Blog | Operational Efficiency (2)

What Is a Long-Term Lease? How to Win with Long-Term Property Management

Today we’re diving into all the nuances of the long-term lease, the pros and cons, and why engaging long-term property management can build a win for you, your residents, and your investor clients. Related: State of Resident Experience Study What is a long-term lease? A long-term lease is a lease agreement that lasts longer than the standard in an industry. In commercial real estate, long-term rentals could be ten years or more. In single-family homes, a long-term lease could be anything more than one year. Long-term leases have the benefit of locking in payment for however long the lease lasts. It benefits property managers by guaranteeing cash flow and reducing vacancy, though with less frequent lease renewals, you may not be able to increase the price as often as you feel you need. The concept of a long-term lease agreement may spark some preconceived notions among professional property managers. Locking a new tenant into their rental agreement for two-plus years seems like something of a gamble where you bet on the quality of the resident and the value of the lease remaining high. While it’s true that this type of lease comes with some tradeoffs, many PMs don’t see the positives, which have begun to outweigh the risks in an evolving market. Benefits of a long-term lease A long-term residential lease can offer several benefits for residents, property managers, and owners. Let’s get into the details: Stability With a long-term lease, residents have the security of knowing that they can stay in their home for an extended period, often one or two years, without having to worry about the possibility of the owner deciding to sell the property or not renew their lease. This can be particularly important for families or individuals in single-family residences who want to establish roots in a community and avoid the hassle and expense of moving frequently. Predictable expenses With a long-term lease, residents know exactly what their rent will be for the duration of the lease, which can help them plan their budget and avoid any unexpected rent increases. Similarly, property managers and owners can count on a steady stream of rental income, which can help them plan their expenses and investments. Reduced vacancy rates A long-term lease can help property owners and PMCs reduce the vacancy rate of their properties by providing them with a stable, reliable resident who is committed to staying in the property for an extended period of time. This can save time and money that PMs would otherwise spend trying to find new residents and dealing with turnover. More responsible residents Long-term tenants lease are often more committed to taking care of the property and being responsible “tenants.” This can lead to fewer damages, less maintenance, and a better overall experience for both residents and property managers. Better creditworthiness A long-term lease can also help residents build their credit score by establishing a history of paying rent on time and staying in one place for an extended period. This can be a particularly useful perk for young adults or those who are just starting to build their credit history. With Second Nature’s Resident Benefits Package, they can receive the benefit of getting their on-time payments reported to credit bureaus. Overall, a long-term residential lease can offer a range of benefits and create a Triple Win for property managers, owners, and residents. However, it's essential to establish clear terms of the lease to ensure that it meets everyone’s needs and expectations. Liabilities of a long-term lease Of course, along with benefits, long-term lease liabilities exist as well. The primary drawback of long-term management is that you need to be more certain that the lease – and the resident – are the right fit for you and your investor. A few things to consider before starting with a long-term lease apartment or long-term lease house: Ensure you do a thorough background check and credit check for all renters Ensure the lease clearly outlines behavior that could lead to eviction Be prepared that it may be more difficult to transition a difficult resident out Account for the fact that you won’t be able to raise the rent as easily or quickly as with a short-term rental Long-term lease vs. short-term lease A residential long-term lease and a residential short-term lease differ primarily in their duration, with long-term leases generally lasting for a year or more and short-term leases lasting for less than a year. Below are some of the main differences between the two types of leases. Duration As mentioned above, the primary difference between a long-term and short-term lease is the length of the lease term. A long-term lease typically lasts for one or two years, while a short-term lease can be as short as a few weeks or as long as 11 months. Flexibility Short-term leases are generally more flexible than long-term leases, as they allow residents to move out relatively quickly if they need to. This can be useful for renters who are unsure about their future plans or who need to move frequently for work or other reasons. Long-term leases, on the other hand, provide more stability and predictability but can be less flexible if the resident needs to move out before the lease term is up. Rent amount The cons of short-term leases are they can be more expensive than long-term leases month-to-month, as owners or property managers can charge a premium for the flexibility they offer. Long-term leases generally have lower monthly rental rate, but residents are required to commit to paying that amount for the entire lease term. Renewal Long-term leases typically include a renewal clause, which allows residents to extend the lease term beyond the initial period. Short-term leases may or may not include a renewal option, and residents may need to negotiate with the PM or owner to extend the lease or agree to a new lease. Maintenance Long-term leases often place more responsibility on residents for maintaining the property, as they are expected to stay in the property for an extended period. Short-term leases, on the other hand, may include more maintenance services from the property management company, as they are more likely to have turnover between residents. Long-term lease examples A long-term residential lease typically refers to a lease agreement between a resident and an owner that lasts for a year or more. Below are some examples of long-term residential leases. One-year or two-year lease A one-year lease is the most common type of long-term residential lease. It lasts for a period of one year and requires the tenant to pay rent on a monthly basis. Two-year leases are less common but still fairly standard. Multi-year lease In some cases, owners may offer a lease agreement that lasts for three, four, or even five years. This type of lease provides residents with a high level of stability and predictability, but it may be less flexible than shorter-term lease options. Corporate lease Some companies may lease a property for their employees on a long-term basis, typically for several years. This type of lease often requires the company to pay the rent directly to the owner. Lease-to-own This type of long-term residential lease allows residents to rent a property for an extended period with the option to purchase the property at the end of the lease term. This can be a good option for residents who are not yet ready to purchase a home but want to establish roots in a community. How the long-term lease helps investors Gregg Cohen of PWB Properties is one of the property managers leading the charge on the long-term lease. PWB has positioned itself as a different kind of property management company, one that's focused on helping investors achieve their highest possible return on investment. "As with most things in life, if goals aren’t aligned, one party typically loses. In “normal” property management, this is an unfortunate truth as well. It’s a shame that so many potential investors who see the incredible opportunities for earning above-average risk-adjusted returns on investment passively in rental property investing are so fearful of a poor property manager and resident relationship that they give up on their investing journey before they even start. At JWB, we are not trying to be “better” at property management. We are DIFFERENT." ‍ JWB is successful because they have perfectly understood how to create a Triple Win in an environment that is increasingly demanding of a relationship-focused property management strategy. As a property management company that offers far more than just plain old management of properties, they've built a business model that is extremely attractive to investors, part of which includes the long-term lease. Note their 5-year case study below on the financial results for the investor of signing residents to long-term leases. The key takeaway is the dramatic decrease in fees paid by the investor. These numbers may scare you at first. JWB is willingly forfeiting profit from tenant placement fees, and quite a bit of it. Understanding the context of this decision is critical though, lest you end up playing catch-up with the rest of the industry over the next decade. JWB's commitment to their investors creates so much value that the growth of their business and retention of clients offsets the short-term profit decreases from this strategy. Property management strategies and business models built around short-term profit from things such as tenant placement fees will lose whatever staying power they're clinging to over the upcoming market cycle. Those types of companies will struggle to attract clients and many will eventually go out of business. JWB has proactively avoided being swallowed by the commoditization of the industry by offering something more personalized, relationship-driven, and value-creating. As mentioned, JWB is focused on long-term investors that intend on growing their portfolios, holding properties for at least a full real estate market cycle, which is typically 10 to 20 years, and are intending to create income via real estate investment over a long period of time. The returns for these investors are diminished by property vacancies, so note the vacancy percentage decrease with JWB's long-term model versus the high-turnover model. All of these benefits come together to provide clients with longer-term, goal-focused property management instead of short-term profit-focused property management, which is differentiating JWB right around the time that property management is becoming commoditized. It creates an enormous amount of opportunity to sign a large number of long-term clients by providing something that isn't otherwise available, creating a sustainable business model ready for consistent growth and prepared to sustain threats such as commoditization and do-it-yourself property management technology. The longer lease is just one element of this triple win, but it's a significant one. As the case study notes, the dramatic decrease in costs is very attractive to investors. However, the long-term lease only works if the residents are willing to sign such a lease. So let's make this double win into a Triple Win. How the long-term lease helps residents Uncertainty has been a big theme over the last two years, mostly as a result of the coronavirus pandemic throwing the SFR space into quite a predicament. PMs have certainly taken some hits as a result with eviction moratoriums, residents being furloughed, and other challenges. But residents are experiencing significant challenges of their own as a result of the uncertainty they’ve experienced within their jobs, their ability to pay rent, and the potential of changing rent. These are problems, but problems demand problem-solvers, and problem-solvers create solutions that end up differentiating their business. The long-term lease is proving to be that solution for many PM companies. The stability that it provides is proving to be a welcome sight for residents. Knowing where they will be in three years and exactly what their rent will be is valuable to residents who are fearful of a changing market, and the percentage of residents who see that value is continuing to increase. The result is one of the best resident retention tools out there. For the PM, this doesn’t mean that rent is stuck. Rent adjustments are still possible, but they’re baked into the lease from the start. This allows the PM to plan for a changing market while giving the resident notice of pending changes prior to them signing the lease. Residents are much less likely to react negatively to rent increases if they signed off on them before ever moving in. “Stability starts with helping them understand what their financial responsibilities are going to be years in advance. That’s where it starts and that’s a big reason why residents do like long-term leases.” People find value in knowing where they will be in 3 years. A long-term lease is a commitment for a resident, but it's one that JWB has found that many are willing to make. Implementing a long-term lease program isn’t for everyone, but it’s proving an effective method for creating a Triple Win by creating stability, something everyone is after in these uncertain times.

