Why I Started My Own Property Management Brokerage

My name is Nathan Knell, and I own a Property Management Brokerage locally based out of Steinbach!

After working as a Property Manager(PM) for a number of years for someone else, I quickly came to believe that there had to be a better way to operate a Property Management Brokerage that could offer a high quality of service to the Owner's and provide a great career for aspiring Property Managers.

The one thing I really valued from the place I started out as a PM was the level of professionalism they held. They had all the bells and whistles that came with that, and I mean that in a good way.

But there seem to be some major issues, and as I worked and met other PM's from other brokerages, I realized that these major issues were common throughout the industry. The larger the brokerage, the greater the degree to which the issues were affecting it.

And here they are...

Issue #1: Too many units to manage, and not enough Property Managers to Manage them.

My first day working as a PM I was assigned almost 100 units to manage. I had managed zero property before this and I had next to no experience with the Residential Tenancies Act or working with the Residential Tenancies Branch. Now 100 of anything is a lot to manage for anyone, but it feels like a lot more when you don't even know the rule book!

Talking to other people who have, or even currently are, managing rental properties, I've found that this is very common, so common it might even be the norm. I've talked to people who started managing over 200 units their first day!!!

Everyone has a capacity!

As we grow in our experience and knowledge, we can grow that capacity, but even then, there is still a ceiling to everyone's capacity to manage rental properties on their own!

Most people starting in property management are being started beyond their capacity. Forget about growing capacity even! This leads to a domino affect. Poor organizational skills and time management lead to poor decision making, which leads to costly mistakes, which lead to frustrated owners, which leads to even more stressed out PM's, which leads out to even worse organizational skills and time management...eventually it all leads to insanity!!

To be fair, I don't believe that any brokerages intend for this to be the case. But they often have so many units to manage that they don't have the time to come up with a training program and to properly mentor newly hired PM's.

Issue #2: Archaic Business Model for Property Management Brokerage.

Although it may be way over simplifying, I do think that the normal business model for a Property Management Brokerage is; More Rental Units = More Income.

Now at face value this may seem quite reasonable. But if we remember the capacity issue I mentioned in Issue #1, it becomes very clear how this leads to serious issues internally for the brokerages. The management fees that the brokerage gets per unit dictate the overall income based on the number of units that the brokerage is managing. So to have an employee that costs the brokerages money, the brokerage has to have a certain number of units being managed by that employee just to break even, let alone to be profitable.

For the sake of discussion let’s say the brokerage needs a new PM to manage 50 units to be profitable. This means that if the brokerage wants to remain profitable, every new PM must start off managing a minimum of 50 units, regardless of the new employee's capacity to start.

So, what does the brokerage do if they have to choose between quality or profitability? Most of the time what we see is the brokerage is willing to deal with the consequence(s) of sacrificing a certain level of quality in order to remain profitable.

This hurts both the Owner/s of the 50 rental units, and the new Property Manager!

The two Issues I’ve discussed above are some of the main reasons why I believe that there is a revolving door at most brokerages, both for Owners and for Property Managers.

The Owners get sick and tired of having to constantly deal with a new Property Manager every few months, as well as put up with all the mistakes that come with a new PM.

And Property Managers get burnt out trying to meet goals and expectations that are unfair, unrealistic, and are expectations that they have not been equipped to meet. The new PM gets stuck in Disappointment Sandwich. They disappoint their bosses with their mistakes, and they disappoint the owners of the rental units they are making the mistakes on!

Most of the time Property Managers can only increase their current income, by increasing the number of units they are managing. This type of system produces PM's that are managing more than they can handle, as well as PM's who feel there is no end in sight for the stress that comes with that.

BUT WAIT!!! THERE IS GOOD NEWS!!!

At NATE’s Pro Property Management I have built, and am continuing to build, this brokerage with these issues in mind! I believe that I have found the answers! Some of the answers are obvious, but would be very expensive and difficult for an already established brokerage to implement. And some of the answers just can’t be implemented without a complete overhaul of any existing brokerages!

If you would like to hear about the answers I have come up with, and how NATE’s Pro Property Management is doing things differently, which is leading to more and more owners leaving their existing management brokerages to hire us, then contact me now!

You can reach me via email at: nknell@natesproproperty.com

I eat, sleep, and breathe Property Management! Which means I love talking about it with people who currently own rental properties, or people who are thinking about buying some rental properties! I promise you won’t regret setting up a meeting with me!!