Triple Win Property Management Blog

Tenant Gift Ideas for All Occasions

As Second Nature, we recognize that many in the industry use terms like "tenant gifts." However, you'll see us use the term "resident" in place of "tenant" as a way to emphasize the human element of property management. There may be instances where "tenant" and "tenancy" are used for legal purposes, or in quotes from property managers or other sources, but we prefer "resident" because it better reflects who they are as people, and sets property managers up to forge stronger relationships with them. Building strong relationships with your residents is essential to running a successful rental property (or properties). That’s why thoughtful, well-timed gifts can be a great way to not only create a sense of community, foster goodwill, and boost retention, but ensure the long-term success of your property management business. In this blog, we’ll explore: What resident gifts are, as well as practical and personalized gift ideas for all budgets and occasions The benefits gifts provide to both property managers and residents When to give resident gifts, such as key events like milestones or holidays Benefits of resident appreciation gifts Who doesn’t like feeling appreciated? Showing your residents what they mean to you can offer numerous advantages, helping to foster a positive and lasting relationship. Increases resident retention: A thoughtful gift demonstrates that you value your residents, making them feel appreciated and more likely to renew their leases. Encourages positive reviews: Happy residents are more likely to leave glowing reviews, boosting your reputation as a property manager. Sets you apart: Small gestures of goodwill can distinguish you from other property managers, making your properties more desirable. Builds trust and respect: Resident appreciation strengthens the manager-resident relationship by fostering mutual trust and respect. Maintains the relationship: If there has been a misunderstanding or miscommunication between the property manager and resident, a thoughtful gift from the property manager could help smooth things over. Investing in resident appreciation initiatives is a simple but effective way to enhance resident satisfaction and create a more harmonious living environment. Related: 9 Ways to Improve Your Resident Experience Why is Resident Experience Important? The State of Resident Experience Report (whitepaper) Overview of gift types There are all kinds of thoughtful gift options that property managers can offer to residents, creating opportunities to extend a sense of community and appreciation. Welcome packages: Everyday essentials like disinfecting wipes, filters, and toilet paper with a personalized welcome message are often well-received by new residents who are just moving in. Discounts or special offers: Reduced rent or exclusive deals, especially during the holidays, can go a long way in showing appreciation. (Learn more about different resident rewards you can offer through Second Nature’s Resident Benefits Package.) Gift cards: Options like coffee gift cards, grocery store vouchers, or spa services provide flexible and practical benefits. Other ideas include gas cards or gift cards from large retailers (such as Walmart or Amazon). (Gift cards are a type of resident rewards you can customize in your Resident Benefits Package.) Community-building contests: Organizing monthly or seasonal contests or giveaways for residents can foster engagement and create a stronger sense of community. Seasonal treats: Consumables like holiday-themed candy, desserts, or other festive goodies. Pet-friendly gifts: If your company allows residents to have pets, toys or treats for furry friends can be a thoughtful touch. Each of these gift ideas is a simple yet effective way to show residents that their satisfaction and happiness matter. Creative resident appreciation gifts by occasion Property managers can customize a resident rewards program, as part of Second Nature’s Resident Benefits Package, as a way to reward positive resident behaviors. Related: What Is a Rent Rewards Program? Although certain occasions or incentives can make gifting especially meaningful, you don’t always need a specific reason to show appreciation to your best residents. Here are some of the best times to consider. Welcome and move-in gift baskets for new residents First impressions matter, and a thoughtful welcome gift can set the tone for a positive relationship with new residents. Move-in gift baskets are a simple yet impactful way to show your appreciation and help tenants settle into their new home. A few approaches include: Practical essentials: Cleaning supplies like paper towels, laundry detergent samples, bathroom essentials like toothpaste, or kitchen basics like dish soap and sponges can be a lifesaver on moving day. Comfort items: Small snacks, a bottle of wine*, or a cozy throw blanket will make the space feel more inviting. (*Wine for adults over 21 only.) Local touches: Gift cards to nearby cafes, maps of the neighborhood, or coupons for local services help residents feel connected to their community. Sustainability-focused gifts: Reusable water bottles, energy-efficient lightbulbs, or biodegradable products align with eco-friendly values. First night’s dinner: Consider a gift card to a local take-out spot so that your residents don’t have to worry about cooking dinner on their first night when all their cookware is still packed away. These gift baskets not only make moving day easier but also show that you genuinely care about your residents’ comfort and experience from the start. A truly welcoming move-in gift for residents In this social post, Ian Joseph, the Owner and Founder of The Joseph Group, showcases a carefully curated move-in gift package designed to make a positive first impression on new residents. The package includes: A custom “welcome home” candle with a unique scent A freshly picked dahlia from a local farm A handwritten note from the property manager with a "dinner on us tonight” offer A folder containing resident benefits and orientation materials to help new residents settle in smoothly An orientation service offering on-site assistance from the moving concierge team This thoughtful combination of practical items, personal touches, and supportive services helps create a warm, welcoming, and stress-free experience for new residents. Resident appreciation gifts Thoughtful, personalized gifts can make residents feel valued and foster stronger relationships year-round. Whether you’re celebrating a major milestone or simply recognizing their presence in your community, these gestures can go a long way in creating memorable moments. Key milestones to celebrate Life events: Big moments like weddings, new babies, or graduations are perfect opportunities to send a personalized gift. A baby care package or a keepsake for newlyweds can make these moments even more special. Resident rewards program: Incorporate appreciation into structured initiatives like rent rewards programs, as part of your Resident Benefits Package, by offering perks such as event tickets, local discounts, or special experiences tailored to your residents’ preferences. Surprise gestures: Even small, unexpected acts—like a note of appreciation with a coffee shop voucher—can leave a lasting positive impression. Customization makes a difference Personalized gifts stand out because they show thoughtfulness. For example, a hand-written birthday card paired with a small, customized gift adds a personal touch that goes beyond standard gestures. When planning resident gifts, draw inspiration from real-life examples, ensuring they’re meaningful and relevant to the occasion. Thoughtful customization doesn’t have to be complicated, but it does make a lasting impact. Lease renewal gifts Thank long-term residents for renewing their lease—consider a gas or grocery card to show your gratitude for having such a loyal resident. You can also gift an affordable experience, like a movie popcorn basket for your residents to enjoy a nice night in, or an inexpensive goodie bag that you hang on their door. You can also offer small improvements to spruce up the unit now that it’s been lived in for a while. We’ve seen property managers offer carpet cleaning or updates to light fixtures, which would normally happen during turnover, but instead your current residents get to enjoy them! Plus, it keeps the property in good condition, which keeps your investors happy, too. Christmas and holiday gifts for residents The holiday season is an excellent opportunity for property managers to show appreciation to their residents. Thoughtful gifts not only create goodwill but also help strengthen the relationship between property managers and residents. Here are some real-life examples of successful holiday gift ideas: Delightful pies for Thanksgiving Tiffany Izenour, Principal Broker & Owner of Freedom Property Management, shared the tasty treat she gifts residents every year. In the Facebook Group, #PMHealth Group, she wrote, "Got my steps and lifting in today during our annual pie event. 🥧75 enormous pies gifted to clients, tenants, and community partners today. Managed to avoid the temptation of digging into a pie thanks to chatty clients 😁." What a great example of spreading holiday cheer with seasonal pies that residents can enjoy with loved ones during Thanksgiving. (Plus, it’s one less pie for residents to prepare on one of the biggest cooking holidays of the year.) Grocery gift card giveaway Dan McKee, President of Keyrenter Knoxville Property Management, understands the financial stressors residents experience around major holidays like Thanksgiving and Christmas. That’s why for Thanksgiving, residents were able to enter a giveaway for a $100 grocery gift card, just by liking the company’s Facebook page. For Christmas, property owners can opt-in to have Keyrenter Knoxville Property Management send residents $50 gift cards to local restaurants in a holiday greeting card - another win-win for residents. The 12 days of giving Brad Randall, Owner and Operator of Welch Randall Real Estate and Property Management, noticed that he had the highest delinquency rate for rent in the month of December. He decided to incentivize residents by implementing a “12 days of Welch Randall giving” initiative. Residents who paid rent on time during the month of December were entered into daily drawings for gifts such as cash, grills, and event tickets, some sponsored by vendors. Residents could also earn additional entries by leaving a Google review. Not only did this support residents and offer them incentives for paying rent on time, but it also fostered a stronger relationship between residents and property managers. When things go wrong Whether it’s a miscommunication with their management company, an unpreventable maintenance issue, or just bad luck, every resident will run into a tough situation eventually. Being there to support your resident in times of need can solidify trust and help improve your relationship. Consider using tough times as opportunities to really make your residents’ days in unexpected ways. Whether you’re making up for your own mistake, or just trying to cheer them up and help them over a hurdle, small gestures can go a long way. Bouncing back Melissa Gillispie of JWB Real Estate Capital prides herself on going above and beyond. Her secret is simple: listen. “Who doesn't love to feel celebrated, seen, valued, appreciated, and considered? Reach out early and often,” she said. “Identify the real roadblock or concern, and do everything in your power to listen and solve it.” In one instance, she had a resident who had a large trampoline in their backyard, but the property owner’s homeowners insurance demanded that it be removed. In response, Melissa and her team got creative. “We bought the resident their very own bounce house!” Budget for resident gifts When planning gifts for your residents, it’s important to balance thoughtfulness with budget considerations. Ultimately, your individual gift budget will also depend on your company’s finances. Make sure you’re maximizing margins so that you can reward the residents who help drive your business forward. Operating on a tight budget may seem intimidating, it’s often enough to cover small but meaningful gestures, such as personalized notes, small gift cards, or eco-friendly items. We also suggest that you speak with your tax advisor or local tax attorney to review any applicable benefits or limitations for gifts with monetary value. Final thoughts Showing appreciation through thoughtful gifts can make a significant impact on resident satisfaction and retention. By adopting a Resident Benefits Package, property managers can build stronger relationships and stand out as a property management company that truly values their residents. To take your resident experience to the next level, explore Second Nature’s comprehensive resident rewards program. Resident Benefits Packages help you create a seamless, rewarding experience for your residents while supporting your property management business.

December 16, 2024

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Property Management Profitability: FAQs on Profit Margin

Property Management profitability is, of course, how much money a property management company keeps of their revenue after their expenses. But Daniel Craig, the CEO of ProfitCoach, wants PMCs to think of profitability far more expansively. “We recommend that you think about profit as the opportunity to reinvest in the business,” Daniel says. “Your business isn’t just a machine that makes a profit; it's a machine that turns profit reinvested into more profit.” In other words, profit is a virtuous cycle that, once started, can deliver increasing ROI, better value, and better business. The big question is: How do property management companies increase profitability? That’s what we connected with Daniel to talk about. We’re sharing some of Daniel’s insights on property management profits and experiences we’ve gathered over years of working with property management companies across the country. Key Learning Objectives: How property management companies increase profit How long it usually takes to become profitable Common mistakes property management companies make when trying to build profit How to optimize operating costs How to find the right residents and property investors Tools for helping to increase profitability Meet the Expert: Daniel Craig Daniel Craig is the CEO of ProfitCoach, which provides property management entrepreneurs with financial knowledge, tools, and strategies to drive greater profits. How do property management companies make money? In the most basic terms, property management companies make money through real estate investors paying for the services they offer. The more value a PMC can drive for its property investors and residents, the more revenue they generate. The profit, of course, is how much is left over after paying all your expenses. “We've worked with hundreds of residential property management companies and seen a wide variety of profitability levels,” Daniel says. ProfitCoach and NARPM started benchmarking profits with the NARPM Financial Performance Guide and Daniel says they’ve seen a significant shift in the past few years. In 2017, the average profitability in the property management space was 6%, and the top 25% of performers’ profitability was 25%. In 2021, the average profitability was 11%, and the top performers were 32%. The important nugget in these benchmarks? Seeing what’s possible. Many rental property managers may not realize they could strive for anywhere from 25% to 32% profitability. But if the target is that high, how do you get there with your business? At ProfitCoach, Daniel and his team have outlined the “Three Steps to 3X Profitability.” Average property management fees Different property management companies structure their fees in different ways, so it’s important to familiarize yourself with the different options and determine what works best for you. First, some property management companies will charge an initial setup fee. Not all companies charge setup fees, and those that do typically keep the fee fairly modest. A 2022 survey of 80 metro areas by iPropertyManagement found that the average setup fee was just $185.24. Next, leasing fees are extremely common. Management companies will typically charge a fee for advertising a unit, collecting applications, screening tenants, and signing leases. Also known as tenant placement services, this is the process of filling a unit so that you can get back to collecting rent, and it’s typically charged as a percentage of rent. According to iPropertyManagement’s survey, the average placement fee is 70.6% of one month’s rent. This is higher than a lease renewal fee, which averages $211.92, according to the survey. Finally, companies will almost always charge a standard management fee. This is the bulk of the expense for most owners, and it may be charged as a flat fee or as a percentage of the rent. The average fee, according to the survey, is 8.49% of rent, but there was a large range in responses—from 3.75% to 14%. It’s also important to be clear in your contract whether your fee is based on rent due or rent collected, so that there’s no dispute if a resident fails to pay. Some companies may also charge other fees, like inspection fees, eviction fees, termination fees, or maintenance reserves. 3 Steps to 3X profitability Here’s what Daniel has to say about the three steps to 3X your profitability. 1. Get clear PMs need to get clear on where they are, where they want to be, and what they can achieve. It’s important to know: What’s possible across the industry Trends in your local market How you compare If you're not clear on the potential, then you're not going to be clear on what you should strive towards. If you're not clear on where you are today, you're not going to be clear on whether you need to change. 2. Define your target Compare your performance to the latest NARPM numbers and benchmarks and determine your target for each of the six Do-or-Die metrics. Maybe the benchmark isn't your target, and that's fine, but you need to know what's possible. Many people go through their business lives without engaging the possibilities. They operate within certain boxes, and those boxes need to be compared to what other people are doing. Then you can adjust your perspective of what's possible and set realistic targets. Next, build a realistic financial forecast that helps you chart the course from where you are to where you want to go based on your financial goals. 3. Stay on track Now it’s time to bring the team into the conversation and basically say, “Here’s our roadmap. What specific tactics and strategies will we enact to accomplish the financial shift we need in each of these six areas of our business?” And once you have those defined, measure your progress against your goals monthly or quarterly. Engage your whole team in the conversation and engage a coach to help you define a financial performance improvement action plan and hold you accountable. How long does it take for a PMC to increase profitability? According to Daniel, businesses should give themselves between one to three years. “We've seen companies make massive changes in 12 months, and we've seen companies make massive changes across several years,” Daniel says. “But generally speaking, I would say to give yourself one to three years to make a major shift – if you want to go from an average company to a benchmark company.” How to set up a property management business for profitability Setting up your business for profitability is often about avoiding the most common mistakes other businesses make. We asked Daniel about where he sees professional property managers most often go wrong. Daniel says three major mistakes affect how profitable your business is. 1. Financial fog Daniel defines financial fog as “Not having clarity on where you are, where you want to go, or what's possible in the industry.” “One of the cool things about this industry is that it's such a unique opportunity,” Daniel says. “I don't think that many property management owners realize the extent to which they can drive profit in this industry. They often don’t have a clear sense of what the real opportunity is.” 2. Financial isolation “At ProfitCoach, we believe that finance should be done in community,” Daniel says. “We are advocates of what we call community-driven finance, which is essentially engaging with community-based benchmarks, community-based best practices, and community-based scoring.” Community-driven finance helps individual rental property managers and businesses know how they’re stacking up against top performers. It also helps generate value for everyone, where each PMC can benefit from best practices from those top performers. “One of the wonderful things about the property management space is that it truly is a community space in which there is a lot of idea sharing,” says Daniel. “We think that when you bring that idea sharing into a conversation that is also numbers-based, you can begin to see the strategies and tactics that will be most effective as indicated by the data.” “Staying in financial isolation is a huge mistake,” he says. 3. Not being mission-driven Being mission-driven is all about thinking in terms of customer lifetime value. Sure, it’s possible to get a quick win on pricing, but it may cost you in the long run if you’re not thinking about lifetime value. Rather, Daniel says, “you want to make sure that your approach to pricing, marketing, everything in your business is values- and mission-driven.” “What is your mission as it relates to your employees? What is your mission as it relates to your stakeholders? What is your mission as it relates to your owners/investors? What is your mission as it relates to your tenants/residents?” How to reduce operating costs to increase profitability So, once you’ve considered the three steps to 3X your profit and evaluated the pitfalls of profitability – what next? How do you actually optimize your operating costs and increase profitability? Daniel advises every PMC to adopt the NARPM Accounting Standards Chart of Accounts for their bookkeeping. He says the best part of using the NARPM Chart of Accounts to optimize your profit is the six “Do-or-Die” metrics. These property management KPIs are critical to business success: Profitability Direct Labor Efficiency Ratio Revenue Per Unit Unit Acquisition Costs Churn Expenses as a Percent of Revenue “It’s critical that property managers get a clear line of sight on how they stack up in terms of specific rental property management metrics that have an operational connection.” For example, an income statement will tell you how much revenue you have but won’t tell you how much revenue per unit you have. By building off your income statement with the PM-specific metrics, you’ll be able to tie it to a more operational connection. For example: From profitability to profit per unit From revenue to revenue per unit From sales and marketing spend to unit acquisition costs In this way, you can understand on a per-unit basis how your business is performing operationally. Daniel says: “The problem with the standard income statement is that it doesn't often give property management owners and entrepreneurs a lot of clarity on specific operational shifts that they need to make in your business. When you implement the NARPM Chart of Accounts, you can then implement a whole suite of metrics that does give you that operational clarity and insight to drive action and improvement in your business.” How to increase profitability in property management Increasing profitability takes time and should be done in a few different steps across your business model. These steps are the same whether you are a large or small business. Daniel breaks down the work between developing your pricing, labor, expense, and growth models. Look at your pricing model Your pricing model is a significant driver of profitability. Getting your pricing right is one of the pillars of profitability. A few things to consider as you are managing properties: How does your pricing compare to the local market in your area? Are you offering any property management services that you should charge management fees for? What are you doing beyond rent collection that you should charge a flat fee for? Are there more services you could offer and charge for their value? How is your cash flow? Daniel cautions that it can take time. “If you roll out a new pricing model to tenants and owners, it takes time to implement. You should give yourself about a year to get that fully implemented.” Look at your labor model Your labor model is the next big thing, as labor is your biggest expense and could also be a driver of inefficiency if you don’t have it right. Daniel recommends asking: Do we have all the right people in the right seats on the bus? Do we have the right mix of U.S. talent versus global talent? Do we have retention strategies in place? Do we have the right systems in place to enable each team member to be maximizing their productivity and their effectiveness in the organization? Again, these questions may lead to significant strategic shifts that you should give yourself time to implement. Look at your expense model This one is a little bit easier but just as important. You can trim expenses fairly quickly once you identify where to cut back. Are you spending too much on overhead? Could you engage property management software to help with bandwidth? In some cases, changing your expense model may take some time – for example, if you need to renegotiate a long-term lease. Look at your growth model Evaluating and updating your growth model is another opportunity for maximizing profitability. Once you’ve identified and set your targets, here are some potential next steps for growth: Finding and hiring a high-performing business development manager Get a new sales process in line Dial in your lead generation strategies so that you have enough leads for that BDM Etc. Again, this shift may take several months or years to integrate into your business processes fully. Launch a Residents Benefit Package Ultimately, one of the best ways to increase profit and influence your bottom line is by considering where you can add more value for your residents and residential property investors. Daniel recommends starting small tweaks to your Revenue Per Unit. “We have seen repeatedly that a 10% improvement to revenue per unit can easily result in a 100% increase in profit per unit. So, look for ways to get small wins on value creation, value communication, and value realization.” Daniel says one of the quickest and most practical ways to adjust Revenue Per Unit is to implement a Resident Benefits Package. (And we didn’t even put him up to it!) “A resident benefits package alone can result in that 10% bump to revenue per unit, which can result in that 100% increase to profit per unit. This profitability can result in more fuel to your freedom, more fuel to your mission, and realizing all the things you went into business for in the first place.” You can also consider adding offerings like Group Rate Internet as a way to increase growth while delivering benefits that your residents want. How to find profitable residents & investors and keep them happy Daniel says they’ve seen significant profitability gains when a company identifies the right-fit and wrong-fit clients. “We have seen significant profitability gains come about for those who are looking through the client list, finding the misfits accelerating, and then getting those misfits out of their portfolio so that they can bring in the right-fit clients who are going to be a better fit from a value proposition perspective. Getting rid of low-performing clients and then backfilling those with the right kind of clients is a great way to improve profitability.” Daniel says that this goes back to being mission-driven. By identifying your point of view on your industry, your values, etc., you can build a “why” for your company that can help you define the right new clients for your business. Daniel uses his own company as an example: “At ProfitCoach, we believe in community-driven finance. If we come into contact with a potential client who's all about financial isolation – they don't want to share their numbers with anybody, they don't want to engage in a community conversation, they don't wanna learn from the best practices in the industry – that's not a good fit for us.” So, the two questions to define are: What is your point of view? What is the value proposition that comes out of that? Based on that value proposition, there will be a certain set of criteria that will define what a right-fit client is and what a wrong-fit client is. Learn more about SecondNature’s Resident Benefits Package, which is designed to generate revenue and “Triple Win” conditions that benefit residents, investors, and property managers alike.

