Calendar icon April 18, 2023

How to Structure a Property Management Company

The property management industry is full of entrepreneurs – self-reliant self-starters who got in the game as a side hustle and grew their property management company to be a full-time occupation. But, of course, with growth comes the need to hire a team. And the key to successful team-building? An optimized property management org chart. 

An organizational chart is a visual representation of a company's structure, showing the roles and relationships between different positions within the organization. Property management companies are no exception, and getting your property management company structure right from the beginning has a massive impact on the quality of experience of your investors, employees, and residents.

In this article, we’re exploring the benefits of having a clear and concise property management company org chart with the help of Kelli Segretto, Founder of K Segretto Consulting. Kelli has helped with the launch of hundreds of property management companies and has tons of insight into how a PMC should be structured for success. 

Key Learning Objectives:

  • What does an ideal property management organizational chart look like?
  • How should you structure your property management company?
  • What’s the difference between an org chart for a PMC vs. a real estate agency?
  • How can you use your org chart to align employee roles?
  • Who should you hire first?
  • What’s the most important role in a property management company?
  • What are the most common mistakes made in structuring a PMC?

Meet the Expert: Kelli Segretto, Founder of K Segretto Consulting

Kelli is a sought-after speaker and consultant with over 20 years of experience in the property management industry. Kelli has expertise in single-family, multifamily, and LIHTC property management, having coached across all 50 states and six countries. She has helped launch hundreds of new property management businesses and has developed in-depth knowledge of the types of organizational structures that work best in property management.

 

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Example Property Management Org Chart 

We asked Segretto about the primary areas of responsibility – or key roles – that that are essential to a successful property management business. She outlined six key focus areas regardless of how you end up structuring the company:

  • Operations Management
  • Property Management
  • Leasing
  • Maintenance
  • Bookkeeping
  • Sales

According to Segretto: “Different structures will dictate the position titles and responsibilities within these roles, but these are the foundational pillars each property management business needs.”

To get started with the cascading structure of the org chart, Segretto explains that in a full property management company structure, you typically see three-deep leadership: owner/broker, manager, and coordinator, each with their own focus area from the list above. 

“Even if your business is small, it is important to have an organization chart to plan for your future growth,” Segretto says.

Here’s how it might break down in your PMC.

Tier 1: Owner/Broker

The Owner/Broker is the executive leadership or highest role and tier in the org chart.

“In most states, you cannot operate a property management company without a licensed broker,” Segretto says. “The requirements to obtain your principal broker license varies by state, but most require a combination of time as a real estate sales agent, experience points, and education.”

Of course, the owner of the PMC isn’t always the broker, depending on various circumstances or state laws. 

“A person with a broker’s license can sign on to be the broker of record or broker in charge for a property management business,” Segretto explains. “We see this when the business owner cannot yet meet the qualifications for their broker license, for example, in franchise property management companies and other organizations that are coming into property management from outside the industry.”

Anyone newer to the industry should take note, says Segretto, “This arrangement can be tricky in some states, like New Jersey where you must operate under the same roof as your broker, or Ohio where any brokerages active under a broker must have the same core company name. There are many state and local regulations you have to be aware of when opening a property management company.  My recommendation is always to reach out to your local department of real estate for guidance and information or work with a consultant that specializes in property management business startup.”

Tier 2: Management (Operations, Sales, Finance, Maintenance, and Leasing)

Reporting directly to the owner (who is usually also the broker) is a set of management roles. Depending on the size of your company, this may be one or many individuals, depending on the expertise and skills gaps of the owner. 

Your management level typically includes roles for Operations, Sales, Finance, Maintenance, and/or  Leasing. These individuals have a fairly high level of responsibility overseeing their area and any direct reports under them. 

Tier 3: Coordinators (Property Management, Maintenance, Leasing, and Bookkeeping)

Reporting to the management roles are employees at a coordinator level. You may hire coordinators that focus on property management, maintenance, leasing, and bookkeeping. These roles will fall under the purview of the manager above them.

Tier 4: Assistants

In large organizations, you may also see assistant roles that support the coordinator or management roles.