May 11, 2023

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How to Structure a Property Management Company

The property management industry is full of entrepreneurs – self-reliant self-starters who got in the game as a side hustle and grew their property management company to be a full-time occupation. But, of course, with growth comes the need to hire a team. And the key to successful team-building? An optimized property management org chart. An organizational chart is a visual representation of a company's structure, showing the roles and relationships between different positions within the organization. Property management companies are no exception, and getting your property management company structure right from the beginning has a massive impact on the quality of experience of your investors, employees, and residents. Example of a property management org chart with 500 rental units In this article, we’re exploring the benefits of having a clear and concise property management company org chart with the help of Kelli Segretto, Founder of K Segretto Consulting. Kelli has helped with the launch of hundreds of property management companies and has tons of insight into how a PMC should be structured for success. Key Learning Objectives: What does an ideal property management organizational chart look like? How should you structure your property management company? What’s the difference between an org chart for a PMC vs. a real estate agency? How can you use your org chart to align employee roles? Who should you hire first? What’s the most important role in a property management company? What are the most common mistakes made in structuring a PMC? Meet the Expert: Kelli Segretto, Founder of K Segretto Consulting Kelli is a sought-after speaker and consultant with over 20 years of experience in the property management industry. Kelli has expertise in single-family, multifamily, and LIHTC property management, having coached across all 50 states and six countries. She has helped launch hundreds of new property management businesses and has developed in-depth knowledge of the types of organizational structures that work best in property management. Example Property Management Org Chart We asked Segretto about the primary areas of responsibility – or key roles – that that are essential to a successful property management business. She outlined six key focus areas regardless of how you end up structuring the company: Operations Management Property Management Leasing Maintenance Bookkeeping Sales According to Segretto: “Different structures will dictate the position titles and responsibilities within these roles, but these are the foundational pillars each property management business needs.” To get started with the cascading structure of the org chart, Segretto explains that in a full property management company structure, you typically see three-deep leadership: owner/broker, manager, and coordinator, each with their own focus area from the list above. “Even if your business is small, it is important to have an organization chart to plan for your future growth,” Segretto says. Here’s how it might break down in your PMC. Tier 1: Owner/Broker The Owner/Broker is the executive leadership or highest role and tier in the org chart. “In most states, you cannot operate a property management company without a licensed broker,” Segretto says. “The requirements to obtain your principal broker license varies by state, but most require a combination of time as a real estate sales agent, experience points, and education.” Of course, the owner of the PMC isn’t always the broker, depending on various circumstances or state laws. “A person with a broker’s license can sign on to be the broker of record or broker in charge for a property management business,” Segretto explains. “We see this when the business owner cannot yet meet the qualifications for their broker license, for example, in franchise property management companies and other organizations that are coming into property management from outside the industry.” Anyone newer to the industry should take note, says Segretto, “This arrangement can be tricky in some states, like New Jersey where you must operate under the same roof as your broker, or Ohio where any brokerages active under a broker must have the same core company name. There are many state and local regulations you have to be aware of when opening a property management company. My recommendation is always to reach out to your local department of real estate for guidance and information or work with a consultant that specializes in property management business startup.” Tier 2: Management (Operations, Sales, Finance, Maintenance, and Leasing) Reporting directly to the owner (who is usually also the broker) is a set of management roles. Depending on the size of your company, this may be one or many individuals, depending on the expertise and skills gaps of the owner. Your management level typically includes roles for Operations, Sales, Finance, Maintenance, and/or Leasing. These individuals have a fairly high level of responsibility overseeing their area and any direct reports under them. Tier 3: Coordinators (Property Management, Maintenance, Leasing, and Bookkeeping) Reporting to the management roles are employees at a coordinator level. You may hire coordinators that focus on property management, maintenance, leasing, and bookkeeping. These roles will fall under the purview of the manager above them. Tier 4: Assistants In large organizations, you may also see assistant roles that support the coordinator or management roles. For each of these tiers of responsibility, Segretto says, “the titles and function will vary depending on the type of structure you are operating under, but the core organizational buckets remain the same. In a small property management business, it isn’t uncommon for the first roles to be 1099. This helps keep costs down for the property management company as long as they are not treating their 1099 partners like employees. For example, scheduling their time, requiring uniforms, etc. As a property management business grows and stabilizes, most of the roles in the business become employees.” (Segretto provides her clients with several org chart templates that walk through the different roles and responsibilities in each configuration.) Types of Property Management Company Structures “Each property management business is unique,” Segretto says. “Some businesses service savvy investor clients, some focus on small multifamily, some are only high-end luxury while others have found their niche in Class C rentals. This means that the best property management business structure can vary for your organization.” Segretto explains that the ideal organizational structure for your business is the one that provides the best user experience for your clients, assigns ownership to the essential tasks, and keeps everyone on the same page. “Too often, I see businesses that have everyone trying to do everything, which ultimately creates chaos and confusion,” Segretto says. “Phone calls don’t get answered, emails get lost, and everyone expects someone else has ‘got it.’” Instead of this chaotic approach, Segretto recommends choosing from three common property management company structures: Portfolio Management, Departmentalized, and Process Driven. “Determining which one is best for your office is dependent on your location, your staffing capabilities, your goals, and your budget,” Segretto says. Here’s how they each work Portfolio Management Structure The portfolio management structure typically involves assigning a dedicated property manager to oversee a set of client accounts. That PM is responsible for all aspects of the portfolio, including property maintenance, resident relations, leasing and marketing, financial management, and other activities related to the management of the real estate assets. The manager is typically supported by a team of administrative and support staff, including accounting and financial specialists, leasing agents, property managers, project management specialists, maintenance technicians, and other professionals who work together to ensure the successful management of the real estate assets. Overall, a portfolio management structure gives clients a premium experience with one point of contact and allows for nimble decision-making. On the downside, portfolio management requires employees to have strong cross-skills, opens the PMC up to risk if that property manager leaves or goes on vacation, and makes it difficult to create operational consistency between portfolios. Departmentalized Structure Department-style management organizes the PMC into separate functional categories, grouping employees and teams based on their roles and responsibilities. You might see departments such as accounting and finance, leasing and marketing, property maintenance, resident relations, and other functional areas. Each department is headed by a department manager who would oversee the day-to-day operations and staff within that department. The benefit of a departmental structure is specialization over generalization. Employees are experts in their field and can focus on improving their area’s performance. The downside is that clients and residents may have multiple points of contact, and communication may get repetitive. No single person is keeping an eye on a specific property’s overall performance. Process Driven or “Pod” Structure A pod-style management structure in PMCs is a relatively new management concept that organizes employees into small, cross-functional teams called "pods.” Each pod is responsible for managing a specific portfolio of properties or assets within the company and typically consists of a portfolio manager, a leasing agent, a maintenance technician, and an administrative staff member. The pod-style management structure is designed to bring the benefits of the portfolio and departmentalized structures together – but can also suffer from their weaknesses. Pod-style management encourages collaboration and communication among team members and gives residents and clients an excellent customer experience. The structure also allows for greater flexibility and agility, as the pods can adapt quickly to changing market conditions and resident needs. Pod-style management is ideal for a fast-paced, dynamic environment where rapid response times and a high level of customer service are essential. By working in small, self-managed teams, pod-style management can lead to greater efficiency, productivity, and innovation while also improving employee satisfaction and engagement. The downside is that the pod structure can be expensive until you fully scale up. What is the difference between the structure of a PMC and a real estate agency? We asked Segretto to explain how a PMC org chart differs from that of a real estate agency. Segretto explains: “I had a client that structured their business like a real estate office, and it worked really well for them when they were small. As they started to grow and scale the business, it became limiting. Real estate offices have a very simple structure. Typically you have an owner/broker, and in larger offices, back office services like marketing, bookkeeping, office assistants, and maybe a transaction department. These are support services made available to the sales agents. Sales agents are independent business owners, often with their own LLCs. They are not employees of the company.” She also points out that some companies operate as both a real estate business and a property management company. “In these businesses, you may have a blend of the two org charts. You will still need all the same buckets as a property management business, but often those roles take on double duty to support the sales agents who still remain independent contractors.” FAQ: How to Use Org Chart to Align Employee Roles and Make the Right Hires So, let’s say you have an idea of the property management company structure you want and the types of roles you need. How do you actually get started? How do you make your first hires or align your current employee roles with your planned ideal structure? We asked Segretto some of the most frequently asked questions on this in the property management space. Here’s how she answered. What should I focus on in the hiring process? Segretto: Property management is an industry that can be trained, but human behavior is much harder to adjust. Pick the right personalities and drive for your team rather than the person with the most experience on paper. That doesn’t mean you should pick the person you get along with best or you think you could be friends with. It is important to identify the key personality traits that will be most beneficial in each role. Remember, your employees will be the face of your company. They will be the ones delivering on the promises you make each client. Make sure you have written job descriptions and a deep understanding of the role the person would fill. Setting proper expectations will also aid in finding the right person who will enjoy the work they are hired to do. In the interview process, ask qualifying questions and provide scenarios to see how the individual problem solves. This industry is fast-paced, multifaceted, and complex. It isn’t for everyone. Most of all, be patient. Start hiring before you need to so you don’t feel pressured to pick someone fast rather than ensuring you have the right person in the right seat. Take your time and avoid costly mistakes. Who should I hire first? Segretto: I have had the opportunity to help launch hundreds of brand-new property management businesses in my career, and one of the most common questions is, “Who should I hire first?” Initially, a property management company is typically run by a sole operator. The business owner wears all of the hats. It is beneficial for the owner to go through this phase of start-up as they learn all the ins and outs of the business and discover their strengths and weaknesses. I like to then take my clients through an exercise where we can discover the highest and best use of their skillset and time. From that exercise, you can then determine what role would be your ideal first hire. For many people, this is a business development manager to cover sales or a back office employee, like a bookkeeper. What are the key components of management structure in a PMC? The key components of management structure are customer experience ownership, work specialization, organization, coordination between departments, and continuous training. Property management is a customer service business. The structure you create should focus on the components that will foster internal communication, collaboration, and a culture of learning. What is the most important role in a property management company? Segretto: This is a tricky question! It reminds me of the grade school phrase, “There is no ‘i’ in Team.” Property management is a team sport; there is no one role that is most important or featured in the line-up. Your team will only be as strong as your weakest link, which is why it’s so important to hire talented individuals with the right personality and drive for each role. Once you have your superstar lineup, it’s crucial that you treat them well, trust them, and listen to the valuable feedback and insights they have. It’s more about having the right person in each role than it is about one role being valued higher. What are the most common mistakes you see in a PMC organization structure? Segretto: The two most common issues I see in the property management structure are: Too many points of contact for property owners and residents to keep track of. Keep it simple! Assign a point of contact to every relationship, and if that point of contact needs to shift, arrange a proper handoff. This business is built on trust, and as humans, we inherently don’t trust strangers. Lack of communication between departments. This business is built on a foundation of excellent customer service. It’s critical that you have processes in place that keep everyone in the loop. Most processes require multiple team members' effort, and when communication breaks down, the card house collapses. Final Thoughts Segretto recommends hiring a consultant to help you develop your org chart for both today and your future growth plans. A good org chart should include “job descriptions, KPIs, and personality traits for each role within your chosen structure,” Segretto says. “A consultant can take you through a process to identify your core values, goals, and action plan, which will help set a solid foundation for your business.” Learn more about property management structures, growth, marketing, and more in our Second Nature Community, or get in touch with Segretto via her website.

