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Triple Win Property Management Blog

Why is Resident Experience Important?

Have you heard? We just published our first-ever State of Resident Experience Report! The report draws fresh insights from the SFR property management industry and explores the three top factors impacting resident experience right now. Download the report to see the results! In the meantime, today we’re getting started with a related topic: Why is resident experience so important? Resident Experience is the cumulative effect of all interactions and engagements between a resident and a property management company throughout their leasing lifecycle. It encompasses every touchpoint, from the initial viewing and leasing process all the way to maintenance services, communication, amenities, and lease renewal. In many ways, the resident experience is the heart of professional property management, encapsulating the quality of living provided beyond just a physical living space. In this article, we will: Explore the paramount importance of resident experience to property management Outline how it can directly impact factors like retention rates, profitability, and reputation Share insights from leaders in the single-family rental property management industry Buckle up as we delve into the power of stellar resident experience – and how it’s becoming a strategic imperative in the current real estate landscape. Here are 8 ways resident experience management can make a difference for residents, investors, and property management companies. 1. Improves Retention Rates Retention rates, or the ability to keep residents renewing their leases year after year, are a key metric of success for any property management operation. High retention rates mean stable revenue and reduced costs associated with vacancies, marketing for new residents, and turnover maintenance. But what fuels high retention rates? The answer is an exceptional resident experience & platform. When residents feel heard and valued, they’re a lot more likely to renew their leases. This positive resident engagement is just as important in single-family rentals as it is in multifamily apartment communities, where it often gets more attention. In essence, the resident experience is your tool to turn the transient nature of renting into a long-term relationship. It's not just about providing a day-to-day place to live; it's about designing a product and service that residents will pay for and stay for. A truly positive resident experience can convert short-term leases into long-term homes, making it a strategic focus for effective property management. “I think ten years ago, property managers were only concerned with collecting rent and keeping tenants from doing damage to properties. It was a much more adversarial relationship than it is today. Today, the best PMs know that resident experience is vital to minimizing vacancy and creating a resident that strives to be a higher quality tenant.” - Jonathan Cook, Business Development Manager, Revolution Rental Management 2. Reduces Vacancy Costs One of the most substantial costs that property managers (and their investor clients) face is the cost of vacancy. Each day a property remains unoccupied equates to lost revenue. Not to mention the additional expenses associated with marketing the property, move-out costs, screening new residents, prepping the move-in process, and preparing the unit for occupancy again. When you add it all up, the costs can be quite significant. This is basically the flip side of the coin of “resident retention.” Good resident experience → Resident retention → Reduced vacancy costs. A positive resident experience can act as a powerful retention tool, encouraging residents to renew their leases and reducing the churn that leads to vacancies. “We’ve really started to notice that the better experience we can make with the tenants, the more they want to come to us as opposed to our competitors. It's all about experience. We’ve held onto this idea that we want to provide the experience that residents gravitate to.” - Chenoa Stark, Property Manager at American Leasing and Management After all, happy residents can become your advocates. They are likely to spread the word about their experience, drawing in potential new residents. By delivering an exceptional resident experience, you're offering them just that, making your property stand out in a crowded market. 3. Increases Profitability “Property Managers who are on the cutting edge realize that by focusing on the resident experience, they will earn better returns on investment for their company and their investor clients.” - Gregg Cohen, Co-Founder of JWB Real Estate Companies. A compelling resident experience is a secret weapon for driving profitability in property management. It's like a strategic chess move that not only strengthens your relationship with residents but also contributes to your bottom line in several key ways. Reduced Acquisition Costs: We’ve already discussed how, by keeping your current residents happy and renewing, acquisition and move-in costs are drastically reduced. Increased Ancillary Revenue Opportunities: A positive resident experience can open the door to various ancillary income opportunities with strategic pricing. Services like an RBP can boost your profitability while simultaneously improving the resident experience. Word-of-Mouth Marketing: Satisfied residents are your best brand ambassadors. They can spread positive word-of-mouth about your property, attracting new prospects and reducing marketing expenses. Operational Efficiency: Elements that enhance the resident experience, such as digital communication portals or automated maintenance requests, also lead to operational efficiencies. These improvements can streamline and automate processes, saving time and reducing costs. In essence, a robust resident experience strategy is not just about resident satisfaction; it's a profitability powerhouse. It allows property managers to attract and retain residents more cost-effectively, uncover new revenue opportunities, and operate more efficiently, all of which positively impact the bottom line. 4. Boosts Reputation In the age of online reviews and social media, reputation is everything, especially in the property management industry. A strong, positive reputation can be one of your most valuable assets, attracting potential residents and providing a competitive edge in the market. The cornerstone of a great reputation? You know the answer already: An exceptional resident experience. When residents have positive interactions with your property management team, they're more likely to share their experiences. These shared experiences, whether through word-of-mouth or online reviews, contribute significantly to your company's reputation. Positive reviews can attract new residents looking for a new home, reducing the time and cost of filling vacancies. They also provide a form of social proof, assuring prospective residents that they're making a good choice by choosing your property. Furthermore, a stellar reputation can strengthen relationships with investors, vendors, and other stakeholders. It can lead to new business opportunities and partnerships, further boosting profitability. In essence, cultivating a superior resident experience is like planting the seeds of a robust, positive reputation. As you nurture these experiences, your reputation can grow, reaping benefits in terms of resident attraction and retention, stakeholder relationships, and overall business growth. 5. Simplifies Rent Collection Rent collection is a critical component of property management, and any strategy that can streamline and improve the efficiency of rent collection is worth its weight in gold. That's where a stellar living experience comes into play. Satisfied residents are generally more cooperative and timely in fulfilling their financial obligations, including paying rent. Positive relationships between residents and property managers foster a sense of mutual respect and understanding, which can go a long way in ensuring smooth rent collection. The resident experience also extends to tools and incentives for on-time rent payments. For instance, an easy-to-use online portal for rent payment can lead to faster, more reliable rent payments. One of the best ways to ensure on-time payments is by providing incentives in a Resident Benefits Package (RBP). An RBP can provide credit reporting for on-time payments, resident rewards for early payments, and more. A great resident experience doesn't just make residents happier; it makes the fundamental aspect of rent collection easier and more efficient. It's a testament to the idea that good relationships make good business sense. 6. Reduces Maintenance Issues Maintenance is a significant part of property management, and it can be a substantial cost center. However, by offering a superior resident experience, you can reduce the frequency and severity of these issues. Residents who feel taken care of are more likely to reciprocate those feelings towards the property. A positive resident experience can also foster better communication between residents and management. Residents are more likely to report minor maintenance issues promptly before they escalate into major, costly repairs. For instance, a leaky faucet reported and repaired promptly will cost much less than ignoring it until extensive water damage occurs. Again, one of the best ways to boost resident satisfaction and reduce maintenance costs is to provide a Resident Benefits Package. At Second Nature, our RBP provides things like scheduled filter delivery to ensure air filters are changed on time and reduce HVAC costs. The mantra is simple – take care of your residents, and they'll take care of your property. 7. Creates Satisfied Investors Property owners are investors who seek returns on their investments and the preservation of their properties' value. A vital element to achieving this is through offering an exceptional resident experience. When residents are satisfied, they tend to stay longer, pay rent on time, and take better care of the property. This leads to consistent income, reduced expenses, and fewer maintenance issues — all key elements for maintaining a property's value and ensuring strong returns. And remember: properties known for their superior resident experience tend to attract quality residents faster, reducing costly vacancy periods. They're also more resilient against market fluctuations, preserving investors' returns. Property investors value professional property management that focuses on resident experience because it signifies competent handling of their investment. It displays a forward-thinking approach that aligns with today's renter expectations. It leads to a virtuous cycle of high-quality tenancies, stable returns, and preserved property value – a “triple win” for residents, PMCs, and investors. “When you're giving that great experience to your residents, you're also giving that great experience to your owners. They have less lost vacancy, they have more care and more respect given to their property, and that's going to protect their assets. That shift in the industry is already happening, and those that are able to make that pivot quickly are going to be able to level themselves up and really get ahead of the curve.” - Kelli Segretto, Property Management Inc. 8. Builds Competitive Advantage “As the operator of a business, how can I get from something transactional to something transformative – so that people are getting something from me that they aren’t getting from most other businesses.” - Jordan Muela, CEO of LeadSimple In today's competitive property management landscape, offering an exceptional resident experience is not just a perk, it's a differentiator. It's what sets a property management company apart in a crowded market and makes it a preferred choice for residents. A positive resident experience leads to higher resident retention, reducing vacancy rates and the costs associated with acquiring new residents. It allows property managers to maintain steady rental income, creating a solid financial foundation that competitors might struggle to match. In a nutshell, a commitment to providing an exceptional resident experience can provide a significant competitive advantage for all the reasons listed above – positioning a property management company as a leader in the field. How Second Nature Helps Optimize Resident Experience Second Nature built a product based on the idea that creating a world-class resident experience could make a difference in profitability and value for residents, property managers, and property owners. We designed a fully managed all-in-one Resident Benefits Package that does just that. The RBP provides benefits, incentives, and concierge services that residents want to pay for and stay for. It drives up value for everyone involved and delivers a unique and elevated experience. “A resident benefits package – you hear people call it the easy button. That’s because it is essentially all of these different services and all of these different, valuable add-ons for your residents that are done for you.” - Kelli Segretto, Property Management Inc. Learn more about the Second Nature RBP, or dig into our 2023 State of Resident Experience Report.

