Ep19: Not your average PM commissions — with Melanie Poole

Not sure where to get started with KPIs and commissions for Property Managers? Melanie Poole shares her simple and scalable 10-part KPI and commission structure using PropertyMe dashboard metrics.

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Connect with Melanie Poole — Daystar First National
Connect with host Kate Sunol — PropertyMe

Transcript

Transcript - Mel

Kate:

Hi and  welcome to Property Management and Me, a series from PropertyMe, bringing quick tips and insights to support your everyday practice. I'm your host, Kate Sunol, and today we're joined by Melanie Poole from Daystar First National. She's head of department and also the BDM there. So welcome Mel, it's great to have you here.

Mel:

Thanks for having me. 

Kate:

So Mel and I recently caught up in an event where we were talking about proactive property management and the sorts of things that you can do to be on the ball with your portfolio and what's going on from a day to day basis. So much of what we do is quite reactive. So it's nice to have those tips and tricks that help keep you ahead of things.

And I absolutely loved her methodology around KPIs and commissions and how she's implemented them and tracks them within her team. So Mel, do you mind sharing a little bit about your team and the processes that have come about there? 

Mel:

Yeah, sure thing. So first we have a fairly big team. We've got eight people in our property management department. So there's myself, Head of Department and Business Development Manager. We have four Property Managers. We have three people in admin, one of which does accounts. We used to, prior to COVID, have where every Property Manager did their new business growth and things like that. And then after COVID, we sort of realized we need to do a little bit of a restructure.

And I moved into Head of Department and Business Development role. And then we've still got those four Property Managers. What I realized with that restructure is that commission for new business growth only didn't really work because it meant that the Property Managers weren't getting any commission because now I was doing all of new business development.

So I had to sort of think outside the box on how can I pay commission to my hardworking Property Managers? And I was inspired by the PropertyMe dashboard. You know, when you look at that dashboard, there's, you know arrears, vacancies, invoice arrears, jobs, and all those kind of things. And I feel like PropertyMe knows what they're talking about, and there's a reason it's all on that dashboard.

And so I looked at that because I wanted to then reward for when they hit certain targets there because that's obviously what our clients want. And so I, yeah, I really look to it for inspiration to come up with about, we've got roughly 10 KPIs and a couple of bonus KPIs, and then that's also how we pay our commission structure.

Kate:

Wonderful. So going through the 10 that you have, do you mind outlining what they are? Yeah, sure thing. I'll go through them one at a time. So, first of all, the first one is rent arrears. Rent arrears and water arrears. I think that's pretty self explanatory that our clients expect our tenants to pay their rent on time.

They want them to pay their water on time. And, you know, It's also something that can get really out of control if it's overlooked and it's something that really should be getting looked at daily. So basically PropertyMe dashboard has that nice little percentage there for us and so we say below a certain percentage of arrears for all of our Property Managers.

Now, obviously there's the matter of keeping people accountable. They can see how they are competing with the other property managers. And you know, that friendly competition. If one Property Manager's got say 3 percent of rent arrears, someone else might want 1 percent of rent arrears. So it does have that friendly competition and keeps people accountable because it's right in front of their faces.

They've got no excuses for missing on it. So it's good for, I guess like the follow up side of things as well. It's obviously that quality customer service that we're providing to a landlord and it just allows for the consistency of the team. And so we've got that for both rent and water. Then the next one that we've got is around lease renewals.

So not every agency in South Wales, and I'm not sure if that's you know, relevant to other states in Australia, but a lot of agencies in New South Wales don't resign their leases. So we've got one of our KPIs that they've got to have X amount of lease renewals per month. It means that we've actually extended our average tenancy length.

I believe the national average I read somewhere was about 2.6 year tenancies. We've actually increased ours to 3.6 years on average. 

Kate:

Wow. 

Mel:

So it's helped our clients to get longer-term tenancies and it also makes our tenants, I guess, happier, feel more secure. And it's good to have that as a little additional reminder for things like rent reviews as well.

