Calendar icon June 28, 2023

Property Management Fees: Opportunities for Growth

Photo of Andrew Smallwood

Andrew Smallwood

Chief Customer Officer - Second Nature

If you’re familiar with Second Nature, you know that supporting SFR property managers in building triple win experiences is our focus. So today, we’re taking on the thorny topic of property management fees within SFR property management companies. And we’re turning to one of the leading industry educators on the subject: Todd Ortscheid, owner of PM Assist. 

Here’s what we’ll cover in this article.

Key Learning Objectives:

  • How to structure your property management fees for growth
  • The benefits and challenges of charging property management fees
  • How you can use fees to add value for yourself, your clients, and your residents
  • How to introduce fees without turning clients off
  • Examples of property management fees you might not be employing (yet)

Meet the Expert: Todd Ortscheid

Todd spent 14 years as an airline pilot – an industry known for capitalizing on fee structures as a growth strategy. He took over his father’s property management company after the 2008 real estate crash and eventually tripled the company’s number of doors. As the co-owner of PM Assist, he offers training and counsel on finding new ways to increase company revenue, process automation, and profit per unit.

Todd is a true entrepreneur and creative thinker, with ideas that challenge the status quo and may even ruffle some feathers. But Todd’s strategies have proven to help grow property management companies, and we’re thrilled to share his insights.

Related: State of Resident Experience Study

 

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What Property Management Fees Are Standard?

You should be seeing income on anything you’re spending money on as well. Anything you want to do to create more value for residents or investors? You should charge a fee for that so your company can stay competitive and your employees can get paid. 

Here are a few examples to get you started.

Inspection & Maintenance Fees

How much time are you spending on periodic property inspections? How much money are you spending on maintenance costs? How valuable is your staff's time? 

Todd says, “You have to be charging for this. Don't just include maintenance requests and inspections as part of your monthly management fee.”

Marketing Fees

Todd says, “I'm sure a lot of you are probably in markets where Zillow started charging you to put your listings on their website. And I've heard a lot of property managers say it's just a cost we're absorbing. Don't do that. Pass on that cost. Call it a marketing fee or the Zillow fee or whatever you want to make sure you're making money on that. Never pay for your own property management costs – come up with some way to cover all of these costs that you have for your business.”

Insurance Risk Mitigation Fees

If your investor doesn’t have insurance, you are often the one who will suffer. 

Todd advises charging a fee if your investor doesn’t send a policy within 30 days. 

“Tell them, ‘This new fee will be charged as a mitigation fee for the additional risk we have.’ You will not believe how quickly people will send you their insurance policies if you do this. We only charged a nominal fee. But a flood of emails came in after I sent out that notice to owners. So this isn't about making more money. For the most part, it's about influencing behavior and ensuring you get the insurance policies you need.”

Account Creation Fees 

As a property manager, you can charge a set fee to investors to create an account with your company. This fee may or may not cover various other costs such as any related property inspection requirements or tenant communications. 

Recurring Management Fees

Recurring (typically monthly) property management fees are extremely common in the industry, and will be built into the initial contract signed between the investor and the property management company. The amount can be based on a flat fee structure, or tied to a percentage of the monthly rent collected.

Vendor Screening Fees

It’s a hassle to use vendors outside your usual network.

“If you have property owners who want to use their vendor instead of your preferred vendors, that creates more work for you.”

If you charge a flat fee, they’ll likely drop it, and you’ve saved yourself that extra work. If they want to keep their vendors and pay the fee, at least you’re getting paid for that extra work.”

Rent Protection Fees or Eviction Fee

A huge area of value for investors is protecting them from unwanted risk. Investors have to deal with concerns about evictions, lost rental income, and more. Property management companies can take on that risk for a fee. You can say you’ll cover missed rent if the investor pays a monthly fee. 

The win for PMCs is that the risk is often low, and you can often control it (controlling for on-time rent due by charging late rent fees, for example). You get the fee, and you will rarely have to take the hit on the month’s rent.

The win for investors is they don’t have to worry about it at all.

Contract resiliation fees

For investors that terminate the property management contract prematurely, you can charge an early termination fee, the amount of which will vary depending on the contract's terms. The fee may cover a month or more of management fees.

Resident Fees

Todd emphasizes that the real moneymaker is resident fees. Plus, charging fees for unwanted behaviors – like late rent, paper leases, failure to change HVAC filters, etc. – can help drive better behavior. 

Todd uses examples like

  • Security deposit processing fee
  • Leasing fee or a lease amendment fee
  • Paper lease setup fee
  • Lease renewal fee
  • Late fee
  • Special programs fee

“Of course, the resident benefit package is the big one. This is a way for you to provide additional services to your residents and make some money off of it.”

What Are the Factors that Influence Property Management Fees?

Ultimately, the fees you charge should reflect your operational reality, and can vary depending on a range of factors:

  • Property location: Properties located in areas with higher operational expenses may incur higher management fees compared to those in other regions.
  • Property condition: The condition of the property, and whether it is new or renovated, affects maintenance requirements and thus can influence management costs.
  • Property size: The size of the rental property directly influences the workload of the property manager, with larger properties typically incurring higher fees.