Calendar icon July 18, 2023

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Mastering Lease Management for Your Property Management Company

In the dynamic world of residential property management, mastering the art of lease management is more than just a strategic business move; it's the cornerstone of cultivating strong, trusting relationships between investors, property managers, and residents. After all, at the heart of every lease agreement is something profoundly personal: a person's home. Lease management extends far beyond the realm of contracts, finances, and legal compliance. Yes, these elements are undeniably crucial, but effective lease management is also about understanding and respecting the unique needs, expectations, and concerns of the people we serve. It's about combining professional acumen with empathy, maintaining a human touch in an industry that can often seem dominated by numbers and legal jargon. In this article, we have three experts who know what that’s all about. With them, we'll explore the lease management process, focusing not only on the technical aspects but also on the human elements that can make all the difference. We'll delve into why a compassionate approach to lease management can lead to better resident relationships, improved resident retention, and, ultimately, a more successful and rewarding property management experience. Related: Free Property Management Agreement Template So, whether you're a seasoned property manager or just starting your journey, there's something here for you. Let's get started. (Or, if you prefer listening over reading, you can hear our full discussion on the Triple Win Podcast!) Meet the Experts Melissa Gillispie JWB Property Management Director of Leasing & Property Management Located in Florida - 5,600+ Doors Under Management David Galant Pathway Properties, LLC Owner / Principal Real Estate Broker (Licensed Broker in Utah & California) Licensed Continuing Education Instructor Utah Division of Real Estate Most recently, with Atlas Real Estate as a Regional Director Located in Utah - 50 Doors Under Management - started up 3.5 months ago Kristin Leet One Focus Property Management Leasing Agent - Boots on the Ground North Central Pennsylvania - 600 Doors Under Management Understanding Lease Management: What It Is Lease management is the process of overseeing and controlling all aspects of lease agreements between a landlord and tenant – or, in the language that we prefer to use here at Second Nature – the investor and resident. It includes tasks such as drafting lease agreements, screening potential tenants, handling rent collection, managing lease renewals, and maintaining clear communication lines between all parties involved. Effective lease management ensures a seamless experience for both residents and property owners, aiding in resident retention and maximizing rental income for your investors. Understanding Lease Management: Why it Matters Our panel has tons of advice on tactics, KPIs, and processes for effective lease management. But first, they say, it’s important to establish why it matters to get it right. “When you think about housing, it’s a basic human need,” Melissa says. “That’s the human element. Obviously, we lean in on [property management] automation and technology to support us, but I think that as things have changed in our industry – and this generation of renters has changed – so must our processes evolve in order to meet the needs of the people that we serve and to impact our local communities.” David adds: “One of the basic human needs is shelter. Another way to look at it is some of the most stressful events in your life are death, divorce, and moving. So we’re dealing with high-stress situations. To be fair to the owners, to the prospective residents, and to your team, the lease management process needs to be efficient, organized, and systematized.” According to Kristin, that’s part of achieving a Triple Win: “A guiding principle is helping qualified tenants find a place that is safe, affordable, and something that they can be proud of. I’m also making sure that I’m doing my due diligence to our clients so they’re getting the best return. We want to give everyone involved an experience that's worthwhile and makes them want to continue to do business with us.” Steps in the Lease Management Process So, with a lease agreement established and prepared, let’s get to the meat of the conversation: each step of the lease management process. We’ll talk through the process and share insights from our panel on each 1. Preparing the Property Before listing a rental property, ensure it's in excellent condition to attract potential residents. This may include repairs, painting, professional cleaning, or upgrading certain features. “We have what's called our JWB Livability standards,” Melissa says. “Does this home meet our company standards? If it doesn't, then we need to make sure we're addressing those things. The more that you invest on the front end in making sure that a property is showing in an amazing way you're going to get that back with a resident who is proud of the place, going to take care of it and lead to a hopefully long-term resident.” 2. Marketing the Property Effectively advertise your property on appropriate platforms to reach your target audience. Quality photos, detailed descriptions, and highlighting of key features can help attract potential tenants. Kristin describes how important the details are here: “Are your pictures fantastic? Are there clear pictures of each room? I get comments all the time from people who say they love that you can get a feel of the property from our ads, just from the pictures or video. Video is such a powerful tool.” 3. Property Tours Hosting property tours is an integral part of the lease management process. It's an opportunity for potential residents to view the property firsthand and for you to showcase the property's best features. This is where your best sales skills come in. Kristin talks about how this is the chance to be the face of your brand. “I'm the one they see in the beginning, I'm the face that welcomes you in, makes you love the place. It’s so important to be positive and create this sense of home and comfort because the rest of it can be more stressful.” Melissa emphasizes that the property tour is the time to “warm it up. Our leasing agents are the ones who can draw people in and get people to open up and tell them what they're really looking for.” 4. Tenant Screening and Selection Next, you’ll conduct thorough background checks, credit checks, and rental history reviews on potential residents. This helps ensure you select reliable residents who will care for the property and meet their financial obligations. This is an intense part of the process for the potential residents. Kristin explains: “It’s meaty. We're going to ask for every single piece of information, and then we're going to let them know if they’re approved. As aggressive as that can sound, it's up to me to basically say, ‘Listen, we know it's a lot, but it's a lot because it's worth it.’” 5. Lease Signing Once a tenant is selected, you’ll conduct a lease signing meeting. Review the lease terms, answer any questions, and have all parties sign the lease agreement. It’s important to be transparent about the terms of the lease beforehand and ensure that residents feel comfortable and understand what they’re signing. Kristin again: “We have a very transparent website. Our leases are on there, so people can actually read the lease before they even come to us.” 6. Lease Renewals Monitor lease end dates and communicate with residents in advance about renewal options. Offering incentives or showing appreciation can encourage lease renewals and increase resident retention. Melissa explains that their company aims for long-term leases for a triple win: “A long-term lease is that security for the client, and it also locks in rental rates for the resident. It comes back to that triple win concept: the resident wins because they're not subject to significant rent increases based on the market every single year. It's great for the client because they have a little more assurance of long-term occupancy. And then we win because we hit our goals! And we all love to hit our goals.” Leveraging Technology for Lease Management Of course, one of the best tools at a property manager’s disposal for lease management is technology. Property management software and other digital solutions can streamline, automate, and simplify nearly every aspect of the lease management process. Especially since the 2020 pandemic, technology and automation have taken over in the industry. “That change [to digital] was inevitable,” David says, “but Covid really accelerated it. People were starting to dip their toes in the water with video tours and better pictures, and better online presence. And then Covid just forced that change.” Our panel shared some of their insights on the best places to leverage that tech to make your process the best it can be. Self-showings “Almost every company I've ever spoken with at this point does some level of self-showing,” Melissa said. “We use Tenant Turner and CodeBox,” David said. “And then leases are put in and automated through Buildium, which we use as our software suite.” Property management software We’ve written a lot about the best single property management software, property management accounting