December 16, 2024

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December 2024 Company Spotlight

As 2024 winds down, we wanted to take a moment to share some updates from Second Nature and give you a glimpse at what’s ahead in 2025. It’s been a big year of growth and setting the stage for the next chapter, which we can’t wait to share more about in the coming months. Here’s a quick 4-minute video detailing everything. Or feel free to read the update below: What’s in the video? Team investment for customer success: Growth on product and support to ship more benefits and help serve your business. Personalized RBP Profile Pages: Showcase your benefits with personalized pages tailored to help you market your RBP to residents. Custom RBP Explainer Videos: Customize a video that matches your RBP offering and answers the question, “What is an RBP?” Collaboration Opportunities: Share your ideas and insights with our product team to help shape the future of Second Nature's offerings. The Future of Resident Experience: A glimpse into 2025 when Second Nature evolves into a Resident Experience Platform Personalized RBP Profile Pages We’ve heard your requests for more tools to help property managers market RBPs to residents, and we’re excited to introduce RBP Profile Pages! These customizable pages are designed to detail the benefits of your specific Resident Benefits Package. Easy to link or embed on your website, they provide clear expectations and highlight the value of your services. Example of an RBP Profile Page Please submit this form if you'd like us to create this marketing asset. Our team will customize your page within five business days and share it with you for edits and feedback. We can then share instructions on how to add this to your website. Custom RBP Explainer Videos In addition to RBP profile pages, we also created custom RBP explainer videos. Each video is tailored to your specific RBP offering, so you only show what you provide to your residents. Here’s an example of an RPB video that can then be trimmed and altered to match your RBP offering: To get your custom RBP explainer video, use the same form to claim your RBP Profile Page. We'll then embed your tailored video directly onto your RBP profile page and share the video embed code for you to add anywhere else on your website. Collaboration Opportunities At Second Nature, we believe the best products are built in collaboration with the people who use them daily. That’s why we’re inviting you to work directly with our product team. You’ll have the opportunity to preview new ideas, share feedback on upcoming features, and help influence the tools that make managing properties easier and more efficient. Your insights drive our innovation, and we can’t wait to create with you. Fill out this form for an opportunity to connect with our product team to help co-build the future of resident experience. The Future of Resident Experience As we move into the next year, we’re focused on closing the “experience gap” in renting—the disconnect between modern consumer expectations and outdated rental processes. Our Resident Experience Platform is designed to make renting seamless, transparent, and personalized, turning what’s often a transactional process into a positive experience for residents. By rethinking everything from onboarding to communication, we’re empowering property managers to deliver the convenience and clarity that today’s residents expect. Together, we can set new standards for the rental experience and make 2025 a breakthrough year. Here’s to What’s Next This is just the beginning. You’ll be hearing more from us in the coming months as we work on elevating the resident experience together. We’re so grateful to have you as a partner on this journey, and we can’t wait to see what we’ll accomplish together in 2025. Let’s make it a year to remember!

December 11, 2024

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Your Guide to Property Management Laws, Regulations, & Rules

Property management activities involve overseeing rental properties, ensuring they’re maintained, residents are managed, and finances are handled effectively. While a real estate license is not always necessary to manage rental properties, licensing requirements can vary significantly by state. Typically, states may require property managers to hold a real estate license or work under a licensed broker. Property managers should familiarize themselves with the specific regulations in their state to ensure compliance. Related: What is the resident benefits package? Basics of Property Management Regulations Property management regulations serve as the legal backbone for managing rental properties, outlining obligations for property managers, and protecting residents. These rules vary across states, but a few core areas apply universally: Licensing requirements To legally operate, property managers in many states must hold a real estate license or work under a licensed broker. Some states, like California and Texas, have specific regulatory bodies overseeing these activities, such as the California Department of Real Estate or the Texas Real Estate Commission. These agencies enforce compliance and provide resources for navigating the requirements. Fair housing compliance The Fair Housing Act prohibits discrimination based on race, color, religion, sex, familial status, disability, or national origin. Adherence to these anti-discriminatory laws is mandatory, affecting everything from resident screenings to marketing practices. Lease and rental agreements Legally binding lease agreements must meet state-specific guidelines. These include clear communication and terms on rent, security deposits, maintenance responsibilities, and notice requirements. States often cap security deposits and mandate how they should be handled, including timelines for their return after the lease ends. Maintenance and habitability Property managers are required to keep residential properties safe and habitable. This includes ensuring access to essentials like heating, water, and electricity, as well as addressing safety hazards such as mold or lead-based paint. Laws typically require reasonable notice to residents before entering for repairs, which again, varies by state. Resident rights and evictions Eviction procedures are governed by state law, dictating notice periods and allowable reasons for termination. For instance, in states like California, tenants must receive at least three days of notice to cure or quit before an eviction process can proceed. In other jurisdictions, notice periods and rules around "unconditional quit" orders differ. Financial responsibilities Property managers must handle resident funds, such as rent and security deposits, in accordance with local laws. Accurate record-keeping and transparent accounting practices help avoid disputes and ensure compliance with tax and financial regulations. Understanding these fundamentals, along with state-specific variations, is essential for property managers to operate lawfully and build trust between property owners and residents. What Are Some Important Property Management Rules and Regulations? Property management laws encompass various areas, ensuring the safety, rights, and responsibilities of both property managers and tenants. Key areas include: Anti-discriminatory laws The Federal Fair Housing Amendments Act (FHAA) establishes clear protections to ensure equal access to housing opportunities. This includes prohibiting practices such as refusing to rent, setting different terms, or falsely claiming availability based on a person’s race, color, religion, sex, familial status, national origin, or disability. Property managers must also ensure advertising does not suggest a preference or limitation that violates these protections. Accessibility, such as allowing reasonable modifications for residents with disabilities, is another critical aspect of compliance. Local laws often extend these protections further, making it essential to review and adhere to all relevant regulations. Lease paperwork Lease agreements are foundational to the relationship between property managers and residents. These contracts should specify key details such as rent amount, payment due dates, security deposit terms, and the length of the lease. They must also outline responsibilities for property maintenance, procedures for repairs, and rules for renewal or termination. Many states impose specific requirements, such as disclosures about lead-based paint or local ordinances. Failing to include mandatory terms or misrepresenting details can lead to legal disputes or voided agreements. To safeguard both parties, leases should be clearly written, precise, and compliant with applicable laws. Safety, maintenance, and repairs Providing a safe and habitable environment is a legal duty for property managers. Basic habitability standards include functional heating systems, access to potable water, weatherproofing, and working electrical systems. Some jurisdictions have additional requirements, such as pest control, smoke detectors, and carbon monoxide alarms. When repairs are necessary, most states require property managers to provide adequate notice before entering a resident's home. Promptly addressing maintenance issues not only avoids legal complications but also reduces resident turnover and protects the property’s long-term value. Residents, in turn, may have the right to withhold rent or arrange repairs themselves if habitability standards are not met. Financial management Managing resident funds requires strict compliance with legal standards to prevent disputes, protect financial integrity, and promote a relationship of trust. Security deposits are often regulated by state laws, which set limits on amounts, dictate how funds must be held (e.g., in separate escrow accounts), and outline timelines for their return after a lease ends. Monthly rent collection should follow a clear system, with receipts provided and payment terms documented. Accurate record-keeping is not only a best practice but also a legal requirement in many states, particularly during tax filings or legal audits. Property management laws by state Each state has specific property management laws that property managers must adhere to. For instance, in many (but not all) jurisdictions, property managers must obtain a real estate broker license to operate. These laws are typically drafted and enforced by various regulatory bodies such as the state's Department of Real Estate or similar agencies. For instance, the California Department of Real Estate is responsible for regulating real estate activities, brokers, and salespersons, including those who work in property management, while the Texas Real Estate Commission handles these responsibilities in Texas. These agencies ensure compliance with state licensing laws and often provide resources and guidelines for property managers of both residential properties and commercial properties. Below is a table linking to the respective government sites for state-specific regulations: State State Body Alabama property management laws Alabama Real Estate Commission Alaska property management laws Alaska Real Estate Commission Arizona property management laws Arizona Department of Real Estate Arkansas property management laws Arkansas Real Estate Commission California property management laws California Department of Real Estate Colorado property management laws Colorado Division of Real Estate Connecticut property management laws Connecticut Department of Consumer Protection Delaware property management laws Delaware Real Estate Commission Florida property management laws Florida Department of Business & Professional Regulation Georgia property management laws Georgia Real Estate Commission and Appraisers Board Hawaii property management laws Department of Commerce and Consumer Affairs' Real Estate Branch Illinois property management laws Illinois Department of Financial and Professional Regulation Indiana property management laws Indiana Professional Licensing Agency Iowa property management laws Iowa Department of Inspections, Appeals, & Licensing Kansas property management laws Kansas Real Estate Commission (for commercial real estate property management only) Kentucky property management laws Kentucky Real Estate Commission Louisiana property management laws Louisiana Real Estate Commission Michigan property management laws Michigan Department of Licensing and Regulatory Affairs Minnesota property management laws Minnesota Department of Commerce Mississippi property management laws Mississippi Real Estate Commission Missouri property management laws Missouri Division of Professional Registration Montana property management laws Montana Department of Labor and Industry Nebraska property management laws Nebraska Real Estate Commission Nevada property management laws Nevada Real Estate Division New Hampshire property management laws New Hampshire Real Estate Commission New Jersey property management laws New Jersey Real Estate Commission New Mexico property management laws New Mexico Real Estate Commission New York property management laws New York State Division of Licensing Services North Carolina property management laws North Carolina Real Estate Commission North Dakota property management laws North Dakota Real Estate Commission Ohio property management laws Ohio Division of Real Estate & Professional Licensing Oklahoma property management laws Oklahoma Real Estate Commission Oregon property management laws Oregon Real Estate Agency Pennsylvania property management laws Pennsylvania Real Estate Commission Rhode Island property management laws Rhode Island Department of Business Regulation South Carolina property management laws South Carolina Real Estate Commission South Dakota property management laws South Dakota Real Estate Commission Tennessee property management laws Tennessee Real Estate Commission Texas property management laws Texas Real Estate Commission Utah property management laws Utah Division of Real Estate Virginia property management laws Virginia Department of Professional and Occupational Regulation Washington property management laws Washington State Department of Licensing West Virginia property management laws West Virginia Real Estate Commission Wisconsin property management laws Wisconsin Department of Safety and Professional Services Wyoming property management laws Wyoming Real Estate Commission Note: This list excludes resources from Idaho, Maine, Maryland, Massachusetts, and Vermont. Tenant screenings Tenant screenings are a critical step in property management, involving background checks, credit checks, income verification, employment verification, rental history, and proof of ID to assess prospective tenants. This process helps ensure that potential renters are reliable and financially responsible. It's important to obtain signed consent before running credit checks, as required by the Fair Credit Reporting Act (FCRA), to comply with legal standards and protect tenant privacy. Another important guidance is provided by the Fair Housing Act, which prohibits discrimination in housing-related activities based on race, color, national origin, religion, sex, familial status, and disability, ensuring equal access to housing for all individuals. Learn more about Tenant Screening Tips for PMs Lease agreements A lease agreement is a legally binding contract between the landlord and tenant, outlining the terms of the tenancy. Key components of rental agreements include lease terms, rent amount, security deposit regulations, and common clauses such as maintenance responsibilities and lease renewal terms. Regulations governing lease agreements can vary by state, so it's essential to ensure that leases comply with local laws. For instance, state laws often contain security deposit limits, provisions for the return of unused portions, as well as a clear accounting for any deductions. Consulting with a lawyer is crucial to ensure your agreement is legally sound and reflects your specific circumstances. We’ve shared some relevant resources below: Learn more about property management agreements, featuring a free template Learn about security deposit insurance, and its pros and cons Financial management Effective financial management in property management involves establishing clear rent collection procedures and maintaining organized financial records. This includes tracking rent payments, managing tenants’ security deposits, and adhering to landlord-tenant laws to avoid legal disputes and financial penalties. Keeping detailed records can help property managers resolve issues efficiently and ensure transparency with tenants and property owners. Solutions such as property management software can streamline financial operations, automate routine tasks, and perhaps most importantly - ensure accuracy and regulatory compliance with respect to various accounting regulations and legal requirements. Evictions Evictions are a legal process to remove a tenant from a property. Common reasons for eviction from rental units include nonpayment of rent, property damage, lease violations, and criminal activity. Property managers must follow their state's rules for eviction notices, such as unconditional quit terminations and termination for lease violations, to ensure the process is lawful and fair. State laws regarding unconditional quit terminations and terminations for violation of a lease vary widely. Unconditional quit notices typically demand that tenants move out immediately without an opportunity to remedy the violation. States like Indiana and Mississippi allow landlords to issue these notices for serious or repeated violations, with Mississippi requiring 14 days to move out. For lease violations, the notice period and the opportunity for tenants to remedy the breach also differ by state. For example, in Kentucky, tenants generally have 15 days of written notice to cure a violation, but if the same violation occurs within six months, landlords can issue a 14-day unconditional quit notice. In contrast, states like Iowa and Maine require a seven-day notice period for tenants to address lease violations before eviction proceedings can begin. In California, on the other hand, tenants must be given three days or more to cure the violation before landlords can file for eviction (source). These legal nuances emphasize the importance of PMs and tenants understanding their specific state regulations to navigate eviction processes appropriately. Property maintenance and repairs Maintaining rental properties is a legal obligation for landlords, ensuring that properties are safe, habitable, and free from hazards like lead, asbestos, and mold. This includes weatherproofing, providing adequate heating and water, and ensuring electrical systems are functional. You can find out more about these issues in our Property Maintenance Guide for PMs. Landlords must also give notice to tenants before entering the property for repairs, as required by most state laws. When in doubt, consult a legal advisor to ascertain the specific laws that apply to you in your state. Tenants have the right to a habitable living environment, and failure to meet these standards can lead to legal consequences as well as issues with occupancy rates. Indeed, when landlords fail to make required repairs, tenants have several options depending on their state's laws. Tenants may withhold rent, make the necessary repairs themselves and deduct the cost from the rent, pay a reduced rent, report the issue to local building inspectors who can order repairs, or even break the lease and move out. Additionally, tenants can sue the landlord for a partial refund of past rent or for damages caused by the substandard conditions, including discomfort and emotional distress. Get our preventative maintenance checklist for property management Learn about the importance of pest control to maintain a pest-free environment Second Nature's Guidance Staying informed about state-specific regulations, maintaining organized records, and ensuring compliance with federal laws such as the Fair Housing Amendments Act is key to successful property management. On a practical level, understanding and adhering to property management laws and regulations is crucial for property managers to ensure smooth operations, maintain property value, and foster positive tenant relationships. Learn more about property management company best practices, marketing, and more in our Second Nature Community.

December 9, 2024

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The Resident’s Guide to Resident Benefits Packages

In today’s rental market, Resident Benefits Packages are becoming more popular, offering residents a range of bundled services designed to make their living experience more convenient and enjoyable. These packages aim to simplify tasks such as paying rent, handling maintenance requests, and even safeguarding personal information. However, many residents may not yet be familiar with what these packages actually include and the value they bring. In this guide, we’ll answer some of the most common questions residents have about Resident Benefit Packages, using Second Nature’s Resident Benefits Package as an example. We’ll look at: What a Resident Benefits Package is What Second Nature’s Resident Benefit Package includes How much value these services provide to residents Why residents love Second Nature’s Resident Benefits Package While Second Nature's Resident Benefits Packages offer a wide range of benefits, we’re not the only company that offers a resident benefits package, and not all packages are the same. Please note that Second Nature is committed to offering transparency about what their Resident Benefits Package includes, to ensure that residents know exactly what they’re paying for. Related: Benefits of Second Nature’s RBP™ for Residents FAQs from residents about Resident Benefits Packages When residents hear about Resident Benefits Packages, they may have questions such as “What exactly am I getting?” or “Is this worth the extra cost?” Second Nature has designed its Resident Benefits Packages to be easy to understand and packed with value, so residents can get the most out of their living experience while knowing that the details are taken care of. Let’s explore some of the top questions that residents ask about these packages and how Second Nature addresses them. What is a Resident Benefits Package? Second Nature’s Resident Benefits Package is a collection of services that aim to enhance the resident’s experience. From everyday conveniences like rent payment portals to essential protections such as liability insurance that includes coverage for your belongings, the package is designed to provide peace of mind and streamline various aspects of renting. At its core, the Resident Benefits Package makes it easier for residents to manage their home life. For example, instead of tracking down different service providers, residents get everything in one convenient bundle. This helps reduce the hassle of setting up utilities, purchasing separate insurance, and dealing with unexpected issues like maintenance requests. In addition to making life easier, the package offers key benefits that protect residents, simplify communications with your property management, and provide added value throughout the lease. What’s included in Second Nature’s Resident Benefits Package? Second Nature has curated a robust Resident Benefits Package that covers a variety of essential services for residents. The benefits meet the needs and wants of residents during their tenancy. Here’s what’s Second Nature’s package includes: Renters Insurance Program*: Covers certain damages to your belongings and legal expenses in the event of a claim brought against you that occurred on your property. This eliminates the need to shop around for separate insurance policies. HVAC filter delivery: Receiving regular air filter replacements helps maintain air quality and extend the life of the HVAC system of the home. With filters delivered directly to the resident’s door, it’s one less thing to worry about. Plus, we found that it can cut utility bills by up to 15%. Credit building services: For residents looking to improve their credit score, timely rent payments can now be reported to all three of the national credit bureaus (Experian, TransUnion, and Equifax), helping to boost their credit over time. Identity protection: In today’s digital age, identity theft is a growing concern. Second Nature includes up to $1 million in identity protection services through Aura, offering another layer of security for residents listed on the lease who are 18+. This also includes dark web monitoring, fraud alerts, and much more. Move-in concierge: Calling multiple providers to set up utilities or researching online for hours is a thing of the past. With this service built into our package, that means less time and less stress in setting up utilities so residents can cross off one more thing on their move-in checklist. On-demand pest control: Second Nature’s on-demand pest control stops the pest issue in its tracks, while also immediately addressing any new issues that might come up. Residents can enjoy a clean, livable space without worrying about rodents and critters. (Note: These services may not be available in all areas.) Resident rewards program: In addition to welcome gifts when they sign their lease agreement, residents could receive additional perks when they submit on-time rental payments. (Benefits are customizable and incentives may vary across different property managers.) Group Rate Internet: Second Nature has partnered with major internet service providers to offer group rate pricing on gigabit-speed internet for single-family rental homes. Residents get high-speed service at a reduced rate, all managed by Second Nature. (Note: Not all residences are eligible for Group Rate Internet.) Additional complimentary services at no cost to you when enrolled in a Second Nature Resident Benefit Package: 24/7 maintenance request hotline: Emergencies don’t always happen during business hours. Second Nature provides around-the-clock access to maintenance support, which helps ensure residents are never left stranded in the event of a problem. Online rent payment portal: Paying rent is simpler than ever with an online portal that offers auto-pay options and a transparent payment history, as well as notification reminders when rent is due. No more writing checks and hand-delivering them to your property manager or worrying about late fees. For complete transparency, Second Nature has shared the full list of services here. How much do residents save with these services? While the exact pricing of Resident Benefits Packages can vary from one property management company to another, bundling these services typically results in savings. By providing essential services like filter delivery, pest control, and identity protection all in one package, residents avoid the higher costs of purchasing each service individually. For instance, enrolling in on-demand pest control alone could cost more than $40 or more per month (depending on services), and identity theft protection might add another $10 to $15 per month. Group Rate Internet can also add significant savings. When you start adding in the convenience of an online rent portal and 24/7 maintenance, the total value of these services can easily exceed what’s bundled in a typical resident benefits package. All told, residents typically save by opting into a resident benefits package rather than sourcing these services independently. While pricing for resident benefits packages will vary by company, the savings that are baked in can be significant. For a deeper look at potential savings with Second Nature’s RBP™, check out the details. Is the Resident Benefits Package part of the lease agreement? Yes, the Resident Benefits Package offered by Second Nature is included as part of the lease agreement, making it a seamless part of your rental experience. This is a best practice, designed to ensure that residents are aware that there are no hidden fees or surprise additions after the lease has been signed. By including the details about the Resident Benefits Package in the lease, property managers provide transparency about what services residents will receive and the associated costs. This also helps prevent confusion about whether services are optional or required, as all the terms are laid out from the start. For properties that introduce the Resident Benefits Package during a lease renewal, all details will be clearly communicated to residents before the new lease is signed. This ensures that there are no surprises, and residents can review the benefits and ask any clarifying questions to their property manager before the lease renewal takes place. Is Second Nature’s Resident Benefits Package compliant? When it comes to compliance, Second Nature takes great care in ensuring that all aspects of its Resident Benefits Package meet the highest standards. In doing so, Second Nature provides guidance to property managers to make sure they have the relevant information necessary to ensure the services offered comply with local and federal regulations. This focus on compliance is key to ensuring that both property managers and residents can enjoy the benefits of the package without worrying about legal concerns. Why residents love Second Nature’s Resident Benefits Package The feedback from residents who use Second Nature’s RBP™ is overwhelmingly positive. By bundling key services into one simple package, residents don’t have to spend time worrying about finding the best liability insurance or wondering how to get a maintenance issue fixed at 2 a.m. Second Nature goes above and beyond to ensure that residents have the best experience possible in their homes. Here are a few examples of how Second Nature’s services make life easier for residents: Emergency repairs made easy: Imagine coming home from work to find that your apartment’s air conditioning has stopped working in the middle of summer. With a 24/7 maintenance hotline, help is just a phone call away, no matter the time of day. Automatic rent payments: For busy professionals or students, keeping track of monthly rent can be tricky. With the online rent portal, residents can set up auto-pay, avoiding the hassle of late payments and tracking down checks. Credit score boost: For residents hoping to buy a home in the future, credit-building services can be a huge advantage. By reporting timely rent payments, Second Nature helps residents improve their credit over time, potentially helping them qualify for mortgages and other loans down the line. Extra services to support residents: Enrolling in the renters insurance program helps to protect your personal belongings, on-demand pest control ensures you don’t have to worry about rodents or bugs in or around your home, move-in support saves time setting up utilities, and identity protection will give you peace of mind as you move into your new home. To read more about why residents love Second Nature, check out their solutions. Final thoughts Resident Benefits Packages, like the one offered by Second Nature, provide a convenient and valuable solution for residents looking to simplify their lives. By having essential services bundled into one package, residents can save time and money, while enjoying the peace of mind that comes with knowing they’re covered for everyday issues. If you’re a resident and want to learn more about how Second Nature’s Resident Benefits Package can benefit you, contact our team today! * Renters Insurance Program is provided by Second Nature Insurance Services, LLC (NPN 20224621). Any policies placed under this program are placed by the preferred insurance partner-broker of Second Nature’s Insurance Services, LLC. Coverage subject to policy inclusions.