Scope of services: The range of services provided by the property management company significantly impacts the fees charged. Basic services like rent collection command lower fees, while comprehensive management services covering rent collection, vacancy filling, repairs, evictions, and financial record-keeping for taxes entail higher costs.

How Should Property Managers Structure Fees? 

Real estate investors often focus on determining what fair or typical property management pricing should be. A general rental property management fee includes collecting the month’s rent, following up on arrears, organizing property maintenance and repairs, and keeping abreast of legal requirements. 

That’s the baseline. But the growth is in what you do on top of that baseline. 

Todd breaks down pricing like this:

“Only 40% of your revenue should come from your property management fee. 60% of our revenue is not management-fee related. If most of your money comes from your management fee, you're doing it wrong. That's not going to last very long.”

And here’s the difference those added fees can make to your bottom line:

“According to recent numbers from Profit Coach, the average PM company gets about $170 a month in revenue. $170 per door per month. I just looked at the profit coach dashboard for my company, and over the last 12 months, we have averaged $320 per unit per month.”

The nugget in there is that the market should determine your base property management fee. But that often cheats PMCs, giving property managers extra work without fairly compensating them for the additional time, effort and cost. You can – and, according to Todd, you should – be charging for that extra work and extra value that you provide as a professional.

Note: Todd emphasizes that ALL fees should be communicated upfront during the onboarding process and lease agreement. Fees aren’t about tricky pricing or hidden markups. They’re about charging for value and driving behavior.

What Are the Benefits and Challenges of Charging Property Management Fees? 

Let’s look at some of the pros and cons of charging additional fees for your additional property management services. 

Benefit 1: More Revenue = Better Service

Todd points out that you can't really provide the level of service that you want if you don't have enough revenue coming in. 

“We've got to be able to provide fantastic service, and the only way you can do that is with revenue. You have to start looking at this as something that you have to do. Your clients and your residents are suffering if you don't.”

It’s a fantasy to think we can offer premium service without paying for the resources they cost us. 

Benefit 2: More Revenue = Happier Employees

Your team deserves to be paid for their work, especially if it’s extra work caused by a difficult resident or investor. Fees help reduce workload because they discourage behaviors that add to busy work. But more on that in the next section.

Todd says:

“Property management company owners talk to me all the time about how they can't afford to pay higher wages in the current market. The reason you can't take better care of your employees is that you're struggling to get by just on a basic management fee. Charging fees for what your services are worth is the only way you’re going to be able to provide competitive wages and benefits.”

Benefit 3: Charging for Service Drives Better Habits

According to Todd, fees drive behavior. Your investors and residents will respond to fees in a way they may not respond to anything else. 

For example, home warranties are a huge hassle for everyone. If you want to discourage investors from using a warranty company, simply charge a fee for anyone that does.

On the resident side, an example is late payment fees. If you communicate from the start that late payments will draw a fee – you’ll notice how payments come in on time much more often. 

Benefit 4: Greater Profits

This one speaks for itself. But here’s what Todd says:

“Never pay for your own cost of running your business. This isn't a charity. Every single expense in your company should be tied to some income you're going to make.”

 

download rental inspection checklist template

 

Challenge 1: Will Investors Be Turned Off by Fees?

In the long run, if you’re charging fees for premium services, you can provide a better outcome for investors. But how can you get them on board with this concept? 

Todd says it’s all in the language we use. 

“People don't understand that the management fee is really a rent collection fee. We shouldn't call it a management fee because it makes it sound like everything we do is included, which is of course, crazy. There's so much that can't be looped into that one thing. We should call it a rent collection fee because that's really what it is. You've got to get your mindset right on this stuff. Don't be afraid of it.”

Challenge 2: Regulations (AKA: Always Talk to Your Attorney First)

Regulations vary across regions, so rental property managers must be familiar with local laws. You may not be allowed to charge fees for certain types of services. But you can almost always categorize a service within an administrative fee. 

But discussing any fees and contracts with your attorney before implementing them in the real world is key. Oh, and you should charge for your legal fees!

How Do Fees Help Property Managers Add Value and Create a Positive Resident Experience?

The additional fees generated by delivering new and higher service levels are a reflection of a positive, resident-focused experience. 

In fact, such additional services are exactly what can set professionals apart from amateurs. Instead of letting increasing competition cut your legs from under you, Todd advises finding ways to generate value that the amateur property managers or real estate agents-turned-property-managers can’t compete with.

And, of course, charge for that value.

“I always tell people that I don't like to say no to clients or residents,” Todd says. “Instead, I like to say, ‘Sure, we're happy to do that. And this is how much that costs.’ You just want to be careful and ensure you’re actually doing things that the owners will find valuable.

Charging fees allows a property management company to offer premium services and benefits they couldn’t if they didn’t have that extra revenue. It’s a perspective shift, but Todd believes we need to start viewing fees as a generative, value-driving approach to property management. 

How Can I Use Fees to Generate Ancillary Income?

In the end, you might think of fees as a burden that will drive away investors, but the truth is the exact opposite. Fees help you drive more premium value for both your investors and your residents – and support your business and employees at the same time. 