software, and property management automation, so we won’t get in-depth about it here. The market has dozens of excellent solutions, and property managers are fantastic at sharing their knowledge. The software helps support client management, maintenance workflows, payment processes, resident relationships, and more. Virtual assistants Virtual assistants have grown as a major solution in the property management space. Especially in single-family rentals, jobs can be spread out across large geographic regions, and virtual assistants make it possible to serve those regions equally. Plus, they help PMCs maintain objectivity when it comes to the leasing process. Kristin explains the value of a virtual assistant: “So we have one dedicated person here at the company that does our applications, and the reason why we do that is that it eliminates any kind of discrimination. She is a virtual assistant, she does not meet with people in person. It eliminates her having a personal opinion while she's scoring the application. She has contact with them via email and things like that.” Digital solutions and video Digital marketing and video tours or social media posts are one of the leading ways to capture attention and serve potential residents. “I get in front of a camera with a tripod,” Kristin says. “I introduce myself and talk about the company that I'm from. I tell them what the address is, I give them a whole walkthrough tour, and I do an outro. When it’s over, they know what our website is, they know how to apply, they know how to book a tour.” “That personal touch right there helps get people in the door. It's not catfishing someone into believing that a property is any more than what it actually is because they're going to see it. It’s really presenting a property for what it is in the best way possible.” Best Practices for Effective Lease Management Melissa, David, and Kristin shared some of their top tips for building a better lease management process. Deliver digital content and contactless engagement The modern renter is looking for faster, more convenient, and, of course, contactless. “Renters more and more want contactless, like you get when you DoorDash something or order on Amazon and all of that – that’s the new norm,” David says. “The consumer is expecting a thorough, interactive, high-quality experience with digital solutions and online content.” Be flexible and responsive “Remote work has increased migration to different markets in different states,” David says. “Time zones have become blurred. Customers want responsiveness outside of normal Monday through Friday 8 a.m. to 5 p.m. business hours for inquiries on vacant properties.” He adds, “I think the pace of the leasing process has increased in terms of the speed. We're dealing with a more informed consumer. They want more information upfront, they want it quickly, and they want to make a quicker decision. There's a feeling that the pace is faster.” “I think that's the new norm, and I don't think that's necessarily a bad thing. It causes people to up their game and be better. And I think it benefits the property management ecosystem.” Stick to your criteria There are laws guiding leasing standards, and it’s critical that your criteria are fair and apply consistently. “Our criteria are firm,” Kristin says. “Every single applicant goes through the same criteria and same processes, and we don't deviate from that. We don't take your personal situation into account or make exceptions for people.” “Sure, you can customize and meet people where they're at,” Melissa says. “But there has to be some level of: what is the standard you are setting? Because ultimately, you want to treat people the same. And I think with leasing specifically, we are obligated to.” Clearly define workflows and process All three of our panelists describe clearly defined processes and roles within their company for the leasing process. Leasing agents provide that first touch and personalization; then you may have a virtual assistant or leasing assistant who helps follow up and get applications in; then it may go to a supervisor who approves the application, all the way back to the leasing agent who sends the lease out. “We use a process for every single thing that we do,” Kristin says. “If we follow it correctly from start to finish, there's not a point where anyone can say: ‘You didn't approve me because of this.’” Follow up on feedback David explains that asking for feedback is key to their leasing process. “We reach out to prospective residents that toured but haven't moved forward, and we ask them, ‘What did you see? Do you have any feedback on the property? We're very direct because it will help us market the property better.” “One thing we do in our department meeting with our leasing team every week is to have a structure for them to talk through any feedback they received from showings the previous week,” Melissa says. “Then we take immediate action on that feedback when needed. I think you get to make changes and actually improve when you ask for feedback.” Pay attention to pricing “You need to understand where your price is at,” David says. “Is it reflective of the market? Before we engage with an owner prior to a vacancy, we actually put together a spreadsheet that's almost like a rental analysis appraisal. And we'll have subject properties, we'll have adjustments, and we’ll make a recommendation.” If a property isn’t selling, evaluating price fit is a key step. “We have what's called a 10-day rule,” Kristin says. “If it's on the market for 10 days and we haven't gotten an application, we drop the rent. It's an expectation that we set with the owners when we put the property on the market: Is it better to take less rent, or is it better to just leave your property vacant? And nine times out of 10, they want to get the rent.” “One thing that's cool is we have rent escalations built into our lease agreements,” Melissa says. “And so even if we have to make a rent reduction while it's on the market in order to really drive in more leads and get it to move, we're then building in an escalation so that hopefully, by the end of that lease term, we sign long-term leases.” Focus on customer service “Since Covid, there seems to be a more consistent customer service experience across the industry,” David says. “Everyone's voice is amplified, especially the consumer. Their vote counts, thanks to things like Yelp, Google reviews, etc. They can really hurt or help your company's brand.” Balance tech with a human touch “There's one specific part of the leasing management process I think takes the most time,” David says, “and that's between the property tour and getting the application complete. Everything else is pretty automated. But getting that person over the hump to make a decision requires a human touch and follow-up. That's a big commitment. It takes the most amount of time, and you’ve got to be present.” “Ultimately, everybody needs to feel safe and secure with where they are,” Kristin says. “If we can get them on board with starting to get comfortable with technology right from the beginning, it helps eliminate hurdles that they have getting through the process and getting them into the place that they want to call home. But it takes that human touch.” Perfect your KPIs The last step, but what Melissa says could be the most important step: Analyzing the data with KPIs. “We lean heavily on data in our office,” Melissa says, “and I think it's really important as a professional property manager that we all have something that tracks and measures how we're doing compared to the industry, our peers, and benchmarking even against ourselves year over year.” Melissa says they use data to track conversion at every stage: from lead to showing schedule, showing scheduled to showing completed, showing completed to application submitted, and application submitted to application approved. “This is a benchmark against ourselves to help understand if there's any cyclicality to leasing, which I think there is. We track those metrics to say, What's in our pipeline at any point, and then how are we converting from each to the next?” David adds that in addition to seeing annual seasonality, it helps to see daily trends. “It’s not only the time of year, but are they looking more on the weekend or in the evening, or on a Wednesday?” A few other favorite KPIs from our panel: “Market to Move-in” - the time from when a home hits the market to the time someone moves in Time from viewing to application submittal Time from application submittal to turnover Clicks and engagement with ads Application count Average lease term Final Thoughts: Focusing on the Triple Win In the end, the most successful leasing process will focus on driving maximum comfort and value for your client, your residents, and your team. “We’re basing our leasing process on the Triple Win philosophy,” David says. “You're matching a resident with their home, you're helping them out, they're getting sheltered, they're happy, they're comfortable. If you do it right, you’re minimizing their stress. “You're also stabilizing the property or the asset and securing income for the owner. “And finally, it’s a win for your team and your company because you have a satisfied resident, a satisfied owner, and you're building goodwill for your business from these positive interactions.” Learn more about our study on what’s making residents happy in 2023.

