Throughout the year, I have had many interesting conversations with members and prospects relating to the age-old question:  how many properties can one property manager manage?

One particular client of mine is a principal who is at a crucial stage in her business after hitting the 500-property mark. She is on a powerful growth path of 75 net managements in six months and seeking advice regarding the structure of her property management department.

When it comes to the structure of your property management department, there is no universal answer to what works best.  When considering what structure you want, you must be mindful of the different roles of the department that bring together the entire business.  In fact, the businesses I have seen with the highest success rates have had detailed job descriptions, shared growth visions and set goals for each team members.

Some will say the smaller the size of your business, the more “hats” need to be worn by the team members.  As the business grows, all of the core duties must become more clearly defined to reduce error and lack of communication.  As your growth takes off and you hit 500, 700 even 1000 properties under management additional sections come into play such as the need for a department manager to oversee the division and human resources support is required.

The top 3 most common styles of Property Management Department Structures include Task Based, Portfolio Based and POD Based.  The question I always get asked is: “What structure is best to take your rent roll growth to the next level?”

In my travels I have found a Portfolio Based structure to be one of the most common styles. It involves one property manager managing all aspects of their own clients across the portfolio and are 100 percent responsible for all stages throughout the management process.  This style of management demonstrates to the landlord and tenant that they have the one person who is the main point of contact throughout the tenancy. This is a structure that works well but can also carry risks. For example, if the property manager managing every aspect of a portfolio choses to give notice and terminate employment, the client may not feel comfortable with someone else taking over the reins.

The Task Based property management sees the property management department separating the various roles within the business such as maintenance, rental arrears, repairs, lease renewals, routines entry and exit condition reports.  It is commonly used across Australia and does work well for the BDM’s selling the service with specialists in each area as they are task specific.  Managing workflow for a Task Based structure can be more manageable for management but not without its challenges along the way.  As your rent roll continues to grow, you will experience staff turnover and that some of the tasks are only attractive to a small percentage of applicants. This can reduce the number of applications for the role and increase the risk of having to off load additional duties onto other team members for an extended period of time while looking for that suitable person to join your team. 

The latest trend, the POD Based management, sees two even three property managers working together in a team environment with several individuals.  This structure works well in terms of staff on leave as the different members of the POD can cover each other if need be. This protects your business when staff terminate employment, as the clients have had contact with more than one person. No one wants to be the person to let down the team. From personal experience, I have seen that a pod can manage a higher number of properties with two team members than two portfolio managers. 

So – what’s the best structure?  In short, it depends on the size and age of your business together with the customer service levels you are aiming to achieve. I encourage all Principals to take charge and embrace the tough decisions ahead of your rent roll growth path. Decide what you feel is best for your Property Management Department and be prepared to make the changes required along the way to ensure you achieve successful net growth for many years to come. 

The one massive piece of advice I will leave you with is: never create your structure around the current individuals in your team. Everyone is replaceable.