At Second Nature, that’s what we call a Triple Win. We aim to help property management companies drive Triple Wins like this all the time. We do it through the value proposition of a Resident Benefits Package. An RBP offers value to investors by delivering a full-service resident experience. And, yes, that’s something property managers charge a fee for!

Since it’s fully managed by our team, you can basically plug it in and let it drive value for you, your investors, and your residents.

Fee FAQs

Q:  What is included in the property management fee?

Property management fees typically cover a range of services, which vary from company to company. Sample inclusions:

  • inspection & maintenance fees
  • marketing fees
  • insurance risk mitigation fees
  • account creation fees 
  • recurring management fees
  • vendor screening fees
  • rent protection fees or eviction fee
  • contract resiliation fees
  • security deposit processing fee
  • leasing fee or a lease amendment fee
  • paper lease setup fee
  • lease renewal fee
  • late fee
  • special programs fee

Q: What is the average property management fee?

The average property management fee varies according to region and state, as well as from company to company. In addition, these fees are largely dependent on the value, responsibilities, and services the property manager brings to the table. Generally, they amount to a fixed percentage of collected rent, as opposed to a flat fee.

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Resident Benefits Package: How to Increase Revenue and Reduce Costs

You might not be surprised to hear that at Second Nature we get asked this a lot: "Exactly what is a resident benefit package?" Or "What is a tenant benefit package?" Simply put, a resident benefits package (RBP) is a suite of services provided by the property manager to make life easier for residents. In today’s marketplace, residents and property investors expect a certain level of ease, convenience, and support. Property managers have noticed that beyond reacting quickly to requests, residents want their needs proactively anticipated. And they're willing to pay and stay for it. (Ready to get started now? Build your Resident Benefits Package today!) In this article, we’ll explore what a resident benefit package is, how it can generate revenue, and how to implement a resident benefits package (RBP) to give your residents, investors, and business a win. What is a resident benefits package (RBP)? The Resident Benefits Package (RBP) is designed to transform the resident's living experience. Sometimes called a "tenant benefits package," the RBP proactively meets residents' wants and needs by providing benefits to make their lives easier. At Second Nature, we pioneered the only fully managed resident benefits package. We chose the term "resident" because the tenant benefit package sounded too impersonal for the value we're driving. Resident benefit packages include an array of services and supports for residents, from filter delivery to credit building to maintenance. Stay tuned for our next suite of services for property managers and investors: the Investor Benefits Package (IBP). What are the benefits of a resident benefits package? The resident benefits package adds value to residents by anticipating their needs and providing them with services that make life easier and better. It adds value to investors by preventing maintenance, vacancy, and delinquency. And, of course, it adds value to property managers because it differentiates them from the competition. Let’s take a deeper look at how the RBP creates a Triple Win – for residents, for investors, and for you, the property manager. Attracting and retaining residents through better experiences Offering a comprehensive benefits package can make a property more appealing to potential residents. By providing desirable perks such as exclusive discounts, concierge services, or access to credit reporting and other financial benefits, the property management company can attract a larger pool of prospective residents and increase occupancy rates. Retaining residents is also crucial for profitability, as turnover costs can be significant. A benefits package can enhance resident satisfaction and loyalty, reducing turnover and associated expenses. Higher rental rates for higher value A well-curated tenant benefit package makes properties more valuable. When residents perceive additional value in the form of amenities, services, or discounts, they are often willing to pay more for their living experience. This allows the property management company to command premium prices for their units, leading to increased revenue and improved profitability. Differentiation and competitive advantage In a crowded real estate market, a distinct resident benefits package can set a property apart from competitors. It becomes a unique selling proposition that highlights the property management company's commitment to providing an exceptional living experience. By offering a package that exceeds what other properties in the area provide, the company gains a competitive advantage and attracts residents who value the added benefits. Ancillary revenue opportunities A tenant benefits package can create opportunities for generating additional revenue streams tied to specific benefits in the package. Resident benefit fee: How much does a resident benefit package cost? Most resident benefits packages cost between $20 and $100, which is often included in the lease and added as a monthly fee for the resident. Prices vary depending on a few key factors, chief among them being the mix of benefits selected by the property manager. What does a resident benefits package include? Here’s what the Second Nature Resident Benefit Package includes. Filter delivery service Air filter delivery was the first service Second Nature offered to scattered-site and single-family property managers. It is a cornerstone of the RBP, and over 1M residents have shown that a physical, tangible product is key to their ongoing perception of value. One of the most common causes of HVAC maintenance requests is a failure to change the home’s air filters on time. Air filter delivery from Second Nature solves the problem by delivering the correct-sized high-quality HVAC filters directly to each home’s front door on a predetermined schedule. The delivery serves as a reminder for the resident to change the filter, and voila – problem solved. The resident breathes clean air, the PM has fewer HVAC tickets to deal with, and the investor has their asset protected. That’s a triple win. Our message to residents: “Changing filters is as easy as opening the front door.” Phil Owen, founder of OnSight PROS, says of the delivery system: “Last year OnSight PROS performed third-party property condition reports at almost 18k single-family rental properties on behalf of property managers. The number of filters that we have to replace or mark as ‘needs attention’ becomes almost zero when a PM implements the Second Nature program. I cannot imagine how a property manager could justify not protecting their landlords with this program. The difference between those using the program and those who simply hope that their tenants go to the store to purchase and install a new filter is staggering.” Our filter delivery service has proven to reduce total HVAC maintenance requests by 38% and save up to $250 per year per property. $1 million identity protection One in four Americans will be victims of identity theft. In 2021, digital theft incidence surpassed home burglary incidents for the first time – and is rapidly rising. With identity protection as part of your RBP, every adult on the lease automatically gets the peace of mind you can expect from professional-level identity protection. Backed by AIG and monitored through IBM’s Watson, Aura Identity Guard works proactively on behalf of the resident to identify fraudulent use of their identity and alert them. In the event of an actual identity theft case, the resident receives a dedicated case manager and is covered up to $1,000,000 for most resulting damages. This protects the resident's ability to pay rent, which makes it a win for the