December 6, 2024

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10 Property Management Goals to Set for the Year (with examples)

Goal-setting is critical to planning for a changing industry. Before we dive into specific property management goals we recommend for the coming year, let's take a minute to define how to approach goal setting in property management. How to set goals and objectives for your property management company Think long-term Dr. Stephen Covey’s 2nd habit is “Begin with The End in Mind,” the principles of which should be applied to your property management strategies as a single-family rental property manager. This is especially true now as we enter 2024 with an industry that continues to evolve. Goal-setting should start with an understanding of where you want to be in several years, not just at the end of this year. It forces you to consider industry trends that you may not feel the impact of immediately but will definitely affect the viability of your business in the future. Short-term goals should ladder up to long-term goals. They should serve as pieces to the long-term puzzle. It’s important not to lose sight of what that puzzle is supposed to look like when it’s finished. Identify opportunities to improve resident experience and retention The most important property management industry trend continues to be the evolution of demand from a simple service to a more complex experience. Thus, you should be identifying opportunities to improve resident experience and setting goals based on how you want to achieve said improvement. What can you do this coming year to improve the living experience for your residents? This could include new programs to be developed and implemented, new roles on the team specifically focused on experience, or a number of things, depending on your answer. The best way to identify opportunities is to listen to your residents. It sounds simple, but they’ll tell you what they perceive as a great living experience, and that becomes data you can act on. Consider a list of services you think a resident may like, some of which could be rental rewards, home-buying assistance, credit reporting, holiday gift certificates to local businesses, etc. You can survey your residents on these ideas pretty easily, or you can simply roll them out and gauge resident response. Identify opportunities to improve investor experience We talk a lot about the triple win here at Second Nature. The third branch of the triple win is a win for your clients. Typically, this is laddered up to by a resident win, which minimizes vacancy to the benefit of the client. There is more you can do, though, to really deliver something irreplaceable to your clients. A popular takeaway from PMLX was the value of communication with clients. Scheduling quarterly meetings with your clients has proven valuable to the companies that pioneered this concept. Launching these quickly became a popular short-term 2024 goal for many attendees. Clients leave with an extensive understanding of what is happening with their investments. That’s an additional win for them and for you, as investors are not only more involved, but they tend to appreciate the time you take to communicate with them and can gain deeper insight into the full value that your company provides. Plan sustainable growth initiatives Like thinking long-term, creating sustainable growth initiatives involves expanding your business in a manner that's not only profitable but also manageable and responsible. This means considering how growth will impact all facets of your business, from your operational capacity to the quality of service you provide to residents and investors. Start by analyzing market trends and potential areas for expansion, whether it's by increasing the number of properties you manage or venturing into new geographical regions. Balance ambition with practicality. Ensure that any expansion doesn't stretch your resources too thin or compromise the high standards of service that have contributed to your current success. Automate and streamline operations to build efficiency James Clear says in his book Atomic Habits, "You don't rise to the level of your goals, you fall to the level of your systems." In some ways, setting goals is secondary to ensuring you have the right processes and procedures in place. Mark Cunningham shares that he has a KPI to achieve 6 percent quarter-over-quarter net income growth. It's not about setting new goals for a number of new doors each year; it's about focusing every quarter on that consistency. If you aren't confident in your processes yet, that should be an area to focus on when you are goal-setting. For example: Identify areas where manual processes are slowing down operations. This could be anything from rent collection and lease renewals to maintenance requests and property inspections. Or, look into streamlining communication channels. Efficient communication tools not only facilitate better interaction among team members but also improve the way you engage with residents and investors. Data management and reporting can also be significantly enhanced through automation. Think about who you want in the room with you Who are the most strategic thinkers in your company? What personalities will be at the table? Set the rules of engagement for the meeting to help your team be successful when you are actually setting goals. You should also decide your approach: Do you want to be deeply collaborative and get everyone's opinions or if you want to hear from your team and then make the executive decisions on your own. (Our recommendation!) Goal-setting isn't a time to give everyone an equal voice. Know your "who" and make sure they're the ones in the room. Ask: What should we stop doing? For you as the leader of your company, ask, "What should I stop doing and delegate away?" But, just as importantly, you should also be asking a broader question: "What does my company need to stop focusing on?" This may be about refocusing your niche, the types of properties you want to handle, the clients you want to focus on, etc. What are the things you're doing that don't qualify as "absolutely killing it." It might be time to cut those out. If you're contemplating stopping, you probably should. Follow the opportunity Another way of saying this is to pay attention to the market. For example, five years ago, focusing on accidental owners would have been a bad strategy because the market was being flooded with investors. But, going into 2024, the market has changed. Now accidental landlords are the majority of new opportunities. Homeowners are hesitant to sell because of high interest rates and have found themselves needing property management for a property they hadn't intend to keep. In short, be ready to pivot to follow the biggest market opportunities. Get your KPIs organized before you set goals It becomes a very expensive goal-setting meeting if you don't have all your metrics and year-in-review numbers prepared beforehand. Have your SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) ready, as well. Review all of your numbers before you sit down to set your next year's goals. It's critical to measure against last year's goals, see where you succeeded, where you hit below the mark, and how that might affect your coming year. Review your financials, dashboards, KPIs, etc., before setting goals. This could include anything from average management fee, to number of google reviews, open work orders, average rental rate, profit margin, number of employees, etc. This pre-review will help you assess where you actually are and where you want to go. Are you ready to take bigger risks? Do you need to double-down on some goals from last year? Your team should come to a goal-setting meeting prepared with all of these numbers ahead of time so you don't waste time. Be specific Your goals should have specificity or they set you up for failure. Get really clear on what is possible and what you really want to accomplish. Be clear and concise about your goals and what would constitute success. That may mean setting different levels that you target: things that must be accomplished, things that are a stretch, etc. If anyone on your team could read one of their goals and ask, "What does that mean?" you need to keep digging into more specificity. Example of property management goals Here are some examples of smart goals to set for a property management company. For your company, you should find ways to make these extremely specific and time-bound in a way that make sense for your team, your niche, and your focus. Our examples are more general so they apply to most SFR property managers who are in our audience. But remember that these can be made more specific for your own business. 1. Grow property portfolios Increasing your portfolio signifies not just an increase in business scale but also an enhancement of market presence and revenue potential. To achieve this, focus on networking with property investors, leveraging marketing strategies to attract new clients, and providing exceptional service to encourage word-of-mouth referrals. It’s also essential to identify emerging markets or areas with high rental demand. Careful market analysis and strategic partnerships can be instrumental in uncovering opportunities for portfolio growth, ensuring that each new addition aligns with your company’s strengths and long-term vision. 2. Increase resident satisfaction KPIs Great property management success is all about improving resident experience and satisfaction. Focus on understanding and addressing the needs and concerns of your residents. Implement regular feedback mechanisms like surveys to gather insights into their living experience. Prioritize swift and effective responses to maintenance requests, and explore ways to add valuable services that residents want, like those offered in a Resident Benefits Package. Training your staff in customer service excellence can also play a significant role. 3. Improve ROI To enhance ROI, focus on optimizing rental rates without compromising occupancy rates. Conduct market research to ensure your pricing is competitive yet profitable. Explore ways to reduce operational costs, such as negotiating better deals with vendors, implementing energy-saving measures in properties, or implementing new services that can increase your ancillary revenue. Regularly reviewing financial performance and identifying areas for cost savings or revenue enhancement can lead to significant improvements in your overall ROI. 4. Increase occupancy rates It's just math: Higher occupancy directly correlates to more stable revenue streams. To achieve this, focus on making your properties more attractive to potential tenants. This can involve the obvious like ensuring your properties are well maintained. But it also means providing services that residents are excited to pay for and stay for. Boosting occupancy rates and increasing retention are two major benefits of a resident benefits package. Understanding the needs and preferences of your target market is crucial. Tailor your services and communication to meet these needs, thereby making your properties more appealing. 5. Improve maintenance quality and speed Implementing a streamlined process and/or software for receiving and responding to maintenance requests can significantly reduce response times. Consider adopting technology solutions like maintenance management software to track, prioritize, and dispatch maintenance tasks promptly. Regularly sourcing feedback from residents post-maintenance can also help in continually assessing and improving the quality of your services. High-quality, quick maintenance responses not only keep residents happy but also contribute to the long-term upkeep of your property. 6. Enhance digital marketing efforts A strong online presence can significantly increase your property management company's visibility and appeal. Focus on building a user-friendly website, optimizing it for search engines (SEO) to improve your ranking in search results. Use social media platforms to engage with your audience, showcase properties, and share valuable content. Consider leveraging email marketing to keep clients and residents informed and engaged. Additionally, exploring online advertising options such as Google Ads or social media ads can help target potential clients more effectively. 7. Improve client satisfaction KPIs Enhancing the satisfaction levels of your clients – the property owners – is as crucial as focusing on tenant happiness. To improve client satisfaction KPIs, start with transparent and regular communication. Keep your clients updated with comprehensive reports on their property's status, including occupancy rates, financial performance, and any maintenance issues. Implement client feedback mechanisms to understand their expectations and areas of concern. Tailor your services to meet these specific needs, whether it’s providing more detailed financial analysis, offering advice on property upgrades, or improving tenant screening processes. Demonstrating proactive problem-solving and value addition can significantly boost your clients' trust and satisfaction. Remember, a satisfied client is more likely to retain your services and refer you to others, enhancing your business growth. 8. Adopt automation Property management automation can streamline various aspects of your operations, from tenant screening and lease management to rent collection and maintenance scheduling. Investing in property management software can significantly reduce manual tasks, minimize errors, and provide real-time data analysis. This not only frees up time for your team to focus on more complex tasks but also improves the overall tenant and client experience. Automated communication tools can keep tenants and property owners updated, while automated reporting can provide insightful analytics for better decision-making. Embracing automation is about staying ahead in a competitive market and offering a more responsive, efficient service. 9. Increase convenience Convenience has become one of the most significant deciding factors for clients and residents. Start by evaluating your current processes from their perspective – how easy is it to pay rent, report maintenance issues, or get updates about their property? Implementing online platforms for rent payments and maintenance requests can greatly enhance convenience for tenants. For property owners, providing easy access to property performance reports and financial statements through a client portal can make a significant difference. Additionally, consider adopting mobile solutions that allow both tenants and owners to access services and information on-the-go. The goal is to make every interaction as seamless and hassle-free as possible. A little twist? Implementing a Resident Benefits Package can make life more convenient for them and for your team. We're all about making things easier. You can learn more about how we do it on our benefits page. 10. Reduce rent arrears To achieve this, start by implementing proactive rent collection strategies. Set up automated reminders for rent payments and offer multiple, convenient payment options to make the process as easy as possible for residents. Implementing a strict but fair rent collection policy can also help in minimizing delays. Educating residents about the importance of timely rent payments and the potential consequences of falling behind can foster a sense of responsibility. In cases where residents are consistently late, consider personalized communication to understand their situation and, if possible, work out a payment plan. A great strategy to hit this goal is to increase incentives for on-time payments. Credit reporting is a great way to incentivize on-time monthly rent, as are resident rewards. The importance of goal setting in property management Setting clear and strategic goals is essential for steering your company towards success and growth. Goals act as a roadmap, guiding your decisions and actions, ensuring that every effort is aligned with your broader vision. Effective goal setting in property management also allows for measurable progress. It enables property managers to track performance against specific benchmarks, making it easier to identify areas that need improvement or adjustment. This process of continual assessment and adaptation is key in an industry that is constantly influenced by market trends, regulatory changes, and evolving tenant expectations. Moreover, well-defined goals can motivate and unite your team. They provide a sense of direction and purpose, fostering a proactive work culture where every team member understands their role in achieving the company's objectives. This collective effort not only drives the company forward but also contributes to a more rewarding and engaging work environment. In essence, goal setting is not just about envisioning a successful future for your property management business; it's about creating a structured approach to make that vision a reality. It's a vital tool for navigating the complexities of the industry and securing a competitive edge in the market.

December 2, 2024

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11 Best Property Maintenance Software

In the property management world, tech solutions are abundant. There are so many different players on the market, and sometimes, that wealth can make it tough to navigate. When it comes to property maintenance software, single-family property managers have to first identify how they approach maintenance and, second, what tech solution will best support their team, workflows, and operational structure. It’s a daunting task! So, today, we’re going to look at some of the best approaches you can take and the best software available to you for property maintenance. Property maintenance software solutions come in two basic categories: Platform Solutions: Property management operations platforms or accounting software that include maintenance support, among other full-service property management solutions. Dedicated Point Solutions: Property management software designed to tackle one specific problem – in this case, maintenance. We’ll explore solutions that fit into both of these categories and how to weigh the pros and cons of each. Related: Best Single Family Property Management Software 1. SecondNature Of course… we had to mention ourselves. (Our house, our rules!) While Second Nature isn’t necessarily a property maintenance software, it is a leading resident experience property management solution. We reduce maintenance needs through preventive maintenance strategies and take work off the property manager’s plate. For instance, our filter replacement service ensures that residents get convenient service, lower energy costs, and higher air quality. The result is that property managers and investors see a reduction in HVAC maintenance requests and costs. Other maintenance features included in our solution include on-demand pest control and utility setup. 2. Property Meld Property Meld is a leader in the small to medium-sized property management business space. It’s a maintenance point solution to optimize work order management, response time tracking, vendor and resident communication, scheduling, and analytics. Its built-in “Owner Hub” helps provide the right amount of transparency to your clients. Perhaps the best feature is the Insights Tool, which helps you track metrics like the median speed of repair, average resident satisfaction, vendor health score, total spend per unit, and more. Pros: The user interface is intuitive for PMs and residents Opening repair tickets take just minutes Tracking repairs and resident satisfaction is easy and transparent Powerful analytics help you see your success at a glance Cons: If you’re looking for a full-service operations platform, Meld won’t be the solution for you. 3. Rentvine Rentvine is a full-service property management platform that focuses on communication support between PMCs, residents, and clients. The platform streamlines application and tenant screening, inventory management, accounting with a manager’s ledger and client money tracked separately, marketing, leasing, and – of course – maintenance. The app tracks all your work orders from start to finish and supports communication between residents, property managers, and vendors throughout. Pros: Easy to use with excellent customer support Owner and tenant portals work seamlessly Excellent accounting process Cons: Has fewer features than some competitors but is continuously improving 4. Lula Lula is another dedicated point solution focused on property maintenance technology. They leverage a network of vetted contractors to make finding the best technicians easy. Lula’s team becomes an outsourced extension of your property management company, troubleshooting, coordinating, and managing maintenance tasks. They operate in over 30 markets in the US and boast results like 80% one-trip resolutions and a net promoter score of 80. Pros: They do the work to vet and provide the vendors You can bring your own vendors in if you want to Integrates with any software Customizable plans for self-service or full-service Cons: May not yet be available in your market Only focuses on maintenance 5. Buildium Buildium is a popular all-in-one solutions platform and property accounting software with excellent management features. The web-based solution and app provide support in accounting and invoicing, communications, leasing, and maintenance activities. Their portals provide tenant support, maintenance management, and templates to make every part of property management easier. Pros: A near-complete solution for property management Excellent tenant and owner portals and communication hubs Analytics and tracking to streamline operations and results A 14-day trial helps you evaluate if it’s a fit Customizable packages Cons: Lack of transparency for owners Expensive if all you need is a maintenance point solution rather than a full platform. 6. Mezo Mezo is an AI-driven, cloud-based property maintenance management software. The aim of the app is to take work off your plate by automating maintenance ticket responses, resolutions, and insights. Mezo takes requests directly from residents and uses conversational AI to ask questions in real-time, identify problems, and diagnose the issue. It will support residents in resolving the issue on their own or integrate with your management system to get work orders quickly sent. Pros: Residents can get help immediately when they have issues and potentially resolve themselves with Mezo’s chatbot support Technicians arrive with Mezo’s analysis and diagnosis, allowing them to come prepared and resolve issues quicker Integrates with most PMS options Cons: Doesn’t integrate with all other PM tech solutions As a newer technology, still has some bugs and gaps 7. Lessen Lessen, formerly SMS Assist, is an enterprise-level solution providing tech-powered renovations and maintenance at scale. It’s an end-to-end platform for maintenance operations with a vetted vendor network and provides everything you need for maintenance or turning projects. PMs simply use the app to request projects, deploy Lessen network pros, track progress and checklists, check for quality control remotely, and process payments – all in one slick tech solution. Pros: Excellent, seamless tech that’s easy to use and deploy A fully vetted vendor network takes that work off your plate An established brand that has worked out the “kinks” in service Cons: More ideal for more enterprise companies who need scale (rather than smaller SFR PMs) 8. AppFolio AppFolio is a full-service rental property management platform solution that is very popular with single-family property management companies. The web-based app streamlines and automates every stage of real estate management, including management, training, marketing and leasing, maintenance, accounting, reporting, and communications. For maintenance, AppFolio includes workflow automation, work order management tools, online maintenance requests, mobile inspections, and more. Pros: Easy-to-use technology with great UX Fully mobile and automated Customizable dashboards and advanced reporting Cons: An expensive platform if all you need is a maintenance point solution Customer service is not always available for maintenance line 9. DoorLoop DoorLoop is another full-service property management software that provides all the features a property manager needs to manage their portfolio. You can handle accounting, maintenance, listings, marketing, client success, and more, all from the app. For property maintenance, their software helps manage work orders, handle vendor payments, and track the process from start to finish. Pros: Intuitive, streamlined UX that’s user-friendly Great customer service Excellent integrations Cons: Ideal for landlords and smaller property management companies Expensive if all you need is a maintenance point solution rather than a full platform Some functionalities are still being developed 10. FTMaintenance FTMaintenance is a computerized maintenance management system (CMMS) point solution platform designed for maintenance managers, executives, and technicians. While it’s not specifically designed for property management, the software streamlines work order management, vendor payments, tracking, and more. For some PMs, this could be the added solution they need to focus simply on complex maintenance jobs. Pros: Robust work order tracking Excellent mobile app for vendors and maintenance managers Analytics and organization Cons: Not designed specifically for residential property managers, focused more on commercial properties Complex if you are not tech-savvy 11. Latchel Latchel is a property maintenance point solution that helps automate maintenance communication, scheduling, work orders, etc. Your residents message the Latchel team directly on the Latchel platform and get an immediate response to begin troubleshooting the issue. If the problem requires a maintenance visit, the Latchel team will deploy that and follow up with the resident. Pros: Fast response times Easy to use for maintenance communication Cons: Many reviews say the issues didn't get fixed correctly App is great for communication but sometimes requires the PM to step in and manage Key Features of the Best Property Maintenance Software When choosing property maintenance software, consider the key features below to make sure you’re selecting the most efficient and effective solution for you. Tenant maintenance requests The software should allow tenants to easily submit maintenance requests through a user-friendly portal or mobile app. This feature ensures that all maintenance issues are reported promptly and tracked efficiently. Tenant communication Effective communication with tenants is crucial for maintaining good relationships and ensuring that any issues that come up are resolved quickly. Look for software that offers built-in messaging systems, automated notifications, and communication logs. Vendor management and payments Managing vendors and processing payments can be time-consuming. The best property maintenance software should streamline vendor management by including vetting, scheduling, and paying contractors. This helps ensure that maintenance tasks are completed by reliable professionals in a timely manner. Work order management and history A robust work order management system is essential for tracking the progress of maintenance tasks. The software should allow you to create, assign, and monitor work orders, as well as maintain a detailed history of all maintenance activities. This is particularly helpful for identifying recurring issues and planning preventive maintenance. Mobile app and cloud features With the increasing reliance on mobile devices, having an iOS and Android mobile app for property maintenance software is a must. The app should offer the same functionality as the web-based platform, allowing property managers to manage tasks on the go. Cloud-based features ensure that all data is accessible from anywhere, providing flexibility and real-time updates. Key Benefits of Property Maintenance Software Property maintenance software offers several advantages that streamline day-to-day operations and enhance efficiency. Most notably, it helps simplify communication. A user-friendly platform helps tenants, property managers, and vendors stay connected. Clear communication reduces misunderstandings, speeds up response times, and keeps everyone updated on the latest information. Other benefits include: Improved accountability and transparency: Maintenance software logs every task, from request submissions to work order completions, making it easy to track the progress of maintenance requests. This visibility assures that nothing falls through the cracks, which helps foster trust and accountability. Time savings for routine tasks: Features such as work order assignments, vendor payments, and updates minimize the need for interventions and constant follow-ups, freeing up time for property managers to focus on more value-added tasks. Improved resident satisfaction: Prompt responses to maintenance requests are key to resident satisfaction. When residents can easily report any new issue and track its progress, they feel more valued, which helps improve retention rates. Better planning and cost management: With the ability to track recurring issues and repairs using maintenance software, property managers can plan preventive actions that save time and money in the long run. How We Selected Best Property Management Maintenance Software Our team has extensive experience in both property management and technology, allowing us to accurately assess how any given software aligns with the needs of property managers. Our SMEs have taken a deep dive to evaluate each solution based on practical usability, reliability, and specific features that benefit scattered site and single-family property management operations. By focusing on functional capabilities as well as user feedback, we’ve curated a list that genuinely enhances efficiency and simplifies maintenance operations. The bottom line: This isn’t just a random list. Each recommendation we’ve discussed has been reviewed for confirmation by our team and SMEs so that it meets high industry standards.