Calendar icon July 11, 2023

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Pet Policy For Renters: Best Practices for Property Managers

Did you know that well over half of U.S. households (66%) own a pet? But, according to the Humane Society of the United States, problems finding and keeping rental housing is a leading reason that dogs and cats end up in shelters. Building a pet policy for renters is an important decision for property management companies. Promoting a pet-friendly listing can be a fantastic way to fill units more quickly – and retain good residents over time. Pet owners are less likely to leave a good pet-friendly home. So, how can you build pet-friendly policies that create a welcoming space for pet owners but protect your business and your property investor’s assets? We sat down with an expert on the topic: Victoria Cowart from PetScreening. We asked her about the key components of an effective pet policy, how to dial in on protective restrictions, how to structure a lease agreement, and more. Read on to learn with us about best practices when building a pet policy for renters. Meet the Expert: Victoria Cowart, CPM, NAAEI Faculty, PetScreening’s Director of Education and Outreach With an early start as a leasing agent, Victoria Cowart built her career in the industry managing apartment communities and a diverse portfolio. Thanks to her years of management experience, Cowart is now a property management instructor and graduate of both the NAAEI Advance Facilitator Training and the NAA Lyceum Program. She has served in the NAA as President of local and state affiliates, the Regional VP for Region IV, and chaired four committees. She joined PetScreening over two years ago and says she has found her “joy zone” there, focused on education, legislation, and sales. Related: Free Property Management Agreement Template Standard pet policy and rules We started by asking Cowart to talk about the key components of an effective pet policy. Her rule #1? Consistency. “The best policies are the ones consistently applied,” Cowart says. When building a pet policy, property managers need to be decisive and apply the rules fairly and consistently – and in compliance with the law – with every unit. With that in mind, a pet policy should have standard rules and statements, including: Pet Restrictions: Any breed or other restrictions Pet Requirements: Licenses, vaccinations, leashing, etc. Pet Charges: How to charge for pets in a fair way Tenant Responsibilities: What is the resident responsible for? Pet Agreement: How to get it all written down and stay compliant Cowart warns not to make easy assumptions about each of these pet policy components. To build a pet-friendly, safe environment, you need to carefully asses what risk means to you, to your investors, and to your residents. “Of course, there’s risk bringing pets into your rentals,” Cowart says. “Bites, property damage, etc. But many companies want to add arbitrary rules thinking it will dial back their risk. For example, breed and weight restrictions, if you’re relying only on that, are very arbitrary without context. If you do want to include breed or weight restrictions, rely on that in combination with other factors. Alone it is insufficient. In combination with other data points and information, it does have relevance.” So, let’s dig a little deeper into each of the key steps in building a strong and resident-friendly pet policy. Related: How to Write a Pet Violation Letter to Tenants + Free Template Components of an effective pet policy for residents A Forbes study found that 85% of dog owners and 76% of cat owners consider their pets to be part of the family. Animals contribute to mental, emotional, and physical health and can be one of the best parts of life. But, of course, pets also introduce risk. A new kitten can do some serious damage to a home, or a frightened dog off-leash could potentially bite a neighbor. That’s where your pet policy comes in. An effective pet policy can support residents with furry family members, minimize your exposure to risk, boost your ancillary income, protect your investors’ assets, and even help increase your occupancy rate. Cowart helped us break down the individual components of an effective pet policy for renters. Pet Restrictions The first thing you need to do is consider and document any restrictions around pets allowed on your properties. This includes considering a no pet policy. Cowart strongly opposes a no pet policy for a multitude of reasons, many of which we’ve discussed here. But let’s say you are going to allow some pets. You can start with what types of animals you’ll allow. Most property managers will stick to the typical domesticated animals like dogs, cats, birds, hamsters, fish, etc. State or federal laws will prohibit certain animals – obvious ones like leopards or tigers and perhaps less obvious ones like ferrets, hedgehogs, monkeys, or even turtles in some states. Breed and weight restrictions Many property management companies also impose breed restrictions and weight restrictions for pet dogs, as Cowart mentioned. But Cowart encourages PMCs to consider that, without more context, those restrictions aren’t sufficient – they may disqualify perfectly safe dogs with good residents and may not protect you from unusually aggressive or problem animals that fit within your weight and breed limits. In fact, a 2022 study published in the journal Science found that breed only accounts for 9% of the variation in dog behavior. The rest is determined by factors such as environment, owner behavior, training, socialization, and more. Behavior restrictions Cowart recommends basing restrictions on a much more holistic view of each individual pet. At PetScreening, they use a proprietary scoring system called the FIDO Score that uses over 35 distinct data points to evaluate the risk any type of animal or pet poses for a home. The scoring system involves 23 questions and then runs it through an algorithm to score a dog from 1 (the lowest) to 5 (the highest). These scores are based on the animal’s unique profile. Then, you can make decisions based on the unique animal’s profile. Cowart says, “No company should welcome a one- or two-paw FIDO-rated pet into their community without thoroughly analyzing the pet profile as to why they scored this. I personally recommend to clients that if an animal has ever bitten a person, they should not welcome that pet into a rental. Should they bite someone again, it could be said you knew or should have known they posed a risk.” Pet Requirements The next part of your policy should include what is required for any pets on your property. This might include a certain level of FIDO score or similar rating. That’s up to individual property management companies. They should definitely include requirements such as: Proof of up-to-date vaccinations Requirements to wear collars with ID tags Municipal license receipt Number of pets Types of pets Etc. ‍ It’s important to be familiar with any requirements mandated by your state or local laws, as well. Pet Insurance Nine out of 10 professional property managers require residents to carry insurance on the lease, but only 41% of residents maintain compliant coverage. Insurance is key to protecting your residents and your properties in the event of an issue. Dog bite insurance losses alone cost $882 million in the US in 2021. According to the CDC, over 4.5 million Americans are bitten each year by dogs. 800,000 of them require medical attention, and over 1,000 per day require emergency care. And yet, many insurers don’t cover certain breeds, like pit bulls or Rottweilers, despite the fact that breed plays little role in behavior, as we’ve discussed. To take matters into their own hands, many property management companies are turning to a Resident Benefits Package that includes a renter’s insurance program. At Second Nature, our renter’s insurance program has 100% compliance – and we cover all dog breeds with no exceptions. Pet Fees Allowing pets at your properties is also a great way to drive ancillary income. Deposit fees or monthly fees – called pet rent – can help hedge your risk and protect you, the resident, and your investor. So, what’s the best way to set up your pet fees? “Number one, know the laws in your area,” Cowart says. “Municipalities and states have certain regulations. For example, one state recently passed a law where their pet rents could not exceed $35 a month, and the pet deposit was limited to $300. One or two states may have rules like that, so the first thing is always to know the laws where you are conducting business.” Once you’ve got your local ordinances straight, Cowart says she is an advocate of installing a pet entry fee and a monthly pet rent fee vs. charging a pet deposit. This protects you in case of needed evictions or other unfortunate circumstances. “You don’t want to be constrained to having a pet deposit only applicable to pet damage on the property,” Cowart says. “Meanwhile, this person is evicted and owes you thousands of dollars of rent, and you have to give back the pet deposit if it’s not pet-specific damage.” Instead, Cowart says, include the “pet deposit” in your regular security deposit. “I would suggest if you want a pet deposit, just increase your base deposit and don’t call it a pet deposit. You don’t want to be out money just because you've delineated the deposit for a particular use.” Tenant Responsibilities Cowart says that at PetScreening, they ask 23 questions across several categories. For example, three of the questions are on bite history alone. But the main breakdown of these questions is to sort out liability and responsibility. Liability has to do with what we’ve covered above – bite history, risk, etc. Responsibility has to do with, according to Cowart, “how your potential resident, as a pet owner, is going to ensure that their pet doesn’t have an adverse impact on the rental property or the community. Cowart recommends asking questions like: Will they pick up after their animal? Will they walk the animal on a leash? Do they take the animal for routine veterinary care? Is it up to date on its vaccinations? Your pet policy should clearly define and outline the responsibilities on the part of the resident. Cowart says, “Identify core responsibilities that you expect from the owners: keeping them under control, leashing, never outside unattended, basic vaccinations up to date, etc.” “Most often, the problems aren’t with the animals, they’re with the owners,” Cowart says. “If you have a Belgian Malinois, and you think you just have a skinny German Shepard, you are wrong. If they’re some sort of herding animal and they’re used to having a whole communal group that they’re nipping the heels of, but now they’re in an apartment. Now they don’t have that job, and they’re feeling unemployed, and so they’re going to find a job.” In short, pet owners need to be responsible for ensuring their animal’s behavior is safe. Pet Agreement or Pet Addendum You should absolutely incorporate a pet agreement in your lease. You want to put all of this work we’ve discussed in writing. Include all the fees, restrictions, violation penalties, etc. The pet section of your lease should be included in all leases because anyone could become a pet owner at any time. When it comes to a pet agreement, Cowart’s strongest advice is to follow the best practices of your local property management association, apartment association, etc. “Make sure you’re educated on the laws in your area,” Cowart says. “Associations involved in property management in your area – NAA, NARPM, AHMA – can help educate you on what you need to know.” The biggest area of risk and confusion for the lease agreement is assistance animals. Let’s take a whole section to examine assistance animals. What about assistance animals? The restrictions we’ve discussed above, and charges, etc. – most do not apply when it comes to assistance animals. Fair housing laws apply strictly to assistance animals. Cowart’s most important piece of advice? “First and foremost, understand what Assistance Animals are because that’s the biggest area of confusion for property managers. What you can or can’t do, what you can charge owners, and what you require they do before you admit them to the community. There is a massive difference, by law.” There are two types of assistance animals: service animals and support animals. Service animals and support animals or emotional support animals are handled totally differently under the Fair Housing Act. An assistance animal is NOT classified as a pet. Cowart emphasizes that you should never have an assistance animal owner sign off on anything with the word “pet” in it because it’s not a pet, it’s a disability device. “I facilitate a 45-minute session on this alone,” Cowart says. “Property managers should look at the FHEO-2020-01 Assistance Animal’s notice for additional information on HUD’s guidance.” Tools to help manage your pet policy It can be daunting to take on the challenge of simultaneously managing risk and creating a welcoming environment for residents with pets. But with the right approach – and the right tools – property managers are creating pet-friendly rental policies that protect both their business and their investor’s assets. PetScreening.com, where Victoria Cowart is a leading educator, provides a holistic approach to preparing your properties for pets. Their proprietary FIDO scoring helps take the guesswork out of assessing risk and revenue. And here at Second Nature, we provide a fully managed Resident Benefits Package that provides services your residents want and need without adding a burden to your team. We focus on creating an experience so good that residents never want to leave. Our RBP includes one of the country’s most robust pet policies in our Renter’s Insurance Program. The policy is friendly to all breeds and supports responsible residents who want to find a warm home for their furry family members. At the same time, the insurance ensures that you and your investor are covered in case of any risk event. Have thoughts or questions about building a pet-friendly, risk-intelligent pet policy? Share them in our Triple Win Community.

