Calendar icon February 6, 2023

Guide to Hydroponic Indoor Growing Systems

Photo of Alec Lower

Alec Lower

Social Media Coordinator - Second Nature

Indoor growing can be fast, easy, and fun with a DIY hydroponics setup.


Last month, we gave you the ins and outs of how to start your own vegetable garden. Now, with summer heat in full swing, toiling in that summer heat can be exhausting. So why not move the garden inside?

Move the garden inside? That sounds like a lot of dirt on the floor.

Actually, there is no dirt involved at all!

No soil in the garden? Do . . . do you not know how gardens work?

Of course we do. We're talking about hydroponics.

Ahhhhh yes, hydroponics. What's hydroponics?

Merriam-Webster's dictionary officially defines hydroponics as "the growing of plants in nutrient solutions with or without an inert medium (such as soil) to provide mechanical support." In layman's terms, it's the process of feeding plants the nutrients they need with a water-based solution instead of naturally through the soil.

Advantages of growing hydroponics

  • A plant growing in a hydroponic system can grow around 30% faster than a plant grown in traditional soil. This happens because the plant does not need to expend energy in search of nutrients within the soil continuously. Instead, the nutrients are carried right to the plant, and that energy goes to growth.
  • A hydroponic system can use as much as 95% less water than traditional soil-based growing methods. Since the system is enclosed, water used in the growing process is not exposed to the outside world, which reduces evaporation.
  • Environmental conditions don't play a large role in the success of your crop. Since your plants are growing inside, factors like weather conditions and soil type won't impact the growth of your crops. You have a lot more control over the growing conditions.

Disadvantages of growing hydroponics

  • Hydroponics can be an expensive hobby. There are lots of different types of hydroponic systems (we'll get into those later), but top-end systems can cost more than $500 alone. Fortunately, there are more affordable DIY options.
  • In traditional gardening, the soil stores nutrients that the plants can access on their own. In hydroponics, there is no nutrient storage. That means you're feeding the plants directly. If something breaks in your system or you forget, your plants will end up just like your Digipet.

As long as you can ensure that your plants will receive the appropriate amounts of nutrients and light, you can set up a hydroponics system pretty much anywhere, including in the comfort of your own home. Pre-constructed systems are available for purchase online, which can become quite expensive, or you can have some fun and make your own. The choice is yours.

Before we start though, here are a couple of terms you should know.

  • Growth tray - Where the plants themselves will sit
  • Reservoir - The bucket or tank that will hold the nutrient solution
  • Nutrient solution - A mix of water and key nutrients plants need to grow and will be supplied to the plant roots
  • Growing medium - the material that the plant will lay roots in (not present in every system)

Related: What is the resident benefits package?

How do you build your own system?

Building your own hydroponics system can be as simple or as complex as you would like. There are some really simple types of systems that require little effort to set up, and there are some really serious investments you can make. Deciding what kind of system is right for you is the first step. Since we're betting against most of you wanting to build a $5,000 hydroponics wonderland—because who has time for that?—we're going to focus on the smaller-scale systems that are best for building in your home.

Wicking systems

A wicking system is the most basic hydroponic system around and it's great for getting started in hydroponics. It has been called the "training wheels of the hydroponic world" and for good reason. It's easy to set up and use, making it the perfect system for first-timers.

This system has seen some innovation, but the general concept is older than hydroponics itself. All you'll need are two containers, your plant of choice, a growing medium, and a wick (hence wicking).

SN Tip: Growing medium is inert, which means it won't decay, and it provides no nutritional value to the plant. It exists to provide structural support, and that's about it. Common mediums include things like vermiculite or perlite, but just about anything that will give the plant support and allow it to root can function as a growth medium. Sand is another example.

This wick does not have to be anything particularly specific. A piece of rope or string will work fine. You set up the system so that the reservoir sits below the growth tray. You then run your wick or string from the solution in the bottom container up into the growing medium in the growth tray, as pictured.

SN Tip: The reservoir and growth tray can really be anything. As long as it can hold a solution, it should work. On a small scale, you can use bottles. Large plastic tubs will also work.
wicking system illustration
Source: offgrid.com
 

Fill the bottom container with the solution and the top with the growing medium and plants and you're done. Capillary action will move the nutrient solution up the wick and into the growth tray with consistency that will allow the plants to intake the nutrients and grow.

