One of the biggest challenges affecting the property industry today is a phenomenon we call The Iceberg Effect. This neatly illustrates the difference between what your clients think you do as a Community Manager and what you really do to help your communities achieve their full potential.

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Ask the average Community Manager what value they’re bringing to the table, and they’ll say they:

• Act as a trusted advisor providing essential guidance to trustees
• Secure and enhance the value of the biggest asset most people own in their lifetime
• Create a preferred and enjoyable place of residence to owners and trustees
• Apply professional and transparent property management practices

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Most directors/trustees, on the other hand, would say their Community Manager:

• Sends monthly levy statements
• Polices the “Three Ps” – people, parking and pets
• Takes meeting minutes (every now and then)
• Must give immediate feedback when requested

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When compared side by side, it becomes glaringly obvious that the vast majority of Community Managers’ value-adding effort goes unseen by their clients. Like an iceberg, it hides just below the surface of clients’ awareness, leaving them under the misconception that the only value they’re getting is the tiny fraction that they can see.

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Why does this matter? Because clients only pay for value they perceive. And in the absence of value (or perceived value) price will always be an issue – something made very clear when you look at today’s compensation statistics.

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Effort vs Compensation – The Stats

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The following statistics were taken from our 2022 survey. They include data sampled from 406,200 units across 8,124 communities. (Communities under 20 units and over 350 units were excluded, as were additional income streams from debt collection and transfer fees.)

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1. Average unit price per month, across regions

• Pretoria: R91.57 per unit per month
• Johannesburg: R104.87 per unit per month
• Durban: R111.58 per unit per month
• Cape Town: R122.44 per unit per month
• National average: R106.22 per unit per month

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Key takeaway: average management prices per unit are low.

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2. Price increase vs inflation

• Average price increase year-on-year over the past 10 years: 4%
• Average year-on-year inflation over the past 10 years: 6%

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Key takeaway: Most community managers are earning less today than they did 10 years ago.

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3. Average monthly debt across regions

• Johannesburg: R 7,725,41 per unit
• Pretoria: R 6,991,49 per unit
• Durban: R 5,766,41 per unit
• Cape Town: R 1,612,12 per unit
• Average increase: 20% - 25% since 2020

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Key takeaway: Debt levels have increased, creating a heavier debt collection/arrears management burden, but only 30% of Community Managers are being compensated for this increasingly time-consuming function.

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As you can see, these statistics show a widening gap between effort/input and compensation for Community Managers. This is the opposite of most industries, where greater complexity, risk and effort is rewarded by greater compensation.

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Closing the gap

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Step 1: Understand the effort

The first step towards closing the gap between value and compensation is to shine a light on how value (and effort) has grown in recent years.

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The following factors are just a few of the changes that have increased the complexity and effort of community management over the last decade.

1. Communications: Between phone calls, emails, instant messages, group chats, voice notes and social media messaging, communications have never been more complex for Community Managers to track and record.
2. Regulations: CSOS, STSMA and POPIA legislation have placed a host of new responsibilities on Community Managers, with potentially dire consequences for failure to comply.
3. Government services: Even keeping the water and lights on has become more complicated, with local and national government bureaucracy at an all-time high, and service delivery heading for zero.
4. Debt Management: Economic pressure on households has also increased exponentially, resulting in higher debt levels – and a greater debt management burden for Community Managers – than ever before.
5. “Zoom boom”: Shifting workplace dynamics post-COVID-19 mean Community Managers now need to accommodate a variety of additional virtual services e.g. hybrid online/in-person community meetings.

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Step 2: Understand the value

At the end of the day, clients don’t pay for effort – they pay for value. That means closing the gap between effort and compensation requires understanding (and improving) how well your efforts translate into tangible value. That’s easier to do when you understand your four core value drivers.

1. Proactive management: Clients may not see the tools and systems you use to proactively control the controllables, but they do see fewer emergencies, greater professionalism, and more effective crisis management (with less negative fallout) when emergencies do happen.
2. Informed advice: Knowledge is power. Clients place a lot of value on Community Managers who use extensive industry, portfolio, community and client data, paired with up-to-the-moment KPI tracking, to provide insightful strategic advice in order to maximise asset performance.
3. Professional meeting management: Community meetings are a critical – yet often painful – touchpoint for clients. Community Managers who can turn this experience into a professional, streamlined, standardised – and informative – event offer highly visible value to their clients.
4. Data-driven performance metrics: Nothing demonstrates value quite like results. Providing accurate, relevant and consistent monthly reporting on community KPIs (including compliance, finances and operations) is a powerful demonstration of transparent value that clients cannot ignore.

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Step 3: Translate value into fair compensation

When you understand the effort it takes to do what you do, and understand what drives your value, it becomes much easier to understand what needs to change to enable community managers to live up to their full potential.

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Fair compensation is a critical piece of this puzzle. However, many community managers remain convinced that charging higher rates will negatively impact portfolio growth.

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Interestingly enough, our 2022 survey shows the exact opposite. Property managers who charged a higher, effort-related rate for their services in 2022 showed a 32% increase in their total units. Those who charged a lower rate grew by only 12.5% over the same period.

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Clearly, clients are not afraid to pay fair rates for good service. The trick lies in helping them connect the dots between value and compensation – and making sure the value you deliver is consistently worth the fee you charge.