Calendar icon June 20, 2023

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14 Bizarre Items Found in Rental Properties | RBP by Second Nature

Disclaimer: We asked for the weirdest, the most bizarre, the most surprising… and property managers delivered. You may want to check over your shoulder before scrolling if you’re in a public coffee shop or you have little ones at home! Nobody can ever deny that property managers have some great stories. We asked around to find some of the weirdest, craziest, more preposterously bizarre stories of items left behind by residents to be discovered by property managers. We figured these would be weird. We were right. 14 Weird and Strange Things We Found After Move Out Get ready for bizarre! A grenade “A LIVE RPG (rocket propelled grenade). Seriously did not think it was active but called the bomb squad just to be safe. We shut down 10 blocks for an entire day” RBP>RPG (learn about our Resident Benefits Package) An entire car “A 1966 fox body Mustang. Engine and all. Who does that?” Fun fact: The 2000 comedy film starring Ashton Kutcher titled "Dude, Where's My Car" is actually based on this. A cannabis farm “Basement full of beautiful, huge, marijuana plants. Evicted for not paying the rent. They could have paid rent for a long time if they knew how to run their pot growing business 🤣” Never get high on your own supply An assassin kit? “My cleaning lady pulled the stove out and found a secret cabinet behind it. It had an uzi handgun, silencer, bump stock and other attachments. It was super creepy. I had the sheriff's office come get it.” Yeah that's a mob safe house you got there Farm life “A very angry rooster” You know, I really hate it when I forget my rooster Snakes! “Boa constrictor shedded skin under a couch. Where is the snake?!?!” Hopefully you burned down the house immediately just to be safe Pool pickles? “Pickles in the skimmer basket of a pool.” May not see a weirder one than this as long as olive Dead cats... “Dead cats in freezer and also had one that had white powder on everything in the apartment couldn’t see floor due to powder. They left everything they owned. They had Bed bugs. Took forever to get that cleaned. Broke 3 brand new vacuums. Just trying to clean it up after pulling all carpet. Also had a unit that had burnt aluminum foil all over the place from drugs gun shot holes and someone tried to drive through the apartment. So busted brick inside apartment.” Please park in the driveway, not the kitchen. Thank you for your understanding All their worldly possessions “A house full of furniture. No packing at all. Looked like they just left for work. All of the family items were left behind including all the china, crystal, silver, and linens in the DR. Only thing not left was a couple of TV's and a bed. Took a crew of 8 to empty the house in 6 hours and took 8 trips to haul off from the junk service. Amazing!” "I swear, Bob! This is the last time you are packing the car!" A placenta “Defrosted placenta” No comment More cats... “Dead/stuffed cat. We had fun with that one” Ever move to a new place and get the feeling you're missing something important? This resident did not get that feeling. ...and even more cats “17 cat urns” The only thing worse than this would be finding 18 cat urns Frog hatchery “I also had an entire pool of frog eggs. They hadn't hatched to tadpoles yet. And if you've never seen them, they look like long strings.” Figured we'd find some poles when we put this list together but was not expecting this type. NSFW "Dancer pole" And there it is Want to see the photos/more from the thread? Click here and join our free private Facebook group for property managers. ” Do you have one that would have made the list? Email alower@secondnature.com

Calendar icon May 23, 2023

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What is A Triple Win and How Do I Achieve One?

