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Introducing Group Rate Internet from Second Nature

At Second Nature, we strive to deliver the best possible experience to residents and property managers alike. We’re always looking for new opportunities to help property managers provide better service, grow their businesses, and give residents homes they want to stay in. Now, with the introduction of Group Rate Internet, we’re able to deliver yet another benefit that residents want, while improving the experience for property managers. What is Group Rate Internet? Group Rate Internet is gigabit-speed˙ internet delivered directly to single-family rental homes, incorporated right into your lease. Thanks to the power of our network, Second Nature has negotiated group rates with some of the nation’s largest internet service providers, and we’re passing the savings on to you. Residents get high speed internet at a discounted rate below what they could get on their ownº, while property managers have a new way to grow their business. Why are we doing this? These days, internet service is a necessity. But until now the process has been time-consuming, frustrating, and expensive. Subscribers face complicated setup and cancellation processes, and when they need to reach customer support, they’re often left on hold. We wanted to bring a better experience to residents and modernize the way they receive internet service. Understanding the single-family market 98% of residents across the United States pay for internet service in their homes. But until now, they’ve struggled with inflexible contracts that don’t align with their lease terms, convoluted phone trees, and expensive hidden fees. Most single-family property managers haven't had the ability to negotiate better rates with ISPs, leaving residents to pay retail prices for essential services. That's where Second Nature comes in. By leveraging our nationwide network, we're able to secure group rate pricing that's lower than what's available on the market—giving property managers a new way to offer high-quality, affordable internet without the headaches of individual negotiations. Difficulties of scattered-site Internet coverage areas can be confusing. When you have properties in multiple areas, they may be serviced by different providers, making it even more difficult to negotiate a one-size-fits-all deal. That’s why Second Nature works with multiple major ISPs to provide maximum coverage, no matter how wide your management area is. Cutting costs and making life easier On average, customers typically pay $80-120 per month for gig-speed internet. Plus they get hit with fees for equipment, setup, early termination, and more. Now, with Second Nature, property managers can provide gig-speed internet, with no installation or cancellation fees, at a fraction of the price that residents are already paying. How does the program work? Like all of the pieces in our Resident Benefits Package, we’ve designed Group Rate Internet to be as easy as possible. From data exchanges to support, we fully manage the process so your teams don’t have any extra work. Integration with property accounting systems to check eligibility Second Nature starts by gathering property details directly from your property accounting system (PAS) to automatically confirm which ISPs serve each property. We confirm eligibility and pass that data back into your PAS, so it’s always available to you. Once a property is marked as eligible in the PAS, you’ll be able to include an internet service addendum in any future leases for that property. Billing operates directly through the PAS, with no extra tools or logins to keep track of. Integrated with the lease cycle When a resident signs a lease that contains the Group Rate Internet Lease Addendum, they’re enrolled into the program, and Second Nature works directly with them to complete setup. We’ll reach out directly to residents to make sure they know how to get set up. If necessary, they’ll schedule professional installation for equipment at a time that’s convenient for them. Because there’s no separate internet contract for the resident, there are also no setup, equipmentª, or cancellation fees, and no struggling to align their utility contract with their lease term. Internet is billed right alongside rent, so residents don’t have an extra monthly bill to manage. Dedicated support We all know the pain of waiting in a phone queue to try to solve a technical issue. That’s why Second Nature offers dedicated phone support for residents using Group Rate Internet. That way residents aren’t calling you for help or getting stuck in phone trees with their ISP. Residents call Second Nature directly, and if they need technical support from their ISP, we can make a warm handoff, making sure they’re on the line with a representative before our team leaves the call. No endless transfers from person to person. Easy transition at turnover When a lease is up and a resident decides to move out, Second Nature provides move-out information to residents. Depending on the ISP, the resident may not even have to return equipment. In most cases, it just stays with the unit, and service is turned off until the next resident moves in and a new lease starts. When a new resident moves in, one phone call is all they need to get their gig-speed service up and running. It’s a simple transition when someone else moves in, all managed by Second Nature. Get started Want to see how you can provide gig-speed internet to your residents? Schedule a demo with a member of our team to walk through Group Rate Internet. ˙ Compared to average nationwide gig speed price of $80-120/mo (source: USA Today) º Up to 1 Gig Internet speed, subject to availability. Internet Service powered by Second Nature is provided through Second Nature's preferred third-party Internet service providers. ª Residents may be subject to fees if equipment is damaged, lost, or stolen.