And I'll get to rent reviews in just a moment too. But yeah it's an extra service that we find that our landlords are really happy with. And of course, not all insurances will cover our landlords if there's no lease in place. So it's a really good strategy to make sure that our landlords are getting the best possible customer service. 

We then have, I might go straight to them, the rent increase one. Obviously we've got the rent review section on the dashboard. So just making sure that all of our properties are, we're doing an X amount of rent reviews per month basically. It means that Properties don't get left behind. We earn more fees. Our clients are happier. What's not to love about that? 

So we've got, yeah, the X amount of rent reviews per month. Then jobs. Ad this one I think is particularly important. I feel like some common complaints that I have heard when I've taken over managements from other real estates is that jobs get forgotten about or property managers just aren't doing the follow-up required to make sure that, all the repairs are done and things aren't getting out of hand, which of course turns into people breaking their leases. It can turn into tribunal claims. It can turn into bond claims. It can turn into quite a lot. 

Kate:

Absolutely. It spirals quite quickly. 

Mel:

It can really spiral. And so we have no overdue jobs for, you know, X amount of days sort of thing. And it just means that the Property Manager doesn't forget about a job that's been entered in PropertyMe.

It means that they see it there and they're following it up really regularly. So it doesn't get forgotten about. And you know, by the time you get to the next inspection, it's not still outstanding. So once again, based on a customer service for our landlords, they're happier. Our tenants are happier, which also makes our tenancies go more smoothly. 

Inspection tasks. We've got that on the dashboard as well. We have X amount of inspections per month. So our Property Managers look after about 150 properties each. So they're doing 25 inspections per month.  And that's just to make sure that they're actually never going to fall behind because if this might sound, I feel like it could be obvious to some, but maybe not others.

If you only do a small amount of inspections per month, then the next month you're going to fall behind the next month, you're going to fall behind the next month, you're going to fall behind. And a lot of people don't pre-plan for that. So we've got that in our KPIs simply for consistency. It's a really common complaint I hear when I pick up managements from other real estates, that my inspections weren't getting done. And I know that other states do have different legislation to New South Wales, but we don't legally have to do any inspections. We just can't do more than four a year. I know that's not the same in every state, but if you are in a state where you don't have to legally do inspections, it's really easy for them to get forgotten about.

So we set a target and that means that the workflow also remains consistent throughout the year for that Property Manager as well. 

Kate:

And is that every type of inspection? So is that ingoing, vacate or just routines that you're tracking there?

Mel:

Just the routines. So the ingoings and outgoings are then on top of that as well, that we have it for just 25 routines per month.

And the beauty of that is there could be some months where you've got no ingoings, outgoings. There could be some months where you've got 10. There's a nice consistent  workflow. You know how many routine inspections you've got to do per month. So it's easier to organize your weeks when there's consistency there. And you know, if you're far enough ahead if you really needed to, you could reshuffle it around to allow for an increased workload in other areas like ingoings or outgoings. 

Then we've got on here the tasks. So PropertyMe has tasks and we use this sort of for creating notes. I know all too well that not all Property Managers hang up a phone call or end an email and put a note in the system about what's transpired. And you find out usually when you go to tribunal in hindsight, I should have made a note about that. 

They have to set X amount of tasks. And we've done this specifically to get people into a habit of creating those file notes. Because, you know, there's some people who just like to write down on a notepad and throw that piece of paper out at the end of the week, and that's not good for record-keeping purposes.

So that's more something we implemented for record-keeping purposes. We want to make sure that all of our Property Managers are following this really structured way of keeping records so that if anything ever goes bad, we've got it all in the background that we can go back and refer to. So it's also good for the follow-up and setting self-reminders to go back.

So, you know, if you do an inspection, you discuss a rent increase, but the owner wants to think about it, you don't just wait for the owner to call back. You create a task for, you know, a week later just to call and say, Hey, you never got back to me about that rent increase.  A lot of Property Managers lack the follow up part of their job and the owner's probably just forgotten all about it and you won't know till six months later when they go, Hey, didn't we talk about doing a rent increase?

