I’m sorry, I’m not”


Michael Furlong: Yeah


Michelle Watt: You know, what are you currently paying? Why looking to change?


Michael Furlong: Yeah


Michelle Watt: That’s right. Well, I think I said to you earlier, you know, I have been able to secure a really good referrer. The Agency that they were referring to was at 4%. You know, like, that’s crazy


Michael Furlong: We spoke before Michelle and I asked you about what your plan was to capitalise on the business once you won the Award. One of the things that I did do when I started winning Awards, and we’re talking about 2012, 13, 14, when I had the Agency, was I put my fees up simply because I felt that I could. And it gave you a positioning. So, food for thought there for you


Michelle Watt: I may or may not have already done that


Michael Furlong: Well, you said you hadn’t really capitalised on that, but it’s a way of positioning yourself, isn’t it really?


Michelle Watt: I haven’t done it formally yet. There’s been some changes made to my schedule that I’m kind of looking at. But, you know, it’s justifiable


Michael Furlong: Yeah


Michelle Watt: Award or not


Michael Furlong: Yeah. Well, Once you have a look at the, Trello’s free, but you’ve got your Inspection Express, Inspect Real Estate, you know, whether it’s Maintenance Manager, PropertyMe, all those portals. Once you’ve got all of that on top, we were paying for all these services and all the subscriptions. It really is very difficult to make money out of Property Management if you’re at a low fee base


Michelle Watt: Yeah, that’s right. All we actually charge is subscription fee


Michael Furlong: I like it


Michelle Watt: We tell our Owners they have to, you know. We need to use several pieces of software in order to manage their properties, and this is their contribution toward that


Michael Furlong: I like it, I like it. Michelle, let’s keep chatting. Thank You very much for taking the time today. I wish you all the best in the next 12 months to really capitalise on the Award that you have just won. Let’s chat soon


Michelle Watt: Thank You

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