investor. And it keeps property managers out of the middle of another difficult situation and decision. Credit building With RBP’s credit building service, on-time rental payments improve the credit score of your residents. It may seem crazy that people are building credit by paying for Netflix and other small subscriptions, but not their largest monthly payment... rent! But that's the truth for most residents. We asked, how is it even possible that someone's largest monthly expense is the only one they aren't getting credit or rewards for? This credit reporting program reports positive-impact, on-time rent payments automatically to all three credit bureaus, helping residents build their credit simply for paying their rent on time. Residents also get an immediate boost with 24 months of back reporting included. This service directly impacts rates on credit cards, auto loans, and future mortgages, incentivizing residents to get rent in on time and helping set them up for home buying in the future. The property manager and the investor both reap the benefit of the extra incentive to get rent on time and the resident gets to see their credit score rise as a result of something they have to do anyway. It’s a big-time triple win here. Resident rewards program Rental rewards are a favorite among residents and another powerful and positive incentive for on-time rent payments. Rental rewards programs deliver automatic benefits at move-in. Then, residents can unlock even more rewards by paying rent on the day it's due. At Second Nature, all on-time payment tracking is done through the app. Like other services in your RBP, it’s managed for you. Gifts include: $30 gift card for national and local brands $25 restaurant card $40 rewards cash on rent day each month rent is paid on time And more The value of rewards is covered in the cost of the RBP, so the property manager isn’t seeing any additional liabilities. The PM and investor only see a benefit, which is the increase in on-time rent payments. For the resident, rent day is now rewards day. Another triple win. Move-in Concierge Setting up utilities can be a massive headache for a new resident. Residents aren’t sure who to call and who provides utilities and home services like internet and TV for their new address. More, the research for discounts/promotions/coupons available takes more time. Most times, the process is clunky, with lots of friction that gets in the way of it getting 100% done. And it is too easy to overlook fine print in the lease about installing satellite dishes. Move-in Concierge changes all of that for professional property managers. In one phone call, residents find out what their best options are and can even get help simplifying setup. An experienced concierge confidently guides multiple people every day to properly setup their utilities. Renters Insurance Program Nearly all property managers require a renters insurance policy in their lease agreements. As part of our RBP, Second Nature offers price-competitive insurance coverage options through a Renters Insurance Program that property managers can apply to all their residents locked in with one group rate. Residents who have their own renters insurance can receive a waiver on RBP's insurance program, but the current list of enrolled residents is tracked for you by Second Nature, and any resident who drops off of their own insurance is automatically enrolled. No more hassle for you, quality asset coverage for the investor, and immediate and comprehensive liability coverage for the resident – another triple win you can create with your Resident Benefits Package. Additional benefits At Second Nature, we help property managers deliver all their services to residents. If you’re already offering perks and are ready to level up to a resident benefits package, we can help you bundle the above benefits with other services. We’ve worked with PMs to bundle in their existing property management services, including: 24/7 Maintenance Coordination: A huge benefit to residents and PMs is a service that provides after-hours support without dragging the property manager out of bed. This type of program makes reporting pesky maintenance issues easy and fast for the resident. It also helps prioritize emergency maintenance. Online Portal: With a simplified online resident portal, residents can access all of their documents, messages, and more through an app. Residents can also pay rent and receive reminders to pay rent online. Home Buying Assistance: For residents who are building up toward home ownership, some PMs offer assistance in building credit and savings. We help them get there. Vetted Vendor Network: A vetted network ensures that vendors who service your properties are screened to exceed your standards for insurance, licensing, and professionalism on the job. Property managers, residents, and investors can rest easy knowing that they have the best vendors working on their assets. Washer/Dryer Rental: Some properties may have these appliances installed or the residents come with their own, but we’ve seen the impact on prospective applicants choosing homes due the convenience of having the washer/dryer available. Security deposit alternatives: Security deposit alternatives come in different packages, but all serve to provide residents ways to be financially liable for damages without having to pay a significant lump sum up front. Pure insurance, surety bonds, and ACH authorization programs are all versions of deposit alternatives that seek to lower the barriers to rental, which in turn keeps days-on-market low and turnover costs down. Pest control services: Property managers can partner with pest control companies to provide routine or on-demand pest control services to the homes they manage. Bugs are one of the most common complaints from renters, and having services available to prevent infestation issues is a big win for resident experience. When implementing a full-service, fully managed resident benefits package, you don’t have to lose the benefits you already offer. A great service can integrate all of these benefits together – delivering more impact to residents, investors, and property managers. How much revenue can I create per unit with a Resident Benefits Package? The amount of ROI on a resident benefits package will vary depending on the property class type, market, and number and type of services offered. Generally speaking, resident benefits packages are often in the $25-75/mo range for residents, but could be more or less. It depends primarily on the amount and type of products and services. To go back to our concept of the experience economy: a resident benefits package gives residents the kind of incredible experience that they will pay and stay for. In short, keeping residents happy can reduce turnover and lead to lower costs and higher ROI for you and your investor. According to Eric Wetherington, VP of Strategic Initiatives at PURE Property Management, “Revenue is all about providing a service. The younger generations we’re dealing with in property management – they want convenience, they want experiences, and they want things to be simple, and they’re willing to pay to have things taken care of for them.” A fully managed resident benefits package can generate revenue in two key ways: Increasing services to improve resident retention Decreasing costs by increasing efficiency A resident benefits package can help to accomplish both. Routine filter delivery cuts down on HVAC and maintenance costs. A move-in concierge helps cut down time and cost as residents get settled in their new home. Credit building services keep residents invested in paying on time, sending online payments, and deliver incredible value. The list goes on. A resident benefits program creates a huge win for you as a property manager, and your investor, by driving higher ROI over time. How can property managers implement a Resident Benefits Package? If a resident benefits package is new to your company, you may wonder how best to implement it. Should you roll out a mandatory resident benefit package – ensuring the maximum benefits for your investor – or allow residents to choose? What is legal or not? We do recommend