So it's really good for that customer service space as well, where you're just making sure that you're actually doing the follow-up. 

Kate:

And I love that you are sort of reinforcing putting that all in the one spot. So like you were saying earlier, you've got three staff off sick this week. I could imagine having those file notes has made a big difference when you're picking up bits and pieces that are going on. 

Mel:

Exactly. One of our administrators is actually like an in-house temp. So whenever someone's off sick, her job is to be that Property Manager. And yeah, I think she's very thankful for being able to go back and look at some records.  

Kate: Yes. Yeah. 

Mel: Then we have the reminders. Now, I know that different people might use reminders for a few different things, but in our agency, that's where we might have things like pool compliance, smoke alarm compliance, things like the few commercial properties that we do look after, that it’s time for a  CPI rent increase or a lease renewal. And so we keep all that in our reminders. And so one of our KPIs is to have nil outstanding reminders and that's once again, a really simple thing to do, but a lot of people probably don't do that.

I think to, you know, check what's outstanding if they don't have anything automated that pops up on their screen, like if they were using a different software, the fact that PropertyMe has that pop up on their software, I've turned it into a KPI to make sure that there is nothing compliance related that can ever possibly fall overdue.

Kate:

And that works quite well, I think, in that reverse scenario that you've said, it is no outstanding reminders because that's something that's going to vary per property. It's not like a number completed, but just by putting that, there's none outstanding that you've sort of covered that to make sure everything's ticking over that needs to be done. 

Mel:

Yeah. Yeah, exactly. And so I mean, all of the sort of KPIs I have, what have they, they come down to record-keeping, follow-up, consistency in customer service. The result of these has been that our office works as a really well-oiled machine. I've got, as I said, I've got four Property Managers and everyone has different personalities, but by having these similar KPIs for everyone, their different personalities can shine, but they're all following the same procedures.

And they're all hitting the same goals and the same targets and things like that. And I think that's really important because we're trying to obviously sell a service. When I go out for business development and stuff like that, I need to know that no matter who I sign that property to in my team, that that client's going to get the service that I am promising them. And you know, we're all accountable for that. 

One of the other KPIs that we have got is our staff are required to get a Google review every month. And I think that one just shows that what we're working on is that quality customer service. We are a service based industry, and if they are following all these procedures, if they are hitting all of these KPIs, then our clients, our landlords will be satisfied, and they, there will never be a problem asking for that Google review.

That Google review helps, obviously, our star rating goes up. Which also then helps us to get more business in the future. So it basically gives off the, it just sets the whole scene for the entire agency. 

And the lucky last one I have got on my 10 KPIs, as I said, I've got a few other bonus ones, but the last one I've got is getting referrals and leads.

My Property Managers don't have to do any business development. I do all of it, but I want them to have meaningful conversations with their clients a lot of the ways they can do that is you know, when an application comes in from a new tenant, they have meaningful conversations. They figure out they own a rental property, they give me the lead.

When they're talking to our landlords, you know, whether it be to organise a repair or a lease renewal, they can ask questions about, “Oh, what are your experiences with other real estates?” And then those conversations start up, they have those meaningful conversations, then they can also forward me over a lead.

So it's, it's a great way to get involved. Also, obviously it's about a certain level of business growth, but it's actually more about them having meaningful conversations because we are a service-based industry. 

Kate:

That's it. And the conversations are about how can we, how can we help you? How can we grow your portfolio? How can we manage things better? How can we improve the service for you? 

So it's, it's very much those customer-focused conversations like you've said, really do lead to some of the best leads that you can get for the business. 

Mel:

Yeah, the, the referrals is what we want, right? 

Kate:

Yes. 

Mel:

And I think that, you know, you sort of traditionally most real estate agents reward for that new business growth, but I find that to be somewhat of a selfish thing to do because we are a service-based industry.