December 2, 2024

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10 Marketing Ideas to Unlock Growth for Your Property Management Company

When it comes to marketing ideas for property management business, the landscape has changed so much in the past few years. Digital marketing has phased out old practices and brought dynamic, exciting tools along with unique challenges. Effective Property management marketing will leverage those digital tools, while not losing the human touch that makes resident experience and engagement so effective. A property management marketing plan should include digital strategies, multiple channels, and goals for increasing your number of doors. Here we dive into the process of constructing a good marketing strategy for your property management company with 10 of the top marketing ideas for property management. We’re joined by Rodney Hays of Geekly Media (formerly RentBridge), who has spent a lot of time conducting marketing specifically for property managers, as well as Second Nature marketing professionals Carol Housel and Brandy Hammond. How to Market a Property Management Company We have 10 property management marketing ideas that leaders in the industry recommend for growing your PMC. They're cost-effective and shown to have high return on investment. 1. Create and Follow a Content Marketing Plan A big part of digital marketing for property management is content marketing, which is defined as media creation (videos, articles, social media) designed to inform rather than to persuade. A good content marketing strategy gives property management companies access to potential clients in the places they are asking questions. This includes places like Facebook, LinkedIn, and Google, where investors and potential investors consume real estate investment content that you can provide. The goal of content marketing is to grow your target audience and give them useful information that both adds value to their business and establishes your company as a subject-matter expert. So, what kind of content is useful in property management marketing? Here’s what Rodney Hays has to say: “[Real estate investors] are going to ask questions about lease agreements and tenant screening. They’re going to ask questions about evictions, emotional support animals, those types of questions are always going to come up.” 2. Invest in SEO to build Organic Traffic Search engine optimization (SEO) is the process of optimizing a website to send signals to search engines and their users to gain organic visibility. It helps extend your online presence. Search engines, mainly Google, are the number one place where people begin their search for information. Content hosted on your website that addresses the most common questions your target audience is asking can position you well on the search engine results page (SERP), leading to increased website traffic. So how do you find out what topics to build content around? SEO programs, such as Semrush and Ahrefs, have an incredible database of keywords and common search terms, along with insights for those terms such as how much competition exists in the rankings, how much search volume there is, and how often searches result in a click. You can also use the “people also ask” tab in the actual SERP to see what common questions are being asked. Then it’s just a matter of addressing the questions in a useful way to start increasing traffic to your website. A big part of SEO is identifying what your potential new clients are interested in. A good content marketing plan follows that up with useful content that addresses the questions and leverages the specific keywords associated with them. Useful is the keyword here. Google is smart, and the analysis it conducts on webpages is extensive, so it will know if you’re just writing some slop and jamming keywords into it. 3. Build a Content Distribution Strategy Okay, so now you’ve developed content that meets SEO requirements and hits on topics that bring value to your potential customer. What’s next? Now you need to build a high-quality content distribution strategy. In others words, figure out how to get your messaging in front of your target audience. A distribution strategy involves assessing where your primary audience is on a daily basis. You can likely reach them on social media platforms, email, direct mail, podcasts, regional conferences, local listings, and more. Identify what pieces of content best match each platform. For example, a longer form piece should be linked via social media with a catchy blurb or infographics to hook your readers. You can plan regular newsletters or other email campaigns or FAQs to leverage content, as well. A few of the best ideas for distributing your content: Share on social media: Twitter, Facebook, Instagram, LinkedIn, TikTok Link to and reach out to real estate professionals and bloggers Ask to share gust posts on sites related to property management or real estate 4. Build an Email List Email marketing is one of the most effective ways to reach your target audience, drive new leads, and nurture existing ones. You can use email marketing tactics to increase sales and your bottom line. But it’s not always easy to nail email marketing. According to MailChimp, the average open rate for property management emails is just under 20% and the click-through rate is less than 2%. Not great, we know. That’s why building the right email list can make all the difference. Creating a targeted email list requires a good amount of research, knowledge of your target market, and email marketing tools to help you get there. Digital marketing products like Hubspot, ZoomInfo, and Klaviyo can help you get there. 5. Host Networking Events For Brand Awareness Of course, digital isn’t everything – in-person events and community-building strategies work, especially in something as hands-on as property management. If you have the resources, hosting events can boost your brand awareness and company reputation in your area. Because property management is so regional – and creating a niche in the market is key to success – these highly targeted events work exceptionally well in the property management industry. A referral program is a great way to go about this, as long as its within legal regulations. 6. Invest in Online Advertisement Paid marketing efforts for property managers are more about visibility and awareness. They’re high-funnel and useful if you have a budget for them. Hays notes that Geekly clients opt for Facebook, LinkedIn, and sometimes Twitter as targeted social channels. Facebook and LinkedIn have far and away the most active property management discussions and, in addition to paid search, are where you can see the most value for your investment. When it comes to old- school paid marketing efforts, Facebook ads are among the best ways to advertise property management services. Ads on Facebook are pretty easy to run and include useful features for property managers such as geotargeting. “Facebook ads are a great gateway into paid ads, since Google ads typically require a much higher budget to get similar performance. Facebook in the past has had a lower cost per click, so you’re getting higher performance from it for less lift and less spend, which is why I recommend it as a really good starting point,” says Brandy Hammond, B2B Marketing Specialist at Second Nature. Certain ad platforms, including Facebook, also offer geotargeting and audience mirroring, which are useful to property managers who need to target specific audiences in specific regional areas. “One thing I do love about Facebook ads, like with any other kind of paid ads, is that you can geotarget. Especially with property management and real estate, it makes sense that you’re going to target a specific area because, depending on the scale of your PMC, you probably don’t have national properties,” continued Hammond. 7. Build and Execute a Social Media Marketing Strategy Your social media strategy should include connecting with and tagging important accounts in your area and industry, and building cross-links and cross-posts with other accounts that might have an audience with your target market. For every piece of content or event you plan, you need to map out how you will share it on social media. Rodney Hays of Geekly has opened a lot of industry news pages for clients and recommends sharing them across social channels whenever they’re updated. “Our customers will put their industry news page out there; they'll pull in like 15 or 16 new articles every month. And then, out of those 15 or 16, we will take eight of those and put a third-party link in it and send those out on social media as well. And I think that's done pretty well in bringing in some different traffic that you know, it's just another resource for the people that might be visiting your page,” says Hays. 8. Manage Your Online Reputation Your online reputation is made up of all the touchpoints anyone could have with your brand online. This includes Facebook, LinkedIn, Instagram, Twitter, Google Reviews, Yelp, and more. One of the biggest threats to online reputation is reviews. Your marketing plan should include regular maintenance and attention to your online reviews. How are people talking about you online in your comments section, Google Reviews, and Yelp Reviews? If you see any negative comments that have constructive feedback, make sure you reach out to the person and find out how you can improve or make it right. Respond to the review or comment publicly with a polite and professional tone. You can’t make everyone happy, but the way you deal with negative feedback goes a long way to protecting your online reputation. 9. Invest in Thought Leadership Content (Podcasts, Videos, Blogs) Many property managers maintain a constant stream of content through a website blog. Real-Time Leasing’s website has extensive content written by their CEO, Deb Newell, who is also a property management consultant. Others communicate useful content with podcasts, such as AHI Properties and Evernest (link to Andrew’s episode), both of which appeared on the Triple Win Property Management podcast. “Good content seizes opportunities you’ve identified through SEO or other forms of communications and delivers actual value to the readers. A holistic strategy covers both of those parts, and you’ll fail to realize the potential of your marketing efforts if you skip one of them,” says Second Nature Marketing Services Manager Carol Housel. A popular content curation strategy used by Geekly Media is the industry news page, an example of which can be found here. This is curated content. It’s not written by the property management company, but rather compiled from sources and shared all in one place, which still creates a lot of value and a reason for real estate investors to be on your website. 10. Build and Maintain Your Presence in Local Business Listings A point will come where a large portion of your new doors will come from referrals. People don’t usually get into real estate without talking to people, so word gets around. Welch-Randall, a property management firm based out of Ogden, Utah, attributes 92% of its new doors to referrals. This is the mark of a business with established authority reaping the benefits of the work it put in to create that trust. A big part of ensuring that you get those referrals is keeping a presence in local business listings. Make sure that people can easily find you, even if they hear of you through word-of-mouth. Stay top-of-mind with partners you’ve worked with, and keep your listings up to date. This is particularly useful in property management, where most of our work stays within specific local and regional areas. Final Thoughts Becoming an industry-leading property management company is about more than just the number of doors you manage. There is a saying in marketing that perception equals reality. If you want potential clients to perceive your company as an industry leader, you have to give them a reason to believe that you are. That’s the point of a marketing strategy that seeks to establish the company as an authority in the space. This is the end state of everything discussed above. This is the fruits of your labor. Real estate investors, especially new ones, above all else, are looking for expertise in the real estate field to guide them through the ownership of their assets. By achieving visibility and brand awareness via paid channels and SEO, and following that up with useful content that answers the questions most important to investors, you’re establishing your company as a trustworthy and knowledgeable option for investors. By answering the questions they have, you’re also driving them closer to a decision. And when you’ve provided them the answers, guess which property management company they’re most likely to want to work with?.

December 2, 2024

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Resident Retention: Ideas, Tips, and Insights from Property Management Pros

Resident retention ideas help reduce turnover in leased properties, a critical key performance indicator (KPI) every property manager pays attention to. But the property managers we’ve consulted have told us something interesting. Merely rolling out the traditional “resident retention” playbook no longer cuts it..Why? These legacy strategies are too reactive and far too basic. They were created to “save” a resident in the last few months of their lease. Instead, in today’s world, modern property managers need to be focused on proactively delighting residents the second they sign. If they do this, then high resident retention rates will follow. Here are some of the best, forward-thinking trends we’ve seen for resident retention in the property management industry. Related: State of Resident Experience Study Meet the expert we partnered with to create this article: Melissa Gillispie, Director of Leasing & Property Management at JWB Real Estate Capital. Melissa is the licensed real estate broker for JWB. She plays an integral role in the organization and her efforts have led JWB to manage over 4,900 single-family homes in Jacksonville, Florida. JWB is now recognized as the largest local rental management company in northeast Florida. What is resident retention, and why is it important? Resident retention is a key part of achieving a Triple Win in property management, whether it’s in single-family (our focus) or multifamily. In transactional terms, the ultimate goal of a resident retention strategy is to increase lease renewal and reduce resident turnover, which results in lower costs and less work for property management teams. However, a Triple Win mindset levels this up by asking, “How can we create experiences so good that residents never want to leave?” Resident satisfaction, in turn, maximizes the investor’s ROI and boosts the property manager’s success. A win for residents is a win for investors is a win for property managers. This mindset moves from approaching property management as a list of menial tasks into a more generative and entrepreneurial approach. You’re in the driver’s seat as the property manager, and you can create programs and solutions that residents will pay and stay for. Now, you might be wondering why property managers should pay attention to resident retention rates. Here’s what Melissa has to say about that: Melissa: “Resident retention is a direct reflection of your customer experience. If people enjoy working with you, they'll stay. If they don't, they won't. Due to rising costs for investor clients, rent rates are climbing to keep up with those costs – which can be a big objection to overcome with residents. Swallowing the pill of a $150-$200 increase in rent can be tough for a resident on a fixed income. That makes their experience with us even more important. If they don't enjoy the experience, they most certainly won't agree to that level of rent increase.” What residents are saying about lease renewing and retention? In a recent survey by Buildium, only 32% of single-family rental (SFR) residents said they were certain they’d renew their lease this year, and an additional 36% were on the fence. This means that more residents have a desire to move than we’ve seen historically. Why is that? A couple reasons… 22% said they planned to move to a rental with more appealing amenities or benefits. 13% said they planned to move because they weren’t happy with the experience at their current rental. That’s a huge chunk of residents whose main reason to leave is a lack of benefits they want or need. What is a good resident retention rate in property management? Calculating resident retention rates and factors that can affect this rate can be challenging, as well as what’s considered a good average retention rate. Melissa sheds some light on this: Melissa: “We look at leases ending as an opportunity, and our resident retention is how many of those leases ending in a calendar year we convert to extend their lease term. Executed / Opportunities = Renewal Rate. A good average retention rate is anything 70% or better. That number has been our benchmark for success for 17 years of business. Factors that impact retention include how much owners are involved in setting rent rates, the housing market, the rental market, demand, experience, etc. We haven’t seen retention rates vary significantly by location, such as states vs. cities vs. rural areas.” Property managers share their best resident retention strategies The Buildium survey findings align with what many property managers are telling us, too. In fact, professional PMs tell us that a Resident Benefits Package is a powerful way to retain residents over the long term. RBPs can help with resident satisfaction and resident retention rates. After all, a proactive, differentiating approach to resident retention means building experiences that people will pay and stay for. Melissa: “Residents who stay longer-term tend to make on-time payments more often, take better care of the home, and reduce vacancy costs/leasing burdens. These benefits lead to better rent collection and increased management fee collection, happier clients with lower turn costs, and a lower market-to-move-in or days-on-market metric for leasing because their inventory continues to be reasonable and controlled.” In multifamily property management, resident retention strategies often center around resident events and building a sense of community. They may try things like holiday parties, happy hours, movie nights, and other get-togethers. But in single-family property management, where your properties are likely very different and spread across a larger region, the strategies aren't always as straightforward. Here are the top strategies that professional PMs are talking about right now. These help with bringing in new residents and with retaining good residents. Build easy communication with residents Relationship building is an important part of resident retention, and the foundation of any good relationship is, as any dating advice will tell you, communication. The rise of digital apps, online portals, messaging services, and social media platforms has made it easier than ever to communicate. Studies show that text messaging is on the rise, and most single-family rental (SFR) residents prefer text to other communication channels. Here’s how one study found the breakdown of where residents are communicating the most. 49% are using text 43% are using email 41% are using a phone PMs also know that expeditiousness is key. If residents are attempting to contact you, they likely have an issue that needs resolution asap. That’s why strategic PMs leverage technology and services that are all about speed.. More PMCs are incorporating solutions like texting, ticketing/inbox, offshore or outsourced staffing, and automation to remain quick-to-reply. Another great communication channel is sending surveys to current residents on a quarterly basis. Professional PMs ask what could be improved and use the data collected as a source for additional resident retention ideas. At Second Nature, we allow residents to survey and give feedback in their rewards app, and even incentivize it. When you are proactively seeking feedback, you can more easily drive positive social reviews and reputation management. Invest resources in property maintenance Anyone can tell you that property maintenance management is critical to a positive resident experience. But sometimes newer property managers only know how to take a reactive approach. They might do an annual inspection or respond to complaints. But they may not be proactively developing strategies to improve the property for themselves and their residents. In contrast, seasoned property management companies approach maintenance with a benefits-focused mindset. Instead of reacting to property problems, enterprising PMs tend to ask, “What habits can I encourage in residents to help keep the property in tip-top shape and therefore avoid maintenance requests altogether?” First, by creating care and value, PMs encourage residents to care for and value the property. But beyond that, PMs can implement strategies that make those behaviors easy. For example, a Resident Benefits Package can include air filter subscriptionsand pest control services – all of which help support residents in maintaining and nurturing the property. After all, it’s easy to change your air filters on time when they show up on your doorstep. We’ve seen a trend of property managers developing proactive strategies that help residents take care of the property. It pays off in dividends. Provide a simple, rewarding payment portal Speaking of paying off, most property management companies now offer online payments to residents. It’s true: 73% of residents say they prefer a digital method for payment. That’s the first step. But PMs have told us that many of those legacy payment systems can be difficult to use or don’t actively support residents in making timely payments. The next step is to ensure you’ve set residents up for success in making on-time payments. Some PMs set up rewards systems or incentives for on-time payments. These programs can help reduce the amount of time you spend following up on rent. For example, Second Nature’s Resident Benefits Package has a built-in credit-building service that reports on-time rent payments to all three major credit reporting bureaus: Equifax, Experian, and TransUnion. We’ve helped residents increase their scores by as much as 40+ points. You can bet that if residents have the option to boost their credit score, they’re more motivated to pay on time. Focus on resident security Creating safe spaces to live in helps protect both the residents and the properties that you manage. Making it clear that safety is a priority is also an effective way to build a reputation as a property management company that cares. Property managers can emphasize the safety of single-family homes through standard practices like ensuring rental properties have flood lights, working smoke detectors, carbon monoxide alarms, and solid locks changed after each move-out or before move-in. Surveys can also help assess how safe residents feel in their homes and if your company can do anything to improve security. Regular inspections and good communication go a long way to maintaining excellent security. For a Triple Win, property management companies can also provide an Identity Protection benefit . The odds of falling victim to online crime is 1-in-4. A $1M coverage provides real protection and peace of mind for residents while they get their personal data restored. Adopt new technology Technology brings ease and automation to every element of property management – and every individual involved. In fact, 79% of SFR residents prefer to complete at least some rental processes online. Technology helps you deliver competitive features without breaking the bank or slowing you down. And it gives ease and convenience to residents, too. These days, property managers have digital solutions for basically every part of their job, including: Online payments Maintenance request tracking Online rental listings & applications Text and email communication Renters insurance programs Resident screening Document signing, sharing, and storage Using SMS messaging platforms, online rent payment systems, and resident portals adds more efficiency for property managers while offering convenience to residents. The ability to pay rent, make a property maintenance request, or register a new pet or vehicle online creates a seamless experience that the resident can manage independently on their own time while also creating an organized system for leasing agents to respond to those requests. No more scribbling a repair request on a sticky note—now you can automate everything. It’s the best option for everyone involved. Be proactive The best PMs are always aggressive. They visit each property at least once each year, not just when something goes wrong. They have automated systems in place to alert them when new needs pop up. They design or invest in benefits packages and perks to serve their residents and stand out from the crowd. In “The 7 Habits of Highly Effective People,” Dr. Stephen Covey’s second habit is, “Begin with the end in mind.” Professional property managers who are ready for the future proactively identify opportunities to improve the resident experience. Ask things like: “What can I do this coming year to improve the living experience for my residents?” Maybe that’s new programs, new roles on the team, new technology, etc. Whatever creates value for residents is worth an investment because the payoff lasts. Melissa: “The best advice I can give is this: Communication and expectations are KEY. Start to work for the renewal on Day 1 of the original lease term, and consider how you can increase your communications. Be transparent. Be open to feedback. See retention as a bottom-line revenue driver. See retention as a benchmark for how residents are experiencing your company. Set a budget for creative incentives, and then encourage your team to USE THAT MONEY UP! The more "dopamine hits" you can give for those feel-good connection moments, the better! I think creativity is understated in property management. We focus so much on difficult interactions. How can we increase the positive ones? Who doesn't love to feel celebrated, seen, valued, appreciated, and considered? Reach out early and often! We start reaching out to residents six months before their lease expires. Make the reason for that initial touch point to "check in" – because it’s about relationships! People like to feel valued. Get creative with incentives for long-term leases! We offer all kinds of crazy resident incentives. We even bought a resident their very own bounce house when the client's homeowners insurance made the resident remove their large trampoline. Identify the real roadblock or concern, and do everything in your power to listen and solve it. Listen to any real complaints. If there are maintenance issues, solve them. If there are communication concerns, address them. Residents want to know that when they voice a real concern, you hear them and work hard to partner with them to fix it!” Automate what you can as you grow As property management companies grow, it becomes harder to dedicate individual time to each one of your residents. Property managers must figure out a way to maintain this resident expectation though. One effective strategy is to utilize technology to streamline operations and foster stronger relationships with residents. Melissa: “Automation is key as you scale your business. We manage around 5,000 doors, and without the ability to send email and text blasts, etc., we'd struggle to achieve the high touchpoint mentality we have. I think the larger your business, the more important these tools become. You can only grow at the pace at which your business can efficiently scale without having to continually add more staff. Text Magic is a low-cost solution for texting, and Callfire is a great option for mass-dialing and automated phone messaging. Any PM software has great reporting capability to build out mail merge lists. It doesn't have to be expensive to make it happen!” For all of the above, invest in a Resident Benefits Package As we’ve seen, resident benefits packages are the best way to build these experiences and perks that residents want. Benefits packages are bundled services that help drive revenue for your investor and drive satisfaction for your residents. At Second Nature, we offer services in a custom resident benefits package (RBP) designed by you and managed by us. We developed and designed each pillar of the RBP based on pain points that property managers shared with us – turning those pain points into benefits. These services include supports like: Internet service: Your residents are probably already paying for internet. By offering Group Rate Internet, you can give them a benefit they already pay for, at a cheaper price than they can get themselves. Integrating internet service right in their lease eliminates setup fees, equipment charges, and other unexpected costs, and simplifies their lives. Routine air filter delivery: This is a cornerstone of our benefits package because one of the most common causes of HVAC maintenance requests is a failure to change air filters on time. PMs who have implemented air filter delivery have seen a total reduction of 38% in HVAC requests. $1 million identity theft protection: Our benefits package includes identity fraud alerts and protection. Your residents can rest easy knowing every adult on the lease has coverage. Credit building: As we’ve mentioned, we report on-time payments to the credit bureaus so your residents can automatically boost their credit scores just by paying rent on time. Rental rewards: People love rewards! We include the cost of rental rewards in our total package, so PMs don’t pay more. We include perks like gift cards to local businesses, restaurant cards, cash rewards, and more. Move-in concierge: The first thing most residents do on move-in is make several calls to set up utilities. With our move-in concierge service, residents turn four phone calls into one. They don’t have to contact utility companies; we do it for them and identify the best rates. Renters Insurance Program: Our benefits package includes price-competitive insurance options to apply to all residents – at one group rate. On-demand pest control: Pests are one of the most common resident complaints, and a huge financial burden for property owners. On-demand pest services allow residents to connect with treatment companies directly when the need arises, while avoiding costly preventative treatments that may not even be effective. A benefits package puts PMs ahead of the game, proactively building the environment residents pay and stay for. How 1,800+ professional management companies create Triple Win experiences Resident retention is far more than a transactional arrangement. We know that a high percentage of residents leave when they aren’t getting benefits they could get elsewhere. Forward-thinking property managers take a proactive approach to resident retention by developing experiences that residents are looking for. By creating a fantastic resident experience through offering benefits and support, property managers drive a triple win for residents, investors, and themselves. Higher retention can drive referrals to prospective residents and clients, too. Offering a Resident Benefits Package that adds value to the leasing and living experience of your residents is as easy as Second Nature.