SN Tip: Capillary action has a very sciencey definition, but all you need to know is that it's the movement of water or another liquid across a surface against gravity. The physical properties of water make this possible and it's what allows a wicking system to work.
SN Tip: fill the bottom reservoir as much as possible in order to minimize the distance the solution has to travel.

The advantage of the wicking system is that it's super easy to set up and maintain. The disadvantage is that it won't supply nutrients to the plants at the same rate as some of the more complex systems, so the variety of plants that can be grown in a wicking system is a little smaller. Plants that don't "drink" as much, such as smaller plants like lettuce or different types of herbs, grow best in a wicking system.

SN Tip: Wicking systems also don't require the use of a water pump to deliver the solution to the plant roots, making it a "passive system." Those that do require a pump to move the solution to the plants are referred to as "active systems."

Deep Water Culture (DWC) systems

A DWC system is a little bigger and a little more complex than a wicking system, but all in all, it's still relatively simple. This system differs from a wicking system in that it submerges your plant's roots in solution 24/7 instead of a growing medium that is supplemented by the nutrient solution.

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deep water culture illustration

Image: offgrid.com

 

Because of this, it is critical that the aquatic environment the plants live in is properly managed. pH and oxygen level management are quite important with the DWC. An oxygen pump is necessary to ensure that oxygen levels remain sufficient.

Setting up a DWC only requires one reservoir and does not need a growth tray. The reservoir is filled with a nutrient solution, and the air pump is installed to ensure the appropriate amount of dissolved oxygen.

SN Tip: Smaller DWCs are harder to manage because it's challenging to keep nutrient concentration, dissolved oxygen, and especially pH levels consistent.

The plants themselves are suspended above or on top of the liquid solution in net pots. Net pots are simply pots with holes in them that allow roots to sit underneath the pot and submerged in the solution. There are several different ways to install the net pots in a DWC system. You can float them, where you attach a flotation device to each pot and allow them to rest on top of the solution. The second option is to suspend your plants in the air above using a brace or a roof with holes in it. The actual process of doing this depends on how you construct your reservoir, but the image below will show you a good example.

 

Image: aquaponicsexposed.com

 

Nutrient Film Technique (NFT) systems

An NFT system is among the most popular hydroponic systems. It's an active system that requires a water pump to run, but other than that it is set up very similarly to a wicking system.

 

Image: offgrid.com

 

Like the wicking system, an NFT has both a reservoir and a growth tray. Unlike the wicking system, a pump is used to move the solution from the lower reservoirs to the growth trays (or upper reservoirs), where it flows across the tray and drips back into the lower one. The system also requires an air pump to ensure the water is properly oxygenated.

NFT, like any active system, requires a little more maintenance because the water does not reach the plants naturally. You're dependent on your pumps to keep the plants receiving the nutrient solution. If a pump goes out, your entire garden is at risk. Thankfully, this isn't common (pump technology isn't particularly complex), but it is something to stay aware of.

Other systems

An ebb and flow system and a drip system are similar to NFT systems, with the lone difference being how the solution is supplied to the plant. An ebb and flow system uses a pump to flood the growth tray the plants reside in periodically, draining it shortly thereafter. It's like an NFT except it doesn't push the solution through continuously. A drip system is also similar to an NFT, but instead of filling the upper reservoir with nutrient solution, the solution is trickled from drip lines on top of the plants in the growth tray, where it then percolates through a growth medium and falls back into the reservoir.

SN Tip: Because of the recirculation of these systems, pH and nutrient amounts can change frequently, so consistent monitoring is recommended.

How do I manage pH?

pH is an absolutely critical element of a functioning hydroponics system. A pH level that is all out of whack can cause plants to die from insufficient nutrient uptake or, believe it or not, too much nutrient uptake.

For anyone who didn't pay attention in eighth-grade science class, pH is a measure of the acidity of a liquid. The scale runs from 0–14, with lower numbers being more acidic and higher numbers being more basic. For reference, battery acid has a pH of 0, water has a pH of 7, and drain cleaner has a pH of 14.