We have to be thinking about the client at the end of the day. And I think that all the KPIs that we've set around that property dashboard. Like the problem in dashboard is set around what clients want. That's why we looked for it to it for inspiration. And so we've really got to be thinking about our clients. We've got to find ways to add value. We've got to find ways to exceed our competitors as well. And I just think by setting a target, that's appropriate to your workplace. And rewarding on that is a great way to get all the team on board. 

Kate:

I love this so much. It's simplified, it's stripped back to exactly what's needed, but like with most things, when you simplify it, it just becomes really clear and impactful.

Mel:

Yeah, like a shared goal. 

Kate:

Yes. 

Mel:

Like everyone knows exactly what's going on. 

Kate:

And your bonus commission? 

Mel:

Bonus commissions. So if they hit all 10, they get a bonus. That's one of them. But we also have one for the days on market as well. So, which actually goes back to that dashboard as well, because you've got on the dashboard vacancies. 

So basically, they get higher commission if they lease a property in the first seven days to if they lease it in the first 14 days. And after 14 days, which is, you know, one to two open houses, after that point, the commission does stop. But we find that it means that people, our Property Managers, are more likely to price a property appropriately.

They're more likely to strive for things like professional photography to get better results. And our average days on market is consistently low. You know, I jump on realestate.com to look at our stats and things like that. And we are consistently so far below the area average, generally speaking, we're around the 12 days on average.

And it's because there's a competitive reason to do it is, hey, if I do it quick enough, I also get a commission.  

Kate:

Yeah, definitely. It's a motivator. So how often do you find that they're hitting all 10 targets? Is it something that is quite achievable for the PMs or is it really a stretch goal to be doing that?

Mel:

No, it's pretty consistent. I'm not going to say it happens every single month, but it is pretty consistent. And if they're not hitting all 10, there's usually, you know, getting around eight sort of thing. I have got one person who's on their 11th month in a row though, and I know she's going for number 12, but all of them have hit it I'm gonna say about 70% of the time, to be honest, like they're, I don't make the targets crazy high, and I do fine tune them. And when I say fine-tune, I should say change the goalposts. When we initially started this system my goal was to change the goalposts. I thought, all right, well this is where we're at at the moment. This is where I want to get next. And then after that, I want to get here, and then I want to get here as an example. When we first started this process, maybe my arrears was something like, maybe, let's say 10%. I can't quite remember. And so the goal would have been why I want everyone to be under 10% of rent arrears.

That changed pretty quickly to go down to below 5%.  Basically every month they're all hitting the below 5 percent of rent arrears. In fact, we've got some people who are consistently at 0%, but I choose to leave it there because there are circumstances where I, you know, we know that rent arrears can be reasonable in certain circumstances.

Like there's no consistently late people on any of our books. And generally speaking, it probably might just keep it low. So I did originally plan to change all the goalposts regularly. But I found myself not doing it that much because the service that we're providing people are really happy with. So I'd rather just continue to reward the Property Managers without changing the goalposts unless I think it's necessary.

I would do it when I see it necessarily, but I don't, our clients are pretty consistently satisfied. 

Kate:

How have you found that having that structure has sort of changed the, the workflow and the day-to-day and sort of the ebbs and flows, is it working in that proactive property management space, or is that something that you're still working on?

Mel:

No, I think that we're quite proactive with this system in place and there probably was a bit more reactivity back before we were doing this and I think this has turned it into more of a proactive experience for everyone.  Because I've even set like an ideal week around this and sort of said, Hey, you know, this is the best way to do it to achieve your KPIs.

Like when I've set an ideal week and even when I train up new staff. I give the ideal week over. I explain that here's an ideal week that I think will help you hit your KPIs so that you can get commissions, so you can be in a happier workplace. It also means, you know, talking about ebbs and flows, I said before,  everyone knows how many inspections they're doing every month.

So when there is a, you know, high amount of outgoings or ingoings, because it’s the biggest workload people experience, they still have that consistency to know, well, this is how many inspections I've got to get done before the end of the month. They can shuffle them around to make it work so that they can still go home on time.