mandatory rollouts to create the most ease for you, your investor, and your residents. Having a choice may give residents a short-term positive experience, but in the long term won’t be much of a benefit. Mandatory resident benefits packages tend to go much smoother and eventually have higher benefits for everyone involved. According to Second Natures Head of Sales, Bob Hansen, “You have to look at the value that a resident benefits package brings to the investor and the resident, not just you as the property manager.” At Second Nature, we’ve seen incredibly low pushback from residents when an RBP was introduced. After all, it benefits residents, and most are delighted to have the extra service. How can property managers reduce costs with a resident benefits package? The answer is: in several ways! Implementing a comprehensive residential benefits package can provide property managers with opportunities to reduce costs and increase operational efficiency. Let’s look at examples from the product above. By including air filter delivery as part of the package, property managers can ensure that residents have regular access to clean air filters, reducing the need for costly maintenance and repairs caused by poor air quality. Offering identity protection and credit building services can help mitigate the financial risks associated with identity theft and delinquent payments, potentially reducing costs related to collections and legal procedures. They also improve retention and encourage on-time payments. Including a resident rewards program can also incentivize desirable behaviors such as timely rent payments or positive referrals, fostering resident satisfaction and reducing turnover costs. By partnering with a renter's insurance program, property managers can transfer potential liability and property damage expenses to the insurance provider, minimizing their own financial risks. A move-in concierge service can streamline the onboarding process for new residents, reducing administrative costs and improving operational efficiency. By providing these benefits, property managers can enhance resident satisfaction and retention, ultimately reducing expenses associated with turnover, repairs, and legal issues. Common mistakes property managers make implementing resident benefits packages In our experience helping property managers implement RBPs, we’ve heard our share of concerns or even horror stories from PMs who had bad implementations with other products. Here are some of the most common mistakes in RBP implementations – and how to avoid them! Overpromising and underdelivering Property managers may advertise extravagant benefits that they cannot consistently provide or fulfill, leading to disappointment and resident or investor dissatisfaction. Property managers should accurately represent the benefits package, ensuring that the offered perks are realistically achievable and consistently provided to residents. Lack of communication Failing to effectively communicate the details and availability of the benefits package to residents can result in confusion and missed opportunities for using the offered perks. Property managers should effectively communicate the details, availability, and utilization process of the benefits package to residents through multiple channels, such as newsletters and online platforms. Inadequate research and selection Property managers may choose benefits that do not align with the residents' preferences or needs, leading to a lack of interest and underutilization of the package. Property managers should conduct thorough market research and engage with residents to understand their preferences and needs, ensuring that the benefits selected align with their expectations. Failure to evaluate cost-effectiveness Neglecting to assess the costs and benefits of the package can result in offering benefits that are financially unsustainable or fail to provide a satisfactory return on investment. Property managers should regularly assess the costs and benefits of the package, considering factors such as resident utilization, return on investment, and overall financial sustainability to make informed adjustments as needed. Lack of flexibility and adaptability Not regularly reviewing and updating the benefits package based on resident feedback and changing market trends can make it less competitive and less appealing over time. Property managers should actively seek resident feedback, monitor market trends, and periodically review and update the benefits package to ensure it remains competitive and relevant to residents' changing needs. Insufficient staff training Failing to train property management staff on the benefits package and its administration can lead to ineffective communication, missed opportunities, and difficulty addressing resident inquiries or issues. Property managers should provide comprehensive training to their staff on the benefits package, including its features, administration processes, and effective communication strategies, enabling them to effectively support and engage with residents. Neglecting legal and regulatory considerations Property managers must ensure that the benefits package complies with all relevant laws and regulations, such as data protection requirements or fair housing laws, to avoid legal repercussions. Property managers should consult legal experts or advisors to ensure that the benefits package complies with all applicable laws and regulations, protecting both the company and residents. Ineffective marketing and promotion Inadequate marketing efforts to promote the benefits package can result in low resident awareness and limited participation, reducing the overall effectiveness of the package. Property managers should develop a strategic marketing plan that utilizes various channels to promote the benefits package, highlighting its value proposition and actively engaging residents in participating and utilizing the offered perks. Ignoring resident feedback Neglecting to seek and incorporate resident feedback can hinder the improvement and optimization of the benefits package, missing opportunities for enhancing resident satisfaction and retention. Property managers should establish channels for residents to provide feedback on the benefits package, actively listen to their suggestions and concerns, and make necessary adjustments to enhance resident satisfaction. Lack of coordination with vendors Failing to establish clear communication and expectations with vendors offering benefits can lead to subpar service delivery, difficulty resolving issues, or missed opportunities for cost savings. Property managers should establish clear expectations, contracts, and regular communication channels with vendors offering benefits, ensuring a seamless and satisfactory service delivery process for residents and promptly resolving any issues that may arise. This is A LOT to keep in mind, and avoiding these mistakes might feel like it will cost too much or simply take too much work. But that’s why opting for a fully managed RBP is a solution so many PMCs are turning to. You can rely on a partner to manage all aspects of your RBP, and ensure its delivering on its promises to your residents. More on that in the next section. How 1,000+ property managers are creating Triple Wins with a resident benefits package Rolling out a resident benefits package is a powerful way for property managers to create a Triple Win – for residents, investors, and themselves. An RBP like Second Nature’s is designed to be simple to use and easy to implement. All the services included within it are managed externally by Second Nature, meaning there is no day-do-day upkeep required from the manager. You plug it in and Second Nature keeps it running. The value creation an RBP generates – with such little work required from the PM – is an incredibly easy way to grow your business and create great experiences that residents will pay and stay for. Don't get left behind in the evolving world of resident experience. Learn more about our fully-managed Resident Benefits Package and how we can build ease for you, your investors, and your residents. Learn More About RBP from Second Nature

