Making a go of propertyComment on this story
In little more than 20 years Mike Bennett has gone from being a middle-aged “rookie” in the property business to one of the most highly respected estate agents in KwaZulu-Natal.
Bennett, managing director of Proprop, believes his success in the property business can be attributed largely to his willingness to adapt to change, especially in difficult times.
In Proprop’s heyday – peaking in 2007, when its turnover was R396 million – the company was a trendsetter in KZN, specialising in “middle-market” housing.
Bennett says turnover has since dropped dramatically – with the effects of the recession – but he has no serious fears about Proprop’s future. “We haven’t done too badly. The whole industry dropped by volume drastically.”
His company, he said, had taken stock and “cut its cloth” to adjust to the leaner years. It still had a healthy share of the market.
“We were the most progressive real estate company in the province in our day and are still way ahead technically,” he said.
Bennett said many other estate agents had not tried to keep abreast of changing circumstances and “quite a few” had fallen by the wayside.
His own company had made some radical changes in changed circumstances. It had, for instance, given up the old cold-canvassing ways of looking for business contacts. “We now do electronic prospecting, using the internet as the backbone of our business.”
Bennett said some other companies were still using the old “handbag brigade” as a means of selling property – “bored housewives who try to sell the occasional property”.
That was a dated way of doing business, he said, one of the many things industry members would have to change. “Those who fail to change will slowly go out of business in the next 10 years.”
He said the volume of property sales countrywide was now only about 35 percent of the figure for 2007. “And the number of sales people is down by 40 percent.”
He seems comfortable with a slower pace of business as he approaches retirement age.
Bennett is a product of Westville. “I went to the Westville junior and high schools, then joined Burroughs, the business machine people.
“I learnt a lot about business there, but after two years I decided go to the technical college and do a computer course.”
He worked in the computer field until 1978, when he bought VIP Data Systems, his first venture into business.
“I had that business for 10 years, until I sold half to a partner and the other half to Waltons.”
Bennett then bought “a Range Rover, a rubber duck and a caravan, and went touring the country” with his wife, Jeanette, for a year. “It was a wonderful year, but it did make me aware of how quickly money goes when you are not earning any and made me think of my retirement one day.” He returned to Durban.
“I had previously bought and renovated two properties in the city – in Berea and Westville – and sold them. I realised there was money to be made in property and thought I should get into it full time.”
He then bought the Westville franchise of Brink Property. “I ran that franchise for 18 months and then found Brink in Pinetown was going into liquidation.”
He bought Brink’s assets and in 1993 renamed the company Proprop. “We opened in Pinetown and six months later in Hillcrest. Then we started to take on franchises.”
In its heyday Proprop had 16 franchises, spread across much of the province. “We had 200 employees, 45 of them in Pinetown.”
Bennett said at one time the number of people working in the industry became inflated because, as a result of black empowerment, many “displaced” whites were looking for jobs.
“They saw this as a job of last resort,” he said. “They thought it was easy. It is actually very difficult.”
Many of these people had since left the industry. “We now have six franchises and employ 40 people.”
He said he, too, had faced many challenges over the years. “I was on a huge learning curve when I started. And with all the political and social change since then I had to start learning all over again.”
Bennett said it was important that he keep in touch with his main market, the black middle class, which was in a process of change. “Much of the old culture of blacks forming little family communities, with a pecking order of seniority, seems to be disappearing. It appears the younger people, in particular, are breaking away on their own.”
He said the property industry had become challenging in recent years, even without the problems caused by recession.
“The industry is in turmoil. The Estate Agents Board has created unrealistic educational requirements. Its requirements are stringent, creating huge problems. The board seems to have no grasp of the reality on the ground,” he said.
Bennett said there were also serious problems getting bank loans for his clients in the “emerging middle class”.
“We have to sell each property five times because the first four buyers do not qualify for loans.”
He said many of his clients were not “educated in the process of buying property”. “I would like to see a series of seminars being held for these buyers.
“They should tell buyers the steps to take when buying property and the hidden costs of living in the suburbs, as opposed to the informal townships.”
Bennett said he was fortunate in that the “middle-class” market was still growing at a steady pace.
“We sell to, say, a teacher married to a nurse, with a combined income of R30 000. That means they can buy a R900 000 house, an average price.”
He said problems in the market had encouraged him to expand the property management side of his business. “We are doing more body corporate management and running blocks of flats.
“It is nice, sustainable work. That sort of business is always there and not subject to the whims of banks.”
Bennett has been active over the years in a number of organisations. “I was chairman of Network Listings, the property sharing organisation, and a director of the Institute of Estate Agents,” he said.
He is also a keen yachtsman. “I am a director of the Durban Marina, a committee member of the Point Yacht Club and of the Boat Owners’ Association.”
He said of his years in business: “I have no regrets. It has been a fun life, especially in the good years of real estate.”