April 18, 2023

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Property Management Revenue: How Can Managers Increase Ancillary Revenue?

Ancillary revenue is a huge profit driver for property management companies. Today, we're looking at what ancillary revenue is, how it can give you better results, and how to get started building ancillary revenue streams. What is ancillary revenue? Ancillary revenue refers to any additional income not including rent that you derive from the properties you manage. By becoming greater service providers, PMs create opportunities for more revenue streams. There is a lot of money to be made in ancillary income in the property management industry and real estate industry. But many property managers don’t even consider the wealth of opportunities to increase profit, grow your business, and increase the satisfaction of your residents that ancillary income opportunities provide. It may seem counterintuitive to suggest that a practice exists that will simultaneously increase the amount your residents pay and increase their satisfaction with you, but if you provide the right ancillary services, and your residents find value in them, you can build a winning situation for all involved parties. How can property managers generate ancillary revenue? The best way to sustainably drive ancillary income for you and your business is through generating more value that your residents and investors want and charging for what that value is worth. Ancillary charges can apply to your investor clients and your residents. In short, property managers should figure out what’s important to their residents and clients and monetize those things. Ancillary revenue opportunities can come from programs that drive resident satisfaction, such as Resident Benefits Packages, property upgrades, pet insurance, pet rent, etc. You can also drive extra revenue through additional fees such as application fees or pet fees for new residents or for behaviors you want to discourage, such as late payment fees, early termination fees, paper lease fees, vendor screening fees, etc. Ultimately, each of these programs help to achieve what we call a “triple win.” A triple win, as described in this video, is any concept that manages to benefit the renter, you and your team of property managers, and the property owner. ‍ ‍ The importance of the triple win comes from the idea that long-term success that results in long-term profit must correlate with long-term satisfaction. Keeping all involved parties in a transaction satisfied will lead to high rates of re-signing, whereas ancillary income programs that residents don’t find value in can decrease renter satisfaction and hurt your bottom line in the long-term. Ancillary revenue stream examples in property management Let’s look at some of the most common and successful ancillary revenue examples. Ancillary programs work well for both multifamily and single-family rentals. You can break ancillary charges down into two categories: fees vs. special programs. Ancillary Fees First, there’s the ancillary fees approach. Those can include the following. Resident-Focused Security Deposit Processing Fees Leasing or Lease Amendment Fees Paper Lease Setup Fees Lease Renewal Fees Renters Insurance Late Fees Investor-Focused Inspection and Maintenance Monthly Fees Marketing Fees (social media, etc.) Insurance Risk Mitigation Fees Vendor Screening Fees Rent Protection or Eviction Fees Essentially, property managers should be sourcing income on anything they’re spending money on themselves. This ensures that you can continue to grow, add on value, and pay your employees. Ancillary fees also help encourage the kind of behavior you want from your investors and residents. You don’t want residents to pay late? Incentivize on-time payments by adding a fee for late payments. You don’t want investors requiring you to use their vendors instead of yours? Charge a small fee for vendor screening. Then you’re either getting paid for your extra time, or the investor will decide it’s not worth it, and you’re saved the extra burden on your team. Special Programs Of course, property managers can also generate additional revenue by developing programs that boost resident happiness and satisfaction. These programs can also help encourage the behavior you want, but the goal is more driven by a desire to improve the resident experience. The most popular – and effective – form of special program is the Resident Benefits Package. An RBP can include several different benefits for residents, from credit reporting to move-in concierge services to identity protection. And they’re easy to monetize for property managers. Increasing property management revenue The residential real estate market is changing. By finding new ways to generate revenue, property managers can accelerate business growth. Ancillary revenue is one of those ways, and it works by providing real value to the resident. These programs don’t necessarily have to directly create revenue, although many do, but the key is always to create value. Of course, some programs work better than others – and some attempts to drive ancillary income can actually do the opposite: drive investors away, or cause resident complaints. Let’s look at a few examples of what is and isn’t working for property managers. Ancillary revenue streams that are working Here are a few examples of the best drivers of ancillary revenue in property management. Resident Gift Programs One example of a program that creates value for the resident without charging the resident is a Christmas gift program run by the Home River Group based out of Boise, Idaho. Residents at HRG’s properties receive a gift package every holiday season that includes gift cards to local restaurants, movie theaters, bowling alleys, etc. This comes at no charge to the resident, but it does create happy renters, which leads to sustainable revenue in property management. 24/7 Maintenance Another great example is 24/7 maintenance, which is often amenitized. Professional SFR managers have web portals, apps, 24/7 hotlines as part of their operations that enable a more professional and convenient resident experience. And it leads to faster resolution. Including maintenance support in a resident benefits package helps differentiate your service. Adding value through a resident benefits package also adds a new revenue stream for a property management business. Convenience Services Convenience services are great examples of ancillary income programs that do drive immediate profit and achieve a triple win. Residents tend to realize a lot of value from convenience services, and these services have become the expectation for renters. Second Nature’s air filter delivery service, which is widely used by property managers around the country, achieves this by providing the resident with cleaner air to breathe and lower utility bills, providing the owner with the peace of mind of knowing the air filters are being changed on time, and providing you with some added ancillary revenue. A great way to identify opportunities for ancillary revenue services that achieve a triple win is by asking your residents. Just ask them. They’ll tell you what services they’re interested in and willing to pay for. This will not only help you identify key insights for your business, but it has a positive side effect of improving the relationship you have with your residents. What doesn’t work in driving ancillary revenue As you can probably infer, programs that don’t work will be the ones that don’t achieve the aforementioned triple win. Property managers are starting to realize the value of the long-term game. The extra effort required to make sure residents feel respected and not leveraged specifically for profit creates a lot of value for the PM as it keeps renewal rates high. Here’s the type of behavior PMs should avoid when designing an ancillary revenue strategy. Cheap Money Grabs When your residents feel like they're just a warm body that pays monthly rent, that's really going to sour the relationship that you need to be focused on here. Truthfully, ancillary income can be created very easily, but cheap money grabs that make residents feel used are not going to be sustainable, and sustainable is the key word here. Not Understanding What Residents Value If the resident doesn’t see value, your program’s long-term prospects are not going to be good. Understanding where a resident will find value also requires you to understand how a resident perceives value. There is a saying in marketing that perception is reality, and whether or not you realize it, you're perpetually marketing your properties to residents. How they perceive their experience is going to affect how they feel when it's time to renew. Mixed Messaging The best ancillary benefit package in the world is going to be perceived negatively if the messaging around it uses words with negative connotations. Avoiding words like “fees” can help prevent a negative perception of a service you as the property manager are providing. A perceived lack of value for a required program contributes to a resident that feels disrespected, and a perceived lack of value for an optional program results in a program nobody uses. Either way, no benefit to the resident means no benefit to you. ‍ In the end, the best way to drive ancillary income is to find programs and services that add value for your residents and clients, and generate profit for your business.