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Property Management Outsourcing Services: Example Tasks & Best Providers

Virtual assistants are becoming increasingly important in the property management industry for a number of reasons. First are the associated efficiencies. Property managers often wear many hats, juggling tasks like resident communication, lease agreements, maintenance requests, and advertising. A virtual assistant can handle many of these administrative and repetitive tasks, freeing up the property manager's time to focus on more strategic initiatives. Virtual assistants can also act as a communication "hub" between residents, property management companies, and service providers. They can field calls and emails, schedule appointments, and ensure everyone is on the same page. In the same vein, virtual assistants can help with tasks related to online advertising for vacancies, managing a social media presence to attract potential residents, and even creating basic property videos or photos for listings. It’s important to note that virtual assistants are not a replacement for in-house staff. Instead, they allow staff to focus on important tasks that add value, as opposed to time-consuming manual operations. In today's post, we'll provide concrete examples of how virtual assistants can help property managers, the pros and cons of using these services, and a brief directory of property management virtual assistant service providers. Note on language: In the interest of clear communication, particularly regarding legal matters, this blog post may occasionally use the term "tenant" in reference to residents. While "resident" reflects the valued community we aim to support, service provider agreements and other legal documents today typically use the term "tenant." For the majority of this post, however, we'll utilize the term "resident" to best represent the positive and collaborative atmosphere we aim to cultivate. 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. Example property management tasks you can outsource to virtual assistants The number of tasks property managers can outsource has increased over time, as companies have become more comfortable with geographically dispersed teams, and as virtual assistants themselves have become more sophisticated (better communication skills, task automation capabilities, and access to information). Given that the benefits of outsourcing to virtual assistants are on the rise, here is a sampling of tasks that can currently be outsourced to virtual assistants. Outreach to homeowners for management Virtual assistants can be a property management company's secret weapon for improving homeowner outreach in a few key ways. Given that property managers often manage a large number of properties and homeowners, virtual assistants can handle sending personalized emails, texts, or even making phone calls to homeowners. As indicated above, they can also help manage the property management company's social media presence, posting updates, building trust, and boosting its brand presence to property owners. Property assessments While virtual assistants can't directly conduct rental property assessments, which typically involve a qualified professional inspecting the property's condition, they can provide valuable support throughout the assessment process by gathering and organizing property information crucial for the assessment (for example, details such as square footage, number of bedrooms/bathrooms, year built, major renovations, and past maintenance upkeep records). They can also compile relevant data from property management software or online real estate industry resources. Virtual assistants can also manage the scheduling of property assessors and ensure clear communication between the property owner, property manager, and the assessor. This involves sending appointment reminders, handling any cancellations or rescheduling needs, and keeping everyone informed throughout the process. Once any given assessment is complete, a virtual assistant can help process and organize the assessor's report. This might involve formatting the report, creating digital copies, and ensuring it's easily accessible to the property manager and owner. Creating and presenting management proposals Virtual assistants can be a highly cost-effective asset to property management companies when it comes to creating and presenting management proposals. For instance, virtual assistants can save a lot of time by gathering data on comparable properties in the area, including rental rates, vacancy rates, and recent sales. They can pull this data from industry reports, rental listing websites, or public property records. They can also compile details about specific rental properties under management such as square footage, amenities, maintenance history, and any unique features. This ensures the proposal accurately reflects the property's value and the services offered. In addition, virtual assistants can alleviate the hassle of creating or maintaining templates for management proposals, ensuring consistency in branding and formatting. This saves time and ensures a professional presentation. As far as actual proposal presentation is concerned, virtual assistants can handle the electronic delivery of the proposal to the client and schedule follow-up calls or meetings to discuss the proposal details and answer any questions. If the property manager is competing against other companies, a virtual assistant can help research competitor offerings and identify areas where your proposal can stand out. Determining property rent In addition to the market research capabilities mentioned above, virtual assistants can gather data on rental trends in the target area. This includes vacancy rates, as well as recent rental listings for comparable properties (similar size, bedrooms, amenities) and their advertised rent prices. They can find this information on rental listing websites, property management software, or public rental databases. Virtual assistants can also handle initial communication with investors to understand their rental expectations and any specific goals they might have (e.g., maximizing rent vs. filling the vacancy quickly). Creating and organizing property photos and marketing