Outsourcing of Property Management to Offshore Employees

Discussion in 'Property Management' started by Avi Khan, 30th Jan, 2017.

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  1. Avi Khan

    Avi Khan Member

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    Hi all,

    I'm writing a blog on this topic and wanted to see what everyone's thoughts were on this matter?

    Outsourcing of Property Management tasks has started to become a trend in the industry and its got me somewhat concerned.

    Just wanted to know if it is something that commonly disclosed by Property Managers?

    Has anyone had any experience with this?

    Would appreciate any feedback

    Avi Khan
     
  2. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Sounds like a very Brisbane thing. Been spoilt with amazing PMs in Sydney. Brisbane was a shocker. High fees and little focus on service plus lack of taking responsibility
     
  3. Avi Khan

    Avi Khan Member

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    Whats the fees like in Sydney?
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    There are a few legislative hurdles to overcome depending upon what is being outsourced eg. Trust accounting function, notifications of inspections, arrears/debt collection, lodgement/release of bonds etc.

    There are some requirements where a certificate of registration is required when dealing with the client yet other back of house functions can be offshored eg preparation of reports.
     
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  5. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    5.5% including GST
     
    Last edited: 30th Jan, 2017
  6. 7312

    7312 New Member

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    Between 5-7% is the average fee range for property management services in Sydney.The further out you get the higher the fee's e.g. regional NSW can charge 8-9% as they have lower rents.In other states eg. W.A. fee's can be up to 14%.
     
  7. Obsidian

    Obsidian Well-Known Member

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    I expect that this would be outsourcing the mundane tasks. Some accounting, data entry, paperwork, etc. Get used to it. If outsourcing is only starting in property management its behind the curve, as many other industries have offshored work for years. When is the last time you called an Australian call centre.

    Hey, if only it made the the exurbarent management fees less expensive. Especially in QLD. Given you can do a short course and become a fully qualified property agent, its not really rocket science work is it. Say bye bye. Maybe we'll see more flat fee structures, not percentage based. Why 5-7%. So something renting for $300/ wk cost half as much in management fees as so thing for $600/wk. Its the same work to find and manage tenents, same paperwork. About time the property industry had a shakeup.

    Don't get me started on outsourcing in my industry (IT), happening for maybe 10yrs now. Now you actually need skills and experience there, yet companies have oursouced more and more to Indian, driven down rates, more 457 visa. Useless Indian resources needing constant guidence and fixing and review of their work.
     
    Last edited: 31st Jan, 2017
  8. bunkai

    bunkai Well-Known Member

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    The vast majority of the work of a PM can be best shored (note my slight of hand into double speak). I doubt that many local regulatory requirements are much of an issue and if they were, that component would be small and retained locally. Data remains "onshore". Quality is a question of execution and building the right delivery model. Typical savings of 20 to 30% taking into account overheads and hidden costs. Could be visible to the customer or not, just depends what they want to do :)

    Whether or not this is a wise thing to do and how to do it depends on how your business operates and what is important. I suspect that almost all well managed agencies will have some component in some form - if not now, in the relatively short future.
     
  9. Scott No Mates

    Scott No Mates Well-Known Member

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    @sydprop - I know of one company who has offshored much of the work to the Philippines. It was an administrative nightmare due to different operating hours, assigning tasks and their understanding of the tasks. We still had to interpret the leases and obligations.

    Why pay a PM $50k locally when you can have an entire team OS for the same price?
     
  10. 733

    733 Well-Known Member

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    From what I have seen, some tasks are sent to second world countries with lower wages as the profit margin in PM is very small. I imagine the issue for a client (myself being a client as I have multiple IPs that are managed outside of Brisbane) is the 'what' of outsourcing...if it is data entry I would be okay with that...if it is to manage more significant matters I would not be okay with that.

    From our experience, people like to have a central point of contact and a seamless service experience.
     
  11. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    I know one of the big boys had 20 odd full time staff in the Phillipines. Rent arrears chasing (phone call next morning), organising maintenance and lots of admin stuff so that the face property manager here can have a load more properties.
     

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