 

pH scale

 

The reason this is so critical is that the solubility of nutrients changes at different pH levels, which affects the ability of the plant to absorb these nutrients. If the plant has trouble absorbing nutrients from your solution, growth will be stunted, and the plant will eventually die. If levels are too high and the plant absorbs higher than acceptable amounts of nutrients, it can die from poisoning. You can have the coolest hydroponics setup in the world, but if your pH is off, all your plants will still die.

SN Tip: There are multiple ways to test your pH. The easiest and cheapest are pH test strips, which are extremely quick and easy to use and available at any gardening or pet store. You simply dip the strip in the solution, swish it around for a manufacturer-specified amount of time, and then match the color it turns to the color on a corresponding table that comes with the test strips.

As you'll see below, many plants prefer a slightly acidic nutrient solution. It's necessary to continually test your solution to ensure it remains at the right pH. If you find it needs adjusting, you have a few options. The easiest is adding "pH up" or "pH down" chemical solutions. These are readily available at the store or online. Follow the manufacturer's instructions for how much to add and be sure to check your pH frequently.

What can you grow in a hydroponics system?

You can grow just about any type of fruit, vegetable, flower, or herb. Ideal growing conditions will vary by plant, and some are more suited for specific system types because of it, but almost anything can be grown with hydroponics.

Hydroponic lettuce and hydroponic tomatoes are some of the more common items to "plant" in your system. Lettuce, in particular, is one of the best plants for beginners looking to dive into the world of hydroponics. The leafy green is easy to grow, will grow in a wicking system, and can be harvested in just one short month.

Fruits like strawberries and the aforementioned tomatoes (a tomato is a fruit, deal with it) have a slightly longer grow time, but are good starter crops as well. Below you'll find some popular plants and key details needed to succeed at growing them.

Lettuce

  • pH range: 6.0-7.0
  • Grow time: 1 month
  • Difficulty: Easy

Tomatoes

  • pH range: 5.5-6.5
  • Grow time: 2 months
  • Difficulty: Easy

Strawberries

  • pH range: 5.5-6.5
  • Grow time: 2 months
  • Difficulty: Easy

Spinach

  • pH range: 6.0-7.0
  • Grow time: 1.5 months
  • Difficulty: Easy

Bell peppers

  • pH range: 5.5-6.5
  • Growth time: 3 months
  • Difficulty: Easy

Hydroponics is a fun way to grow your own fruits and vegetables from the comfort of your own home. It can get complex and expensive, but it doesn't have to be if you don't want it to be. Simple and easy systems exist that will allow you to enjoy fresh homegrown produce at your dinner table.

You know what else you can make simple and easy in your home? Air filters, with Second Nature. Never forget to change your filter again.

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How to Value, Buy, or Sell a Property Management Company