For each of these tiers of responsibility, Segretto says, “the titles and function will vary depending on the type of structure you are operating under, but the core organizational buckets remain the same. In a small property management business, it isn’t uncommon for the first roles to be 1099. This helps keep costs down for the property management company as long as they are not treating their 1099 partners like employees. For example, scheduling their time, requiring uniforms, etc. As a property  management business grows and stabilizes, most of the roles in the business become employees.”

(Segretto provides her clients with several org chart templates that walk through the different roles and responsibilities in each configuration.)

 

download rental inspection checklist template

 

Types of Property Management Company Structures 

“Each property management business is unique,” Segretto says. “Some businesses service savvy investor clients, some focus on small multifamily, some are only high-end luxury while others have found their niche in Class C rentals. This means that the best property management business structure can vary for your organization.”

Segretto explains that the ideal organizational structure for your business is the one that provides the best user experience for your clients, assigns ownership to the essential tasks, and keeps everyone on the same page. 

“Too often, I see businesses that have everyone trying to do everything, which ultimately creates chaos and confusion,” Segretto says. “Phone calls don’t get answered, emails get lost, and everyone expects someone else has ‘got it.’”

Instead of this chaotic approach, Segretto recommends choosing from three common property management company structures: Portfolio Management, Departmentalized, and Process Driven. 

“Determining which one is best for your office is dependent on your location, your staffing capabilities, your goals, and your budget,” Segretto says.

Here’s how they each work

Portfolio Management Structure

The portfolio management structure typically involves assigning a dedicated property manager to oversee a set of client accounts. That PM is responsible for all aspects of the portfolio, including property maintenance, resident relations, leasing and marketing, financial management, and other activities related to the management of the real estate assets.

The manager is typically supported by a team of administrative and support staff, including accounting and financial specialists, leasing agents, property managers, project management specialists, maintenance technicians, and other professionals who work together to ensure the successful management of the real estate assets.

Overall, a portfolio management structure gives clients a premium experience with one point of contact and allows for nimble decision-making. On the downside, portfolio management requires employees to have strong cross-skills, opens the PMC up to risk if that property manager leaves or goes on vacation, and makes it difficult to create operational consistency between portfolios. 

Departmentalized Structure

Department-style management organizes the PMC into separate functional categories, grouping employees and teams based on their roles and responsibilities. You might see departments such as accounting and finance, leasing and marketing, property maintenance, resident relations, and other functional areas. 

Each department is headed by a department manager who would oversee the day-to-day operations and staff within that department.

The benefit of a departmental structure is specialization over generalization. Employees are experts in their field and can focus on improving their area’s performance. The downside is that clients and residents may have multiple points of contact, and communication may get repetitive. No single person is keeping an eye on a specific property’s overall performance.

Process Driven or “Pod” Structure 

A pod-style management structure in PMCs is a relatively new management concept that organizes employees into small, cross-functional teams called "pods.” Each pod is responsible for managing a specific portfolio of properties or assets within the company and typically consists of a portfolio manager, a leasing agent, a maintenance technician, and an administrative staff member.

The pod-style management structure is designed to bring the benefits of the portfolio and departmentalized structures together – but can also suffer from their weaknesses. Pod-style management encourages collaboration and communication among team members and gives residents and clients an excellent customer experience. The structure also allows for greater flexibility and agility, as the pods can adapt quickly to changing market conditions and resident needs.

Pod-style management is ideal for a fast-paced, dynamic environment where rapid response times and a high level of customer service are essential. By working in small, self-managed teams, pod-style management can lead to greater efficiency, productivity, and innovation while also improving employee satisfaction and engagement.

The downside is that the pod structure can be expensive until you fully scale up. 

What is the difference between the structure of a PMC and a real estate agency?

We asked Segretto to explain how a PMC org chart differs from that of a real estate agency. 

Segretto explains: “I had a client that structured their business like a real estate office, and it worked really well for them when they were small. As they started to grow and scale the business, it became limiting. Real estate offices have a very simple structure. Typically you have an owner/broker, and in larger offices, back office services like marketing, bookkeeping, office assistants, and maybe a transaction department. These are support services made available to the sales agents. Sales agents are independent business owners, often with their own LLCs. They are not employees of the company.”

