The art of negotiation is one that every Property Manager should practice and understand. In fact, it’s a skill everyone can apply to day-to-day life. Getting the best deal possible for you and your clients is essential, and savvy negotiation is the way to make that happen.
Becoming a good negotiator takes practice and intimate knowledge of the process. However, there simply isn’t enough attention paid to the art of negotiating, and it is seldom taught. Therefore, we’ve put together a list of tips on how you can negotiate more effectively as a Property Manager.
Why should you negotiate?
Negotiating can be the difference between a better rental price for your client’s property, a friendly fee structure for managing properties, or better lease terms for a new tenancy. You may also need to negotiate with service providers, such as a gardener or maintenance company, to ensure fees are acceptable.
There may also be disputes and disagreements that you will need to resolve as a Property Manager. Navigating these situations with good negotiation skills and clear communication leads to a good outcome for everyone, which is clearly the desired result.
Many new clients will wish to negotiate a better deal for management fees, and tenants are often on the hunt for cheaper rent… so you’ll need to be prepared for these scenarios. It all boils down to your process, your communication skills, and your understanding of the market (which we’re sure, is excellent). At the end of the day, the aim should be to create a win-win situation for everyone.
How do you negotiate like a pro?
The best negotiators take into account a number of factors when discussing a deal. They are always prepared, and they understand how to listen, while making themselves heard clearly. Most of all, they understand that negotiations should not be approached as a win or lose situation.
Planning is essential
The first step to planning is to understand your own objectives. Usually, that will be a price range or figure, for services, rent, or property management fees. You should understand your base figures, and how low you are willing to go, worst case scenario. It’s also important to have a backup plan, should the negotiations fail to find a satisfactory outcome for you and the other party.
Doing your homework for the other party is always a must. For instance, if you’re negotiating with a tenant on lease terms, you should be well aware of their rental history, employment circumstances and the number of prospective tenants. If it’s a service provider, you should get a good overview of what they are offering, along with reviews and past clients. The better you understand the other party, the stronger your negotiating position.
Develop a process
Dealing with negotiations on a daily basis can be exhausting and time-consuming. Developing a process that you can rely on when those common queries pop up from clients and tenants will help enormously. What’s more, making the other party aware of the process keeps negotiations on track. An effective negotiation process will include timelines, such as when you expect the deal to be wrapped up.
Listening is as important as speaking
It’s essential you listen carefully to the other party throughout the negotiation process. Active listening is a must, because it shows your clients or tenants you are fully committed to a positive outcome for everyone involved. It also shows professionalism, a critical factor in good property management. Good listening skills from both sides of the negotiation make that ideal win-win situation much more likely. Most importantly, listening carefully ensures you don’t miss any critical information.
How do you start a negotiation?
A negotiation may start with either party announcing that they’d like to revise rates, negotiate for services or simply get a better deal on their monthly rent. You’ve probably dealt with these situations many times before, and know that it often begins with an email or a phone call.
On the other hand, if you wish to begin negotiations, it’s important to be upfront about what you wish to achieve, and clearly explain why you feel negotiations are required. From there, implement your process, listen and speak clearly, deliver clear boundaries, and do not forget your figures. Don’t sell yourself (or your client) short!
So, what is the best negotiation style for Property Managers?
The best negotiation style for Property Managers is one that incorporates clear communication and a win-win goal for both parties. After all, the other party will be someone you’ll continue to work with into the future (in most cases) so a positive relationship is a must.
Playing hardball on every single negotiation will probably leave a sour taste in your mouth, and you may well lose clients. On the other hand, if you are receptive to the other party’s requests and make some concessions that you can afford, everyone wins.