Putting a precise figure on the value of a property management company can be challenging, given the changeable nature of the market. That’s why understanding what goes into the value calculation is crucial for both investors and business owners. Today, we’ll be discussing how property management company value is calculated, with an assist from Jock McNeill, VP of Acquisitions at PURE Property Management. Jock has completed over 70 property management acquisitions and has tons of insight into valuation models for property management companies. How to Value a Property Management Company: Contributing Factors Several factors help determine the value of a property management company, including revenue, profit margins, average rents, portfolio diversity, growth potential, and more. You can think of these as success metrics in determining “What is my company valuation?” Here are the most important factors to consider. 1. Profitability Before valuing a property management company, you need to determine profitability. Evaluate financial metrics like gross revenue, profit margins, cash flow or EBITDA, and debt-to-income ratios. McNeill explains how they evaluate this at PURE: “We evaluate pro forma financial statements and arrive at a percent profitability based on adjustments we can make by removing ‘seller benefits’ such as vehicle leases, personal expenses, etc.” Two of the biggest red flags in terms of a property management company's valuation, says McNeill, are “low revenue per door managed and low-profit margins. [These] can keep a business on the lower end of the valuation scale. These are often driven by low average rents and high labor costs.” 2. Consistency Consistency is key in valuing a property management company. A company with "lumpy" financial growth is risky. Steady growth in profitability, on the other hand, shows reliability and may provide a reliable basis for projecting potential returns on investment. The same goes for employee turnover: a revolving door of staff suggests instability. Similarly, consistent and well-organized records make a company more attractive to buyers (it facilitates due diligence processes and generally reduces the headache of taking over operations). In sum, consistency across finances, personnel, and records paints a picture of a well-run, predictable business, and that translates into higher value. 3. Portfolio churn Portfolio churn tells a story about the company's ability to keep clients happy, which directly affects its future revenue stream and overall value. High churn (i.e., with rental properties frequently leaving the portfolio) suggests difficulty retaining clients. This could be due to poor service, pricing issues, or a weak rental market. Low churn, with properties staying on board for extended periods, is an indicator of strong client relationships and high satisfaction – which reduces uncertainty for potential buyers. 4. Overhead costs Overhead costs refer to indirect expenses required to keep the business running smoothly, but that are not directly related to managing specific properties. Examples include rent and salaries (excluding those assigned to specific properties), office supplies, marketing, and software subscriptions. Expressed as a percentage of revenue, these overhead costs play an important role in a company's valuation. A lower overhead percentage of total revenue indicates a more efficient company that can generate profit without excessive spending. In turn, this can translate to higher potential returns for investors. 5. Debt-to-income ratio Debt-to-income ratio (DTI) is a key metric of a property management company's value. It shows the balance between a company's debt (loans and outstanding payments) and its ability to generate income (revenue). Lower DTI is better, as this indicates the company relies less on debt to operate. This suggests financial stability and a lower risk of defaulting on loans. A higher DTI, on the other hand, raises concerns about a company's ability to manage its debt burden. This can make it vulnerable to factors such as economic downturns, and cause investor hesitancy. 6. Customer concentration Customer concentration, or how reliant a property management business is on a single large client, can significantly impact its valuation. If a large portion of the portfolio belongs to a single owner, the company's income virtually depends on keeping that client happy – and if the owner decides to switch property managers, this could represent a severe financial blow. Property management companies with diversified portfolios are essentially spreading this risk thin, which is a plus for potential investors. 7. Transferability Business transferability, or the ease with which a property management company can be sold to a new owner, is a crucial factor in its valuation. A company that has well-documented processes, a strong team, and a healthy client base is easier to transfer to new ownership than a company lacking clear documentation, or that relies heavily on a single key employee. 8. Specialization Companies specializing in a specific type of property (e.g., single-family homes) develop deep expertise in that market. This expertise translates to better service for clients with that portfolio profile, potentially leading to higher client retention and satisfaction. Loyal clients are a valuable asset and boost a company's worth. 9. Contract terms The contract terms of properties under management are another important consideration. Management contracts with longer terms and automatic renewals create a more predictable stream of recurring revenue for the company over a period of time. Property management fees are another important consideration. Stability is attractive to investors, as it makes future income streams steadier and more predictable. Conversely, short-term contracts with frequent renegotiations introduce uncertainty about future rental income, potentially lowering valuation. 