She also points out that some companies operate as both a real estate business and a property management company. “In these businesses, you may have a blend of the two org charts. You will still need all the same buckets as a property management business, but often those roles take on double duty to support the sales agents who still remain independent contractors.”

 

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FAQ: How to Use Org Chart to Align Employee Roles and Make the Right Hires 

So, let’s say you have an idea of the property management company structure you want and the types of roles you need. How do you actually get started? How do you make your first hires or align your current employee roles with your planned ideal structure?

We asked Segretto some of the most frequently asked questions on this in the property management space. Here’s how she answered.

What should I focus on in the hiring process?

Segretto: Property management is an industry that can be trained, but human behavior is much harder to adjust. Pick the right personalities and drive for your team rather than the person with the most experience on paper. 

That doesn’t mean you should pick the person you get along with best or you think you could be friends with. It is important to identify the key personality traits that will be most beneficial in each role. Remember, your employees will be the face of your company. They will be the ones delivering on the promises you make each client. 

Make sure you have written job descriptions and a deep understanding of the role the person would fill. Setting proper expectations will also aid in finding the right person who will enjoy the work they are hired to do.

In the interview process, ask qualifying questions and provide scenarios to see how the individual problem solves. This industry is fast-paced, multifaceted, and complex. It isn’t for everyone.

Most of all, be patient. Start hiring before you need to so you don’t feel pressured to pick someone fast rather than ensuring you have the right person in the right seat. Take your time and avoid costly mistakes.

Who should I hire first?

Segretto: I have had the opportunity to help launch hundreds of brand-new property management businesses in my career, and one of the most common questions is, “Who should I hire first?” 

Initially, a property management company is typically run by a sole operator. The business owner wears all of the hats. It is beneficial for the owner to go through this phase of start-up as they learn all the ins and outs of the business and discover their strengths and weaknesses. 

I like to then take my clients through an exercise where we can discover the highest and best use of their skillset and time. From that exercise, you can then determine what role would be your ideal first hire. For many people, this is a business development manager to cover sales or a back office employee, like a bookkeeper.  

What are the key components of management structure in a PMC?

The key components of management structure are customer experience ownership, work specialization, organization, coordination between departments, and continuous training. 

Property management is a customer service business. The structure you create should focus on the components that will foster internal communication, collaboration, and a culture of learning.

What is the most important role in a property management company?

Segretto: This is a tricky question! It reminds me of the grade school phrase, “There is no ‘i’ in Team.” Property management is a team sport; there is no one role that is most important or featured in the line-up. 

Your team will only be as strong as your weakest link, which is why it’s so important to hire talented individuals with the right personality and drive for each role. Once you have your superstar lineup, it’s crucial that you treat them well, trust them, and listen to the valuable feedback and insights they have. It’s more about having the right person in each role than it is about one role being valued higher.

What are the most common mistakes you see in a PMC organization structure?

Segretto: The two most common issues I see in the property management structure are:

  • Too many points of contact for property owners and residents to keep track of. Keep it simple! Assign a point of contact to every relationship, and if that point of contact needs to shift, arrange a proper handoff. This business is built on trust, and as humans, we inherently don’t trust strangers.
  • Lack of communication between departments. This business is built on a foundation of excellent customer service. It’s critical that you have processes in place that keep everyone in the loop. Most processes require multiple team members' effort, and when communication breaks down, the card house collapses.

Final Thoughts

Segretto recommends hiring a consultant to help you develop your org chart for both today and your future growth plans. 

A good org chart should include “job descriptions, KPIs, and personality traits for each role within your chosen structure,” Segretto says. “A consultant can take you through a process to identify your core values, goals, and action plan, which will help set a solid foundation for your business.”

Learn more about property management structures, growth, marketing, and more in our Second Nature Community, or get in touch with Segretto via her website.