material Virtual assistants can be a game-changer for property management businesses when it comes to creating and organizing property photos and marketing materials. If professional photography is required, a virtual assistant can schedule appointments with photographers, and even perform basic photo editing tasks like cropping, and adjusting brightness and contrast. This ensures a clean and polished presentation of the property. They can also create file-naming conventions for these photos, in order to make them easily searchable for future use in marketing materials or listings. As far as marketing materials are concerned, virtual assistants can create or maintain templates for various materials, ensuring consistent branding and design across all platforms. This saves time and creates a professional look while delivering cost savings. Advertising the property Virtual assistants can be highly beneficial for property management companies when it comes to advertising their properties. For instance, virtual assistants can create and manage listings on various online rental platforms, ensuring accurate and up-to-date property information reaches a wide audience of potential tenants. They can also optimize listings with relevant keywords to improve search ranking. On the social media channel, virtual assistants can help create targeted ads with eye-catching visuals and compelling descriptions highlighting the property's best features. They can also schedule ad posts and track their performance to optimize future campaigns. In general, virtual assistants can create and manage a content calendar for property promotions. This can include scheduling social media posts, email blasts to potential residents, or even blog posts showcasing the property and surrounding neighborhood. Responding to inquiries Virtual assistants can be the first point of contact for prospective tenants who inquire about a property through listings, social media, or the company website. They can answer basic questions, schedule viewings, and qualify leads to ensure they are a good fit for the property. Likewise, when it comes to responding to inquiries from potential investors, they can assess the lead quality and guide the initial conversation. Vetting resident applications Virtual assistants can be a valuable asset in the vetting process for property management companies. For starters, they can handle the initial processing of rental applications, collecting and organizing applicant information, as well as lease agreements and supporting documents. This frees up property managers to focus on reviewing qualified applications. They can also manage initial communication with applicants. This might involve sending automated emails with application instructions, answering basic questions about the property or application process, and scheduling appointments for viewings. Many property management companies use tenant screening software that virtual assistants can be trained to utilize, ordering credit reports, background checks, and eviction history reports efficiently. Approving a tenant application after review Virtual assistants can play a crucial role in streamlining the post-review approval process for property management companies. Once the property manager approves an applicant, they can handle initial communication with the new resident. This might sending a lease agreement electronically, explaining signing procedures, and collecting e-signatures. Virtual assistants can also coordinate move-in logistics, such as scheduling move-in property inspections, providing information on utility activation, and sending welcome packages with important building information and resident resources. Lease preparation Virtual assistants can help to streamline the process of lease preparation while minimizing the potential for errors. At a minimum, they can gather essential information from the approved application and property details to populate lease templates. This might include resident names, contact details, leasing terms, rent amounts, and security deposit details. Many property management companies use pre-defined lease templates with standard clauses outlining They can then handle initial communication with the approved resident about lease signing. This might involve sending the lease electronically, explaining signing procedures, and answering basic questions about lease terms and conditions. resident responsibilities, maintenance procedures, and lease termination processes. Virtual assistants can ensure these clauses are included in the lease agreement. They can also review completed lease agreements for any typos, inconsistencies, or missing information before sending them to the resident for review and signature. Lease renewals Virtual assistants can also help streamline the process of lease renewal, thereby helping to increase resident retention. For example, virtual assistants can monitor lease agreements and identify upcoming lease expirations. They can then create a timeline for initiating communication with residents about potential renewals, via personalized emails or letters to residents approaching the end of their lease term. These messages can express appreciation for their residency, highlight the benefits of renewing, and outline the renewal process. Virtual assistants can also track resident responses to renewal offers, flagging those requiring further discussion with the property manager. They can also generate reports on renewal rates, providing valuable data for analyzing resident retention strategies. Running tenant background checks While virtual assistants can't legally conduct background checks themselves, they can be a valuable asset in streamlining the process for property management companies. This might include managing the initial steps of collecting and organizing applicant information crucial for background checks. This includes details like full names, Social Security numbers (with applicant consent), and previous addresses. They can also help maintain standardized forms with clear instructions for applicants regarding background check consent. This ensures applicants understand the process and provide the necessary authorization for releasing information to background check companies. Organizing tenant records