December 1, 2024

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Investor Benefits Package™️ IBP™️: How Does It Help Owners?

An Investor Benefits Package™️ (IBP) in property management is a suite of products, services, and benefits offered by property management companies to property investors. Just like a resident benefits package is a way to drive value for residents, investors, and property managers, the IBP™️ is an innovative approach to property management that focuses on driving value for an investor's assets and turning that value into profit for the property management company. In this article, we’ll dig into the different features that an Investor Benefits Package™️ can include, and how those benefit not just investors, but property managers and residents, too. What Is an Investor Benefits Package™️ (IBP)? As stated above, an Investor Benefits Package™️ (IBP™️) is a comprehensive suite of services that offer property investors higher quality property management, stability, and profit. It's referred to by some as an Owner Benefit Package, but we'll get into that in a moment. An IBP™️ typically includes concierge-level services beyond basic property management – such as property insurance policies, eviction guarantees, rent guarantees, maintenance plans, asset performance reports, etc. These services are aimed at maximizing the investor’s assets, stability and convenience, profitability, and peace of mind in managing their properties. They're commonly managed through an investor experience platform to securely manage and monitor the performance of these assets online, which we'll discuss later. The first step to outlining an IBP™️ is to define what your basic management fee means and covers. If the answer is, that it’s collecting rent, handling maintenance, and general communication – does that include maintenance coordination or is that a separate fee? Does it include asset reporting or is that an additional service? In your management agreement, define what the management fee is, what it covers, and how much it is. An IBP™️ can be an effective tool for articulating the new and differentiated things that an investor wouldn’t be able to do on their own and that you are offering beyond basic property management. Articulate your unique and differentiated services (IBP™️) and use that as a tool for positioning and charging for what it’s worth. Why Call it An "Investor Benefits Package™️"? Here at Second Nature, we like to refer to “tenants” as “residents” and “landlords” or “owners” as “investors.” This humanizes the relationship between the resident and investor and is important in what we’re trying to accomplish: a "Triple Win" for all involved. That's why we're referring to an "Investor Benefits Package" rather than an "Owner Benefits Package." Winning as an investor is so much about attracting and screening for people who are most likely to be the best residents and delivering a professional resident experience that they will pay for and stay for. An Investor Benefits Package™ is instrumental to getting to that Triple Win, and we'll turn to that now. What’s Included in An Investor Benefits Package™️? An Investor Benefits Package™️ should include a range of solutions to help deliver consistency, insight, and asset protection to a property owner’s portfolio. After all, professional property managers don’t have to be functional managers of a home – they can be strategic partners in the management of financial assets. Again, you might hear services similar to the IBP™️ called an “owner benefit package,” but at Second Nature, we believe that the “investor” term is useful in encouraging a longer-term mindset, and emphasizes the economic value professional property management can bring. Contrast this with the notion of an owner-benefit package, which doesn't share the same mindset. According to Eric Wetherington, VP of Strategic Initiatives at PURE Property Management: “As property managers, we need to think more like asset managers. This client made an investment, and we should be guiding that client through managing that investment, not just collecting rent.” To build and manage a winning IBP™️, property managers need an Investor Experience Platform that unlocks scalable product and service customization, digitized onboarding, accounting policy automation, and more. In addition, Investor Experience Platforms provide transparency and convenience for your investors. Here are some of the most valuable services that property managers can offer through an innovative Investor Benefits Package™️. Property insurance program Similar to offering a renters insurance program through an RBP in the lease agreement, property management companies can offer an insurance plan to investors to cut costs and ensure the safety of their assets. Most management agreements will include the requirement that the investor carries insurance on the property and that the property manager is additionally insured. But what if you as the property manager could help manage that for the investor – at scale? Property Insurance for investors should have dynamic pricing based on individual investors’s property portfolio and needs. The benefit beyond flexibility is the savings they’ll see on their premiums while also getting insurance that’s tailored to the needs of their specific property class. At Second Nature, we work primarily with single-family rental properties and small multi-family residences. Property Insurance Programs can bring scale that will drive economic value for the investor over what they could get retail on their own. They’d still have the option to go get their own insurance that meets requirements, but they can pay you a small fee to manage it for them. Rent guarantee An IBP™️ can include a number of financial guarantees to protect property investors and drive ancillary revenue for PMCs. A rent guarantee, or rent protection, ensures a consistent rental income to investors by protecting them against resident defaults or non-payment of rent. If a resident fails to pay rent, the property management company covers the unpaid amount and takes necessary steps for eviction or collection, providing financial security and minimizing the risk for property owners. Rent guarantees work for professional property management companies that have enough properties to balance the loss of rent if a resident doesn’t pay. The risk is low and the additional profit from fees for this guarantee can have a very high ROI while driving satisfaction and stability for the investor. Plus, if you’re using services in an RBP to help incentivize on-time rent payments, you’ll rarely find yourself out in the cold. Eviction protection guarantee An eviction protection guarantee also goes beyond the normal scope of property management services and can be used as a secondary source of revenue. Eviction Protection is a service provided by property management companies to property investors that offers additional security and financial protection in the event of an eviction. Under this guarantee, the property management company assumes the costs associated with the eviction process, including legal fees and court expenses. It helps alleviate the financial burden on property investors and provides peace of mind by ensuring that they are safeguarded against potential losses resulting from resident evictions. The eviction guarantee helps protect property owners from the complexities and potential costs associated with evictions, ensuring a smooth and efficient resolution to tenant-related issues. Pet guarantees & other guarantees A pet guarantee is a service offered by property management companies to property investors that aims to address any potential issues related to allowing pets in rental properties. It typically involves implementing policies and procedures to ensure responsible pet ownership, such as thorough pet screening, pet agreements, and collecting additional pet deposits or fees. The pet guarantee may also include services like pet damage insurance or assistance with pet-related issues during the lease term. It provides property investors with a framework to accommodate residents with pets while minimizing risks and maintaining the condition of the property. For many residents, finding a pet-friendly apartment increases retention and profitability. They’re willing to stay longer and pay more for a pet-friendly place. And–get this–pet damage is less likely to happen than damage from kids! It’s not a huge risk to the asset, but can provide a big benefit in terms of satisfied, longer-term residents. Maintenance plan Home warranties are a four-letter word for property managers. They’re a massive headache to deal with, and yet there’s high demand for them among property investors. Because of that, most property managers charge a fee for home warranties, for each they have to file. Imagine if there was a world where home warranties weren’t needed. Here’s the thing: Professional property managers already have the vendor network and the know-how to coordinate maintenance jobs. What they don’t usually have is a product that’s priced to give the investor the experience they want. Let’s say right now an investor is paying $50 a month for a cheap home warranty. The warranty only covers 40% of issues and it creates all these extra people and friction in the middle. For anything moderately significant that goes wrong with a property, PMCs generally must contact the investor for permission to get work done. It’s all a massive hassle and loses time in maintenance requests that leave residents frustrated. What if there was a product that costs, say, $150 to $200 a month but it actually covered everything? Instead of having sudden expenses and emergencies, this maintenance plan smooths out the experience and makes it more predictable for the investor. For PMs, it means taking the initiative on fixes without waiting for approval. Imagine a world where you didn’t have to get owner approvals for 95% of maintenance issues – because they’re already budgeted for and already paid for. For residents, it means better maintenance, and faster. Another Triple Win! Asset performance reports Another piece focuses on property managers as asset managers. Think about any investment app, like Robinhood, Acorns, etc. You can log in to these apps any time, 24/7, and see how your stock and investments are performing. In most investment classes, you can see in real time how your assets are performing. Why shouldn’t property investors have that as well? An IBP™️ can include exactly that: a dashboard or online portal that shows investors regular reports on how their property is doing. They could get updates on the value of their home over time, the home price appreciation, rent price over time, and project rent growth, typically maintenance costs and how they’re doing against that, and more. Resident Benefits Package Another piece to include in your IBP™️ is to highlight the benefits of your resident benefits package to your investors. Explain how features like a filter delivery program protect their assets and reduce HVAC repair costs. Show how a renters insurance program can ensure coverage and protection. Give numbers on how credit reporting incentivizes on-time rental payments and helps ensure financially stable renters. Explain how a movie-in concierge saves both time, headache, and money. Each of the pillars of an RBP is critical to encouraging better resident behavior, increasing renter retention and lease renewal rates, reducing vacancies, and more – all primary goals for a property investor. A note about Rent Advance Programs There’s been due buzz about “Rent Advance” offerings, though many advise caution when approaching this financial product. It works in some ways like cash advance programs, which can satisfy urgent needs, but not be more valuable for anyone long term. The way it works is PMs offer to send a year of rent upfront to the investor in a big chunk, and collect monthly from the resident. The investor typically pays a 5-10% premium on the advance, which can be their entire expected return. So the question becomes, where do they put that cash to get a better return instead? Another thing to think about is who would actually use this product. Investors who don’t have enough cash on hand? How does that benefit anyone in the long run? What happens when there’s a big maintenance bill later? Does this encourage better decisions and practices by the investor? To date, there’s been pretty low adoption of this program, which is another sign it may not be hugely beneficial to everyone involved. But plenty of innovations start that way, evolve, and find traction. One case where it might be a value generator is if an investor is looking to take a cash advance and put it toward a down payment for another house. That would benefit the property manager as well, promising more business, and the PM could offer a lower rate for getting more properties to make the financing more attractive than hard money loans or other alternatives. The jury is still out here, it’s an interesting one to track. How Can Investors and Property Managers Benefit From an Investor Benefits Package™️? Investors and property managers can benefit from an Investor Benefits Package™️ in several ways. They’re also great for residents in the sense they build more stability and quality into the renting process. Here are just some of the benefits of an IBP™️. Enhanced investor attraction An Investor Benefits Package™️ provides incentives and advantages that can attract more investors. Financial guarantees and protections against the risks associated with evictions or late payments can increase stability, while services like a maintenance plan can ensure premium care of their property assets without increasing their workload. By offering attractive perks, property managers can differentiate their offerings and generate greater investor interest. Increased investor retention Both IBP™️s and RBPs help build loyalty with residents and investors. By fostering a strong relationship and demonstrating ongoing value, property managers can build trust and loyalty among investors, and retain them over the long term. IBP™️s help establish the stability, transparency, and asset growth for a real estate investment that an investor hopes to achieve. Improved property performance An Investor Benefits Package™️ can also contribute to improved property performance. For example, by offering discounted property management fees or access to professional services at reduced rates, property managers can help investors optimize their returns and reduce costs. Additionally, incentives such as rent guarantees or eviction protection can mitigate risk for investors and attract more capital to the property. Streamlined communication and transparency A well-designed Investor Benefits Package™️ facilitates effective communication and promotes transparency between property managers and investors. This can involve regular reporting on financial performance, property updates, and the sharing of relevant market insights. Transparent and consistent communication builds trust and confidence among investors, fostering a positive and long-lasting relationship. Competitive advantage A comprehensive Investor Benefits Package™️ can give property managers a competitive edge in the market. When investors have access to exclusive benefits and advantages, they are more likely to choose a property managed by a company that offers a compelling package – and to recommend it to others. Say hello to increased investment inflow and a stronger market position for your PMC. Should You Make an Investor Benefits Package Mandatory? The first thing most property managers ask us when we’re talking about an RBP or an IBP™️ is: Should I make this mandatory for all investors or do I make it a flexible opt-in/opt-out program? Unlike RBPs, where best practices are more proven and established, different PMs are taking different approaches with their IBP™️s. Some have a mandatory level of service set at a flat price. Others may say they’re fine offering a base level of service without these differentiated products, giving investors the choice to simply pay a baseline management fee and opt out of the IBP™️ premium service. Some may offer a baseline to all investors and then give them the chance to opt in for premium IBP™️ services. There are a lot of ways to do it. With the RBP, we’ve found that making it mandatory does not generate nearly as much pushback as people expect – and can be a strong value add overall. About an Investor Benefits Package™️ by Second Nature The Investor Benefits Package™️ is an innovative way to generate ancillary income and create more value for investors and residents. Similar to Second Nature’s premier Resident Benefits Package, the IBP™️ can deliver high-quality service for investor experience – and help create a triple win for investors, residents, and property management companies. The IBP™️ reinforces the value of a professional property management company for investors and helps differentiate you from the crowd. Stay tuned to learn more about the latest in the IBP™️ space, or learn more about how a resident benefits package can launch a whole new level of value for your PMC.

November 22, 2024

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The Property Maintenance Services List for Property Managers

There are a couple of reasons why property maintenance is so crucial in managing rental properties. First, no matter the size of the property, keeping up with both its interior and exterior aspects ensures a safe, attractive, and functional environment for residents. Secondly, it protects the value of the property, which is vital for investors. In today’s post, we’ll take a closer look at the ins and outs of these important services. We’ll discuss: What property maintenance services entail The benefits of staying on top of these tasks Services that are commonly provided to residents How planning for both routine and emergency maintenance is crucial Related: Property Maintenance Guide for Property Managers What Are Property Maintenance Services? Property maintenance involves the regular care, repair, and upkeep of a property to ensure that it remains in good working order. It includes building maintenance, as well as maintenance for the exterior portion of the property, such as lawns and driveways. Maintenance tasks can range from routine inspections and resident requests to emergency repairs. All told, a well-managed maintenance program helps avoid unexpected breakdowns and ensures that all aspects of the property meet safety standards. For interior maintenance, this can include heating, ventilation, and air conditioning (HVAC) services, plumbing upkeep, and electrical system checks. On the exterior, it includes tasks like landscaping, pest control, and seasonal repairs. Beyond ensuring that residents are satisfied with their living environment, the main goal of property maintenance is to maintain the real estate value, keeping it visually appealing, and making sure it operates efficiently. Regular inspections can help identify issues before they become larger problems, reducing the likelihood of costly repairs in the future. Maintenance services also play a key role in resident retention, as residents are more likely to stay in properties that are well-cared for and meet their expectations. Benefits of property maintenance services As alluded to above, there are several advantages to keeping up with property maintenance for all parties involved—property managers, property owners, and residents. Here are some key benefits: Improved property value: Consistent maintenance keeps the property in excellent condition, which can help preserve or even increase its market value over time. This benefits property managers as well as investors looking to protect their investments against wear and tear. Cost prevention: Proactive maintenance helps prevent major breakdowns or expensive repairs down the line. By addressing issues early, property managers can avoid having to deal with larger, costlier problems in the future. For instance, fixing a minor leak can prevent water damage that might require significant structural repairs later. Resident retention: Residents are more likely to renew their lease if they live in a well-maintained property. A safe, clean, and functional environment leads to a positive resident experience, which in turn can reduce turnover and vacancy rates. Keeping residents satisfied means they’re less likely to move, saving property managers time and money in finding new occupants. Longevity of equipment: Regular maintenance of systems such as HVAC, plumbing, and electrical units ensures they last longer, reducing the frequency of replacements and major repairs. This not only saves money but also minimizes potential disruption to residents down the line. Most Common Property Maintenance Services Below are some of the most common types of maintenance services property managers handle: Interior Services HVAC maintenance: This includes regular inspections, filter replacements, and cleaning of heating and cooling systems to ensure they’re in good condition and function efficiently. Maintaining these systems prevents breakdowns and helps reduce energy costs as well as maintenance costs. (Learn more: What is HVAC?) Plumbing: From fixing leaks to maintaining water heaters, plumbing issues are common in rental properties all year long. Regular maintenance of pipes, drains, and fixtures can prevent more serious problems later on. Electrical systems: Inspecting wiring, outlets, and appliances helps avoid fire hazards and makes sure that all systems operate safely. Air filter services: Delivering and replacing air filters (a service offered by Second Nature through our resident benefits program) regularly improves indoor air quality, which benefits residents and the property itself. General repairs: Maintaining doors, windows, roofs, and flooring keeps the property functional and appealing. Regular upkeep of these elements reduces the potential for expensive maintenance issues later on. Exterior Services Landscaping and lawn care: Maintaining the appearance of the property’s grounds is essential for curb appeal. Regular lawn care, tree trimming, and other landscaping tasks are necessary for both safety and appearance. Pest control: Preventing infestations is key to maintaining resident satisfaction and protecting the property from damage caused by insects or rodents. Pest control is a service offered by Second Nature as part of our resident benefits package. (Learn more: Why Pest Control Is Important) Safety inspections: Routine checks of smoke detectors, fire alarms, and carbon monoxide detectors ensure the property complies with safety regulations and provides a secure environment for residents. Related: Preventive Maintenance Checklist for Property Management Learn more about rental inspections Seasonal checklist for maintenance Property managers should also consider the timing of certain maintenance tasks. Some jobs need to be handled throughout the year, while others are more seasonal. Here’s a quick property maintenance checklist covering how to plan for routine and seasonal maintenance: Year-round maintenance: Regularly check HVAC systems, faucets and plumbing, electrical setups, and safety features like smoke alarms and fire extinguishers to prevent the need for emergency repairs and maintain property safety. Winter: Test heating systems and check fire safety equipment. Spring: Focus on landscaping and checking the property for mold or water damage that may have occurred over the winter. Summer: Lawn care and landscaping tasks such as mowing are essential. It’s also a good time to service HVAC units for cooling needs. Fall: Inspect downspouts, clean gutters, and ensure the heating system is ready for the colder months ahead. Fall is also a good time to assess winter readiness by checking for roofing issues such as loose or missing shingles. Emergency planning Having a solid emergency maintenance plan is essential for any property manager, as emergencies such as a burst pipe, electrical issues, or fires can happen unexpectedly. A well-prepared plan should include evacuation routes, emergency contact information, and a clear process for residents to report urgent repairs. Having this in place minimizes damage and ensures resident safety. Property maintenance services software Technology plays an important role in making property maintenance more efficient. Many property managers use property management software to streamline maintenance requests, track repairs, and manage ongoing tasks. These tools help managers keep up with routine maintenance while ensuring residents can easily report issues and track their resolution. Learn more: 10 Best Property Maintenance Software Final Thoughts The bottom line is that a well-maintained residential property not only keeps residents happy but also protects the long-term value of the investment. By staying on top of routine inspections, preventive maintenance, and emergency planning, property managers can avoid costly repairs and create a positive living environment for residents. For more detailed checklists and resources, explore tools like Second Nature’s rental inspection checklist. Learn more about the benefits of resident benefits packages.