10. Future Growth Potential And, of course, signs of growth potential are critical to a property management company's valuation. Many buyers are thinking about company value related to size. According to McNeill, “Growth potential can influence how we approach a deal. If we can grow organically and quickly in a market, that can be very attractive. What a seller may perceive to be a problem in their business can be the acquirer’s opportunity. Maybe the issue is as simple as better systems, we can help with that.” Growth potential can be in the form of the real estate market in the area, but also opportunities to grow the business with existing residential properties. It’s also key to see a demonstrated network within those key markets. Property management is still largely driven by personal contacts and business relationships. Having strong contacts and connections in key markets is an important sign of growth potential. How to Calculate the Value of a Property Management Company: Valuation Multiples Valuation multiples are a key tool for determining the fair market value of a property management firm because they leverage comparable market data to establish a standard for pricing. We’ll cover the basics and provide some examples. Property Management Company valuation multiples to consider Property management company valuation multiples compare key financial metrics such as earnings or revenue, to the market value of similar companies that have recently been sold. When using valuation multiples, the caveat is that it's important to compare companies that are truly similar in terms of size, clientele, and service offerings. Three common types used for property management companies are SDE (seller’s discretionary earnings) multiples, EBITDA (earnings before interest, taxes, depreciation, and amortization) multiples, and revenue multiples. SDE multiples for a property management company The SDE (Seller's Discretionary Earnings) multiple focuses on the cash flow available to the business owner after accounting for all business expenses and taxes (excluding owner salaries and perks). The SDE times its multiple is one way of representing the value of a business. A higher SDE indicates a more profitable company, and the SDE multiple applied will reflect that. In the property management industry, a company with a strong track record of SDE might command a higher SDE multiple (say, 2.5-3 times SDE) compared to a less profitable company (say, 1.5-2 times SDE). An established company with steady profitability might be valued at 2.5 times its SDE. If its SDE is calculated at $1 million, this would result in an SDE x 2.5 = $2.5 million business valuation. EBITDA multiples for a property management company The EBITDA multiple is similar to the SDE multiple but excludes non-cash expenses like depreciation and amortization, and also ignores owner compensation. A growth-oriented company might be valued at 6 times its EBITDA. If its EBITDA is calculated at $700,000, this would result in an EBITDA x 6 = $4.2 million valuation. Revenue multiples for a property management company Revenue multiples simply take a company's total revenue and multiply it by a factor to arrive at a valuation. For example, a rapidly growing company with a revenue of $2 million might be valued at 2 times its annual revenue, resulting in a $4 million valuation. What multiple should you consider when valuing a property management company? No one multiple tells the full story. It is, after all, just an indicator, and cannot predict the future. That said, revenue multiples are a less common metric for property management companies compared to SDE or EBITDA multiples, given that revenue alone doesn't reflect profitability. Indeed, this multiple is often used in conjunction with other multiples for a more accurate picture. Valuators of property management companies are more likely to use EBITDA multiples alongside SDE multiples to get a more comprehensive view. Factors That Affect the Value of a Property Management Company A property management company's value is typically influenced by a variety of factors reflecting its operational structure, market position, and potential for future growth. These elements can provide insight into the overall stability and attractiveness of the business. Below is an overview of some key factors that can significantly impact a company's valuation. Owner involvement The role the owner plays in the day-to-day operations is crucial. A business that's heavily reliant on its owner may be less appealing to potential buyers because of the challenges involved in transitioning leadership. If the owner is deeply involved in tasks like managing client relationships or handling property issues, the company may struggle to maintain operations after a sale. Conversely, businesses where the owner plays a more passive role and has a solid management team in place are easier to transfer, which makes them more attractive and valuable. Number of units The number of units under management is one of the most straightforward indicators of a property management company's scale. Larger portfolios generally signal greater revenue potential. However, it’s not just about numbers; the quality of management across these units also matters. Naturally, a company that's managing a significant number of units efficiently, with minimal client turnover and satisfied property owners, is seen as more valuable than one managing the same number with