April 10, 2023

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Top 20 Property Management KPIs to Track

Property management KPIs (key performance indicators) are critical, quantifiable metrics that measure your PMC’s performance over time and help you evaluate the success of your objectives, projects, or team members. PM KPIs can be divided into three broad categories: Financial performance KPIs: These measure the financial performance the the property management company Operational performance KPIs: These measure the effectiveness of the property management company’s operations Property performance KPIs: These measure the performance of the rental property that is being managed A narrow focus on KPIs isn’t a magic pill for company growth or stability. By nature, KPIs are very transactional. They tend to focus on short-term goals like maximizing rent/fees/etc. at a specific point in time. While those point-in-time metrics are critical to success, they need to be contextualized with the view of maximizing customer lifetime value. Build your KPIs with two overarching questions: “How do we create experiences so good residents never want to leave?” “How do we create investor experiences that are so good that they generate organic referrals?” These questions helps you to keep a “Triple Win” mindset – that we can grow the pie for ourselves, for our residents, and for our investors. Meet the Experts: Matthew Tringali, CEO of BetterWho, and Daniel Craig, CEO of ProfitCoach Matthew and Daniel are both experts in their respective fields, helping PMCs drive greater productivity and profits. We asked Matthew and Daniel to share insights and help us review the most important things to know about property management KPIs. 1. Net Income/Profitability Net income and profitability (which is net income expressed as a percent of total income) is what you’re making after you subtract your operating expenses from your earnings. PMs also track “profit per unit,” so they can break down exactly how much each unit is making – or costing – them. PMC valuations are typically done as a multiple of revenue or a multiple of EBITDA, so tracking your revenue and net income can help you keep an eye on the value of your business as a sellable asset too. When it comes to net income, one of the leading strategies to “grow the pie” is to build opportunities for ancillary income. Ancillary income is anything outside of the core service of rent collection. Enterprising PMs have found ways to generate more value for their investors and residents by offering supportive services like a Resident Benefits Package. With that extra value comes the opportunity to charge what it’s worth and create more net income. Adding value to the resident experience eliminates preventable vacancy costs for investors, keeping them – and your business – happy. KPI Formula: Net Income(Profitability) = Earnings - Operating Expenses 2. Labor Efficiency Ratio Labor Efficiency Ratio (LER) tracks how effectively you are deploying labor in your company. It certainly plays into improving company financial performance, but it’s also about helping your team members hit their individual goals and perform better – so they and you end up more satisfied. According to Daniel Craig: “LER is the most important driver of profitability. There are only two ways to increase profitability in any business: charge more for what you do, or spend less to get the job done. LER takes both aspects into consideration. There are three key levers to improving LER – we call them the three P's of LER: Pricing (how effective you are with client pricing as defined by your Revenue Per Unit), Pay (how effective you are in compensating your team), and Productivity (how effective you are in enabling a high-performing team).” Improving LER starts with making sure you have the right people in place. Find people who embrace your core values, who believe in the triple win, and in the importance of the resident experience. Look for people with initiative who understand that proactively seeking success for others is the way to achieve success for themselves. Matthew Tringali’s secret sauce for a better LER? Global remote team members. Tringali says: “I used to tell people that utilizing global Remote Team Members (RTMs) can be your unfair advantage against your competition. Now I tell people that if you aren't properly leveraging global RTM's, then you are going to get left behind. Top property management companies have 65% of their direct labor comprised of global RTMs. Companies who have six or more global RTMs on their team have a 7% higher profit margin, on average, compared to companies not yet using RTMs. LER is a master KPI that captures right people, right seats, revenue, efficiency and payroll. These type of A-players add value, nail performance metrics, and keep residents and real estate investors around. KPI Formula: LER = Gross Profit / Direct Labor Cost 3. Resident Acquisition Costs Some may track this as “tenant acquisition costs" or customer acquisition costs. But, again, our focus should be on the resident experience to generate value for a triple win. That’s why we call this KPI “resident acquisition costs.” Language matters! You can calculate resident acquisition costs by totaling your annual sales and marketing budget and dividing it by the total new units you acquired in the same date range. As you track this benchmark year over year, you will see how effective your Biz Dev strategies are. The objective of both the PM and investor is to lower acquisition costs while not sacrificing the quality of the resident match. One of the best ways to reduce the cost of resident acquisition is to focus on building an attractive experience – particularly one that attracts the best residents in the applicant pool. A resident benefits package or another value-add can draw in residents without much effort on your part. KPI Formula: Customer Acquisition Cost (CAC) = Total Costs of Acquiring Customers / Total Number of New Customers Acquired 4. Average Maintenance Costs Tracking average maintenance costs is tricky as an SFR property manager. The properties you manage can be far apart and vary greatly in their needs and resident requirements. Plus, repair and maintenance costs are a huge chunk of expenses for PMs and investors. One great way to build value for yourself and your investor is to take a proactive approach to maintenance. Offer services like an HVAC filter delivery subscription, comprehensive renter’s insurance, and other features of a resident benefits package. With Second Nature’s filter delivery service, property managers saw a 38% reduction in HVAC-related ticket requests. This saves hundreds of dollars in maintenance costs a year. For more advice on using your KPIs and data to drive value, check out this video from BetterWho featuring Ray Hespen of Property Meld. KPI Formula: Average Maintenance Costs = Total Maintenance Costs / Total Number of Units 5. Average Arrears Every property manager’s approach to arrears is some form of: “MINIMIZE!” Arrears – otherwise known as the unpaid debt owed by residents – can have a massive effect on your company’s cash flow. Tracking average arrears helps you see who is paying rent on time vs. who isn’t. These metrics can also include delinquency rates (paying late and how late) and eviction rates (never pays and must be removed). Here are a few examples: Offering credit building as part of an RBP – reporting on-time payments to credit bureaus can have a huge impact on residents’ credit scores. Offering rental rewards programs through an RBP – turning rent day into rewards day. Identity protection – this guards the resident’s financial security and ability to pay rent. The triple-win approach here is working to prevent delinquency and eviction before they happen. The best way to do that is to incentivize on-time payments and continue to add value to the resident. KPI Formula: Average Arrears = Total Amount of Overdue Payments / Total Number of Tenants 6. Occupancy and Vacancy Rates We all know vacant properties come at a high cost. They require upkeep and payments, but they aren’t generating any revenue. That’s why occupancy rates are one of the most important metrics that a property manager can track. Your turnover rate or average days vacant can tell you a lot about your company. A higher occupancy rate than the market average can be a huge selling point for your property management company, signaling to potential investors that you provide a better experience for residents and, therefore, have better retention. (Or it could signal you aren’t charging enough!) One of the best ways to drive that coveted retention is to offer experiences that residents will pay for and stay for. That means identifying services that offer long-term value, not just a fancy one-time “shiny toy.” An example of this in the multi-family housing space is the apartment complex that invests in a $15k pool table. Sure, it’s great for tours. But 99% of the time, it isn’t used, and a pool table is never the reason someone chooses to stay in their home. Professional PMs know better and take time to think about what’s attractive in the sales process vs. what’s going to make people stay. For example, a better benefit than the pool table might be co-working phone booths so people can more easily work from home and save money. Finding ways to add value like that in the SFR space will go a long way to boosting this metric. KPI Formula: Occupancy Rate (%) = (Number of Occupied Units / Total Number of Units) x 100 KPI Formula: Vacancy Rate (%) = (Number of Vacant Units / Total Number of Units) x 100 7. Maintenance Request Response Time It’s important for PMs to know how long it takes for maintenance requests to be solved. When we’re talking about resident expectations, a reasonable response time for maintenance is one of the most basic things residents need and want. When requests take too long, residents can quickly become unhappy with their experience and decide to leave. Tracking this metric helps you understand how well your team is doing and if you need more resources to ensure timely responses. An online maintenance request portal can help streamline this process, and an RBP with services like air filter delivery can help reduce maintenance problems in the first place. KPI Formula: Maintenance Request Response Time = Total Time Taken to Response of Requests / Total Number of Requests (this gives you an average overall) 8. Property Inventory Property inventory is the metric tracking the number of properties you’ve acquired successfully and the number of properties lost. It’s also important to consider whether you’re acquiring properties that really support your business. Is your team burning out? Do your investors fit with your property management niche? One of the best ways to get more doors and keep them is to build resident experiences that are the best on the market. By offering more value than your competitors, you can attract more of the kind of business you want. KPI Formula: Track the total # of properties at the start and end of a period. Subtract Properties Lost from Properties Acquired. 