November 4, 2024

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What Is a Rent Rewards Program?

Rent rewards programs are designed to make renting more rewarding for residents by offering incentives for behaviors that benefit both the resident and the property manager. These programs often help residents improve their financial standing while encouraging responsible residency. In this blog, we’ll look at: What these programs include Benefits they bring to property managers, investors, and residents How rent rewards programs work An Overview of Rental Rewards Programs A rent rewards program is a loyalty program that encourages and recognizes positive resident behavior, from paying rent on time to renewing a lease. In providing a structured system of rewards, these programs aim to improve resident satisfaction and encourage long-term residency. Many property managers offer a range of incentives for various behaviors, which we'll explore next. What rent rewards programs typically include Most rent rewards programs are designed to offer residents something in return for making timely rent payments or taking other actions that benefit the property. Here are some examples of behaviors that are commonly incentivized in these programs: On-time rent payments: Residents might receive a credit boost for consistently paying monthly rent on time, which helps them build credit over time. Lease renewals: Property managers often reward residents who choose to renew their lease instead of moving out, reducing vacancy rates. Autopay enrollment: Residents may earn rewards for setting up automatic rent payments, reducing the chances of missed payments. Positive reviews: Leaving favorable reviews on social media or review sites can also be rewarded. Prompt maintenance reporting: Residents who report maintenance issues quickly may receive incentives for their proactive actions. Rewards vary by each property manager, but they typically include gift cards, credits toward rent, points that can be redeemed for various perks such as travel rewards, or discounts on local services such as gym memberships and fitness classes. Some residents might even receive cash back or percentage discounts on their rent for maintaining good payment habits. How a Rent Rewards Program Benefits Everyone Property managers For property managers, rent rewards programs reduce delinquencies and encourage residents to take better care of their homes. These programs also help properties to stand out in a competitive market, offering an extra reason for residents to stay for the long term. Managers can also incentivize and track behaviors they want to reward, adding a layer of customization to the program. Investors Happy residents are more likely to stay in a rental property, which boosts retention rates and reduces turnover costs. Real estate investors benefit from consistent occupancy and reliable rental income. Residents For residents, rewards create extra motivation to pay rent on time and engage with their property manager in a positive way. Beyond the financial benefits, these programs offer peace of mind by helping residents improve their credit scores and manage their rental experience more smoothly. Note that residents can continue to pay using the method preferred by the property manager, including credit card, debit card, or direct bank account deposit. Resident Rewards Through Piñata Second Nature partners with Piñata to offer its rent rewards and credit-building services. Piñata provides an app (accessible via mobile as well as desktop) that allows residents to track and redeem their rewards easily. This partnership gives renters access to additional perks, such as exclusive deals and credit improvement opportunities, making it a win-win for both residents and property managers. How rent rewards work When a property manager signs up for a Resident Benefits Package with Second Nature, a rent rewards program is included in the price. They can simply tailor the program to fit their needs. Managers choose which behaviors they want to incentivize, such as paying rent on time or renewing a lease. As indicated above, with Piñata, these programs are accessible through both a web browser and a mobile app, making it easy for residents to track their rewards. Residents benefit right away, with some programs offering a welcome gift at lease signing. Over time, residents accumulate reward points they can redeem for rewards in Second Nature’s exclusive perks marketplace, with built-in savings. They also position themselves with better credit scores, meaning better deals on credit cards and leases, as well as better rates on loans, including an eventual home mortgage. From the property manager’s side, the rewards – and the resulting positive resident behaviors – are part of the resident benefits package, so there are no extra costs involved. Final Thoughts Rent rewards programs bring value to both property managers and residents. By incentivizing positive behaviors, property managers can reduce delinquency, increase resident retention, and help ensure a better rental experience overall, as well as a more rewarding rent day! For more information on how rent rewards programs can work for your property, check out Second Nature’s Resident Rewards Program. Additionally, you learn more about the many benefits of a resident benefits package here.

November 4, 2024

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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.

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.

October 10, 2024

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Property manager filling out rental inspection check list

Property Management Rental Inspection Checklist [Free Template]

There's a hero tool that stands between you and potential disputes, wear and tear issues, and even costly oversights. It's a Property Management Rental Inspection Checklist. Now, someone who isn't in property management might think, "It's just a checklist, right?" But professional property managers know that without it, everything can kind of fall apart. Throughout this article, we'll dive deep into what rental inspections are, their undeniable importance, the key items you shouldn't overlook, and – because we love making your life easier – we're gifting you a comprehensive checklist template. Stick around to have all your pressing questions answered in our FAQ section and discover how Second Nature can be your partner in acing rental inspections. What is a Rental Inspection? A rental inspection is a systematic evaluation of a rental property's condition carried out by the property manager, landlord, or a dedicated inspector. It’s not just a casual walkthrough of the premises. The inspector will thoroughly assess every nook and cranny of the property – from the foundation to the roof, from the plumbing to the electrical fittings – is thoroughly assessed. The primary goal? To ensure that the property meets all safety and maintenance standards, that the residents are complying with their lease agreements, and that potential issues are identified and addressed before they escalate into major, costly problems. Think of it as a health check-up, but for properties. It provides an objective snapshot of the property's current state and offers insights into areas that might need attention or repair. Here's an example of what a checklist might look like: Why Are Rental Inspections Important? Rental inspections play a crucial role in the property management world, and here’s why: Resident Experience: A well-maintained property is a happy home for residents. When renters see that the property management company is proactive about upkeep, it fosters a sense of value and respect. This can translate to longer tenancies, on-time rent payments, and even positive word-of-mouth referrals. (Learn more about this in our State of Resident Experience Report.) Protection of Assets: Your rental property is a significant investment on the part of your client. Regular inspections ensure it remains in top condition, preventing minor issues from escalating into costly repairs, and protecting your clients’ real estate investments. Safety Assurance: By checking everything from electrical fittings to potential structural issues, inspections make certain the property is safe for habitation. No landlord wants to be on the receiving end of lawsuits or liabilities. Lease Compliance: Regular inspections ensure that tenants are adhering to the terms of their lease, such as not making unauthorized alterations or keeping pets when they aren’t allowed. Predictive Maintenance: Rather than always being in a reactive mode, inspections help in predicting potential issues. This way, you can schedule maintenance tasks before problems arise, which can be more cost-effective in the long run. Property Value Preservation: A well-inspected and maintained property not only attracts and retains quality tenants but can also help maintain or even increase its market value over time. In essence, rental inspections aren’t just a formality; they're a pivotal tool in ensuring the long-term success of your property management endeavors and in enhancing the overall resident experience. What to Include in a Rental Inspection Checklist When you're planning a rental inspection, your approach should be methodical and thorough. As Janet Sprissler, Broker/Owner at Rent 805, puts it: “There are no optional parts of the checklist. That’s why it’s a checklist; you have to check everything off. I don’t have any nice-to-haves on my checklist because everyone is treated the same. We don’t do for one resident what we won’t do for the other.” Organizing your checklist by room or space is a practical way to ensure no corner is overlooked. For each item listed within these spaces, always include a status, such as "Good," "Requires Maintenance," or "Replaced." This helps in keeping track of the condition and any changes over time. You should also consider what type of inspection you’re conducting and may want to tweak what you include depending on where the property is in its rental cycle. Different types of inspections include: Move-In Rental Inspection: Conducted right before a resident moves in, the move-in inspection serves as a benchmark for the property's condition at the start of a lease. It helps to document the existing state of the property, from the functionality of appliances to the appearance of the interior and exterior. This documentation can be invaluable in resolving potential disputes over damages when the resident eventually moves out. Move-Out Rental Inspection: Carried out once the resident vacates, this inspection compares the property’s condition to its state during the move-in inspection. It identifies any damages or changes that have occurred during the tenancy. Based on this, you can decide what portion of the security deposit needs to be returned. Routine Rental Inspections: These are regular checks conducted during a resident’s lease period. Typically done every six to twelve months, routine inspections monitor the ongoing condition of the property. They're also a great way to catch and address issues early, as well as to ensure lease compliance. “Drive-By” Rental Inspections: These are less invasive checks where property managers drive by the property to ensure its exterior is in good shape and being maintained appropriately. This type of inspection is less about detailed checks and more about getting a general sense of the property's outward appearance and ensuring no major lease violations are visible. For single-family property managers, these inspects may be less frequent since properties are often spread out from each other geographically. As you create your rental inspection report, remember that every property is unique. While categorizing by room ensures thoroughness, it's essential to adjust and add specific items tailored to each property’s unique features and needs. And always remember, communication is key. Ensure that residents are aware of inspections, their purpose, and the schedule to foster a transparent relationship. How to Conduct Rental Inspections Given the importance of rental maintenance, it's important to conduct inspections methodically and thoroughly. We highly recommend using a detailed checklist to ensure you are covering all areas of the property. It's also critical to conduct inspections in a professional and courteous manner to maintain a positive relationship with residents. This means informing them about upcoming inspections (notice may also be required by local laws – more on that below), scheduling inspections at reasonable times, and generally minimizing disruptions to their daily routine. As indicated above, there’s also an important compliance component to rental inspections, so be sure to familiarize yourself with local housing regulations to ensure your inspections meet all legal requirements. This will help you abide by fair housing laws and avoid discriminatory practices. To protect everyone involved in the process, document inspections thoroughly and maintain accurate records. You’ll find it helpful to schedule inspections regularly, for example, on a semi-annual basis, in order to nip any maintenance issues in the bud. Semi-annual inspections should focus on the property's overall condition, including the exterior, interior, and appliances. You’ll also check for wear and tear, potential damage, and any maintenance needs. Also, ensure that safety systems, such as smoke detectors and carbon monoxide detectors, are functioning properly. Yearly inspections are an opportunity for more in-depth inspections, including a detailed examination of the roof, foundation, and HVAC system. You'll assess these for any signs of structural damage or pest infestations, and update any necessary documentation, such as property records and insurance policies. As for the inspection process itself, simply follow the following 6 steps: Schedule the inspection: Coordinate with the resident to schedule a convenient time for the inspection. Gather your materials: Prepare your inspection checklist, camera, and any necessary tools. Conduct the inspection: Work through your checklist, taking note of any issues or concerns throughout the process. Document findings: Take photos and videos of any visible damage or maintenance needs. Communicate with the resident: Discuss your findings with the resident and address their questions or concerns, if any. Follow up: Create a plan to address any issues identified during the inspection. By following these guidelines, your rental inspections go a long way toward protecting the investment, maintaining property value, and ensuring resident satisfaction. How to Notify Tenants about Rental Inspections As mentioned above, effective communication is vital during the inspection process. Here are some tips to ensure that your approach is as thorough as possible. Provide written notice While the property manager's right to inspect the property may be (and should be) specified in the lease agreement, including frequency and required notice, you should also send a formal written notice to the resident, either by mail or email. This notice should include the date and time of the inspection, as well as the purpose (such as routine maintenance, addressing maintenance requests, or ensuring compliance with lease terms). You should also indicate whether the tenant's presence is required during the inspection, and provide your contact information in case of questions or concerns. Choose the right time Be sure to schedule inspections during reasonable hours. For example, avoid early mornings, late nights, or times when the resident may be unavailable. If possible, work with the residents to find a time that’s convenient for them. Respect resident privacy Before entering the property, knock on the door and announce your presence. Limit disruptions by keeping the inspection brief and by avoiding unnecessary distractions. If you need to access areas with personal belongings, handle them with care. Document the inspection Document the condition of the property, any maintenance issues, and any violations of the lease agreement. Consider sharing a copy of the inspection report with the tenant, especially if there are any issues that need to be addressed. Address resident concerns If the resident has any concerns or questions about the inspection, address them promptly and courteously. Explain the reasons for the inspection and the importance of maintaining the property. These tips will help you maintain a positive relationship with your tenants while also protecting the property investment. Property Management Rental Inspection Checklist With the help of OnSightPROS, we've developed a rental inspection checklist template for single-family rental property management companies. Use this template to build out your checklist. General Overview Date of Inspection: Inspector Name: Tenant Name: Address: Previous Inspection Date: Front Exterior Status: [Good / Needs Maintenance / Poor] Mailbox: Functional door and flag, no damage Lawn and garden: Well-maintained landscaping free of debris, no bald grass spots Driveway and walkways: No cracks or obstacles Fencing: In good condition, no damage Exterior lighting: All bulbs functioning Windows/Screens: Clean, no cracks, seals intact, screens intact Walls/Siding: No damage or cracked/peeling paint or caulking, no insect damage Downspout/Splash Blocks: Attached properly Light Fixtures: No missing bulbs or broken fixtures Roof/Trim/Gutter: No visible damage or leaks, discoloration, holes, clogged or loose gutters Rear Exterior Status: [Good / Needs Maintenance / Poor] Lawn and garden: Well-maintained, free of debris, no bald grass spots Patio/Walkways: No cracks or obstacles BBQ Grill: Set away from house, not under awnings Rear Door: Weather stripping intact, locks installed as needed Possible Hazards: Trampoline, open fire pit, swing set Pool: Clean, clear water, no damage, fence and lock in place Fencing: In good condition, no damage Exterior lighting: All bulbs functioning Windows/Screens: Clean, no cracks, seals intact, screens intact Walls/Siding: No damage or cracked/peeling paint or caulking, no insect damage Downspout/Splash Blocks: Attached properly Light Fixtures: No missing bulbs or broken fixtures Roof/Trim/Gutter: No visible damage or leaks, discoloration, holes, clogged or loose gutters Entry Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Patio/Porch: No cracks in concrete, railing, stair intact Front door exterior: No scratches, chipping, stains Locks/Keyless Deadbolts: Check for installation, functioning correctly Front door interior: No gaps in weather stripping, clean Walls and ceiling: Clean, no signs of mold or damage Closets: Shelves stable, no stains or damage to walls Flooring: No damage, carpets clean Blinds/Drapes: Fully functional and clean Windows: Open and close easily, locks work Living Room Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Door/Door stops: Fully functional Walls and ceiling: Clean, no signs of mold or damage Ceiling fans: Working properly Closets: Shelves stable, no stains or damage to walls Flooring: No damage, carpets clean Blinds/Drapes: Fully functional and clean Windows: Open and close easily, locks work Kitchen Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Door/Door stops: Fully functional Flooring: No damage, carpets clean Walls and ceiling: Clean, no signs of mold or damage Cabinet under sink: No leaks with running water, no standing water Countertops/Backsplash: Clean, no damage, caulking intact Cabinets: Doors/drawers work, no damage Sink/Faucet: No leaks, drains well, spray hose works Pantry: Shelves intact, walls clean, lights functioning Appliances (oven, fridge, dishwasher, microwave, etc.): Clean, functional Exhaust fan: Functional, no excessive noise Windows: Open and close easily, locks work Hallway/Stairway Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Door/Door stops: Fully functional Handrails: No loose or missing spindles, or other damage Walls and ceiling: Clean, no signs of mold or damage Closets: Shelves stable, no stains or damage to walls Flooring: No damage, carpets clean Blinds/Drapes: Fully functional and clean Windows: Open and close easily, locks work Bedrooms (repeat for each bedroom) Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Walls and ceiling: Clean, no damage or mold Ceiling fans: Working properly Flooring: No damage, carpets clean Closets: Shelves stable, no stains or damage to walls Door/Door stops: Fully functional Blinds/Drapes: Fully functional and clean Windows: Open and close easily, locks work Bathrooms (repeat for each bathroom) Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Door/Door stops: Fully functional Flooring: No damage, no sagging floorboards or discoloration Walls and ceiling: Clean, no damage or mold Exhaust fan: Working properly Closets: Shelves stable, no stains or damage to walls Toilet: Flushes correctly, no leaks Sink/Faucet: Drains well, no leaks Cabinet under sink: No leaks with running water, no standing water Shower/bathtub: Drains well, faucets work, no mold Towel bars: Present and functional Mirrors: Clean, no damage Blinds/Drapes: Fully functional and clean Windows: Open and close easily, locks work Utility Spaces (if applicable) Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Door/Door stops: Fully functional Flooring: No oil stains or cracks Walls and ceiling: Clean, no damage or mold Closets: Shelves stable, no stains or damage to walls Blinds/Drapes: Fully functional and clean Cabinet under sink: No leaks with running water, no standing water Windows: Open and close easily, locks work Washer/dryer: Functional, no leaks. No lint or debris in dryer. Water heater: No visible damage, no leaks HVAC system: Operational, air conditioning filters clean, no moisture issues around drip pan Satellite dish: Attached to house correctly Garage (if applicable) Status: [Good / Needs Maintenance / Poor] Smell test: No odors from animals, smoke, waste, must Interior door/Door stops: Fully functional Garage door opener: Functions correctly Flooring: No oil stains or cracks Walls and ceiling: Clean, no damage or mold Windows: No damage, hardware intact, no evidence of moisture Storage areas: Organized, no damage Safety and compliance Status: [Good / Needs Maintenance / Poor] Handrails: In good condition, no damage Smoke alarms: Up to code, batteries good, working order. Fire extinguishers: Inspected, and placed in easily accessible and visible spots. Carbon monoxide detectors: Up to code, batteries good, working order Electrical outlets: Functioning, GFCI compliant installed Lighting fixtures: Functional, no missing bulbs or broken fixtures Lighting: Functional Electrical panel: Good condition, labeled, all circuit breaker boxes work properly Additional Notes: Space for the inspector to make any additional comments or observations. Signature: Inspector’s signature, date. What To Do After a Rental Inspection Once you've conducted your inspection, there are a few steps you can take to make sure you're not missing any identified issues. 1. Document the inspection: Create a detailed written report of the inspection, including the date and time of the inspection, the property address, and the names of the inspector as well as the resident. Include all observations about the property's condition, particularly any damage, wear and tear, or maintenance issues. You'll want to take photos or videos of any significant issues, and keep a record of the inspection report in your property management records. 2. Communicate with the resident If appropriate, share the inspection report with the property resident, highlighting any concerns or maintenance issues. Address questions and concerns promptly and courteously. If maintenance or repairs are needed, provide the resident with the expected timeline for completion. 3. Schedule repairs Prioritize maintenance tasks based on their urgency and impact on the property's condition and resident safety. Where needed, hire reliable contractors to complete the repairs. As needed, monitor repair progress and ensure that they’re completed on time and to your standards. 4. Follow up Once the repairs are completed, inform the resident and schedule a follow-up inspection as necessary. If the resident has concerns or complaints about the repairs, address them promptly. 5. Update your records Update your property management records to reflect the completed repairs and any other relevant information. FAQs Here are a few frequently asked questions about rental inspections. Q: How often should you conduct rental inspections? A: The frequency of rental inspections can vary based on several factors, including local regulations, lease agreements, and the specific needs of the property. Generally, here's a recommended guideline: Move-In Inspection: Once, right before a new resident moves in. Move-Out Inspection: Once, immediately after the resident vacates. Routine Rental Inspections: Typically, every six to twelve months. It's a balance between ensuring the property is being maintained without being overly intrusive to your residents. Drive-By Rental Inspections: These can be conducted more frequently, perhaps quarterly, since they are less invasive and don’t require entering the property. However, always consult your local laws and regulations, as some areas might have stipulations on how often you can inspect a rented property. Also, it's crucial to provide residents with proper notice before any inspection, respecting their privacy and rights. Q: Can a tenant refuse a rental property inspection? A: While rental inspections are essential for property managers, tenants have rights, and their privacy must be respected. Generally, a resident cannot outright refuse a rental property inspection if: It's Stipulated in the Lease: Most rental agreements or leases have clauses that allow for periodic inspections by the property manager or landlord, given proper notice. Adequate Notice is Given: Many jurisdictions require landlords to provide a specific amount of notice (usually 24-48 hours) before entering the property unless there's an emergency. The Inspection is Conducted at a Reasonable Time: Inspections should be scheduled during reasonable hours, avoiding early mornings, late nights, or any time that might intrude on the tenant's reasonable expectation of quiet enjoyment. However, if a resident has a valid reason like health concerns, religious reasons, or personal issues, it might be possible to reschedule the inspection to a more convenient time. Always be sure to check local laws and regulations as tenant rights can vary by jurisdiction. Open communication and understanding between both parties can help mitigate any concerns or conflicts. Make Property Management Easier with Second Nature At Second Nature, our goal is to make property management easier for professional property managers. We built our Resident Benefits Package to support property management companies in delivering the best resident experience on the market. From a move-in concierge to air filter subscriptions to rent reporting, we deliver the services that residents will pay for – and stay for. Learn more about our RBP today!