The Triple Win = long-term growth and success What is a Triple Win? A Triple Win is a simple but effective concept in property management in which everyone benefits. There are three parties that are involved in a property management transaction: The investor, who owns the property and is seeking a high return on investment. The property manager, who manages the property for the investor and is seeking to grow a successful business. And finally the resident, who lives in the property and is seeking a great living experience. A Triple Win is the concept of each party accomplishing all of these things at once. Solutions like Resident Benefits Package (RBP) and Investor Benefits Package (IBP) spring from this value-generating mindset. Why is it important? The Triple Win is a relatively new idea in the PM space, but it’s quickly becoming the cornerstone of industry-leading businesses. This is because property management as a whole is becoming commoditized. The service of managing properties is getting harder and harder to differentiate from other providers. This trend eventually ends in a state called “perfect competition”, where consumers (in this case investors) don’t perceive differences between the offerings of different companies and are likely to select the cheapest option. Throw in the growth of single family property management software that investors can operate themselves, and the need for a basic property management service in the future rapidly declines. Not surprisingly, the key to success in the future is to provide something better than a basic property management service. This is where the Triple Win comes in by providing real tangible value to all parties to create an experience that cannot be matched by old-school companies and software. The Triple Win is important because companies that fail to evolve with this changing industry will be left behind and eventually go out of business. Creating a Triple Win is a fool-proof way to ensure the evolution of your business. How do I create a Triple Win? Pt. 1. The investor JWB Real Estate Capital was one of the first property management companies to identify the long-term value of the Triple Win. The business is built around the idea of helping real estate investors achieve the highest possible ROI, and it does this by creating a Triple Win that keeps ROI high for investors via low vacancy rates and other costs. This concept has led to a number of practices that help achieve that goal including some that actually subtract from JWB’s short-term profit. One of these is the long-term lease, which cuts the income JWB receives from tenant placement fees pretty dramatically. However, this creates a lot of value for the investor, whose vacancy and tenant placement costs are much lower. JWB also works closely with their clients to create a detailed plan for real estate investment that’s designed to maximize the investor’s ROI. It’s a property management company, but a lot more than property management is going on here. That’s the key. It’s this excellent experience JWB provides that drives business from long-term investors, which adds sustainability to the business model. It’s differentiated and it creates unique value, so the short-term profit decrease is offset by the growth and retention of clients that understand the benefits of working with JWB can’t be matched by any old run-of-the-mill PM business. Auben Realty has built their literal company structure around experiences that create a Triple Win. They employ Investor Experience Managers and Resident Experience Managers to enable clear communication and quick action on the needs of both other parties. Again, this is differentiated and creates unique value that an investor won’t typically realize from a scaled company that is still operating with a basic service. Creating a Triple Win for the investor is about creating value. Ask yourself right now, “what am I doing to help my clients achieve maximum ROI?” and, “what am I doing to make communication as easy as possible and streamline the real estate investment experience for my clients?” The value they perceive from you simply managing their properties is dying, so you need to create value beyond that in order to build a business that’s worth the cost to employ. Pt. 2. The resident So what about the resident side of this? Recall that JWB’s long-term lease decreases vacancy costs for investors. Vacancy doesn’t just create costs though, it’s unrealized profit if nobody is paying rent. So vacancy, not surprisingly, is the number one thing your investors want to avoid, meaning resident retention becomes a priority. This is why resident experience has become a key term in property management. The best way to decrease vacancy is to provide a resident experience so great they don’t want to leave the property. "So traditional property management, we’re focused on the investor. That’s our client. The resident pays rent. If you don’t pay rent, we’ll find someone else who can. We wanted to kind of think outside the box there and say ‘okay, the resident is important in investing because if we can decrease vacancy and reduce turnover and keep the residents happy, they’ll stay in our properties for long periods of time and ultimately increase the investor’s return as well.’” - Auben Realty CEO Phil Vera Providing an exceptional resident experience is challenging, but this is really where property management companies can differentiate themselves and create something that commoditization can’t touch. You can’t really commoditize an experience, and a devoted team of property managers that can create such an experience for residents will decrease vacancy rates to a point where investors have no choice but to work with a professional PM if they want to maximize ROI. The industry-leading method for resident experience is RBP by Second Nature. Ancillary income programs like RBP can help create a fantastic resident experience by offering real valueIt takes all the work out of creating and managing a great resident experience. RBP is a suite of services that property managers can purchase and add to a rental agreement for the express purpose of creating that unmatched experience. Every single one of these services is managed externally for you by Second Nature. You don’t have to do anything. It’s so simple to implement, it’s not even plug-and-play. It’s just... plug. Resident Services within RBP by Second Nature include things like Rental Rewards, which make residents feel valued by management and also incentivizes on-time rent payment for the investor. Programs like identity protection and credit building are great tools that many residents wouldn’t otherwise have access to. Even one-call utility setup creates a great resident experience, as getting all the utilities working for a property can certainly be a hassle, and efforts to make settling into their new home easier are rarely lost on residents. Pt. 3. The property manager Happy residents and happy investors lead to happy property managers. RBP creates a great resident experience that ladders up to the investor’s experience, all of which benefits the PM in the end. That’s the Triple Win in a nutshell. The PM is focused on the needs of the client and the resident, and everybody wins as a result. This is the future of property management. External pressures on the industry have made it so. Creating a Triple Win creates value that can’t be realized in any way other than working with a professional property manager. That’s how you escape the grasp of commoditization and technological innovation, and companies that don’t orient themselves towards a Triple Win will be left behind.