operational inefficiencies. Types and quality of properties The types of properties under management can directly impact revenue and client retention. For example, a company managing high-end, well-maintained properties will typically have more stable clients and higher margins. On the other hand, a focus on lower-quality properties, especially those in difficult-to-manage areas, can reduce profitability due to increased maintenance demands and tenant turnover. Diversifying the types of properties under management can also reduce risk, contributing positively to valuation. Contracts The structure and length of management contracts are another clear indicator of future revenue stability. Companies with long-term contracts in place, especially those with automatic renewal clauses, can offer a more predictable and consistent revenue stream. This makes the business more appealing to buyers who value income security. Short-term contracts or those frequently renegotiated, on the other hand, introduce uncertainty, which can detract from the overall value. Expansion opportunities Any company’s potential for future growth is always a key consideration for buyers. A business located in a growing real estate market, or one with untapped opportunities to expand its portfolio, can be significantly more attractive. Expansion can come in the form of geographic growth into new markets or by adding additional services to existing clients, such as maintenance or leasing services. The ability to grow without significant capital investment inevitably increases the company's appeal and overall value. Location The location of the company can affect its valuation in different ways. Businesses in high-demand real estate markets or rapidly growing areas often see higher valuations, as market conditions are favorable for both current operations and future growth. On the other hand, property management companies in regions with stagnant or declining real estate markets may face a tougher path to maintaining value or increasing it. Business tenure The length of time a company has been in operation is often an indicator of its stability and credibility in the market. A property management company with a long track record is usually viewed as more reliable, especially if it has built a strong reputation for service and client satisfaction. Newer companies may struggle to command the same valuation, as they lack the historical data that provides insight into their ability to weather market fluctuations. Increasing the value of a property management company before the sale For owners of a PMC looking to sell, your first goal is obviously to increase the value of your business as much as possible before the sale, in order to increase the eventual purchase price. Keep in mind, though, that increasing your company value doesn’t need to become a barrier to selling. In fact, McNeill warns not to be too perfectionistic on that front. “One of the biggest misconceptions is that valuation is only based on revenue, and you have to have your business in perfect condition to sell,” McNeill says. “There are many factors that influence valuation, but for PURE, revenue and profit margins are most important. We’ve also seen a lot of potential sellers stall in early discussions because they want to wait to get their shop in order, implement new initiatives, or clean up their books. It isn’t always necessary, and trust me, we’ve seen it all.” Here are some industry tips for increasing your PMC’s value to buyers or property owner investors. Invest in your business infrastructure By this, we mean that you should invest in technology and people. Reinvesting in your business will make it healthier and more valuable to potential investors. On the tech side, you could adopt new property management software, update your current tech infrastructure, or integrate the newest AI-enabled tools. On the people side, you don’t necessarily need to hire more employees. Rather, ensure that the people on your team are as equipped as possible. Invest in excellent recruiting and onboarding processes, ensure you have robust training programs, etc. Integrate ancillary services We’ve talked a lot on our blog about how to develop ancillary programs to drive income. Ancillary fees aren’t just a cash grab – they’re a way to add needed value for residents and investors while driving profit for your PMC. Ancillary property management services can include things like: Renter’s insurance programs Credit-building Supportive services like air filter delivery Resident rewards And more! One of the best value-added services is to integrate a resident benefits package into your program. Develop marketing strategies You should be able to show potential investors that you have a strong marketing plan that has proven to grow your business over time. Your marketing strategy should include a content plan, distribution, social media strategies, networking events, and more. Pay attention to things like your reviews and online reputation as well. Marketing your property management company well will pay off in dividends when you are ready to sell. How to sell a property management company Completing a thorough valuation is just the first step in selling a property management company. If you’ve done the work to value your PMC, the next steps will be much easier. Whether you're looking to retire or simply move on to a new business venture, selling your property management company requires careful planning and execution – with the following steps. Identify potential buyers The next step after valuing your PMC is to identify potential buyers. The field of possible buyers may include other property management firms in your area, real