9. Average Time to Lease Tracking the average amount of time to lease helps show the cost to your investor when a property hits the market. Property managers and investors both want to reduce the average time to lease. The best way to do that? Build experiences that stand out. When someone sees your listing – beyond the property and rent price, do they see a different experience and set of benefits by renting from you as a professional PM? Are you offering benefits that residents will pay for and stay for? Other things that help with this metric: Measure traffic and conversion from listings to showings Provide attractive photos, 3D or virtual images, and clear pricing, etc. Provide and track the availability of showing times, self vs. guided showing experience, etc. Track incomplete applications, qualified %, time to approve/reply, etc. All of these impact two critical business metrics: "days on market" and "days vacant,” which are key to this KPI. KPI Formula: Average Time to Lease = Total Days on Market for All Properties / Total Number of Leased Properties (during the same period) 10. Revenue Per Unit Tracking your profit goes beyond simply adding up revenue and expense. Not all revenue is created equal. Tracking revenue per unit is a key KPI to increase profitability. Revenue per unit does just measure whether you have enough doors. It also assesses whether those doors are worth your time. What if the doors are unprofitable? According to the 2022 NARPM Financial Performance Guide, “it’s worth noting that a 10% increase in RPU can easily lead to a 100% increase in profitability.” We’ve said this before, and we’re saying it again – the most innovative way that professional property managers are generating greater revenue for themselves is through building better experiences. According to Eric Wetherington at PURE Property Management, “Revenue is all about providing a service.” You can increase your RPU by adding more value that investors and residents are willing to pay for. With the right tools, you can add that value without increasing your cost too significantly. That’s where services like an RBP and other value adds translate directly into revenue growth. KPI Formula: Revenue Per Unit = Total Revenue / Total Number of Units 11. Unit Churn Churn is one of the leading KPIs for any business. After all, what’s the point of all your sales effort if you’re losing as much (or more) business each month as you gain? According to NARPM’s Financial Performance Guide, “Cutting your churn rate in half will double your average lifetime revenue per unit.” Some churn is out of your control and subject to market changes. But for the most part, churn is a direct result of customer satisfaction. PMs should find out why customers are leaving, where they would like to see improvement, etc. And, of course, that’s where resident and investor experience comes into play. Figuring out how to make the experience so good that your best clients never feel the need to look for another manager. KPI Formula: Unit Churn Rate = (Number of Units Vacated / Total Number of Units) x 100 12. Ratio of Customer Acquisition Cost (CAC) to Lifetime Value (LTV) of a Client The Ratio of Customer Acquisition Cost (CAC) to Lifetime Value (LTV) of a Client is a crucial metric in property management and business, as it evaluates the cost-effectiveness of acquiring new clients relative to the value they bring over time. Nothing feels better than letting a bad client go. This metric can help you put numbers behind that decision and helps property management companies understand the long-term financial impact of their marketing and sales strategies. Customer Acquisition Cost (CAC) is a key metric for any business dealing with clients and customers. This is the total cost of acquiring a new client, including marketing and sales expenses. It’s calculated over a specific period, and you can use the following formula: CAC = Total Cost of Sales and Marketing / Number of New Clients Acquired. Customer Lifetime Value is another common metric in business, and it’s calculated by adding up the total revenue you expect to earn from a client throughout their relationship with your business. You can calculate it as LTV = Average Revenue Per Client x Average Client Lifespan. A lower ratio between these two indicates a more cost-effective client acquisition strategy relative to the value the clients bring. Typically, a healthy CAC to LTV ratio would be below 1, indicating that the lifetime value of the client is higher than the cost to acquire them. KPI Formula: CAC to LTV Ratio = Customer Acquisition Cost / Lifetime Value of a Client 13. Executed Renewals This is a measure of how many lease renewals have been successfully completed within a specific time frame. This will help you understand your tenant retention rates and the stability of your income. A high number of renewals is the goal since reducing turnover can help cut costs and improve income and revenue. A low number of renewals could be a signal that resident satisfaction is on the decline or issues with property conditions, market competitiveness, etc. KPI Formula: Executed Renewals = Total Number of Renewed Leases within a Given Period 14. First Call Resolution & Number of Unanswered Calls The "First Call Resolution" KPI is essential in property management as it measures the efficiency and effectiveness of your customer service team in resolving tenants' or clients' issues during the first interaction. This metric indicates the quality of service and the ability to address concerns promptly. Essentially, you’re tracking how effective your team is at resolving an issue right away – or escalating it to the right person or process. You can also track the number of unanswered calls that come to your team to know if too many are getting missed. If you track days and times of unanswered calls, you can better understand where your team may have gaps or how to communicate to residents and clients the best way to contact your team. KPI Formula: First Call Resolution Rate = (Number of Issues Resolved on First Call / Total Number of Calls) x 100 15. Average Hold Time Average Hold time is a common KPI in any customer service or customer management role – but is just as important in property management. The metric helps assess the efficiency of your team’s call handling and refers to the average length of time callers are put on hold before speaking to someone. Longer hold times, as we all have experienced ourselves, generally lead to frustration and dissatisfaction, while shorter hold times can indicate your team is more efficient with service and your residents are happier. Reducing AHT is key to boosting resident experience and operational efficiency. KPI Formula: Average Hold Time (AHT) = Total Time Callers are on Hold / Total Number of Calls 16. Number of Overdue Tasks This KPI is critical for tracking the effectiveness and productivity of your team members. It tracks how any scheduled tasks or maintenance jobs are past their due date. Prioritizing this metric helps ensure that your team is tracking tasks in a way that drives efficiency and resident satisfaction. Obviously, a high number of overdue tasks can indicate workflow bottlenecks, staffing issues, or inefficiencies in task management. If this number is increasing, it’s a red flag (or maybe a beige flag?) that you should open up the hood and evaluate your operational effectiveness. KPI Formula: Total Tasks Scheduled - Total Tasks Complete on Time (it’s key to track deadlines for tasks) 17. Average # of Units Per Client While most SFR property managers work with clients who have one or two properties at most, you may want to consider this if you have any multifamily units or clients with a uniquely high number of units. The average # of units per client can help guide your business strategies and service offerings. It can also help you identify if your business is niche-ing down in the right direction. What kind of client do you want to work with? KPI Formula: Average Numbers of Units per Client = Total Number of Units Managed / Total Number of Clients 18. Average Google Review Rating While residents in single-family homes aren’t a great referral source, their reviews of your company can go a long way toward building your reputation and bringing you to the attention of new clients. Google reviews are a great way to track how your reputation is faring in your area. It may feel like moving this average up is out of your control, but you can influence it if you don’t like the direction it’s going. First of all, the baseline is to provide excellent service and resident benefits to boost your resident satisfaction. But beyond that, you can also give perks for filling out a review, simply ask good residents if they’re willing to give you a rating, etc. KPI Formula: Total Sum of Review Ratings / Total Number of Reviews 19. Number of Tenant Delinquencies This metric tracks how many of your residents are behind on their payments. It’s crucial for assessing the financial health of your rental portfolio and the effectiveness of your rent collection processes. If the number is higher than you’d like, you should look for a few culprits. Maybe you have several residents who aren’t able to make the payments, and you need to consider being more clear in your rental requirements at the application stage or your tenant screening process. Or, maybe it’s difficult for residents to figure out how to pay, and your payment system needs an update. KPI Formula: Ensure your property management system tracks the total number of tenants with overdue rent payments 20. Client Net Promoter Score (NPS) In SFR property management, residents don’t tend to make referrals, but you know who does? Clients. Your clients can be your best promoters if you’re looking to grow. And you can track how well you’re doing in that area by keeping track of your Net Promoter Score (NPS). NPS is a widely used metric to gauge customer loyalty and satisfaction. To get it, you need to conduct a survey. Ask your clients how likely they are to recommend your property management services to others on a scale of 0-10. Categorize responses like this: Promoters (score 9-10): These are your most satisfied and loyal clients, who are likely to recommend your services. Passives (score 7-8): Satisfied but not enthusiastic clients who are unlikely to actively promote your business. Detractors (score 0-6): Unhappy clients who might not only refrain from recommending you but could potentially damage your reputation through negative word-of-mouth. Next, calculate the percentages of respondents who are promoters and detractors. Subtract the percentage of detractors from promoters: the result is your NPS. KPI Formula: NPS = (% of Promoters) - (% of Detractors) How 1,000s of Property Managers are Creating Triple Wins with Savvy KPIs Property management KPIs are critical to success in the property management industry. Tracking metrics like these eleven KPIs also set professional property managers apart from hobbyists or amateur landlords. The key to all of it is building metrics around the idea of incredible resident experiences – all aligned in such a way that we’re creating new value. When we’re focused on driving success in that arena, the resident does better, the investor does better, and our team and talent do better. Creating triple-win experiences for everyone involved allows a more rewarding relationship focused on lifetime value. Through value drivers like a Resident Benefits Package, property managers are building those wins across the industry.