October 10, 2024

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Benefits of Outsourcing Property Management Services

Property management services have changed by leaps and bounds over the past 5-10 years. And property management outsourcing services have grown along with it. While the traditional approach to property management simply provided the basics – maintenance, rent collection, etc. – entrepreneurial PMs saw a massive gap in that value proposition and have transformed the real estate industry. Now, property management services are increasingly seen as a way to generate value for residents, real estate investors, and property management companies. PMCs are delivering resident benefits like credit reporting, renter’s insurance programs, pet guarantees, and more. And each of these services acts as a value add for everyone involved. But that can also add extra burden and cost to your property management business when your team is already spread thin. One of the best ways to offer value without overextending your team is to outsource some of those PM services to PropTech products, contractors, or a fully managed solution. Today we’re going to talk about this option in more detail. Whether you’re just getting started in property management or a seasoned pro, we hope you’ll find something here to help. Key Learning Objectives: What is outsourced property management? What services add the most value to the resident experience? What property management services are most easily outsourced? What are the costs associated with outsourcing PM services? What are the benefits of outsourcing PM services? What is Outsourced Property Management? Outsourced property management refers to the practice of paying for a third-party company or product to handle certain tasks or operations for your property management company. This could include tasks such as tenant screening, resident benefits, renters insurance programs, rent collection, maintenance and repair coordination, lease enforcement, financial reporting, and more. Property management is, in itself, an outsourced service for real estate investors/property owners. Just as property owners often choose to outsource their property management to save time, reduce stress, and ensure they stay profitable – property management companies may outsource several of their services for the same reasons. Property management outsourcing services, whether PropTech products or fully managed solutions, allow property management companies to build efficiencies and focus on quality and growth. Outsourcing certain services can give residents more of what they need and investors more value for their dollar. What Services Can Property Management Companies Outsource? Advances in technology and innovation within the property management industry have given PMCs greater flexibility in terms of outsourcing key services. As a property manager, you may outsource for a range of reasons. Maybe you’re still building up your team and need cost-effective expertise in a certain area. Maybe you have core products you want to focus on and want certain services to take less of your time. Maybe your investors or residents are asking for out-of-scope services that you can offer for an additional fee. Overall, outsourced property management services can help PMCs save time, reduce stress, and maximize the profitability of their company. So, what are some of the most commonly outsourced property management services? They can be grouped into a few categories: A single-family property management software and integrations that enable all kinds of business operations. Maintenance and repair. Many PMs outsource things like plumbing, HVAC, and other contractor work. Resident benefits and ancillary services. Property managers often outsource value-driving products like an RBP and other services that investors want, and residents will pay for. Let’s dig into the services that might be included within each of those larger categories. Rent collection Third-party payment processing companies can handle the actual collection and processing of rent payments for the PMC. The property management company will provide the payment processing company with the necessary information and details about the residents and the property, including lease terms, payment due dates, and amounts owed. The process may involve various payment methods, such as online payments, credit card payments, ACH transfers, or other payment options. Some popular outsourcing solutions that help collect rent include Buildium, Propertyware, and AppFolio. Second Nature provides a fully managed service that helps ensure your residents pay rent on time. Repair and maintenance Many PMCs outsource repairs and property maintenance. We’ve spoken with experts like Bob Preston, who run their own maintenance companies separately as another source of income and an added value to their clients. When a property management company outsources repair and maintenance, it typically involves hiring third-party contractors or service providers to handle the actual repair, upkeep, and maintenance tasks required for the property. Outsourcing repair and maintenance can offer several benefits for property management companies. You can access a broader range of specialized skills and high-quality expertise, which may not be available in-house, and save time and resources by avoiding the need to recruit and manage in-house staff to handle repair and maintenance tasks. Marketing and advertising Marketing isn’t everyone’s strong suit, and that’s okay! When a property management company outsources marketing and advertising, it typically involves hiring a third-party marketing or advertising agency to handle the promotion and advertising of the rental properties. The agency will work closely with the PMC to develop a comprehensive marketing strategy that aligns with the property's unique selling points and target audience. The marketing agency may use a variety of advertising channels and mediums to promote the property, including social media marketing, search engine marketing, online advertising, email marketing, print advertising, and other marketing channels. They may also create engaging content and visuals, such as videos, images, and virtual tours, to showcase the property's features and amenities. Legal Most PMCs outsource their legal services to a third-party law firm or attorney to provide legal advice and representation on various matters related to the property or properties. Legal services that may be outsourced can include lease agreements, evictions, compliance with local and federal laws and regulations, dispute resolution, and other legal matters that may arise in the course of managing the property. Outsourcing legal services helps minimize legal risks and liabilities, ensure compliance with applicable laws and regulations, and protect the property investor’s interests. Accounts and finance Many PMCs outsource to an accounting firm or financial service provider to handle the financial management and reporting. The outsourced firm will work with you to manage financial records, provide financial reporting, and ensure compliance with accounting standards and regulations. Accounting and financial services that may be outsourced can include bookkeeping, financial statement preparation, tax planning and compliance, budgeting and forecasting, and other financial reporting and analysis. Overall, outsourcing accounts and finance can help property management companies to operate more effectively and efficiently and achieve their financial objectives while minimizing financial risks. Insurance PMCs often work with a third-party insurance broker or agent to provide insurance coverage and manage insurance-related issues for the property or properties. The insurance coverage that may be outsourced can include property insurance, liability insurance, workers' compensation insurance, and other types of insurance coverage that may be necessary or recommended for the property. Another way to outsource insurance is to find a service that provides a renters insurance program like Second Nature’s. Ensuring that residents have insurance coverage is a priority for 90% of property managers, but only 41% of residents maintain compliant coverage. At Second Nature, our renters insurance program has 100% compliance. You can learn more about our coverage and fully managed Resident Benefits Package in our 2023 Resident Experience Report. Safety and security Many PMCs outsource to a security company to provide safety and security services. The security company will work closely with the property management company to assess safety and security needs, design and implement safety and security protocols, and provide safety and security personnel and equipment as needed. Security services that may be outsourced can include security personnel, security systems and equipment, safety training and education, emergency response planning and execution, and other safety and security-related services. Costs of Outsourcing Property Management Services? The cost for a PMC to outsource some property management services can vary depending on a number of factors, such as the scope of services required, the complexity of the work, the location of the service provider, and the level of expertise required. Some service providers may charge a flat fee, while others may charge an hourly rate or a percentage of the property's rental income. The cost of outsourcing property management services can range from as low as $1 per property per month to as much as hundreds of thousands of dollars annually, depending on whether it’s a full-service tech solution, simple maintenance services, a Resident Benefits Package, etc. It's important to note that while outsourcing property management services can come with a cost, it can also provide benefits such as increased efficiency, reduced workload, and access to specialized expertise. Before outsourcing any services, it's important to carefully consider the potential costs and benefits and to choose a service provider that offers high-quality services at a reasonable price. Benefits of Outsourced Property Management Services Outsourcing property management services can have a massive impact on your return on investment per door and per client. Outsourcing also helps with scaling when you can’t afford to run every service in-house. With the ability to outsource, you can offer more value to your clients without skyrocketing your operating costs. You can also drive secondary sources of revenue through outsourcing. Not convinced? Let’s go over some of the real-life benefits we’ve seen PMCs leverage with outsourcing select services. Cost savings Outsourcing property management services can save property management companies significant costs associated with hiring and managing in-house staff, as well as investing in technology and infrastructure. Outsourcing can also help to minimize overhead costs, such as office space, equipment, and supplies. Let’s think even bigger. Outsourcing value-generating services like a Resident Benefits Package has multiple benefits: boosting resident satisfaction, incentivizing on-time payments, and reducing vacancy rates. Talk about a cost-saving win! Increased efficiency We’ve seen PMCs use outsourcing to streamline their operations, reduce administrative property management tasks, and increase productivity. This can free up time and resources for property management companies to focus on core business functions and strategic planning. Instead of using your own team for time-consuming tasks, you can outsource them. Access to expertise Outsourcing property management services allows PMCs to access specialized expertise and skills that may not be available in-house. This can include legal, accounting, marketing, and maintenance expertise, among others. Outsourcing can also provide access to the latest technology and software, which can improve efficiency and effectiveness. Better risk management Property management inherently involves risk. You’re managing people’s lives on the one hand (residents) and investments on the other (owners/investors). Outsourcing can help better manage risks associated with property management, such as legal liabilities, compliance issues, and safety and security concerns. This can help protect your company from financial and reputational damage. Improved resident satisfaction You can more seamlessly and reliably improve resident satisfaction by providing better maintenance and repair services, more efficient rent collection, and faster response times to tenant concerns and requests. This can help to increase tenant retention and attract new tenants. Higher employee satisfaction Outsourcing services to a third party is a direct way to impact your employees’ satisfaction. How? Outsourcing helps reduce workload, gives access to better training and development, improves working conditions, and provides a better work-life balance. Often, outsourcing means that your employees get to focus on the core functions that they love instead of getting bogged down in tasks they don’t love or don’t feel equipped for. Factors to Consider When Outsourcing Property Management Back Office Services Selecting the right property management outsourcing services provider is a crucial decision that can significantly impact the efficiency, profitability, and overall success of your property management operations. Here are key factors to consider: 1. Range of services Evaluate the range of services provided by the outsourcing company. Check to make sure they offer the specific services you need, such as rent collection, maintenance, legal support, marketing, financial management, and resident benefits. A comprehensive provider can handle multiple aspects of property management, which can streamline your operations. 2. Industry experience Look for a provider with extensive experience in property management and a proven track record of success. They should have expertise in the specific types of properties you manage, whether residential, commercial, or mixed-use. Experienced providers are more likely to understand industry-specific challenges and deliver effective solutions for various situations. 3. Reputation Research the provider’s reputation within the industry. Check online reviews, testimonials, and case studies to gauge client satisfaction. A provider with positive feedback and strong references is more likely to deliver high-quality services. 4. Cost Evaluate the cost structure of the provider’s services. Compare their fees with the value they offer, as well as review how they bundle these services. While cost is an important factor, it’s essential to consider the overall value and benefits the provider brings to your property management operations. The goal is to achieve a balance between cost-effectiveness and high-quality service. 5. Customer service Effective communication is vital to successful outsourcing. Assess the provider’s responsiveness, transparency, and customer service quality. They should offer multiple channels for communication, ideally with a main point of contact, and provide timely updates on important matters. 6. Technology and innovation Assess the technology and software solutions the provider uses. Advanced property management software can enhance efficiency, improve communication, and provide valuable insights. Ensure the provider leverages the latest technology to offer seamless and efficient services. 7. Compliance and legal expertise Ensure the provider is well-versed in local, state, and federal regulations related to property management. They should be able to navigate legal complexities and ensure compliance with all relevant laws. This reduces the risk of legal issues and ensures smooth operations. How Thousands of PMCs Are Outsourcing Services for Better Resident Experiences Property management companies are always looking for new ways to generate value for themselves, their residents, and their investors. One of the quickest ways to scale and increase return on investment is to outsource property management services. At Second Nature, we’ve pioneered the first-ever fully managed Resident Benefits Package in order to support PMCs with just that goal. Our RBP provides services that residents are proven to pay and stay for – and our team manages every part of the process so property managers can focus on strategy, growth, or work-life balance. We’ve helped thousands of property managers transform their services and their operations with a customized RBP providing services they couldn’t do alone. Our goal is to make property management easier for PMs, residents, and investors – and drive value that benefits all three. We call it the Triple Win.

October 2, 2024

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9 Best Property Management Podcasts to Follow in 2024

As incredibly busy single-family and multifamily property managers, staying informed on the latest industry trends and resources on top of your ever-increasing list of to-dos can feel near impossible. But thankfully, there is now a wealth of excellent industry podcasts to do the hard work of staying up to date. All you have to do is tune in. Property management industry podcasts make it extra easy for you to gain insight, advice, and practical tips while commuting, cooking dinner, or working out. By listening to industry thought leaders and experts, you'll learn new ideas and perspectives on improving your strategies and ultimately growing your business. We've combed through all of the property management podcasts to find you the eight best ones. And we've made sure they meet the following criteria: The podcast's relevancy to your role as a single-family property manager – With so much information tailored to multi-use property managers, it can be hard to find industry insight into your particular challenges and industry issues. The caliber of the hosts and their guests – we looked for those run by reputable sources endorsed by trusted associations, organizations, and professionals in the property management business. Content quality and diversity of topics – We wanted to see that the podcast covered a wide spread of topics—from real estate investing to leasing challenges to tips like building your cash flow—and provided a well-rounded perspective on the industry. Actionable insights – We looked for podcasts that provided practical tips, strategies, and advice you can readily implement in your day-to-day work as a property manager. Length and accessibility – We all know how tiring it can be for a podcast to drone on and on. We looked for ones that were under an hour and were accessible, engaging, and even entertaining. 1. Triple Win Podcast The Triple Win Podcast is hyper-focused on the needs and challenges of single-family property managers. With each topic it addresses, The Triple Win Podcast looks at how property managers can create and monetize value for their company while also building strong working relationships. Its core focus is finding solutions that are a win-win-win for everyone involved—residents, real estate investors, and property managers alike. The Second Nature team hosts the podcast and invites experts across the industry to discuss topics such as using Practical AI for property management, turning customers into superfans, and tips for revenue building, annual goal planning, and more. The Triple Win Podcast is released twice a month and can be listened to here, and for more insights, subscribe to one of these property management newsletters. 2. Owner Occupied with Peter Lohmann Owner Occupied is an interview-style podcast. Each week, Peter Lohmann invites experts from across the industry to discuss the business side of property management. Lohmann covers super granular topics (like competing with the 3% management fee) and ones that look at the big picture (like how to know which opportunities to pursue and which to let go). Lohmann interviews experts such as Michael Girdley of the Complete HoldCo Course, Todd Ortscheid of Always There Repair, and Brandon Scholton of Key Renter Denver. The best part of this podcast is that Lohmann lists the time stamps in the description. So, if you don't have time to listen to the full interview, you can easily skip to the parts that most interest you. Find Owner Occupied on Spotify here and tune in weekly for valuable information and insightful interviews. 3. Property Management Business with Marc Cunningham Marc Cunningham of PM Build works tirelessly to help property managers build their people, profit, and processes. And he shares a wealth of industry tips in his podcast Property Management Business. Each episode is less than 30 minutes, making it incredibly accessible and easy to fit into your day. Marc brings an optimistic and grounded perspective to the industry, inspiring property managers to build strong working relationships with property owners, tenants, and realtors. He also encourages property managers to simplify maintenance and discover the industry's exciting future. Tune in for new episodes each month and be inspired to grow your business here. 4. The Profitable Property Management Podcast Do you love to hear success stories of non-stop go-getters? Well then, The Profitable Property Management Podcast is for you. The host, Jordan Muela, has worked in the industry for over ten years, started three businesses, hiked the Grand Canyon to raise money, launched two podcasts, and released the industry's first financial benchmarking study. And he brings all of that energy and expertise to his interview-style podcast. "This podcast is dedicated to the property manager entrepreneurs that refuse to settle in life and business," says Muela. And it's clear he's walked the talk. Tune in to his weekly podcasts on Apple, Spotify, or wherever you like to listen. He'll inspire you to find meaning at work, boost your profit margins, and stay resilient as you navigate the daily challenges of property management. 5. 300 to 3,000 300 to 3,000 is hosted by Matthew Whitaker and Spencer Sutton of Evernest. The episodes vary from 30 minutes to over an hour and a half, but because they are chock-full of tips for adding new properties to your portfolio, we decided to include it in our round-up. Evernest is a national property management company that grew out of necessity. When the 2008 economic crisis happened, Matthew Whitaker owned 30 investment properties he was desperate to sell but couldn't. Using all of their creativity and gumption, Matthew and Spencer launched their property management company. They have grown from the rockiest start to a thriving property management business that oversees 15,000+ properties across the U.S. Every week, Matthew and Spencer provide industry insight from an incredibly thoughtful perspective. They cover interpersonal dynamics (Episode 82: Trying to Build a Great Team? How Trust and Conflict are Essential), the emotional strain of property management (Episode 61: How to Find Clarity in the Middle of Painful Problems), and practical business tips (Episode 55: How to Grow Your Maintenance Department). Tune in here. 6. NARPM Radio The industry's most trusted association is the National Association of Residential Property Managers (NARPM). NARPM hosts conferences and trade shows, provides courses and webinars, advocates for policies that affect property managers, and offers ample networking opportunities for PMs. It's no surprise that their podcast is also an excellent resource. Twice a month, host Pete Neubig interviews different industry experts and provides invaluable insight into the various aspects of property management. Learn how to identify your business's core values, stay focused while growing your business, navigate property management taxes, and more. Connect with the organization on social media and catch the latest episodes here. 7. The Property Management Mastermind Show Like The Triple Win Podcast, The Property Management Mastermind Show focuses on single-family property management and is thus a valuable resource for those in that specific sector. Host Brad Larsen owns RentWerx, one of the fastest-growing property management companies in Texas. Brad brings his own hands-on experience to each episode and provides listeners with insight into the latest trends, best practices, tips for vendors, and more. Catch his weekly episodes here and take your property management strategies to the next level. 8. Property Management Brainstorm This podcast focuses primarily on maximizing your property value and raising your income while maintaining strong relationships with your tenants. Host Bob Preston brings his experience as a Silicon Valley technology executive to the property management space, guiding PMs on using the right technology and implementing effective operations to streamline and scale their businesses. Every week, Bob interviews other industry experts to help property managers think through business strategies and operations. Earlier this summer, Bob re-released our conversation on pest control in rental properties. It was such a delight to chat with Bob and I'm honored they have dubbed it one of their best episodes ever. Tune in to the full Property Management Brainstorm podcast here. 9. The Property Management Show The Property Management Show podcast, created by Brittany Stephens and Marie Liamzon-Tepman of Fourandhalf, Inc., breaks down the keys to business success with insights from industry experts. Launched in 2015, the podcast covers topics such as marketing strategies, industry innovations, and best practices for running a successful property management business. All content is based on the expertise of the folks at Fourandhalf, a marketing agency specializing in helping fee-based property management companies grow through services like website design, SEO, content creation, and online advertising. Catch show episodes here. Alright, there you have it—our nine favorite industry podcasts. We would love to hear which ones you enjoy the most and which ones you would add to the list. Happy listening!