I know a big problem in the property management industry is overtime. And I'm really happy to say that my team, except for myself, because I'm terrible at this, but my team are always leaving at five o'clock. Like I don't see my team doing overtime, I don't see, and in saying that one day a month, all of our copy managers get basically five hours off as well.

So we don't do a 38-hour week every single week. They all get a short week once a month as well. And they still don't do overtime. 

Kate:

And is that based on being ahead of those KPIs or that's just a given regardless, they get the short week, the time that's just sort of structured. 

Mel:

They get the short week regardless. Yeah, that's just how we're structured. And I guess we've done that in the way that, hey, if you need to do overtime, you've got five hours up your sleeve, but no one ever needs to use it because they're just so well organised. Like we've got a good amount of properties per Property Manager, 150 properties.

It's not asking too much. I see a lot of Property Managers try to fit 250, 300 properties onto one person without assistance and things. We've got a good figure that they can, that is manageable. Then they've got this consistent workflow. Then they're attending things proactively, not letting things get really far out of hand. They've got all the record keeping. They've got these systems in place for follow-up. It means that it's just a well-oiled machine. They come in, they get the job done. Sometimes they’ve got time to bludge too. 

Kate:

That's the dream. 

Mel:

And then they can, they can go home and have the work-life balance. 

Kate:

Yeah. That sounds like you've really got it mastered — you've said it exactly, a well oiled machine. And I think a lot of people would be saying that is a dream. 100% exactly what I need, you know, how do I get started? Did you transition from another commission structure or KPI structure? Is that something that you consulted with the team about? 

Mel: The previous commission structure was just new business. Back when I was doing it. Doing property management as in I was doing the day-to-day portfolio stuff. I had been at the company for such a long time that I had this unfair advantage that I'd win so much business and all the newer people, the younger people, all those who don't have the gift of the gab, they just weren't hitting those same figures.

Like I was walking away with thousands of dollars in commission every month, whereas they were getting one property and not getting a lot out of it. And so when I did move into this different role, I sort of took away from me to make it more, make it so that they could get more commissions because it just wasn't a fair system. 

Kate:

And that's quite an ask for somebody to do that. So you've certainly been very, very strategic and taken a long-term view, which is amazing. And now you're essentially reaping the benefits of that with the team, with the structure that you've got. In place. Well done. 

Mel:

It's not only that, I get more business.

So I get my commission structure that I work on is because I'm a BDM. It's on new business  because I've got everyone as that will machine will be more likely to get referrals. Plus they give you new leads. So I benefit from them being so well organised and providing such quality service as well. So it's kind of got a knock-on effect to both sides of property management.

Kate:

Yeah. I love that. I just want to circle back to one of the things that you mentioned before you were talking about the overtime and the flexibility and going home at five o'clock, or when things are wrapped up. How are you finding that your customers are responding to that? Are you getting a lot of those? Because a lot of those things are the after-hours calls that pop up and people just find it very, very difficult to turn customers off at a certain time and switch off. Have you implemented anything there or how are you achieving that essentially?  

Mel:

We don't have after-hours contact. Clients cannot get any of our team after business hours.

We do not have work mobiles and that is intentional. I like to keep it that way. And I think that surprises a lot of people to go, what do you mean you don't have a mobile that people can contact you on after hours? When we sign a new tenant up, we are explaining to them the urgent repairs procedures and what to do outside of business hours if there's repairs or maintenance. And that is our tradies details are on the front and here's the urgent repair cause. If you can't wait till 9am the next business day here's what you need to do. So urgent repair wise we manage over 600 properties and I reckon we have like maybe three or four a year if and it doesn't seem worth it for everyone to have to work have a mobile phone after business hours just so four people can get a repair done when they could just follow the legislation that's in the lease agreement.

And then from a landlord's perspective, obviously there's the Owner Access portal as well. And I guess that goes for tenants and landlords, you know, there's the Owner Access portal, the Tenant Access portal. They can get a lot of the information they need outside of those business hours through the porta or they can just be patient. 

