The Important things ain’t worth paying for
By Bailey Compton 3 Nov 2023
Short term savings vs long term value
It always baffles me why people pay the least for what is the most important!
Take the property manager who bears crucial responsibility but are paid the least in the property industry.
Compare them to the sales agent, someone who makes a sale, and moves on. If you’re selling property, you’re entitled to $15,000 to $20,000 per sale.
I’m not saying that salespeople don’t deserve their award, but let’s look at the figures:
Property managers are essentially portfolio managers demonstrating a wide range of skills. They help investors protect their return on investment and defend their assets. Yet they are paid approximately 5% of the rent, usually receiving between $30 to $50 per week.
Because of this relatively minimal sum, these roles have only attracted the youngest and least experienced candidates for decades.
While real estate salespeople can earn substantial commissions acknowledging their hard work, property managers face a disparity in income. Salespeople also benefit from the support of mortgage brokers, solicitors/licensed conveyancers, financial planners, and accountants, enhancing their earning potential and job stability.
In contrast, property managers primarily rely on each other for support within the property management industry. This difference highlights the challenges faced by property managers, who struggle to generate sufficient income to pay for professional support services.
It underscores the need for better compensation and recognition for property management professionals, who, unlike their sales counterparts, lack extensive external networks to bolster their income and job prospects.
The disparity of low pay doesn’t stop at undervaluing Property Managers, who play a vital role in safeguarding the purchaser’s investment. It also affects Conveyancers, another essential component of property investment.
Conveyancers ensure the legality and smooth transfer of property ownership, managing intricate legal processes and documentation, crucial for a secure and successful investment.
On the business of sales, the most important part of buying a property is to ensure that you obtain a title. This is sometimes a complex issue that can result in a number of major problems. For example, we had the experience of undertaking conveyance for a person who was buying into a strata scheme. The garage was on separate lots. Unfortunately, an inexperienced conveyancer forgot to transfer the garage, and this had been done three times. Thank goodness, we were finally able to identify the initial owner who agreed to sign a transfer transferring the garage directly to our client.
The chase of two conveyancers can be a vigorous one. Commonly, Solicitors and conveyancers are chosen on the quote they provide. The cheaper, the better! The problem is, this is money you spend to adequately protect the purchaser and the vendor.
I once had a property professional say to me that, conveyancing is just an administrative task. Yes, conveyancing is an administrative task! Unfortunately, ensuring each person’s property interest is dealt with is not just an administrative task. Each and every family and person purchasing a property has a different living arrangement, if you do not get the title correct in the first place, it’s ineffective and cost parties an extraordinary amount of stamp duties to rectify it.
Because of these penny-wise attitudes, property managers and conveyancers will continue to be paid at the lowest echelon in the marketplace. On one hand, saving money by paying less may seem like a financial gain, on the other hand, risks associated with subpar professional services may deeply impinge upon your title in the future.