estate investors, or even individual buyers looking to enter the industry. Determine how you want to sell In his article on valuing your PMC, Lohmann outlines the two different transaction types in how a property management company can be purchased: A stock sale. In a stock sale, the buyer will purchase shares of your business. They take on all past liabilities of your company but also get to hold onto your brand, contracts, and vendor relationships. The depreciation of long-lived assets is not reset. Asset sale, also known as Goodwill. In this case, the buyer buys your “book of business.” They’re paying for the property management agreements or contracts your PMC holds. If any of your contracts aren’t assignable, you’ll need to get an individual agreement from those investors. Prepare your PMC for a sale Next, you'll want to prepare your property management company for sale. This may include making necessary upgrades to your facilities, improving your management processes, and ensuring that all financial records are up-to-date and accurate. According to McNeill, the question you should ask yourself is: “How can I best tell the story of my company to a potential buyer? Are my financials detailed, and can I show a buyer I have great margins (or how they can achieve them)?” Work with a qualified broker or attorney Finally, when it comes time to negotiate a sale, it's important to work with a qualified business broker or attorney who can help you navigate the complex legal and financial aspects of the sale. With their guidance, you can ensure that you get the best possible price for your property management company while also protecting your interests and ensuring a smooth transition of ownership for your employees and clients. How to buy a property management company But what if you’re on the buying side? Buying a property management company can be a great investment opportunity, but you can’t sleep on due diligence. Before you start the process of purchasing a property management company, there are several key steps you should take to ensure that you make an informed and profitable decision. Research thoroughly & find a PMC that fits The first step in buying a property management company is–like with anything–to do your homework. Thorough research on PMCs involves identifying potential acquisition targets, analyzing their financial performance, and evaluating their market position. You'll want to look at factors such as revenue growth, profit margins, and client retention rates, as well as any potential growth opportunities that may make the company more valuable in the future. Basically, everything we covered in the sections above! If you already run a PMC, you want to make sure the business model can integrate with your structure. But again, McNeill cautions against being too rigid on this one. “We have yet to see a company that does everything the PURE way after over 60 acquisitions. Our partner integration team jumps in quickly and has a plan in place before we close a deal. If a seller has already implemented similar ancillary revenue models, such as a resident benefit package, etc., it means we can optimize that faster than rolling it out from scratch. Our proven platform includes the people, processes, relationships, and technology to consolidate, tech-enable, and optimize the companies we acquire carefully and thoughtfully. We have an all-star team of industry insiders, innovators, and leaders already in place, so when we bring on new teams, the integration is pretty smooth.” Conduct due diligence and identify liabilities Okay, so let’s say you’ve identified a potential PMC you’d like to buy. Now it’s time for due diligence. This involves reviewing financial records, contracts, and legal documents to ensure that there are no hidden liabilities or risks associated with the company. Additionally, you'll want to evaluate the quality of the company's management team, as well as its operational processes and systems. Determine fair market value After completing the due diligence process, you'll need to determine the fair market value of the property management company. This involves taking into account a range of factors, including its current and projected financial performance, market position, and growth potential. Once you have a clear understanding of the company's value, you can begin the negotiation process with the seller. Work toward a smooth transition Finally, once the sale is complete, it's important to take steps to ensure a smooth transition of ownership. This may involve working with the existing management team to establish clear roles and responsibilities, as well as communicating with clients and stakeholders to ensure that they are aware of the change in ownership. According to McNeill: “A buyer should make sure they have the foundation in place to integrate an acquisition into their existing operation. Look for opportunities to add value for the clients and residents, and that will turn into value for you as a buyer. Anything you can do to create a simple and satisfying experience for clients and residents will help with the anxiety that can come with a sale.” Conclusion Ultimately, the value of a property management company will depend on a range of factors, and there is no one-size-fits-all approach to valuation. But the bottom line is that by following a structured and analytical approach, you can feel confident in your valuation, which will help you make informed decisions about buying or selling the business. Whether you're a business owner looking to sell your property management company or an investor looking to make an acquisition, a proper valuation is essential to ensuring a successful transaction.