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10 Best Property Management Websites for Property Managers

One important approach that property managers can take to keep up to date with current industry trends and approaches is to maintain a watchlist of different property management websites. That's because these sites often reflect best design practices and website templates as well as content sharing ideas. Today we'll cover some of the top property management websites, all considered favorites and regularly featured on “Top 10” lists in the industry, with a focus on what makes each one distinctive, whether from a design optic or a content perspective. 1. Second Nature It may seem odd for us to mention ourselves first on this list, but we are genuinely proud of our brand and messaging! After all, we’re in this business for a reason – and that’s why the content of the Second Nature website is so squarely people-focused, with an emphasis on solutions that improve the lives of residents, investors, and property managers alike. There’s a robust business principle underpinning this “Triple Win” philosophy: residents want their needs proactively anticipated, and they're willing to pay (and stay) for that service. This is particularly true for a younger generation that is attuned to the convenience offered by services such as Uber and Amazon. That’s why the language used on the website reflects a humanistic approach that goes beyond transactional basics, preferring “residents” rather than “renters,” for example, or “home” rather than “rental property.” It’s also why Second Nature’s “Resident Benefits Package” is front and center, and designed to give residents, investors, and property management businesses a win. Accordingly, like all successful marketing, Second Nature’s value proposition is not only tangible – it’s personal. Visit www.secondnature.com to learn more. 2. Nest DC The Nest DC website also focuses on the families behind the doors and the people behind the investment portfolios. Although residential real estate management is associated with a certain gravitas, the language as well as the overall branding of the Nest DC website plays off of a certain “avian” riff and is designed for easy readability. Where most sites incorporate an “About Us” page, for instance, Nest DC features an “About the Birds” content piece. It’s all done with serious intent, however, and the website design is sleek, clear, and user-friendly. Visit www.nest-dc.com. 3. Bay Management Group As soon as you hit the homepage of the Bay Management Group website, it’s clear that its primary target audience consists of real estate investors and property owners. That said, the site does host an impressive library of instructional and advisory videos for tenants, property managers, and landlords, as well as investors. With the tagline “property management that’s a cut above the rest,” home page testimonials, and a blue-toned web design of the sort favored by financial institutions to connote trustworthiness, the focus is on differentiation through delivery of high-quality property management services to deliver reliable rental income. Beyond its primary “free property management analysis” feature, other web functionalities include a blog, owner portal, tenant portal, and various program application options. Visit www.baymgmtgroup.com 4. Rentberry Rentberry is a global rental platform describing itself as a “transparent and secure home rental platform that connects tenants and landlords.” With the tagline “Renting done right – finally,” its principal focus is on prospective tenants and landlords. Top-level navigation includes online rent payments/rent collection. It also includes tenant screening functionality as well as options to search listings for vacancies or create a property listing. Among the usual resources (blog, help center, FAQ, contact information), Rentberry also features pricing guides for both tenants and landlords to help streamline the onboarding process. Visit www.rentberry.com 5. Grace Property Management & Real Estate Based in Denver (Colorado), Grace Property Management & Real Estate focuses on both residential and commercial properties in Denver. Although the company was founded in 1978, its online presence boasts astute use of online marketing tools and property management solutions, to say nothing of search engine optimization, with numerous calculators and other resources available from the top-level menu. Like many companies with a strictly regional presence, Grace Property follows the tendency of including full social media and phone contact information in the header. Visit www.rentgrace.com. 6. MESA Properties MESA Properties gives its geographical focus the hero image treatment, with the tagline “Servicing the Inland Empire, Eastern San Gabriel Valley and High Desert.” Below the header, it also bills itself as “an owner-centered property management company.” Accordingly, much of the functionality on offer from the top-level navigation is focused on professional property manager services and resources for owners, but it does include resources for tenants, including maintenance request options, and portal login. Visit https://www.mesaproperties.net/ 7. Golden State Property Management The Golden State Property Management website presents with the tagline “Total property management of the most comfortable homes in the South Bay,” as well as two prominent feature buttons aimed at residents (“Pay Rent”) and potential residents (“Search Vacancies”). With straightforward top-level menu options, mobile-friendly design, and high-contrast navigation elements, this site is exemplary in its simplicity. Visit www.goldenstatepropertymanagement.com 8. Sleep Sound Property Management Sleep Sound Property Management takes aim at the stress of managing the rental process, and as such takes on an advisory persona in its content. With the word “guarantee” appearing over 10 times on the homepage alone, the message is clear: this is a company devoted to providing great property management services in support of maximizing investment returns. Its “Why Choose Us” page also highlights its investments in cloud-based property management software, also designed to ease the stress of managing property investments. Visit www.propertymanagementportlandor.com 9. Good Life Property Management The website of this San Diego-based property management company is one of the only companies in the industry to highlight customizable user elements (color and font size) in the header of every page of its website. From the marketing perspective, this sends an important signal that the company is serious about finding ways to partner effectively with its community of investors and tenants. Visit www.goodlifemgmt.com 10. Luxury Property Care Luxury Property Care bills itself as “Florida’s only full-service property management and investment concierge for residential and commercial properties.” Its focus on offering high-end services is reflected in its mission statement: “Treat yourself to the luxury you deserve and let us handle every aspect of investing in off-market real estate and building a first-class rental empire with ease.” It’s also reflected in the website design scheme, with black and gold color elements being a popular way for brands to convey notions of elegance and prestige. Visit www.luxurypropertycare.com Follow the Second Nature Website to Keep Tabs on the Property Management Industry At SecondNature.com, you’ll find an abundance of resources designed to keep you up to date on events, analysis, and expert perspectives in the field – all geared toward helping property managers create a “Triple Win” that benefits residents, investors, and property managers alike: Triple Win Property Management Blog Triple Win Property Management Podcast Triple Win Property Management Events Learn more about Second Nature’s Resident Benefits Package, which is designed to generate revenue and establish Triple Win conditions for your residents, investors, and business.

