The Hidden Cost of not Outsourcing your Property Management
Managing risk, and ensuring your property is developed to a strict time schedule while balancing tight finances, are all within the skillset required of the average property developer in South Africa. You battle the odds on a constant basis. You reach the finish line. Only to realize it’s the start of a different race. The big question is whether you should manage your own property or outsource your property management.
It’s not a sprint, but a marathon
With everything that goes into sourcing land, raising capital, and completing your property development project on time, the one thing often underestimated is what happens afterward. Who manages the property? In the past, this question was easy. You can save so much money if you manage your property yourself, and keep control at the same time.
Yet whereas the development of your property feels like a sprint with a large trophy waiting for you, management is a marathon with no trophies and no finish line.
“Property management is not about doing it once or twice but doing it every day,” explains Camalb Property’s MD Hennie Venter. “The single most important word in management is consistency”.
The Juggling Act of Strengths
A great property manager juggles admin, maintenance, tenant relationships, and ever-changing regulations. “The reality is that a successful property developer possesses different strengths to that of a manager,” says Strengths Coach Rentia Human. “To reach the ultimate level of success, it is important to understand where your unique strengths lie, and outsource that which is keeping you up at night.”
The Opportunity Cost Paradigm
Yes, it is possible to be a successful developer and manager of your own properties. The fundamental risk is the opportunity costs. Getting bogged down in the daily minutia and headaches of property management which turn into months and then years that you’re not developing property. The end result is possibly a standing appointment with your therapist, strained relationships with those closest to you, or even the bar as a last resort.
Ever Changing Regulations
It is possible to convince yourself that you can stay on top of admin, even though you ultimately hate it, but staying abreast with the ever-changing regulations that our dear government keeps on adding and changing is a nightmare on its own. “The reality is that you cannot shy away from the effect that changing regulations have on your property management endeavors,” adds Hennie Venter. “We have a team whose sole responsibility is to keep abreast with changes. It is almost an unsurmountable challenge to overcome if this is not your main focus.”
Confusion Abound
When you are a developer who turns his property into a Sectional Title Scheme, it is very common to keep a couple of units for yourself as an investment. If you are the developer, owner of units, and manager of the sectional title property as a whole, your fellow sectional title owners will most probably become suspicious of your intentions. This will have a massive hampering effect on your ongoing management of the property. “In some cases, we find that this developer/owner/manager is also the company affecting the maintenance of the building,” elaborates Hennie Venter. “It is a recipe for disaster to the highest degree.”
Activator vs Passifier
Playing to your strengths is key. Successful property developers have a certain get-it-done-at-all-cost mentality, which does not come in handy when you have to manage relationships. Managing brick & mortar is far removed from the realities of managing frail personalities on an ongoing basis. Managing all the personalities in a Sectional Title Complex is a massive challenge on its own. Adding the fact that you are not geared to be managing a myriad of personalities, might just ruin your chances of ever freeing yourself up to develop the next property.
Outsource Property Management
If you are a passionate and successful property developer to the bone and you want to keep it that way, there is only one solution to the chaos: Outsource your admin and headaches and insource growth.
If you are keen to outsource your property management, we would like to talk to you.