April 10, 2023

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Best 17 Single-Family Property Management Software in 2024

Property management software is a booming industry with dozens of options for multifamily and single-family property management companies. Today we're going through the best software for single-family property managers, and tips from two experts on how to leverage the software best. Our two experts, Kelli Segretto and Rhianna Campbell, have been through more than their share of tech rollouts. They’ve seen what works and what doesn’t for single-family property management, and they’re here to share with you what a good process for building a tech stack actually looks like. For this article, they walked us through some of the best property management software for single-family homes. These apps and platforms can help with everything from: Rent collection Work orders Credit card payments Online rent payments Tenant Screening Lease management Maintenance management CRM Let's jump right in with the top 17 software solutions for single-family property managers. The first six in our list are software solutions specifically and exclusively designed for property managers. 1. RBP by SecondNature Second Nature pioneered the property management industry’s first-ever fully managed Resident Benefits Package (RBP). The RBP includes critical services that more and more residents are asking for – and are willing to pay for. It's not just a package of services, though. The RBP is a tech platform that helps single-family property managers boost retention by creating a better resident experience and incentivizes better resident behavior with support like resident rewards and credit building for on-time rent payments. Campbell says that she looks for technology that can support both her team and the resident experience: “One of the things I want my clients to think about is the property management software is not just for our benefit," Campbell says. "This is not just to make our lives easier and our jobs easier; it's to really be able to reposition our time so that we're focused on value creation.” RBP by Second Nature generates value through: Attracting and retaining residents Boosting rental rates through improved resident experience Giving PMCs a competitive advantage Driving ancillary revenue opportunities Incentivizing good resident habits like on-time rent payments, property care, etc. The RBP supports PMCs by managing services like credit building, air filter delivery, maintenance requests, renter’s insurance programs, resident rewards, and more. The RBP by SecondNature provides services that residents and investors love, and that support you and your team. 2. Appfolio Appfolio is another cloud-based software that can be used for single-family property management and helps automate tasks and workflows for PMCs. They support real estate and property management professionals in digitizing their business operations, and support every aspect of your workflow with management, training, marketing and leasing, maintenance, accounting, and communications. They're one of the most popular apps for single-family property managers, thanks to the easy-to-use platform, automation, and customizable dashboards and reporting. 3. Buildium Buildium is another all-in-one property management software for both single-family homes and multifamily apartments. They provide management tools for accounting, leasing, maintenance, a mobile app, and integration services. Their platform includes tenant and owner portals and templates for leases, listings, reports, and more. We like their 14-day free trial that helps you really evaluate if the tech is a fit for your team, and get buy-in. Plus, their analytics are some of the best. 4. PropertyWare PropertyWare is a rental property management software for single-family properties. The software helps manage every aspect of a PMC workflow, from listing, leasing, managing payments, ordering and tracking maintenance, accounting, and more. Tenants and owners have a portal with 24/7 access that you can customize. Customers like that the system can easily scale and makes communication easy, but some of the downsides include that the reports are less customizable than other options and glitches sometimes take a while to get fixed. 5. PropertyBoss PropertyBoss is a platform solution that supports property managers for student, multifamily, and single-family rentals. Manage phone calls, work orders, financial statements, and rent payments all in one place. They aim to help property managers automate and run services without needing to scale up their teams. It's fairly customizable with an excellent QuickBooks integration and other financial packages. It's not as intuitive or easy to learn as some of the other options, but great for robust support. 6. YardiBreeze YardiBreeze is another cloud-based property management software for small to medium-sized owners or property managers. They have solutions for both residential properties and commercial. On the residential side, their app allows you to manage all your properties on one device with tasks and activity calendars and tracking, workflow managment, leasing, rent collection, accounting, owner tools, maintenance, and more. It's one of the easiest to use of all the apps on our list, but it does require some workarounds for reports and can be difficult to organize. 7. Rent Manager Rent Manager is another software built specifically for property managers. It's an operations platform solution that combines all the tools you need to run your property management business. Its features include accounting tools; operations support like communication, a call center, a mobile app, and an owner portal; reporting and automation; maintenance management; marketing and leasing; and software customization. Like PropertyBoss, the platform can be difficult to learn, and some features may only be used if your team keeps up to date with training. Now let's move into a group of apps that are focused on serving both property managers and landlords. 8. Innago Innago is a free rental property management software for small to mid-sized landlords and property managers. The software helps with rent collection, leasing, and tenant management all on the cloud. Everything is collected in a straightforward dashboard tracking rent collection, managing late fees, invoice automation, online leasing and document storage, and more. The app has a very high rating among customers and is particularly easy to use with a slick and professional interface for residents. 9. TenantCloud TenantCloud is a cloud-based property management software connecting property managers, owners, landlords, tenants, and service vendors. Its capabilities include posting listings, collecting rent online, and screening applicants. Overall, the interface is fairly intuitive, even from the back-end accounting and maintenance management. The software puts most of the responsibilities of property management in one place and streamlines workflows and communication. On the downside, some of the features, especially related to payments, aren't very customizable, and the software can be slow. 10. DoorLoop DoorLoop is a property management system that provides services like a built-in CRM, tenant portal, owner portal, and rent collection. Like other platform solutions, you can handle most of your workflows and tasks within the app and use their tools to build reports, track payments, and communicate with tenants and owners. The UX is intuitive and user-friendly, with excellent integration capabilities. Some functionalities are still being built, but it is overall an excellent solution for single-family property managers. 11. Hemlane Hemlane is a platform solution for landlords and PMs that supports and automates the day-to-day tasks of managing rental properties. It includes a user-friendly tenant portal for online payments, plus tools for lease management, listings, tenant screening, applicant tracking, maintenance and repairs, and more. Their UX and user-friendly design stand out among competitors, but if you need really robust accounting tools or reporting for single-family property management, you may want to go with a different option. 12. Rentec Direct Rentec Direct is a platform solution with full features for property managers and landlords managing properties. The web-based solution includes general ledger accounting and financial reporting that you can integrate with Quickbooks, and accept online payments from tenants through a tenant portal and app. The platform supports tenant and owner communication, listings, marketing, billing, tenant screening, and more. One unique feature is their US-based customer service team. The app is missing some advanced features that you can find with other solutions supporting single-family property management, but they are adding more regularly. 13. ManageCasa ManageCasa is built for landlords, property managers, and community associations. The platform provides full-service owner and tenant portals, lease management, digital documents, accounting and reporting, online payments, and marketing tools. You can build a marketing website, manage listings and leasings, and automate workflows, all with the support of a 24/7 customer service team. Some of the reporting and banking tools are not as robust as other single-family property management software options, but the marketing and communication portals are a standout. And, finally, let's look at a group of apps focused primarily on serving landlords, though some single-family property managers may find the technology useful. 14. Avail Availa is a landlord software that helps property owners or "DIY landlords" find and screen tenants, sign leases, and collect rent. It's focused on helping landlords be more hands-off and helps manage the onboarding of new tenants, leases, and even maintenance requests or work orders. The platform helps track payments and maintenance costs, too. A few cons are the app is sometimes slow, and the payment portal isn't as easy to use or customizable as some competitors. 15. Stessa Stessa provides real estate investors with single-family and multi-family rentals an easy platform to track, manage, and communicate. Their tools focus on supporting rental applications, tenant screening, rent collection, banking, and accounting. One standout feature is the Stessa Tax Center, which helps guide landlords/owners through the complexities of filing their taxes. One downside is the single-entry accounting system, which doesn't allow for more robust accounting. But for basic tracking all in one place, it's an excellent tool. 16. Landlord Studio Landlord Studio also helps DIY landlords with finding, screening, and placing tenants. Their portal includes online rent collection and tax reporting. Plus, they have a feature for responding to maintenance requests, prioritizing tasks, and easily communicating with tenants. It's very easy to use and relatively inexpensive for what it offers. However, their pricing structure can make it tougher to scale up with charging per unit, and some users find the features difficult to customize. 17. RentRedi RentRedi is a mobile app for landlords to help manage their properties. Landlord features include listing, tenant screening, lease support, rent collection, rental property accounting, and renter's insurance. Their tenant features include a tenant app that supports different forms of rent payment, application tracking, credit building, and more. A few downsides include some glitchiness in the integrations with Zillow and Trulia, and a lack of transparency into all communication sent to tenants. How to choose the right software for your single-family property management business Now it's time to turn to our two property management experts for insight on how to pick the right software from the list above. Meet the Experts: Rhianna Campbell and Kelli Segretto are two property management consultants who combine more than 35 years of property management experience. Kelli Segretto is the founder of K Segretto Consulting and a 20-year veteran of property management. Rhianna Campbell is a property management consultant and speaker with Proper Planning LLC, and former CEO with over 15 years of experience in the industry. Campbell and Segretto walked us through the process of identifying the best software for your property management business. Define the problem you want to solve with software “Start with your issues list,” says Segretto. “Realize what your biggest need is first and choose technology that matches that need. Talk to your fellow PMs, join these mastermind groups, attend Triple Win LIVE events, network on Facebook, and talk to other people to find out what’s working for them.” The biggest mistake PMs make when trying to build a useful tech stack is collecting as many programs as possible and trying to jump directly into a fully functional stack instead of identifying solutions and rolling them out strategically. Instead, says Campbell: “I talk to every single employee and find out what their biggest challenges are,” says Campbell. “And then from there, you can really pull out some of the commonalities that everyone seems to be having.” Below is an example of an issue list template Segretto uses in meetings with her clients. Issues List Template from K Segretto Consulting Vet potential PM software vendors When vetting specific technologies, Segretto suggests asking for a sandbox instead of just a demo. “Ask for a sandbox to where you can actually play with it, manipulate it, break it, find where those weaknesses are in that software before you commit to it,” Segretto says. She also recommends seeking referrals to users who have used the software successfully and who have tried the software and decided against it. Being able to understand those different perspectives will help you see a complete picture of who the software is for, where it excels, and where it may come up short. Get buy-in from your team & track performance “I’ve seen hundreds of businesses launch technology across the nation and helped them implement. Ones that tend to fail are the ones that are not prepared,” says Segretto. “What I mean by not prepared is they don’t have their team’s buy-in. They don’t even know what they really want the technology for. They just feel like they want it, and they want it right now. They’re not willing to dedicate a resource or a person that’s going to own it. Without that ownership, tech stacks fail.” Getting buy-in from your team is critical for any implementation. The people who are using the tech need to believe in and understand it. Nothing guarantees failure more than just throwing a new service at someone. “You’re prepping your team, you’re talking about it, and you’re giving those ‘why statements’ so that everyone is on board before you launch. All of that needs to happen in your pre-implementation,” says Segretto. You also need to identify who on your team is the point person for the new tech rollout. According to Segretto: “You have to pick a designated person who's going to be the owner of that technology. Then, as you implement, they're going to be the expert.” Finally, monitor the tech’s performance. Campbell says you need to conduct regular reviews of your tech’s performance much the same way you would of your team’s performance. “Being able to evaluate whether or not that technology is working is really important,” says Campbell. “I've seen a number of times where people buy into the tech and then don't use it. It’s important to have points in time where you check to see if you're really utilizing that software that you paid a lot of money for, and not just spending money on it every month.” Final Thoughts Tech is a good thing. Don’t let the length of this article about implementation scare you into thinking it’s more complex than it is. As long as you’re willing to manage your tech stack and make sure your team knows how to use it, you’re going to be in good shape. You wouldn’t bring on a new employee for no reason, so don’t add tech for no reason. Tech is a tool, and its power is determined by the person who wields it. If you’re purposeful and thorough, you can vastly improve the efficiency of your business with the ever-growing field of PropTech companies in existence. Learn more about how Second Nature is supporting property managers with leading tech solutions and services that residents pay and stay for.