And if that comes down to when we, you know when I sign up new properties or whenever any of our Property Managers are talking to them,  all these things are taking place between nine to five. If you start making, if you say back one day and you make a phone call at 6:30, you're basically giving consent that I'm available at 6:30. And so you can get your own work done between nine to five. If people say to you, Hey, can I get you to come to my house at six o'clock for an inspection? You can just say, no, you can set those expectations. It all comes down to setting those expectations. 

People won't sign up with an agency if we don't meet their expectations, but we could just have great service between nine to five, and then they don't need it after hours. 

Kate:

Yeah, that's phenomenal. It seems quite unheard of, but you seem to be smashing it. So you've got team being rewarded for doing a good job across the board. You've got an increase in leads, you've got nil over time, essentially, and you have really happy customers,  like you've actually mastered the process, which It sounds like it's a really challenging thing to do.

And you've done amazingly, like I absolutely love this structure and it is, it does go against the grain of what has been done for a lot of agencies. So it's, it's really mastered the workflow of property management. Within 10 steps. It's brilliant. I love it. I can't stop raving about it. Clearly. 

What would you say to anyone? What's sort of like one piece of advice you would give to someone who's looking at rolling this out, sort of based on what you've experienced with implementing?  

Mel: 

Good question. I think that  I, you know, I said before about changing the goalposts.  I think that it would be to get everyone on board with this because I'll be honest, I don't know if my team loved the idea of it at the beginning, but now they are all used to it.

I think that starting with very realistic goalposts, like don't try and go from 10 percent of arrears to 0 percent of arrears in one month. I think that it's, if you're going to start, start broad and then bring those goalposts, put those goalposts a little bit further away. a few months in as they start to get the hang of it.

I would say that the consistency didn't start straight away. I think that was a good, I wouldn't even say maybe six months into this. Like we've been doing this since 2021, I think. And I say that we're a well-oiled machine now, and I would have said the same thing a year ago. I'm not sure if I would have said it maybe the year prior. 

I do feel like there, there is a process there. And I think I've learned a few things, right? Like I was my original KPIs. I had a few different ones at the beginning. I realized that they weren't necessary. I just deleted them and I put in the ones that were necessary. I also think that for someone who is busy trying to run a department.

It's a good way to, if you see, they say there's 10 KPIs, right? You see that one person's hitting number one and someone else is hitting number two, but not number one, you can actually team people up to work together and sort of put a bit of a buddy system in place to help get the motivation going and I guess reward collaboration as well.

Kate:

Yeah, I love that. 

Mel:

And it is a good way to just monitor what's going on in the whole business as well anyway. I check this at the end of every month and it means that I feel confident that all my team are doing what I expect them to do as well, so. 

Kate:

And is that monthly, they're, they're self-reporting in, do they do mid-month checks and that sort of thing on themselves or you just trust that they know when to check in and, and sort of keep an eye on things?

Mel:

They all have a little checklist. And so they've basically, they get a new checklist every month. So they sort of fill it out for themselves because they want their comms. Um, they do self-report and then I double-check that their self-reporting is accurate and legitimate. 

Kate:

Yeah, of course. Keep things on track.

Mel: 

Yeah. And I give them a bit of space. At the beginning, I checked all of it and that's another thing I'd probably say is, tart by monitoring it yourself, but as they grow confident and you can see that they understand what they're doing, you can take a step back and let them do the self-reporting and it really does just take care of itself.

Kate:

Amazing. Thank you so much for joining us and for actually sharing what you're doing with our community. I love hearing from what PMs on the ground are doing and the more that we can share with each other, the better that we all become. Right. So thank you so much for sharing that. And for coming on the podcast. If someone wants to reach out or have a conversation about these, are you happy for them to get in touch?

Mel:

Yeah, that's absolutely fine. The best way for people to contact me would just be probably via email. So melanie@daystar.com.au.