September 30, 2024

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Property Management Pest Control: Why It’s Important

Pest control plays a critical role in effective property management. That's because pests are not just a nuisance – they can also contaminate food, damage belongings, spread diseases, and make rental properties unlivable. In this blog, we'll cover the impact of pests on your property and residents' lives, practical strategies for controlling these unwanted guests, and the benefits of a preventive approach to pest management. On hand to help us deliver these insights is Landon Cooley, the Co-Founder and CEO of Pest Share, a commercial pest control expert. Cooley's extensive experience in the pest control industry provides valuable knowledge on how property managers can effectively integrate pest control into their maintenance routines. What you'll learn: Why preventive pest control is a smart strategy How to monitor and control pests on your property The responsibilities of property managers and residents in maintaining a pest-free environment Common pests, how they enter properties, and the importance of immediate action and resident education By the end of this article, you’ll have a thorough understanding of the importance of pest control in property management and actionable steps to ensure a healthy, comfortable living environment for your residents. Why Preventive Pest Control Is a Good Strategy The most important part of pest control? Prevention. There are so many reasons that a good preventive pest control program can pay off for your company, your investor, and your residents. It sets professional property managers apart from the crowd. Here are some of the top reasons why preventive pest control works. Cost-effective in the long run Investing in a preventive pest control plan can save significant costs in the future. While there is an upfront cost, it's generally far less than the expense of handling large-scale infestations or property damage caused by pests. Prevents major infestations Pests have a way of multiplying exponentially. A preventative approach can nip potential critter nightmares in the bud. By treating small issues promptly, you can prevent them from developing into major infestations that are difficult and costly to eradicate. Enhances resident satisfaction Preventive pest control contributes to a comfortable and healthy living environment. By keeping pests at bay, you increase resident satisfaction, which can lead to longer tenancy periods and positive word-of-mouth referrals. Preserves property value Pests can cause significant damage to the structure and aesthetics of your property. By keeping properties pest-free, you protect and preserve the value of the property. Property managers are, in the most foundational way, asset managers for their property owners. This is a critical way to protect those assets. Reduces health risks Many pests carry diseases that can pose health risks to your residents. A preventive approach to pest control helps maintain a healthier living environment by reducing these risks. It also protects you and your investor from liability associated with those health concerns. Maintains reputation Effective pest control is a key aspect of property management, and a preventative approach helps maintain a good reputation. It shows prospective and current residents that you are proactive and dedicated to providing a safe, comfortable living environment. Again, prevention sets you apart from hobbyists and amateur property managers. How to Monitor and Control Pests in Your Property Regularly scheduled inspections are the best mechanism for effective pest monitoring. Ideally, qualified personnel should conduct quarterly or biannual checks. These inspections will focus on identifying potential entry points for common pests, and might include checking for cracks in the foundation, gaps around pipes and wires, and proper ventilation in crawl spaces. Maintaining open communication with residents is equally important. Encouraging residents to report any signs of pests, like droppings or unusual noises, allows for early intervention. Property managers should have a clear procedure for responding to such reports, ensuring a swift and effective resolution to prevent infestations from escalating. Of course, understanding the problem only gets us halfway (if even!) to solving it. As property managers, the responsibility of dealing with pest issues falls squarely on your team’s shoulders. Great property management companies employ a strategic approach to integrated pest management (IPM), minimizing the possibility of pests – and dealing with them immediately when there’s an issue. Along with routine inspections, here are some of the top property management pest control trips we’ve handpicked from the industry. Immediate action Taking immediate action at the first sign of a pest problem is crucial. Delays can allow the pest population to grow, making the issue more difficult and costly to handle. A quick response to reported issues shows your residents that their comfort and safety are a priority and can often prevent minor issues from escalating into serious infestations. Whether you call an exterminator or handle it in-house, a swift response is key. Tenant education Educating tenants on proper food storage and waste disposal can drastically reduce the attractiveness of your property to pests. Regular communication about cleanliness and preventative measures empowers residents to contribute to a pest-free environment. Professional pest control services Sometimes, professional intervention becomes necessary. Pest control services can effectively deal with large infestations, employing safe and targeted solutions. They can also provide expert advice on preventing future infestations. Cooley says it’s important to understand what specializations pest control companies offer when hiring. “There are several different segments of the industry, and not all companies do everything,” he says. “Some do only residential insect control, or maybe rodent control. Some are very robust and specialize in all these areas. Every company is a little different.” Landscaping and exterior maintenance Maintaining the exterior of your properties is as crucial as looking after the interior. Regularly trim overgrown plants, manage water drainage effectively, and keep outdoor trash areas clean to deter pests. Seal entry points Prevent pests from entering by regularly checking for and sealing any potential entry points. This includes filling cracks, fixing broken screens, and covering crevices. Keeping your property in good repair helps make it less accessible to pests. Proper waste management Secure and timely waste disposal is key to pest prevention. Ensure that all trash bins are properly covered and regularly emptied to avoid attracting rodents, insects, and other pests. Each of these methods contributes to effective pest control, helping to create a comfortable, pest-free environment for your residents. Property Management Pest Control Concerns Who is responsible for pest control? The responsibility for pest control can vary depending on the state and the specific situation. In many states, landlords are largely responsible for maintaining a habitable dwelling, which includes addressing existing pest infestations and taking preventative measures. However, some states place more responsibility on residents, especially if the infestation arises from unsanitary conditions within the unit or from a tenant's actions that attract pests. Lease agreements often address pest control by outlining each party's obligations. It's important for both property managers and tenants to understand these clauses to avoid confusion or disputes. What are the most problematic pests? In terms of structural damage, termites and rodents are high threats due to their ability to gnaw and burrow. Ticks pose significant health risks as they can transmit diseases. For general nuisance and quality of life issues, cockroaches and bedbugs are common culprits. Ultimately, the most problematic pests will depend on the specific location, property type, and potential health risks. Do I need preventive pest control? If the properties you're managing have historically had pest problems, or are situated in an area with frequent infestations, then proactive measures will certainly be beneficial. Regular inspections and preventative treatments can offer peace of mind and potentially save money by stopping infestations before they start. Even if you haven’t had any issues, a purely reactive approach can end up costing you. How can pests enter my property? Pests can enter properties in a surprising number of ways. Cracks in foundations, gaps around windows and doors, holes created by utility lines, and damaged vents are all potential entry points. Even seemingly small openings can be enough for some persistent pests, like rodents and insects. Additionally, pests can hitchhike inside year-round on cardboard boxes, used furniture, or on pets. Why Property Management Pest Control Is Important When we talk about property management, pest control isn't just an afterthought—it's a crucial component of providing the peace of mind that comes with a safe and comfortable living environment. Dealing with these “visitors” is important beyond just the ick factor. “The pest control industry only serves 15% of US residents, and yet 86% of US residents have an experience of pest infestations every year,” Cooley says. “So there’s a big gap.” Let's delve into some of the key reasons why pest control is so important. Pests contaminate food Many pests, such as cockroaches, ants, and rodents, are notorious for finding their way into food supplies. They can carry harmful bacteria and other pathogens, contaminating food and cooking surfaces. Mouse droppings, for example, can spread disease, in addition to just being … gross. This can potentially lead to foodborne illnesses amongst residents, causing unnecessary discomfort and potential health issues. Pests destroy property Pests like termites and carpenter ants can cause costly damage to the property structure, eating away at wood and compromising the integrity of the building. Other pests may gnaw through electrical wiring or insulation, leading to costly repairs. By maintaining consistent pest control measures, you can prevent such destruction and safeguard your property, making it a more secure and stable environment for your residents. Pests destroy residents’ belongings Some common pests, like carpet beetles or silverfish, may seem small and harmless, but they can wreak havoc on a resident's personal belongings. These pests can destroy everything from clothing and books to upholstered furniture, causing financial stress and discomfort to your residents. Pests spread diseases Pests are known carriers of a variety of diseases and can be a public health risk. Rodents can spread hantavirus and salmonella, mosquitoes transmit West Nile virus and Zika virus, ticks carry Lyme disease, and fleas are known to carry several diseases or allergic reactions, to name a few. Roaches carry any number of bacteria and diseases. Keeping these pests at bay is critical to maintaining the health and well-being of your residents. Pests make it difficult to live Beyond physical health risks, pests can create an uncomfortable, even distressing, living environment. The presence of pests can lead to anxiety and sleep disturbances, negatively affecting residents' quality of life. Pests like fleas and bedbugs cause physical discomfort if not outright health problems, and many pests, like mites, spread or trigger allergens. In short, effective pest control is essential to maintaining the integrity of your investors’ property assets, the health of your residents, and your reputation as a caring and responsible property manager. How Much Does Pest Control Cost? The last, and sometimes biggest, hurdle when it comes to pest control? Cost. General pest control methods can cost hundreds of dollars per service. Here’s an average breakdown for budgeting purposes: Cockroach/flea treatment: $350-$750 per service Bed bug treatment (heat): $1500+ per service Bed bug treatment (chemical): $1000+ per service Rodent trapping service: $250+ per service Quarterly general insect service: $40-$50 per month How can property managers find a cost-effective solution that drives value and comfort for their residents without breaking the bank? Throughout his years of experience, this is the question that Landon Cooley found was nagging the property managers he met. “We wondered: Can we take these specific pain points – bedbugs or cockroaches or fleas – and find a solution that we can build into our Resident Benefit Program?” Property Management Pest Control Solutions Cooley’s solution? He co-founded Pest Share, which is a new service in Second Nature’s fully managed Resident Benefits Package. The Pest Share model is a subscription model that works like a co-op: everyone pitches in, and the collected funds go to the more expensive parts of the plan without burdening any one client with too much cost. Property managers simply select the Pest Assurance plan from four tiers of service levels. They add that plan to their RBP or OBP and pay a flat rate for it, which they can also roll into their overall RBP ancillary fees. Their residents can then go directly to Pest Share on their mobile phones to get pest services for no cost. “What we’re offering is unique, on-demand, and very tech-forward. Pet Share gives quick access to service but allows us to offer cheaper price points for the same end result,” Cooley explains. “Our approach is, 'How can we take this off the property manager’s plate?’ We aim to create ancillary revenue for them, take an annoying task off their list, and enhance the resident experience.” The result? Pest Share has helped their property management clients increase their Benefit Package ROI by 75%. For Second Nature, including Pest Share’s model in our Resident Benefit Package – and upcoming Investor Benefit Package – was a no-brainer. Learn more about Pest Share by getting in touch, or read our latest study on the impact of our RBP on the resident experience.

September 27, 2024

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12 Tasks for Property Management Automation

Property management automation refers to using technology and software to automate various tasks and optimize processes related to managing properties. It can involve using single-family property management software to streamline tasks such as rent collection, applicant screening, property maintenance requests, and accounting, among others. At Second Nature, we think of automation and outsourcing as two sides of the same coin. Either way, you're getting your time back. That's why our focus is making life better for residents and easier for property managers. Our suite of resident services helps support a better resident experience, driving up retention and making investors happier, too. And, since we fully manage every part of it, we also make life easier for you, the property manager. That's a "triple win." With that being said, let's dive into the nitty-gritty of property management automation: the 12 tasks and seven tools you can most easily automate and the seven tools to help you get there. Which Property Management Tasks Should You Automate? Automation might make us think of manufacturing lines or robots, but in the modern workplace, automation is simply a catch-all term for tech tools that can instantly streamline your work process. Automation tools handle time-consuming, repetitive tasks, speeding up the workflow process, creating fewer mistakes, and freeing us up to do more valuable work. Without automation, we find ourselves losing time with busy work like: Manually entering data Writing and sending emails Phone calls and follow-up Keeping track of to-do lists Fixing mistakes in spreadsheets or other work Reminding team members how to do day-to-day tasks Think about the last month when you took the same action repeatedly – or saw the same situation and made the same decision – or got the same question and shared the same information. If a task is easily duplicated and policy/rule-based, automation is coming for it. Here are a few of the most common areas where PMs are standardizing and applying automation tools. 1. Rent collection automation Online rent payments can automate reminders to tenants, reduce errors, and increase on-time payments to collect rent without creating any additional work for the PM. Tools like ELI+ (formerly Colleen.ai) and EliseAI are innovating this space. Both are chatbot-type tools that help automate things like rent collection by automating communication about delinquency and the follow-up process. The tools communicate directly with your residents for you with rent payment reminders, support, and more. 2. Property inspections and compliance Maintaining compliance with property regulations and ensuring thorough inspections are critical responsibilities for property managers. Using an automated checklist on a handheld device not only speeds up the inspection process but also ensures consistency, helping you meet regulatory standards efficiently. Automation tools can instantly generate comprehensive reports, eliminating the need to return to the office to manually input data. Tools like RentCheck and OnSight Pros can either automate or outsource this work for you as a property manager. RentCheck is a software tool that you and your staff can use for photos, checklists, workflows, and more, all while ensuring that inspections adhere to compliance standards. There's also a native app that residents can use to do inspections themselves. Then, it will compile a clean, easy report that you can send to your investors. OnSight Pros isn't exactly an automation, but it has the same impact on your workflow. They have a network of professionals who do property reviews in person for you, helping you stay compliant without having to perform every inspection yourself. They're not available in every market, but you can check their website for available service areas. Related: 5 Best Property Management Inspection Software Property Management Rental Inspection Checklist [Free Template] 3. Maintenance requests A 24/7 maintenance portal means you don’t have to take calls every time they come in, and you can quickly and easily triage maintenance requests. Tools like Property Meld help automate work requests, vendor communication, scheduling, and more. Mezo is another newer tool on the market that provides conversational AI to interact with your residents, scope the maintenance issue, support self-service, and help deploy the right professional if needed. With a tool like this, you can eliminate multiple trips out to the property or even have it fixed by the residents themselves. Related: 10 Best Property Maintenance Software 4. Accounting and bookkeeping Bookkeeping was one of the first areas of automation when computers entered the scene. It's hard to find a professional property management business that doesn't use property accounting software. Tools like Rentvine help automate fees, statements, financial tracking, and more. Most property management software platforms provide accounting features, and everyone uses them somewhat differently. You can use integrations, layer in vertical tools, and more. However, a lot of the actual accounting can't be truly automated. Instead, you can outsource to companies like Bynnd and Reconcile Daily who will do the accounting work for you. 5. Document management Property managers are always on the go. Automated document management is a game-changer. This one is pretty straightforward. Most property management software works with cloud-based documents and tracking or integrates with services like Docusign. 6. Managing new accounts With integrations, you can add new properties, trigger automatic processes, and reduce vacancies more quickly. For example, after entering a new property in your CRM, automation can launch a new property checklist and notify your whole team. For example, you can set up an integration where a new lead comes in as "won" through LeadSimple and Zapier automatically starts a new property checklist in Process Street, populates the data from the sales process, and assigns the checklist to the right person on your team. All automated. 7. Resident communication Email is the most common form of communication, and yes, it is automation. Some PMs are using even more streamlined workflow communication like Slack, LeadSimple, or Help Scout. Automation can feel alarming to some at first, but the best property managers are embracing it. They’re quick to do the hard work of developing policies, documenting the process, and then using tools to systemize their expertise and automate the work. The result is more reliable and likely less expensive than people doing it. Solutions like LeadSimple provide communication tools across customer types so you can set up automation for clients and residents. 8. Lease renewals Automating lease renewals allows property managers to streamline communication with residents when their lease is going to end soon. Various tools on the market can automatically generate renewal reminders, send them to residents, and draft lease agreements for electronic signatures. By automating this process, property managers can ensure they never miss a renewal opportunity, helping to reduce vacancies and keeping the workflow organized without manual tracking. Related: How to Craft a Lease Renewal Letter That Wows Your Residents [Free Template] 9. Resident onboarding Self-service workflows for resident onboarding allow new residents to manage their move-in process independently. Through online portals, automated messaging, and chatbots, property managers can reduce their direct involvement. This is especially useful for smaller property management companies that need to stay competitive while cutting down on manual tasks. By using these tools, residents can handle everything from signing leases and making deposits to setting up rent payments and maintenance requests, all without the need for back-and-forth communication. Although some property management companies may have some hesitation around adopting new technologies, the ability to simplify operations and offer a more seamless experience to residents makes these systems a smart choice for companies looking to operate efficiently in a tech-driven world. Related: How to Create Self-Service Tenant Onboarding Workflows Best Tenant Onboarding Software 10 Steps to Onboard New Tenants 10. Vendor management Managing vendors is an integral and sometimes time-consuming part of property management. Automation helps by consolidating communication and scheduling. For example, software systems can automatically dispatch work orders, track progress, and update the property manager on the status of repairs or maintenance. By using automation to manage vendor interactions, property managers can ensure timely service delivery while keeping their operations running smoothly. 11. Reporting and analytics Automating reporting and analytics allows property managers to track essential key performance indicators (KPIs) in real-time, providing a clearer picture of both financial and operational performance. These KPIs might include rent collection trends, occupancy rates, or maintenance costs, categorized by financial, operational, or property performance. By automating reports, property management companies can instantly access critical, transactional data while keeping sight of broader objectives like maximizing customer lifetime value. This enables data-driven decisions that not only focus on short-term metrics but also support long-term growth and stability. Learn more: Top 20 Property Management KPIs to Track 12. Utility billing and expense management automation Utility billing and expense management can be complex, but automation tools simplify the process by accurately tracking utility usage, generating bills, and distributing them to residents. This eliminates manual errors and ensures timely payment, while also allowing managers to monitor utility expenses across multiple properties. With automation, you gain full visibility into costs, making budgeting and forecasting significantly easier. Property Management Automation Tools After identifying the processes you want to automate, the next step is to adopt the best tools available to property managers. We’re seeing buzz from PMs across the industry using automation tools at every stage of their operations. One of the more visible examples out there is Peter Lohmann, CEO of RL Property Management. He outlined several no-code tools that he uses to automate his property management business. No-code tools are easy for anyone, and most can “talk” to other software through APIs. Here are some of the tools we like the best and how Lohmann has used them for his PMC: 1. LeadSimple LeadSimple is a sales and operations CRM geared towards property and real estate management. You can approve a rental application in the CRM and trigger other automations like emails, checklists, and more. LeadSimple recently added workflow automation and an inbox product that works like a ticketing system. 2. Zapier Zapier is a workflow automation app that connects all your other apps. For example, when you mark a new property in your CRM, it can “zap” your checklist software to start a “New Property Checklist.” 3. Process Street Process Street is an automated checklist software that gets your entire team on the same page. You can assign management tasks, mark priorities and completions, schedule, and more. It also has email templates that can be automatically populated from your CRM. 4. Slack We all know Slack. Slack is the communications app that puts your whole team in one place, sets up groups, streamlines topics, and more. Zapier can automatically send notifications through Slack about new accounts and assignments. 5. Mailchimp Mailchimp automates and sends professional emails. Through integrations, you can connect it with your CRM and other automations, so emails are automatically populated and triggered at the right time. 6. Airtable Lohmann explains that he has transitioned all non-financial data from their legacy system into Airtable, where they have control of it and can connect it to other tools. 7. Buildium Buildium is a property management software for PMs with 50+ doors in their portfolio. With a monthly fee, you can use Buildium to set up recurring rent payments with credit cards or ACH and use other property management features. Benefits of Automating Property Management Workflows and Processes Professional property managers don’t just manage property; they manage projects, workflows, and processes. Here are some of the top benefits of implementing automation tools to improve those processes and workflows. Improved efficiency Automated property management processes can drastically reduce the time spent on repetitive tasks, allowing your team to focus on more strategic activities. Use rent collection as an example: Instead of manually tracking payments, an automated system can collect payments electronically, keeping records updated in real time. Minimized errors Automated workflows minimize the chance of human error in tasks like accounting, tenant screening, or maintenance scheduling, ensuring accuracy and consistency. For instance, in accounting, automating calculations and data entry can reduce errors that may occur due to manual entry, ensuring the accuracy of financial records. Increased resident satisfaction Automation can speed up response times to maintenance requests, rent payment processing, and communication, leading to a better tenant experience. Using maintenance as an example here: Tenants can submit requests online, the system can automatically assign a service provider, and update the tenant with progress in real-time. Enhanced communication Automated reminders and notifications keep all stakeholders, from tenants to service providers, informed and engaged, improving communication. For example, automated reminders can notify tenants about upcoming lease renewals or rent due dates, ensuring they're well-informed and reducing late payments. Scalability Automated systems allow for easier scaling of operations as your property portfolio grows. It's much simpler to manage increased workloads when processes are automated. As your property portfolio grows, an automated system can easily handle adding new tenants, properties, and corresponding data, without requiring more administrative effort. Real-time reporting With automation, real-time reporting becomes possible, providing valuable insights into your business's performance and enabling better decision-making. An automated system can provide real-time occupancy rates, rental arrears, or maintenance costs, enabling you to make data-driven decisions. Cost savings By streamlining operations and reducing manual labor, property management automation can lead to significant cost savings in the long run. By automating routine tasks like tenant screening or lease agreement generation, you can save administrative time and associated labor costs. Regulatory compliance Automated systems can help ensure compliance with housing laws and regulations, reducing the risk of legal issues. For example, automated systems can update you on changes to housing laws and ensure all lease agreements are compliant. Remember, automation doesn't mean losing the personal touch that sets your business apart. Instead, it's about freeing up time and resources to focus more on those areas that truly require a human touch. What Is an Example of an Automated Property Management System? One innovative example of automated property management is right here at Second Nature. Our service helps manage and automate the resident experience to be the best that it can be. Our Resident Benefits Package allows property managers to deliver premium services – without the hassle of managing the programs in-house. Second Nature's RBP™ offers benefits that residents pay and stay for, like rent reporting, renters insurance, filter delivery, identity protection, resident rewards, and even a move-in concierge. With the RBP™ you can essentially automate resident happiness. How Second Nature Helps With Property Management Automation Automation sets professional property managers apart. As automation is adopted across the industry, professional PMs are more likely to build the right systems and put together the right tools faster than people who aren’t as motivated or skilled. At Second Nature, we believe in the power of innovation, and we see it every day in property managers around the country. Our tools, like the Resident Benefits Package, aim to bring more ease and automation to your work processes so you can get out there and grow your business. Learn more about our benefits and tools at secondnature.com.

September 26, 2024

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