Calendar icon October 18, 2024

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How to Choose Moving Concierge Services: Personal Touch vs. Automated

Moving is a complex process that can feel overwhelming, from organizing packing to coordinating utility setup. For many, moving concierge services offer a much-needed helping hand. But in a world leaning heavily toward automation, does the personal touch still hold value? In today’s post we’ll explore: What moving concierge services are How moving concierge services work Typical cost of moving concierge services Two approaches: personal touch vs. automation The verdict What Are Moving Concierge Services? Moving concierge services, or relocation concierge services, are designed to simplify the resident's experience of moving to a new location. Relocation services often cover everything related to setting up a new space, primarily focusing on utilities such as electricity, gas, water, high-speed internet, and home security systems. The idea is to provide a seamless and stress-free transition for residents, taking the worry out of the moving process. Imagine stepping into a new home with all utilities up and running, with none of the hassles of making multiple calls to various providers. That’s the promise of a moving concierge service. Some even extend to help with additional tasks like finding local service providers, scheduling movers, and more. These services can work in different ways. Some are complimentary offerings that come as part of a resident benefit package provided by property managers, while others might require a fee if handled separately. A complimentary resident move-in concierge service typically partners with utility providers to arrange everything on the resident's behalf. How moving concierge services work Different platforms offer varying methods for assisting residents with specific needs in their move to a new house. In many cases, the service involves scheduling a call or using an online portal to set up utilities. When included in a Resident Benefits Package, the property manager works directly with a concierge service provider to ensure utilities and essential services are ready by move-in day. (Note that Resident Benefits Packages typically include this service.) Residents are often sent a personalized link or receive a phone call, allowing them to schedule a session to handle their utility setup. This process may include collecting information from residents, like current utility account numbers, to streamline the transition to the new address. Cost of concierge moving services without a resident benefits package Without the project management support of a moving concierge service, residents may find themselves spending several hours managing utility setups on their own, across a number of days or weeks. The process can include contacting each provider individually, scheduling installation or activation times, and sometimes dealing with long-distance calls, as well as unexpected last-minute fees, even in cases of local moves. The cost can vary widely depending on location, the number of services needed, and the providers involved. For some, the time and stress alone can feel like a hefty price. Moving concierge srvices offered through Resident Benefits Packages are typically included as part of the package, saving residents both time and money. Two Approaches: Personal Touch vs. Automation When selecting a moving concierge service, there are two primary paths: a personal touch approach or a more automated process. Let’s take a closer look at two high-quality services in this field: Citizens Home Solutions (CHS) and Utility Profit. Citizens Home Solutions (CHS) Citizens Home Solutions (CHS) offers a personalized experience, aiming to make the moving process as smooth as possible. CHS originally started as a phone-assisted service, focusing on creating a higher level of personal interaction. Their survey data indicated that 59% of residents preferred phone calls over completing online forms, underscoring the desire for human interaction in the moving process. Through its partnerships with providers, CHS seamlessly handles the setup of utilities like electricity, gas, water, high-speed internet, and security systems—all free for the resident (as part of the Resident Benefits Package). Their approach involves reaching out to residents through calls or digital means, offering a choice between speaking with a representative or completing an assisted digital workflow. This flexibility ensures that residents who value a personal touch can have it, while those who prefer self-service still have that option. The process with CHS involves receiving move-out reports in advance, allowing them to research and prepare for the resident’s new utility setup. When it’s time to set up utilities, residents receive a personalized link through email or SMS to a mobile-friendly webpage. From there, they can choose to schedule a call or proceed with the digital workflow. CHS then guides them through the setup process, including account management, so everything is ready for move-in day. With over 200,000 residents served, CHS has proven expertise and positions itself as a one-stop solution for utility needs. Their experience shows in their seamless process and attention to the individual needs of each resident. You can call them or use this form to schedule an appointment. Utility Profit Utility Profit takes a different approach by automating most of the process. As a newer company, they offer a streamlined service that directs residents to set up utilities on their own through a dedicated webpage. This method is designed for those who prefer handling things directly, with less involvement from a third party. Residents can navigate the setup process using Utility Profit’s online platform, entering their information, selecting utilities, and submitting their account numbers. While this method can be efficient for tech-savvy individuals who want to manage things independently, it may lack the personal guidance some residents find comforting during a stressful move. The simplicity of Utility Profit’s system can be attractive to those who desire more control over the process. However, for individuals who are not as comfortable navigating these tasks solo, this option may seem daunting. The verdict Both personal touch and automated services have their merits. However, in the realm of moving, where stress and uncertainty often abound, the comfort of having a human on the other end of the line can make a significant difference. Citizens Home Solutions stands out because of its blend of personalized and digital options, offering residents the best of both worlds. With a track record of over 200,000 satisfied residents, CHS has honed its process to cater to individual preferences. Starting as a phone-based service, they recognized the need for a personal touch, particularly during such a life-changing event as moving. Over time, they've adapted by incorporating digital workflows for those who prefer a more hands-off approach, demonstrating a commitment to meeting diverse resident needs. In contrast, Utility Profit offers a viable solution for those who are comfortable with a more automated approach. While this might work for some, the value of CHS lies in its ability to offer guidance and support throughout the move, ensuring nothing falls through the cracks. For many, that extra level of care can transform the moving experience from a daunting task into a smooth transition. Final Thoughts Choosing the right moving concierge service depends on what you value most: personal guidance or streamlined automation. Services like Citizens Home Solutions combine the personal touch with modern digital conveniences, ensuring residents receive tailored support while also accommodating those who prefer to manage things independently. If you're looking for a service that prioritizes a seamless move with a blend of personal and automated options, CHS is worth considering. Their extensive experience and adaptable approach have helped countless residents settle into their new homes with ease. Learn more about what Citizens Home Solutions can offer for your move. For property managers interested in incorporating moving concierge services into their resident benefit package, explore Second Nature’s Resident Benefits Package benefits now.

Calendar icon October 10, 2024

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