One of the most common concerns we’ve heard from real estate agencies recently is the struggle to grow rent rolls. Agencies are working hard to bring in new landlords, yet they’re losing just as many properties through owner sales or reoccupation. As one of our clients reported, they signed 100 new managements last year but lost 95 properties in the same period, resulting in a net growth of only five properties. This isn’t an isolated case—many of the larger agencies we work with are seeing similar patterns.
Economic Pressures Leading Owners to Sell or Move In
From what clients have told us, property owners are increasingly opting to sell or move back into their investment properties due to rising interest rates and the growing cost of living. Australia’s Reserve Bank has increased interest rates multiple times in the last year, leading to higher mortgage repayments for investment property owners. For many, these higher costs make holding onto an investment property unsustainable.
Many property owners are choosing to sell now while property prices remain high, worried that the market could shift downwards. For others, moving back into their investment property provides a way to reduce their own living expenses in the face of rising costs. As a result, agencies are losing properties from their rent rolls almost as quickly as they can sign new managements.
What Real Estate Agencies Are Telling Us About Staffing Costs
Another major issue we’ve been hearing from our clients is the rising cost of property management staff. Salaries for property managers have increased significantly over the past few years, and agencies are feeling the strain. With growing competition for experienced property managers, many agencies are having to offer higher salaries and more benefits to retain their staff.
One agency told us that property management salaries have risen by 30% over the last 4 years alone. This is putting pressure on profitability, especially for agencies that are also dealing with the economic challenges outlined above. The balance between keeping good staff and maintaining profitability has never been more difficult to strike.
Staff Turnover: A Growing Concern for Agencies
Many agencies we speak with are also reporting high levels of staff turnover, particularly in property management roles. In fact, 33% of property managers have left the industry over the last four years, driven in part by the appeal of higher-paying jobs or more flexible, work-from-home roles.
There are a number of contributory factors to this trend, including increasingly better pay levels in other industry sectors and the increasing need for more flexible,
homeworking arrangements-all sometimes not readily attainable with property management agencies. Agencies have accordingly found themselves in a struggle to retain experienced staff but also to maintain continuity with regard to the quality of service provided to clients.
It means that the “ripples” of leaving skilled property managers create a much higher level of pressure on the remaining staff, which will again have a rippling impact in potential damage to relationships with landlords and tenants. It is there that employee retention as a proactive process helps in issues dealing with flexibility, opportunities for growth, and respect for the employee’s contributions as valuable property management professionals.
What Frequent Staff Changes Mean for Agencies and Landlords
The impact of frequent staff turnover goes beyond the immediate loss of an employee. For real estate agencies, finding a replacement can be time-consuming and costly, and the loss of experienced property managers can result in service gaps. This turnover also has a direct impact on landlords, who may feel frustrated by the lack of continuity in the management of their properties. One agency told us that landlords are becoming increasingly distrustful of agencies where property managers frequently change, leading to strained relationships and, in some cases, landlords moving to other agencies.
Retention Challenges: Counteroffers and the Battle for Talent
Another challenge we’ve been hearing from our clients is the increasing frequency of counteroffers. In a highly competitive market, when agencies attempt to recruit new property managers, they’re often met with competing offers from other companies or even counteroffers from the candidates’ current employers. This makes it even harder to secure the right talent.
At MSR Talent, we’re hearing more and more about these counteroffer situations, with agencies often caught in bidding wars to attract and retain staff. The rising salaries and increased competition are making it difficult for agencies to manage staffing costs while ensuring they have the skilled property managers needed to keep their rent rolls growing.
How MSR Talent Is Helping Agencies Navigate These Challenges
At MSR Talent, we work closely with our clients to understand the unique staffing challenges they face. The feedback we’ve received has shaped our approach to recruitment in the real estate industry. Here’s how we’re helping agencies deal with the staffing pressures affecting their rent rolls:
We specialise in identifying property managers who not only have the right skills and experience but are also a good fit for the agency’s culture. With MSR Talent’s long-standing relationships with Sydney property managers, we have placed a large portion of the top senior property managers around Sydney for many years. Because of this, we’ve developed a deep understanding of the industry and the candidates we work with.
Our long-term relationships allow us to know where a candidate may fit best based on their previous offices and past experiences. This insight helps us place the right person from the start, ensuring they align with the specific needs and culture of your agency, minimising the risk of turnover.
2. Competitive Compensation Strategies
With salaries rising and the cost of living in Sydney increasing, agencies need to offer competitive compensation packages to attract and retain top talent. However, we understand that agencies also need to maintain profitability. We work with our clients to strike the right balance, crafting compensation packages that are attractive to candidates while being sustainable for the business.
3. Standing Out in the Market Beyond Compensation
At MSR Talent, we know that compensation is only one piece of the puzzle when it comes to attracting top talent. Many high-quality property managers are looking for more than just a paycheck—they’re searching for great leadership, a supportive culture, work-life balance, and future growth opportunities.
We help agencies showcase their strengths in these areas from the initial engagement. By highlighting the agency’s unique culture, leadership, and potential career pathways, we position our clients as desirable places to work, even if their salary offers are lower than the competition. This approach allows agencies to compete for talent by emphasising the aspects that matter most to candidates beyond money.
Great leadership and a positive work environment are huge draws for talent who want to feel valued and supported. Additionally, flexibility and work-life balance have become increasingly important for candidates, especially with the rise of remote work opportunities. MSR Talent helps agencies communicate these strengths, which can sway potential hires who are weighing their options between higher-paying offers and a more fulfilling workplace.
4. Reducing Staff Turnover
One of the most consistent pieces of feedback we’ve received from our clients is the need for stability in their property management teams. High turnover not only affects the agency’s ability to manage its rent rolls effectively but also damages the trust that landlords place in their property managers. We focus on helping agencies build strong, stable teams that are committed to long-term growth.
5. Handling Counteroffers
As competition for skilled property managers increases, counteroffers are becoming more common. We help our clients navigate these situations by advising on effective counteroffer strategies and ensuring they’re prepared to secure the best candidates, even in a competitive market.
How MSR Talent Is Listening to Agencies and Offering Solutions
Real estate agencies across Sydney are facing unprecedented challenges in growing their rent rolls. Rising interest rates and cost of living pressures are causing property owners to sell or move back into their homes, limiting growth opportunities. On top of that, the rising cost of property management staff and high levels of turnover are making it difficult for agencies to maintain a stable workforce
At MSR Talent, we’re committed to helping agencies overcome these challenges. We’ve listened to the feedback from our clients and developed tailored recruitment solutions to help real estate agencies find and retain the talent they need to grow their rent rolls, even in this challenging market.
If your agency is facing similar challenges, reach out to us today to learn how we can help.