March 29, 2023

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Four Keys to Successfully Scaling A Property Management Company

Today we're looking at the best ways to successfully scale a property management company. And we're going to an industry expert with our questions: Patrick Freeze. Patrick Freeze was once a professional poker player. Now he is the CEO of Bay Property Management, a Baltimore-based firm that has scaled to nearly 6,000 doors and is one of the largest PMCs on the east coast. While his personal origin story is one of the most interesting in the PM industry, his company’s growth story and the tactics used to go from nothing to a heavily-scaled PMC are equally interesting. Through a marketing-focused approach that was complimented by intentional and detailed process optimization, Freeze achieved an impressive amount of growth at Bay, and he joined us to explain exactly how he got there. Four Keys to Successfully Scale Your PMC Here are Freeze's top strategies. Optimize Your Marketing for Efficient Growth From day one, Bay Property Management has invested in its organic marketing efforts to help attract new business. Freeze himself became an expert in SEO early on and it’s the primary focus of his robust marketing team today. “I started reading everything I could on online marketing, so SEO, pay per click, etc. Over that coming year, I became really skilled at doing all the marketing on my own,” says Freeze. “So if you were to type in property management companies, Baltimore property management companies, or any variation of those keywords, we could come up number one. And then we started getting phone calls 24/7.” Bay grew rapidly as a result of its ability to generate web traffic and organic leads through SEO, and Freeze doubled the size of the business on a yearly basis for several years after the initial launch, eventually expanding into four different markets. Freeze credits his and his team’s investment in low-funnel digital marketing tactics as the catalyst for his rapid business growth. The CEO estimates he gets between 120 and 140 new single-family leads a week, with almost all of them coming from online sources. “We have 10 people in our marketing department that solely focus on that. Google is actually going through a big algorithm update right now, and you have to be on that. If you’re not on top of that, you’re not going to rank well in search. We spend a lot of time on that. Someone could probably argue the other side and say you should be more diversified, but at least that’s worked for us.” Process Improvement Never Takes A Back Seat One of the biggest pitfalls as a business grows is its process development and refinement. Scale requires processes, and enacting and optimizing these can often be a much bigger challenge than actually growing the client list. A rapidly growing PMC has already optimized its process for finding new business. Defining the systems your company will depend on to be efficient is a new undertaking, something Freeze learned quickly as Bay grew to nearly 200 employees. “When you’re managing 500 units, you know everyone at the company very well, and you can get away with not having systems, policies, procedures. When you have 190 people, you really have to have your systems down,” says the CEO. Freeze notes that the challenges that come with a large company are not universal, and what you have to be prepared for at 50 employees is different from 150. It pays to have continuous improvement and always be optimizing. Process management is never something that’s done. “So I think probably scaling from let's call it, you know, five employees to 15 to 50 To 100. You have to keep iterating. You have to continuously make improvements on what you're doing. So what worked for, let's call it 200 doors is not going to work for 1,000. So a good example, I guess when we started out. We had one person handling maintenance, we had one person handling accounting, we had one person as the property manager, right? And I would go out and get new business. Well, as the company continued to grow then we had two people on maintenance. And then we had two property managers. And as we were growing, we realize, wait a second, when a work order comes in, whose work order is that?” Early on in the company’s growth, Freeze sought to define the exact responsibilities of all positions within the company in order to minimize overlap. Overlap in roles leads to inefficiencies that can be avoided with clear guidelines as to exactly what role is responsible for what upcoming tasks. “We have a handbook for our property managers that’s probably 80 pages. We have a procedural guide for every single position,” says Freeze. “I don’t think anyone whom I’ve talked to that has scale has not had very, very defined policies, procedures, handbooks, because if you don’t, it’s going to be a total mess.” Structure has helped create more traceable outcomes, which results in processes that are “more easily optimized and improved as the company continues to grow. “We made a change when we had about 1000 or 1200 units from having maintenance coordinators and property managers to just having the property managers handle everything. It was a big switch for the company, but I think it was for the better because we know exactly when there’s a mistake that’s made. We can trace that and see exactly who was responsible for the problem instead of having four hands in the pie.” Quality Employees Are The Backbone of Growth “I don’t think there is anything more important than having good quality employees,” says Freeze. “You can get all the new business you want but if you don’t have good employees managing the new property, you’re going to lose it as quickly as you gained it.” Bay did not grow to almost 200 employees without a developed process for finding good quality workers. While the hiring process has become much more role-specific now, Freeze credits a unique interview design that’s much more action-focused than response-focused as what has helped him pick the most suited people for property management. “I had a list of 30 to 40 questions that had nothing to do with property management. I would ask questions like ‘who is the vice president?’ ‘What is 46 times 24?’ I used to have this brick wall in my office and I would ask how many bricks are on the wall. I would ask them to name something that’s complicated but you know really, really well, and take five minutes and explain it to me. And I would just keep going on and on for probably 30 minutes with these questions.” Freeze never particularly cared if the candidates got the answers correct. He was much more interested in their process for getting to the answers and how they handled the abnormal interview. “In property management, you’re constantly dealing with problems. You’re basically problem-solving when you’re a property manager, and if you can’t deal with complicated questions, you’re probably not going to be able to deal with complicated situations. So I would just start blasting off for 30 minutes all these random questions, and some people did great with it and we would hire them. We probably had 25% of all people who wouldn’t even finish the interview.” Resiliency is a key trait for a property manager, and Bay’s interview process succeeded in testing for one of the harder traits to ID in an interview setting. Freeze’s process also includes a timed writing test designed to see if candidates can write clearly and quickly when applying for a company that’s very email heavy. The process is designed to test ability more so than experience, and it’s helped get the right people in place from the beginning, allowing Bay to offer a better property management service that is more marketable. Compliance Is Key Compliance is hard enough in the heavily regulated world of property management, but one of the biggest challenges as you expand into other markets is managing the different laws and ordinances in each individual market. Freeze believes that compliance is “far and away” the biggest challenge of scale. “All of our leasing agents have to know different things in different jurisdictions that we’re in, because the requirements are different,” says Freeze. “We have attorneys review our stuff every single year, all of our lease documents, addendums, etc. Even with all that said, there is so much legislation that is passed every quarter that it can be tough to stay up on it.” Managers at Bay’s regional offices are required to be diligent in remaining current with the nuances in local leasing laws and ordinances, which can change monthly. “They really are changing that much, as crazy as that sounds. And then when COVID happened, it was a complete and utter nightmare. They were changing weekly, and the odds of getting hit with a big class-action lawsuit go up, and you can be sued for something that you don’t even know you’re doing wrong. So always make sure you are totally buttoned up and spending extra money on compliance. I can’t say that enough. You can’t spend too much on that.” Advantages of Scaling a Property Management Business With these tools for scaling a PMC, you can increase the size and scope of your business in order to achieve higher levels of efficiency, profitability, and growth. Let’s look at what benefits you stand to gain from scaling your business. Business growth Scaling a business can help to grow your business by expanding the customer base, increasing sales volume, and improving operational efficiency. Improved profitability As a business grows, it can benefit from economies of scale, which can help to reduce costs and improve profitability. Competitive advantage Scaling a business can help to create a competitive advantage by allowing it to offer a wider range of products or services, enter new markets, and achieve greater brand recognition. Improved access to capital A larger and more successful business is often able to attract more investment and secure better financing terms, which can help to fuel further growth. In the case of property management, it can also drawn clients. Attracting and retaining top talent Scaling a business can help to create new opportunities for employees, increase job security, and improve overall job satisfaction, which can help to attract and retain top talent. Increased innovation As a business grows, it can invest more resources into research and development, which can help to drive innovation and create new products or services. Tools You Need to Scale Your Property Management Business The property management industry is an enormously tech-savvy group of people. In our network of property management companies, we’ve seen quick adoption of new tools and tech like AI, cloud-based systems, etc. Of course, the property management tools you choose will depend on the specific needs and goals of your PMC. Second Nature’s RBP aims to provide tools that are customizable across multiple property management levels, needs, and niches. With fully managed and integrated services that add value for residents and investors you can much more easily see the benefits of scale. Here are some other tools and property management software we’ve seen most highly rated in our industry. Slack: A cloud-based platform that makes communicating with your team easy. You can get immediate responses from team members, and even vendors or clients you add to your channels. LeadSimple: Sales CRM and process automation RentCheck: Automating property inspections Process Street: No-code, simple process and workflow management Airtable: a low-code platform to build collaborative apps to visualize data, processes, etc. Zapier: A tool that allow syou to integrate all your applications and set up automated workflows between them. These are just a few of the many property management tools available. It's important to evaluate the specific needs and goals of your business, and choose a tool that best fits those requirements. How Second Nature Helps With Scaling Second Nature was built on the idea that we could help make property management easier for everyone involved – residents, investors, and especially property managers. To that end, we’ve built fully managed services that generate greater value for your PMC by delivering better resident experiences. Our team takes care of the details for you so that your team can focus on growth, reputation, and quality. Learn more about Second Nature’s industry-leading resident benefits package and how it can help you scale with greater ease.

March 21, 2023

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Property Management and The Experience Economy