Calendar icon March 19, 2025

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AI for Property Management: Benefits and Top Tools

AI is one of the hottest topics of the past year, especially in property management. Property managers all over the country are trying to get up to speed on what it is, how to use it, and why. So what is AI for property management, and how valuable is it, really? AI is best positioned to help property managers by supporting and automating a lot of administrative or repetitive tasks. It’s also a great resource for helping to analyze and understand performance metrics and to gain insights from data. More and more software and service companies are building AI into their solutions, helping users to leverage AI more effectively than ever before. Think about tasks like screening residents, coordinating maintenance, and communicating out key messages about rent collection, due dates, and policies. All of these can be assisted by AI, leaving you to spend more time on strategic efforts. Keep in mind, AI is not here to replace property managers, it’s just here to make them more efficient. In this post, we’ll explain the benefits and opportunities that PMs can see with AI, along with some of the best AI tools for property management. Benefits of AI for property management AI does a lot of things, so sometimes it can be difficult to figure out what specifically you should be using it for. For property managers, there are plenty of practical use cases, from marketing and lead generation to scheduling and compliance. Task automation Artificial intelligence is very good at automating routine or repetitive tasks. Think about invoice processing, maintenance scheduling, showings coordination, inspections, and more. AI can take on a lot of these tasks, giving you more capacity to dive into strategic planning. It can also help with more complicated tasks like compliance monitoring and fraud detection. Not only is that one less task you have to handle, but it also helps ensure financial security. Better communication AI tools can also enhance the way that you communicate with residents and clients. You can use it to help understand maintenance requests, automate follow-up communications and satisfaction surveys, and schedule repairs. All of this helps build a better resident experience, which can increase lease renewals and decrease vacancies. Faster screening AI is great for automating background checks, credit evaluations, and rental history analysis, and some of the leading tools in the industry are able to analyze applicant data to predict lease default risk. All of this helps to ensure that property managers select reliable tenants more efficiently. Predictive maintenance Predictive AI is also particularly useful for things like preventative maintenance and estimating future maintenance costs. For example, when combined with internet-connected hardware, some AI tools can assess property conditions and flag upcoming maintenance issues before they occur. Whether you’re trying to predict plumbing failures or minimize HVAC repairs, AI can help. Targeted marketing Marketing is one of the most prominent areas where companies are leveraging AI. Modern tools can help write property descriptions, build websites, and syndicate listings to get more applicants faster. Review management AI can also help solicit and respond to customer reviews. By analyzing resident satisfaction, artificial intelligence tools can pinpoint the best moments to automatically ask for reviews. Plus, newer tools can also craft responses to reviews based on the content and sentiment, making sure every review is followed up on. 8 Best AI tools for property management There are hundreds, if not thousands, of AI tools available that property managers can evaluate. To simplify things, we’ve collected eight of our favorites here to give you a sense of what’s available. Feel free to browse this list, do your own research, and see what fits best for your company and your workflow. 1. TenantCloud Best for: Applicant screening TenantCloud has a fully-featured, robust resident screening tool that goes beyond a simple credit report. In fact, with a proprietary algorithm, TenantCloud can actually predict the risk of an applicant defaulting on their lease or causing other problems. Fully compliant with the Fair Credit Reporting Act, TenantCloud offers multiple ways to view report data, while also validating applicant identity and running a full background check. While TenantCloud offers a full suite of tools, applicant screening stands out from the rest. Key features: Flexible reporting options based on your specific needs Identity validation, income verification, credit check, and background checks Optional County Criminal Records Search for deeper research Flexible pricing based on company size and door count Lease default risk analysis 2. AppFolio Realm-X Best for: Automated communications Our partner AppFolio is widely known as one of the largest property management software providers on the market. With Realm-X, AppFolio has entered the AI space to help property managers save time on manual tasks. In particular, Realm-X thrives when tasked with communications to residents. With a single prompt, property managers can generate comprehensive, customized emails to residents based on specific criteria like lease term, date of renewal, or rent price. The tool also helps automate maintenance scheduling, application review, and lease renewals. Key features: Embedded into AppFolio natively Reimagined inbox to prioritize and respond to key messages Detailed workflow automation Natural language chatbot Communication generation 3. EliseAI Best for: Leasing management EliseAI is designed to automate the mundane parts of the leasing cycle so that you can fill your units with highly qualified, satisfied residents. With a built-in customer relationship management tool, Elise organizes all of your resident data, reports, and workflows. Elise offers integrated tour scheduling, a chatbot to handle inbound requests, and the ability to automatically recommend units to specific applicants based on square footage, number of bedrooms, budget, amenities, outdoor space, and more. It serves as a comprehensive prospect management tool, superpowered by AI. Key features: Automatic responses to inbound leads Smart tour scheduling Personalized unit recommendations based on size, budget, amenities, and more 24/7 customer support for your residents and applicants Built in CRM Data center with robust reporting 4. RealPage AI Screening Best for: Applicant screening RealPage AI Screening is designed to move beyond just measuring an applicant’s ability to pay, and instead look at their willingness to pay. With comprehensive AI integration, RealPage reaches a deeper level of screening and understanding applicants. RealPage’s solution promises to reduce bad debt, delinquencies, and evictions using powerful proprietary data. Key features: Integrates with any property management software platform Leverages RealPage history of over 30 million lease outcomes Predictive scoring model for applicants Risk Advisory Services to optimize risk threshold Criminal and financial history checks 5. Showdigs Best for: Leasing management Showdigs aims to take the manual and repetitive parts of the leasing process off your team’s plate. The tool is focused on the applicant experience, offering real-time automated communications and a chatbot to answer applicant questions. All of this is personalized to the individual, helping to increase conversion rates to residents. Showdigs also puts a heavy emphasis on security and fraud prevention. With AI-driven facial recognition, age verification, and ID verification, the tool weeds out scam applications so you can focus on the individuals who actually want to rent from you. All of this is backed by a U.S.-based call center for support when your team has a question. Key features: Personalized search process for residents 24/7 automated communications to keep leads warm Advanced security measures and scam prevention ID check and facial recognition to verify identity U.S.-based on-demand call center for support 6. Happy Property: Maintenance Best for: Maintenance coordination and inspections HappyCo has been a well known name in the property management space for nearly a decade, particularly for their intuitive inspection tools. Now, in the AI era, they’ve taken their offering to the next level. Their maintenance and inspection tool automatically schedules inspections, routine maintenance, and preventative repairs. HappyCo is also mobile-first, allowing your team members in the field to see everything they need. Happy Property: Maintenance also offers automatic work order generation, using AI to pull all the necessary details from a maintenance request and pass it on to your vendor of choice. With automated scheduling, it’s one less thing your team has to worry about. Key features: Customizable inspection and maintenance templates 24/7 support for residents Automatic inspection and maintenance scheduling Integration with popular property accounting software Digital make-ready board to expedite turns Comprehensive reporting and document management Automated scheduling 7. Convin Best for: Customer and resident support There are plenty of AI tools out there that aren’t specifically designed for property managers, but are still valuable nonetheless. Convin is one of them. Convin is designed to increase customer retention through real-time guidance on live phone calls. Convin integrates with your phone support system to offer support agents real-time insights on customer behavior, needs, and challenges. The result is a better informed support team, happier customers, and higher customer retention. If your company is small and doesn’t have a dedicated support team, Convin can still help with inbound calls to your main business line. Key features: Real-time customer insights Customer audits for behavior and compliance Immediate prompts to answer complex customer questions Built-in agent training for new support agents Relevant knowledge base information to help solve customer challenges 8. SOCi Genius Reviews Best for: Review management SOCi Genius Reviews is an artificial intelligence-powered tool for responding to customer reviews, both good and bad. Reputation management is key for property managers, but can sometimes take up a disproportionate amount of time. SOCi is here to fix that. SOCi is designed to respond to reviews by reading tone and sentiment, then replying appropriately in your own brand voice. Each review response is personalized, on-brand, and contextual. It also offers reports to spot trends in customer feedback so that you can make changes to your business in order to delight more customers. Key features: Brand voice training to make sure all replies are on-brand Integrates with multiple review sites to spot all reviews Personalized responses to generate maximum engagement Emerging trend reports Automatic or personally selected responses Simplify property management with Second Nature Artificial intelligence can help property managers focus on the things that matter. If you want to save time, boost revenue, and create happier residents and clients, Second Nature’s Resident Benefits Package can help. With everything from Group Rate Internet to on-demand pest control and a move-in concierge, the RBP helps maximize the resident experience while minimizing the work your team spends on manual tasks. See Second Nature in action: request a demo today.