Calendar icon May 18, 2023

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How To Ensure A Smooth Resident Benefits Package Rollout

Rollout is a high stress time for any new program, but it doesn't have to be. One of the leading concerns for property managers any time they seek to roll out a new program is resident pushback. In the property manager/resident relationship, there’s a narrative that’s persisted for too long that the two parties are at odds with each other and playing some sort of zero sum game. Oftentimes, this is internalized by residents who have been exposed to said narrative or have had a bad experience themselves, and the natural inclination is to push back on any advances from their management team. Related: State of Resident Experience Study Having to battle this is one of the main concerns property managers have when it comes to introducing a resident benefits package. This includes Kyle Hendricks, Vice President of Hendricks Property Management in San Antonio, Texas. “It was ours. For a couple years, we were like ‘I don’t know if that's going to work, you know?’ But it’s the same with a lot of programs that we’ve rolled out. Our fears are never really founded. The pushback is usually pretty minimal if at all, and it was the same here.” ‍Read more about why pushback on RBP is minimal ‍So how did Hendricks Property Management deliver such a seamless rollout? Well, it’s pretty simple actually. It’s all in the communication. Hendricks was quick to note that open communication and transparency are big keys to minimizing pushback and easing the path to successful rollout. The actual logistical rollout of an RBP is handled by Second Nature, so there’s very little for the property management company to actually physically do, making acceptance and adoption by residents and investors their primary concern. Hendricks Property Management nailed this part with clear and concise communication. Second Nature's resident facing flyer “The flier that Second Nature provided was a pretty clear point of communication. It says on there that you’re being enrolled in this program and the charge is this much. It’s just simple like ‘welcome to Hendricks Property Management, we give you a resident benefits package, here are the things you get with the resident benefits package.’ Because of course the question is ‘what am I paying for? You’re saying this is a benefit package, what are the benefits?’ So that just clearly outlined what they were, and did everyone love it? Not necessarily, but the amount of pushback was definitely minimal." Beyond the reality that most residents simply don’t object to a resident benefits package, clear and open communication is part of a great resident experience anyway and will certainly ease any fears you have about rollout, as well as any fears residents or investors might have. It's another part of delivering a triple win. “Be ultra transparent and get it done in the beginning, just saying, we're not hiding anything. This is what you're being enrolled in. This is what it is. I think that helped the adoption rate a little bit. And if people did call in with questions, we were happy to answer them and talk to them about it. So ultimately, it was fine. But I don't think we did anything special. I think just making sure we had that transparency up front was crucial.” ‍A resident benefits package creates a triple win. Everyone benefits. The purpose of clear and open communication is to establish those benefits within the perception held by the resident and owner parties. They may not know much about this, they may have never heard of a resident benefits package, so you have the opportunity and responsibility to show them the value it creates for them and how you are committed to ensuring it remains a mutually beneficial undertaking. Hendricks touched on how team buy-in has affected Hendricks Property Management’s ability to do this. “For me and anything that we adopt, we believe that if it's not something I can stand behind and competently tell a tenant or owner ‘this is good,’ then I'm probably not going to do it. I was easily able to do that with this program. So get your team on board. If they can't confidently tell a tenant or an owner, this is what it is, this is why, and this is how it benefits you and your tenant, then you're going to run into trouble because they can tell if it's kind of lackadaisical, if it's just this thing that the owner of the company wants to do. We try not to go ‘well it is what it is, so just deal with it.’ We try to explain in a positive way what the benefits are. So kind of getting that script together, you don't have to be like a robot or anything like that, but just have the main talking points available to your staff about what the benefits are.” At the end of the day, ensuring a great rollout of your RBP with minimal friction isn't too hard. It's just about positioning the services as the mutually beneficial programs they are and always being up front and willing to communicate. From there, the sky is the limit with resident experience.

Calendar icon March 21, 2023

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Why You Should Focus On Resident Experience

What's the best way to stand out from other Property Management Companies? How can you stay relevant and keep residents and owners happy? Andrew Smallwood from Second Nature explains why focusing on the resident experience can make all the difference. Related: State of Resident Experience Study For more on the topic of wow-ing your residents and building resident retention, check out some of our other articles and podcasts: Top Resident Retention Ideas from Real Property Managers How to Screen Tenants: Tips for Property Managers Types of Resident Problems and How to Handle Them How to Streamline Property Maintenance for a Business Win How to Ensure a Smooth Rollout of Your Resident Benefits Package Here's more from Andrew on how to approach resident experience, and the best perspectives he gather along the way. ‍ TRANSCRIPT Andrew Smallwood: Hey everybody, Andrew Smallwood back again with Stevie Wonder for a quick video. And in today's video we're going to talk a little bit about how property managers have been resonating with this concept of focusing on experience. And I want to share with you a concept that I need to credit to Joe Pine. And you know what Joe Pine says: Hey, if you go back hundreds of years, materials were valuable. People were trading wood for metal, for gold, etc. And what happened is those materials became commoditized. And so in order to create value, those materials got turned into products. The metal turned into nails, right? The wood turned into a wall, etc., or a skateboard or what have you. And so materials turned into products and suddenly the dollar amount here that was very low and commoditized went here and the dollar amount became more. But at a certain point, products even have become more competitive and commoditized. And what you've seen more recently, the last few decades, is a move to services, the services that are built around those products. So it's not just, here's a nail, but here's also a person to help you hang everything in your home and have it designed the way that you want. Instead of just here's a skateboard, here's also a teacher to help teach you how to use it. And even now, we've seen commoditization of service industries, entire industries, being commoditized. And a lot of people are noticing and saying that's what's been happening in property management. And so where does that lead us next? It's really, here's where we are now: experiences. The customization of materials leads to products, the customization of products leads to services, the customization of services leads to experiences. Whereas commoditization moves things down this way, and the value goes down here -- the value goes up as you move up this way. And so experience is really the name of the game today, and that's why we have RBP is because we believe the experience, the number one resident experience is where property managers are going to win. The people who create the best experiences for owners, the best experiences for residents, the best experiences for their team, create what we call a triple win. And an RBP is just a great example of a triple win. It's why we've had the podcast, it's why we've had so much of this content. This is just part of the mental framework of what we believe is important and part of the way that we see the world. Would love your commentary if you've read The Experience Economy by Joseph Pine. Would love to hear your thoughts. If you haven't, would love to hear your thoughts. And we hope this helps you in some small way or some big way. With that, take care.

Calendar icon March 21, 2023

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What is the Triple Win in Property Management

What is The Triple Win?

In this video, Andrew Smallwood walks you through the process of the triple win. Property management strategies have historically been focused on a zero sum game: getting the most out of your clients for the least amount of work. But in the end, that strategy doesn't generate more value for anyone. The Triple Win is about a completely different business mindset. It's all about finding a way to elevate the SFR rental experience for everyone - Residents, Owners, and Property Managers. We aim to help build property management products and services that add value for all three. In this video, Andrew talks about how to build programs that deliver wins. That's why we call our podcast the Triple Win Podcast. In it, we talk with property management and real estate experts around the country and outline the best innovations in the SFR property management space. Programs like an filter delivery service, move-in concierge, credit reporting, and more. All of these can be wrapped into a Resident Benefits Package (RBP). These programs help solve for what residents want, and what they'll pay for and stay for. It also helps build the kind of behavior the property managers and investors need. Andrew introduces these concepts in the video below. To learn more, get in touch with our Triple Win Leadership Council, or join the Triple Win Leadership Exchange. ‍ ‍ TRANSCRIPT: Andrew Smallwood: Hey everybody, Andrew Smallwood coming back again. Listen, I wanted to record one more short video because the last one got such great feedback, and I had an idea that I've been talking about to a number of folks and they say has really been resonating with them. Again, I'm just going to move over here for a little visual help. People have been talking about, "Hey, this triple win concept in your podcast and everything like that, what's really going on here?" There's three parties that professional property managers are thinking about anytime they're making a decision or structuring their business. And that's residents, owners, and then you and your team. Here is often what property managers feel stuck with: They make a decision that benefits their owners, maybe in a meaningful way, right? But there's a little bit of a trade-off as far as how it impacts a resident, and then here's their team cut in the middle between these two expectations, right? It feels like everything's kind of going every direction. What we want with a triple win is something more like this, right? You've got your residents, owner, you and your team, and everybody benefits. So you've got this powerful, aligned transformative effect in the business. Everybody going the same direction, everybody impacted in a positive way. When you think about this, it's like, "Hey, when you structure a new fee or a new program or what have you, it's really keeping in mind, 'How do we do this in such a way that it elevates the experience for everyone, and that that story is all lined up, the incentives are all lined up.'" Listen, I'm not telling you this is the only way to do things. Some of you may be saying like, "Of course, it's obvious this would be the way you would do things." But for some property managers, it isn't. For some property managers, there are questions like, "Well, hey, I make so much on maintenance. Do I really want to prevent maintenance?" That's really just a question of how do you want to align your value. Meaning if, yes, you make money from reactive maintenance, maybe there's a benefit here that you can say, "Hey, I'm monetizing all that reactive maintenance." But for property owners, we know that's no good and for residents, that's no good as well. So while it may be a win here, it's a single win and it's a double L, right? Preventive maintenance means a win for the resident, it means a win for the owner, and it means prevented work for your team and you can monetize your preventive maintenance. So it's still a win for your bottom line as well. That's really the takeaway: This lens that we're talking about seeing the world through. Once you put this lens on, it's like you can never see anything the same way again. Just like glasses change your view of the world, or a microscope or a telescope give you a different view of something that you're looking at, so does the triple win lens. Hope this video is helpful. Would love your feedback. Shoot me a comment, email, wherever you're seeing this. Would love to hear your stories of triple wins or how you structured things or what you implemented in order to create a triple win and transform your property management business. With that, until next time, keep rocking. See you.