Virtual assistants can be instrumental in bringing order to record-keeping processes, from data entry and management to record-keeping and accessibility. They can handle the initial data entry of resident information from applications, including names, contact details, emergency contacts, lease details, and pet information. This ensures all crucial information is captured and readily accessible. Virtual assistants can upload and organize various tenant documents electronically. This might include lease agreements, signed addendums, rental history verifications, and maintenance request records. They can also create a filing system for easy retrieval of documents when needed. Note that virtual assistants should be trained on data security and privacy regulations to ensure the confidentiality of resident information – while virtual assistants can manage record-keeping tasks, the property manager should maintain oversight and ensure compliance with data protection laws. Invoicing and accounting Virtual assistants can handle a range of tasks related to recording rent payments, managing maintenance expenses, and categorizing various property management costs For example, virtual assistants can help set up secure online payment portals for residents to easily submit rent payments electronically. On the tracking side, virtual assistants can track incoming payments, reconcile bank statements, and ensure accurate records are maintained. Virtual assistants can then generate basic financial reports for the property manager, summarizing expenses and overall property income. This allows for better financial tracking and informed decision-making. Many property management companies utilize accounting software. Virtual assistants can be trained to use these platforms, automating tasks like data entry and simplifying record-keeping. Best property management virtual assistant services providers Identifying the "best" virtual assistant service provider will of course depend on your specific needs and budget. First, we'd recommend that you determine the specific tasks you want your virtual assistant to handle (e.g., advertising, resident communication, bookkeeping), then conduct research on different providers, and compare their services offered, pricing structures, and experience with property management. Also look to online reviews and ask potential providers questions about their screening processes, and data security measures. We're highlighting a couple of providers below that focus exclusively on property management, as well as a short list of solutions that include property management in their overall focus. Virtual Property Management Solutions VPM Solutions is a platform designed specifically to connect property management and real estate businesses with virtual assistants. Learn more Purple Powered Virtual Assistant Purple Powered Virtual Assistant (PPVA) specializes in providing virtual assistants specifically catered to the property management industry. They focus on connecting property management companies with qualified VAs as well as ensuring those VAs have the necessary skills to excel in the role. Learn more Honorable mentions Virtudesk Virtudesk specializes in virtual assistants for various industries, including property management. They offer a proven track record and a focus on quality service. Learn more MyOutDesk Known for their expertise in real estate and property management, MyOutDesk offers virtual assistants with experience in tasks relevant to the field. Learn more Wishup This company boasts a user-friendly platform, offers flexible pricing plans, and has a quick onboarding process for virtual assistants. Learn more Pros and cons of using property management virtual assistants Overall, virtual assistants can be a valuable asset for property management companies, boosting profitability, resident satisfaction, and business growth. However, careful vetting, clear communication, and training are necessary to mitigate potential downsides related to quality control, local regulations, legal issues, and retention. Pros of using virtual assistants in property management Increased profitability Virtual assistants can handle tasks like advertising and resident communication, freeing up property managers to focus on maximizing rental income and minimizing vacancies. Improved tenant satisfaction Virtual assistants can ensure timely responses to new tenant inquiries and manage resident portals, leading to a more responsive and efficient experience for residents. Streamlined bookkeeping and reporting Virtual assistants can assist with bookkeeping tasks and help generate accurate financial reports, allowing for better financial management. Support for business growth Virtual assistants can handle administrative tasks and marketing efforts, reducing the overhead costs of executing this work, and freeing up property managers to focus on growing their business and taking on new clients. Cons of using virtual assistants in property management Quality control challenges Ensuring the quality of services provided by virtual assistants can be tricky, especially for complex tasks like legal compliance or resident screening. Potential legal issues Data security and privacy become a concern when sharing property information with virtual assistants. Clear contracts and data security measures are crucial. Retention challenges Finding and retaining qualified virtual assistants can be difficult, especially for specialized tasks within property management. Maintaining resident satisfaction Reliance on virtual assistants for initial communication with residents might lead to impersonal interactions, potentially impacting satisfaction. Limited expertise Virtual assistants may not have in-depth knowledge of property management regulations or local real estate market nuances compared to experienced property managers. How 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 can be through property management service outsourcing. At Second Nature, we’ve pioneered the first-ever fully managed Resident Benefits Package. The 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. 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 what's important to them.

Calendar icon April 29, 2024

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