Calendar icon February 26, 2024

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10 Best Property Management Blogs to Read and Learn From

As a property manager, one of the best ways to stay attuned to the latest trends, technologies, and strategies in the field is to read industry blogs across a range of property management websites. That's because the content of these blogs often consists of shared best practices and practical tips from peers and other experts. They also help you keep abreast of any regulatory changes and compliance requirements that may inform your business decisions and strategies. Today we'll cover some of the top property management blogs, with a focus on what each site brings to the table. 1. Second Nature The SecondNature blog provides insights on a wide range of topics related to property management, including market trends, technology, resident retention, and more. Its focus is primarily on a “Triple Win” philosophy, which expresses the idea that residents, property managers, and investors can go beyond transactional basics to create new, mutually winning experiences. In that vein, sample blog post titles include “How to Start a Resident-focused Property Management Company in 13 Steps,” “9 Ways to Improve Your Resident Experience,” and “How to Craft a Lease Renewal Letter that Wows Your Residents.” With top categories ranging from “Operational Efficiency” to “Resident Experience” and “Homeowner Insights,” the SecondNature blog is a valuable, highly readable resource for property owners and managers alike. Visit the SecondNature blog 2. Bay Management Group Blog The Bay Management Group manages over 6,000 units throughout Pennsylvania, Maryland, Northern Virginia and Washington, D.C. Its blog reflects this partially regional focus, with categories including “Owning a rental property in Maryland,” “Owning a rental property in Pennsylvania,” and the like. However, much of the content is broadly relevant to the property management business, with articles including “7 Ways to Ensure Your Potential Tenant’s References are Real,” “Tips for Successful Real Estate Partnerships” and “What is the Renter’s Bill of Rights and How Does It Protect Tenants?” This is a great blog that hosts archives going back to July 2012, making it one of the more venerable sites in this list. Visit the Bay Management Group Blog 3. Nest DC Blog Nest is a Washington management firm that focuses on homes and residents in and around Maryland, with expertise in single family homes, condos, multifamily housing, and mixed-use property in high-density, urban environments. Its clean, stripped-down design dispenses with the standard trappings of blogs such as tags and categories, and features both job listings and articles, with sample titles including “Important Factors for Real Estate Investing,” “Best Practices for Tenant Screening,” and “A Guide to the Eviction Process in Washington DC.” Visit the Nest DC Blog 4. Buildium Blog The property management software company Buildium publishes blog posts and other resources on a wide range of property management topics, from accounting & taxes to legal considerations, to marketing tips and the latest news from Buildium. Clearly, the content is aimed at a broad segment of the property management community, including rental property owners, property maintenance professionals, and real estate investors. Sample blog post titles include “The ins and outs of HOA reserve fund accounting,” “The best rent payment app in 2024: Comparing 8 online rent payment systems,” and “The 5 best multifamily property management software solutions in 2024.” Visit the Buildium Blog 5. Appfolio Blog Another software company, Santa Barbara (California)-based AppFolio focuses on SaaS for the real estate market. You do not need to be a user of the Appfolio software to find its blog relevant – in fact, much of the content focuses on issues of broad interest to property management and property investment groups, with sample blog article titles including “Three Leasing KPIs Every Property Manager Should Track