Calendar icon February 16, 2023

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Property Management FAQs About Resident Retention

Resident retention is one of the best ways for property management companies to drive greater success for their business and their clients. Residents who stay longer ensure consistent revenue, often take better care of the property, and help make planning more predictable. But resident retention can be a moving target. In a recent Buildium survey, 36% of single-family rental residents said they were on the fence about renewing their lease in the coming year. We’ve talked a lot here about resident retention and ideas for building long-term success with residents. Today, we want to do something a little different. We decided to ask a property management expert about her experiences with building resident retention, and we’re sharing our Q&A with her here. ‍ Key Learning Objectives: Recent trends and data on resident retention How retention strategies can save money Best ideas for setting up a resident retention program: What works and doesn’t work How to calculate resident retention rates ‍ Meet the Expert: Melissa Gillispie, Director of Leasing & Property Management at JWB Real Estate Capital Melissa started her career with JWB in 2013 and is currently the Director of Property Management. She is the licensed real estate broker for JWB and plays an integral role that has led JWB to manage over 4,900 single-family homes in Jacksonville FL, being the largest local rental management company in Northeast FL. Under her purview, JWB has delivered over 26 million dollars in cash flow to its current clients through exceptional management services. Melissa also sits on the Board for NARPM Northeast FL as the Membership Co-Chair. She won the 2022 NARPM Rocky Maxwell award for dedicated service and contribution to NARPM. She is married to her husband of 14 years and has three sons aged 11, 9, and 6. When she is not working, she can be found at the football and soccer fields cheering her sons on! Why should property managers pay attention to resident retention rates? Can you share some recent data or trends about resident retention? Melissa: Resident retention is a direct reflection of your customer experience. If people enjoy working with you, they'll stay. If they don't, they won't. We use resident retention as a key benchmark for measuring our customer service. In our market, we renew 72% of our leases annually. A standard PM benchmark historically is that about a 70% renewal rate for residents is a huge success. Some factors currently impacting retention include the housing market, higher interest rates, and tax/insurance cost increases. These factors make buying harder, which drives more rental retention. On the flip side, due to rising costs for investor clients, rent rates are climbing to keep up with those costs – which can be a big objection to overcome with residents. Swallowing the pill of a $150-$200 increase in rent can be tough for a resident on a fixed income. That makes their experience with us even more important. If they don't enjoy the experience, they most certainly won't agree to that level of rent increase. Related: How to write a rent increase letter. How can resident retention strategies save property managers money? Melissa: Residents who stay longer-term tend to make on-time payments more often, take better care of the home, and reduce vacancy costs/leasing burdens. These benefits lead to better rent collection and increased management fee collection, happier clients with lower turn costs, and a lower market-to-move-in or days-on-market metric for leasing because their inventory continues to be reasonable and controlled. What are some of the best ideas to set up a resident retention program? Melissa: Reach out early and often! We start reaching out to residents six months before their lease expires. Make the reason for that initial touch point just to "check in" – because it’s about relationships! People like to feel valued. Get creative with incentives for long-term leases! We offer all kinds of crazy resident incentives. We even bought a resident their very own bounce house when the client's homeowners insurance made the resident remove their large trampoline. Identify the real roadblock or concern, and do everything in your power to listen and solve it. Listen to any real complaints. If there are maintenance issues, solve them. If there are communication concerns, address them. Residents want to know that when they voice a real concern, you hear them and work hard to partner with them to fix it! What are some ideas for PMs who are struggling with resident retention? What have you seen work well? What doesn’t work? Melissa: The best advice I can give is this: Communication and expectations are KEY. Start to work for the renewal on Day 1 of the original lease term, and consider how you can increase your communications. Be transparent. Be open to feedback. See retention as a bottom-line revenue driver. See retention as a benchmark for how residents are experiencing your company. Set a budget for creative incentives, and then encourage your team to USE THAT MONEY UP! The more "dopamine hits" you can give for those feel-good connection moments, the better! I think creativity is understated in property management. We focus so much on difficult interactions. How can we increase the positive ones? Who doesn't love to feel celebrated, seen, valued, appreciated, and considered? Do you recommend using property management software or tools to help improve resident retention? What are some of the best options? Melissa: Automation is key as you scale your business. We manage around 5,000 doors, and without the ability to send email and text blasts, etc., we'd struggle to achieve the high touchpoint mentality we have. I think the larger your business, the more important these tools become. You can only grow at the pace at which your business can efficiently scale without having to continually add more staff. Text Magic is a low-cost solution for texting, call fire is a great option for mass-dialing and automated phone messaging. Any PM software has great reporting capability to build out mail merge lists. It doesn't have to be expensive to make it happen! How do you calculate resident retention rates? What’s a good average retention rate, and what factors impact retention? We look at leases ending as an opportunity, and our resident retention is how many of those leases ending in a calendar year we convert to extend their lease term. Executed / Opportunities = Renewal Rate. A good average retention rate is anything 70% or better. That number has been our benchmark for success for 17 years of business. Factors that impact retention include how much owners are involved in setting rent rates, the housing market, the rental market, demand, experience, etc. We haven’t seen retention rates vary significantly by location, such as states vs. cities vs. rural areas. Improve Resident Retention Rate with Second Nature RBP Time and again, we’ve heard that one of the most important factors to resident retention is resident experience. It’s such a natural connection it almost goes without saying. As Melissa said, “If people enjoy working with you, they'll stay. If they don't, they won't.” In recent years, one of the more effective innovations in resident experience is the Resident Benefits Package (RBP). Second Nature’s RBP was designed to create an easy win for SFR property managers. We developed each feature as a direct response to a pain point in resident experience and property management – but that often fell out of the scope of property management companies’ bandwidth or expertise. To learn more about driving resident retention with a custom RBP, get in touch with us!

Calendar icon February 16, 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.

Calendar icon October 25, 2022

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