What is an experience economy and why is it relevant to single family rental property management? There are 3 questions driving the future of value creation in professional property management. How do we create an experience so good, residents never want to leave? How do we create an experience so good, investors never want to sell? How do we create an experience so good, talent wants to be in this business forever? The word experience is key. Whoever creates the best experiences will create the most economic value as the service side of property management becomes commoditized. In Joe Pine’s book, The Experience Economy, he reveals a critical insight that transcends real estate to other industries. It’s about the staging of value creation through the lens of commoditization and customization. In today’s highly competitive world, companies often focus solely on process improvement, optimization, cost-cutting, and driving efficiencies. While these are critical to remain competitive and improve margins, they are the playbook of a game that ends with operating a low-margin commoditized business. Some business leaders even talk about their industries being commoditized as a badge of honor. Interestingly enough, that thinking is self-fulfilling; by not focusing on creating higher-value offerings, they are riding the train to commoditization.History contains many examples of innovations so groundbreaking they captivated people and led the way for economic prosperity. Artificial light, telecommunications, automobiles, to name a few. While these were all once higher-margin innovative offerings and the most attractive businesses to be in, they have grown to be stale and competitive industries, forced to compete on price, leading to lower profits and company value relative to size. For example, Ford and GM, once praised as innovators in manufacturing goods, are now in a sea of competition and worth a mere 0.4x revenue at the time of this writing. The Experience Economy dives into these macroeconomic trends and shows the change over time in their Progression of Economic Value chart. The macroeconomic trends demonstrate how we have gone from extracting commodities to making goods to delivering services to, finally, staging experiences as the current primary driver of economic growth. One of the many great examples included in the book is the staging around birthday party: A birthday party at home that consisted of a cake and celebration requires the commodities, flour, sugar, butter etc.. to make at a cost of <$0.10. Then companies began offering “cake mix” which was more convenient that cost $1.00, followed by bakeries making the whole cake as a service for $15, and now, people outsource the whole birthday party to a venue like Dave & Busters or a party planner. There’s a party, invitations, custom napkins, entertainment, and yes, a cake is part of it. So someone can be in the pennies for cake materials business, the quarters for cake mix product business, dollars for a fully-made cake, or thousands of dollars for a full birthday or wedding or celebration event experience. That’s the commoditization to customization journey. Many property managers have correctly said, “We’re in the service business.” However, looking at where the most economic value will be created, today’s industry leaders have already started the shift to “We’re in the experience business.” They’re seeing different opportunities, which lead them to different choices that yield different results, and they find themselves in differentiated businesses. Professional property management is fast approaching a “hotelification” phase, where premium amenities and hospitality-grade service are creating a rental experience so good that more people choose the rental experience for longer periods of time. Hotel staff are called upon to enhance the experience of a proposal, an anniversary, a birthday celebration. And the great ones answer and emotionally connect. They are “moment-makers'' who create enduring loyalty, allowing them to drive more economic value. Consider how many of life’s meaningful and memorable moments are created at home. But how many people can name the owner of the apartment they lived in as easily as the hotel that elevated that special moment? So what are property management leaders doing today, and talking about doing tomorrow to create the #1 resident experience? The occupied experience is being defined by the “Resident Benefits Package”. From conference events like IMN, to NARPM, to PM XChange and PM Grow, it is hard to find an agenda that doesn’t include it. It’s a hot topic. Property managers and service providers have figured out how to turn persistent problems into a suite of proactive solutions that residents will pay for. Some of these services have been amenitized, like 24/7 maintenance coordination, vetted vendor networks, home-buying assistance, multiple payment options, and more that have become standard practice in professional firms. But there’s also a list of emergent ancillary services that are making their way from initial adoption to the definitive standard in the professional management experience. Move-in Concierge - Getting utilities and home services set up is a hassle for residents. Instead of 4 phone calls to get water, energy, internet, and TV services set up after researching who services the address, now residents can make one phone call and speak to a concierge who has looked up the discounts and promotions available and can confidently guide them through the process. In the future, this service likely expands to moving itself, deals on furniture with offers to assemble it, coordinated home cleaning, and landscaping. Air Filter Delivery - HVAC has been the #1 maintenance line item in SFR in most markets, second to plumbing in more temperate markets. And it has been a persistent problem of getting residents to change their filters on time. A 2020 HVAC Data Study that looked at over 7,900 SFRs in 4 markets, over an 18 month period, showed a 38% reduction when comparing a scheduled filter delivery program over the status quo of leaving a stack at move-in or hoping the resident remembers to go to the store. Every 2-3 months, residents are getting a box on their doorstep, where convenience makes it easier to do the right thing than to forget or ignore the responsibility entirely. Credit Building - every month that residents are paying rent on time, they get the benefit of that activity contributing to their credit file. A Goldman Sachs study showed a 42 point average increase in credit scores over 4 months. The credit bureaus also allow for up to 24 months at the same address to be back-reported which can provide a meaningful boost. Property managers are able to incentivize on-time rent payment and help residents build their credit over the course of their lease. Rewards - Residents are used to getting points and rewards for their loyalty with hotels, airlines, their credit cards… why not on their largest monthly expense? And while a rewards platform offers residents a unique benefit and savings on both everyday and luxury items, it is an incentive platform for the property manager. Rewards points allocated for on time payments, timely renewals, and ticky-tack maintenance like flipping a circuit breaker or resetting a GFI outlet mean more of the resident behaviors property managers want. Leveraging it for concessions and leasing incentives also means savings over cash offers, or higher perceived value at the same cash expense. 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. Smart Home - From thermostats to keyless entry to water leak detectors and more, there is hardware and technology alike growing more popular each year. Not only are they appreciated by residents, but they provide critical operational efficiencies to the management team. In addition to these, there are many more innovations that are going to dramatically improve the experience of renting and raise the bar on what’s expected. The companies that architect the best experiences will be the market leaders and capture the most upside in this future economic environment. We constantly are asking ourselves, what might the professional property management industry look like in 2030? The shift from transactional services to transformational experiences is one of the surest bets on the table. The big winners will be the players who embrace the new discipline of experience design. We believe the future belongs to the professionals, the trusted, the innovative… the people dedicated to changing the way people live forever.

October 25, 2022

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Why You Should Host Quarterly Zoom Calls with Your Investors

Three veteran property managers who have implemented quarterly video calls with their clients. They speak to exactly how and why they operate these, and the specific value it creates for their companies. In late 2019, Real-Time Leasing CEO Deb Newell launched a new communication initiative aimed at building a better investor experience. The concept was simple but effective: a regularly cadenced zoom meeting with all their investors. “We invite all of our owners and we basically do a ‘state of the union’, a state of our company,” says Newell. “You pull back the curtain, you’re really showing them what’s going on behind the scenes and inviting them to have a little bit more information as to what the day to day may be.” Other PMs have since recognized the value of disclosing the innards of the business to investors, including Bryan Jenkins of AHI Properties and Karen Jordan of HBR Rentals, all of which appeared on a panel at PMLX with Newell to break down how they run these calls. What is the goal?‍ These investor zoom calls have one main goal, which is to keep the investor informed about and engaged in the processes of how their asset is being managed. When it was pioneered by Deb Newell, CEO of Real-Time Leasing and professional property management consultant, the intent was to provide such a thoroughly informative session that investors would leave feeling like they’re being kept in the loop and their questions and concerns were heard. This has proven more than successful for Newell and Real-Time Leasing, as well as other companies that have adopted the practice. It’s an obvious win for the investor, but the resulting relationship development with clients is also a big win for property managers. In the new age of property management, where lifetime value has supplanted immediate cash flow as the PM’s north star, making efforts to keep investors in the loop helps build a relationship that contributes to said lifetime value. Newell notes that a lot of investors think that the only time they hear from their management company is when there is a problem. That can really strain the client relationship, but it’s such an easy thing to fix and doing so will usually come as a surprise to the investor. Many probably aren’t expecting to be this informed. Their experience with old school PM companies would give them no reason to. “We’ve heard nothing but positive things about it. They were amazed that we did it in the first place,” said Newell. Bryan Jenkins of AHI Properties, part of the PURE Property Management family, has seen similar positive reviews after adopting the quarterly zoom call concept. “We've had nothing but positive feedback on the two that we've done this year. I've got clients that have properties in multiple states with multiple managers. And their comment is always no one else is doing this. And they're just blown away that it's proactive versus reactive.” How do you run them? Newell recommends doing these meetings quarterly and generally tries to provide investors a holistic view of the company’s status and the performance of the assets it manages. “The idea was to say ‘hey, we’re just going to tell you exactly what’s going on in the company, how well we’re doing, how well rent has been received, what our percentage of occupancy is, what our percentage of delinquency is, that way they felt more engaged.” Newell typically lays out an agenda that features a run through of all those things. “That usually lasts about 45 minutes, and we do open it up for questions. So we’ll have somebody monitoring chat . . . they can definitely ask questions during the chat, then at the end we open it up, let everybody unmute and ask questions.” Jenkins and AHI take a slightly different approach, electing to focus on the strategy for AHI’s decision-making and making sure their clients have a good understanding of why they’re doing what they’re doing. “We want to have our clients understand the why, why we’re doing certain things, why we’re deploying certain systems. They don’t need to understand the how, it’s the ‘why’ portion of it.” Jenkins hits on an important point, which is that it’s worth identifying what’s important to your clients and focusing exclusively on that. You could probably talk about what you’re doing as a company and why for hours, but whittling down to what’s most important to the clients can result in a more streamlined and efficient meeting that loses fewer people over the course of it. “We're explaining why we're doing things, how we're doing it for their benefit, and we focus on the triple win. We even talked about on our last call that we're looking for a win for the owner, the resident, and the manager and once we focus everything through that lens, it's easy. And we're also focused on the education of our owners and educating them on the way that we want them to think as investors.” Jenkins, Jordan, and Newell break their meetings up into segments, each with time allotted to different speakers within the company. Karen Jordan of HBR Rentals remarks that this helps clients put faces to names and build a more direct relationship with employees beyond just company execs. “I loved that they can put a face to a name because a lot of our owners have only met myself. So they haven't met the team. So to see the face of who's our maintenance coordinator, who's the Resident Experience Manager, to really get to know them, I think it really helps them,” said Jordan. Creating a Triple Win The extra communication with investors Newell, Jordan, and Jenkins are striving to create is another great example of how property managers are realigning their business toward lifetime value via triple wins. The benefit to the investor of being in the know and feeling like their questions are addressed is obvious. On your side as the PM, this is a great opportunity to forge a strong relationship with your clients, but it’s more than that too. Regular communication with clients also gives you an opportunity to teach. Investors may not understand everything you’re doing, why, or how your long-time priorities have shifted as a triple-win driven property manager. Jenkins focusing on “the why” provides powerful insights to investors on this exact question. As a property manager, you’re trying to provide value that investors can’t easily replicate themselves or with the assistance of technology. These quarterly calls are great opportunities to ensure your clients understand exactly what value it is you’re creating for them. When investors and property managers are on the same page about the future of property management, creating a great resident experience is even easier. That's a triple win.

May 19, 2022

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Four Keys to Successfully Scaling A Property Management Company

Property Management and The Experience Economy

Why You Should Host Quarterly Zoom Calls with Your Investors