In this episode we discuss why property management is a great and growing business opportunity in Canada.
Welcome to Canada's Property Management Podcast, your number one resource for investing, managing, and maximizing the value of your real estate assets. And now here's your hosts, Carla Browne and Adrian Schulz, Canada's rental property experts.
Adrian Schulz (00:18):
In today's episode, we're talking about why property management is a great and growing business opportunity in Canada. Carla, let's start off with the technical reasons.
Carla Browne (00:34):
Which is, sorry.
Adrian Schulz (00:35):
Hand flailing there. Ready to go.
Carla Browne (00:37):
Hands flailing. I shouldn't start laughing as you're talking, but you're so serious right now. And I want to start this conversation off by making people realize that in property management we actually do more than collect rent checks. Actually, we never go door-to-door to collect rent checks. I hope none of my investors or any investors out there are doing that right now, and fixed toilets because that's what the image that people get in their minds, there goes my hands, when you say property management, we are so much more than that.
Carla Browne (01:06):
And in fact, with Real Property Management, we consider ourselves asset managers versus property managers. We can kind of dig into that in a second, but from a technical standpoint, there's a few statistics that I think are really key for people if they're thinking of looking at this as a business opportunity for themselves. There was a report by the Bank of Canada a couple weeks ago. I'm not going to say when, because I'm not dating this right. It could be a couple weeks from whenever you listen to this, that 20% of the mortgages being funded currently are for investment properties. That's huge.
Adrian Schulz (01:38):
That's one in five. Wow.
Carla Browne (01:39):
That's huge. And then other statics to get your mind thinking is that we know that approximately 36% of Canadians are renters. That's over a third are rentals. If you think of that, it's one in every three houses is a rental property, which not in every area, but yet it's huge when you look at it. And in Canada, there is about 26,000 that we know of property management companies yet about 80% of the investors still self manage.
Adrian Schulz (02:15):
Carla Browne (02:15):
So just by doing the math, looking at that, you can see the opportunity that's available in this industry currently.
Adrian Schulz (02:23):
What I like about the property management business is it's a professional service business. It's reoccurring income without technically any accounts' receivable because property managers are paid upon rent collection, a percentage thereof. There's a low-cost of entry to get into the business, you do in many jurisdictions have to be licensed and credentialed. It's province specific. There's unlimited earning potential even based on the statistics that you just shared.
Adrian Schulz (03:01):
And for me, I love that there's spin-off business opportunities as you grow such as maintenance, appliance repair, landscape, janitorial, and many others that we can add to that list. But I think what property management business in Canada lacks is brand consistency and systems, but Carla, you have a solution for that.
Carla Browne (03:31):
Yeah. And that's why I got into this business to begin with, is that I saw a real need of, I guess, that whole customer service and how this industry could be much more professional and provide a level of service for the clients. That actually was a win-win for everyone, the investor, the tenant, et cetera, because investors and tenants have high expectations. I would, and someone could argue with me, but I would say higher expectations than they did years ago.
Carla Browne (03:59):
We are not coming into a property, especially because renters rent by choice. Now they don't necessarily rent because they have to, which was what I think was thought of years and years ago. So what we're trying to do with Real Property Management across Canada, as you know, we're a franchise organization with offices from one side of the country to the other and growing, is that we can interject through technology, through proven systems and marketing the automation and a lot of workflows that are automated to improve that communication to really get to that consistent client experience.
Carla Browne (04:33):
We also know that investors are not investing in their own backyard anymore. So they may live in Ontario and invest in Alberta. So they could have a company managing a property for them in Ontario and a Real Property Management company, managing a property in Alberta. And the reports would look the same. The service would look the same. They'd be used to a lot of consistent ways of doing business and consistency especially on the communication level drives business, because people want to know that they're going to be getting that each and every day or each and every month. And that's really, really important.
Carla Browne (05:08):
And I think when we look at COVID, it is very much like any industry really accelerated the need for technology. Technology comes at a cost, Adrian, as you know, you are my director of tech that we work very close on the technology here at RPM. And I'll let you talk to that in a second, but the reality is that not everyone could just go out and get this to do a handful of properties.
Adrian Schulz (05:29):
No, it's impossible. I've been a real estate investor since give or take 2002 and have been actively involved in the property management industry for over 10 years. And what I would argue having seen many different property managers and their businesses, and the reports, and the ways that they operate, is that the benefit of working with a franchised property manager, such as an RPM office, gives you a level of resident experience of brand, right? People love their Apple computer because it's an experience. It's a quality thing. It's a service thing and the same would go for-
Carla Browne (06:23):
It's a symbol of credibility as well.
Adrian Schulz (06:25):
... Right. And trust, right? So there's the ability to trust because any one of our family members or network members that are franchisees, they're attending our weekly best practice calls and our monthly calls, and sharing the same systems and tools to run their businesses, to help them run their properties that they asset manage. And I think personally, and I'm a little bit biased, but I think we have the most sophisticated and best quality systems and processes currently available in Canada, many of which are actually proprietary to us, that enable an RPM office to manage your property better than anyone else in the local market can.
Adrian Schulz (07:22):
And I think if you want a business that's service based where you set in many ways, you can set some of your work day, you've got that reoccurring revenue. You're not always having to go look for another client because the revenue is reoccurring on your book of business. Again, low-cost to get into, but the networking and the real benefit of RPM is the ability to collaborate with like-minded people who are doing the same thing as you. No one's out on their own and you can trust that our systems and processes are going to benefit you when you're starting or converting your business to an RPM office.
Carla Browne (08:05):
Yeah. Thanks for that, Adrian. I can sum that up really quickly, just being with a company like Real Property Management and gaining that edge in the automation and technology, and we didn't even dive into what our marketing actually can do for somebody who's trying to build their business, which is huge, huge, huge. One of the biggest pain points I would argue that most businesses have is, how do you market effectively?
Carla Browne (08:26):
We've figured that one out as well, but you can be in business for yourself and you're not by yourself. And that's really how we sum it up that RPM is that we do feel we are community of like-minded individuals who want to create consistent and excellent client experience across Canada, like investors wouldn't get anywhere else.
Adrian Schulz (08:47):
Now that's Real Property Management.
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