to Optimize Their Business,” “4 Ways to Strengthen Vendor Relationships,” and “Your Ultimate Guide to Leasing Season: How to Maximize Occupancy and Efficiency.” Visit the Appfolio Blog 6. BiggerPockets BiggerPockets is positioned as a complete resource for anyone looking to succeed in real estate investing. Thus, its blog is squarely focused on matters relating to property investment and rental income, with titles that reflect that focus (e.g., “12 Ways To Make Passive Income From Real Estate Investing,” “High Credit Borrowers Get Punished and New Landlord Laws Put Tenants First,” and “2024 Rental Market Outlook: Is a Shift Coming Next Year?”) However, it also provides a number of articles with potentially broader interest to property management services (e.g., “Put THIS in Your Lease Agreement (So Tenants Don’t Break It!)” “9 Ways Your Property Management Tool Can Improve Your Business,” and “The Rise and Fall of the American Shopping Mall”). Visit the BiggerPockets blog 7. Rentometer Blog Rentometer provides a number of offerings around its collection and analysis of approximately 10 million rental records annually. The Rentometer blog is an extension of this capability, and aims to provide marketing insights to help manage real estate businesses. Its blog publications date back to 2018, and provide perspectives on remote property management, tools for growing real estate businesses, and more. Sample titles include “6 Tips for Communicating Rent Increases,” and “How to Use Rent Comps When Setting Your Rent Price.” Visit the Rentometer Blog 8. Propertyware Blog Like Buildium, Propertyware is an acquisition of the RealPage corporation but it continues to maintain a blog featuring news, trends and tips on single-family rental properties. Sample titles include “10 Tips For Maintaining Electrical Safety At Your Rental Homes,” “What’s Hot: Tankless Water Heaters for Rental Housing,” and “How Rental Property Software Helps in Processing Security Deposits.” The blog has also compiled different article series under various themes and topics, making it easier to navigate the wealth of information on offer. Visit the Propertyware blog 9. Rent Manager Blog The Rent Manager blog is largely focused on news about this property management software developed by London Computer Systems (LCS), and features tips and best practices for users, as well as news on feature enhancements. However, the blog also includes a dedicated category for property management trends, with articles such as “The Benefits of AI for Residential Property Management,” “Why Lowering Renewal Rents is a Smart Move for Multifamily in 2024,” and “Resident Screening: The Lost Art of the Reference Check.” Visit the Rent Manager blog 10. All Property Management Blog The All Property Management Blog reflects its identity as a marketplace of property management services, with articles aimed at real estate investors as well as property managers. Blog categories include property management tips and advice, product reviews, and content related to property taxes and finances. Sample titles include “How to Rent Out an Apartment: The Go-To Guide for New Landlords,” “Top 10 Rental Listing Syndication Websites and Time-Saving Tips,” and “5 Successful Rental Property Management Strategies.” Visit the All Property Management Blog Follow the Second Nature Blog, Podcast, and Events to Keep Tabs on the Property Management Industry At SecondNature.com, you’ll find an abundance of resources designed to keep you up to date on events, analysis, and expert perspectives in the field – all geared toward helping property managers create a “Triple Win” that benefits residents, investors, and property managers alike: Triple Win Property Management Blog Triple Win Property Management Podcast Triple Win Property Management Events Learn more about SecondNature’s Resident Benefits Package, which is designed to generate revenue and establish Triple Win conditions for your residents, investors, and business.

Calendar icon February 21, 2024

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