Calendar icon May 6, 2025

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20 Ways to Get More Property Management Leads

It's no surprise that high interest rates over the last few years have driven plenty of opportunity for property managers. With plenty of homeowners carrying mortgages at comparatively low rates, they're less likely to sell and are instead renting out their properties. There's a high demand for skilled property managers, and lots of opportunity to get more property management leads from those entering the rental market. And that's exactly what we're talking about in today's article: property management lead generation. We're exploring 20 effective strategies to tap into this market potential, from leveraging referrals and business networks to harnessing the power of digital marketing. 1. Referrals Referrals can be a great step for new businesses. You can get referrals to new clients from friends and family, local business groups, realtors, and other clients. Leverage your existing network and ask for referrals. Satisfied clients and professional contacts can often provide recommendations to potential leads, which is why it's so important to keep a high level of client satisfaction. The happier an investor is, the more likely they'll be to recommend your services to other property owners they know. 2. LinkedIn Another great starting point for new business is to use LinkedIn to connect with potential clients, join industry groups, and share valuable content. It's a powerful platform for B2B lead generation. You can either sponsor posts and advertisements targeting people in your ideal client profile, or directly message individuals that you know are looking for property management services. Even more powerful, though, are LinkedIn's networking groups, where you can find and connect with property investors. Just be cautious when joining groups, as they may each have their own unique rules that limit or prohibit self-promotion within the group. 3. Event marketing If you're looking to grow your door count, you should also consider attending industry events to network with potential property management clients. These can range from local real estate meetups to larger industry conferences. If you're willing to invest the funds, you can also look into hosting your own networking events for real estate investors. Make sure the events are accessible and informational, not just a sales pitch for your company. That way attendees feel like they're getting real value, while also building a positive association with your brand. 4. Cold calling While it may seem old-fashioned, cold calling can still be effective, especially if you’re just getting started. The key is to ensure that you're targeting the right property owners and investors in your local market. Make the value of your offering clear and be prepared to get a lot of rejections, but know that even just signing a couple of new clients can make the time investment worth it. 5. Facebook Facebook, and other social media marketing, is effective for new and growing companies. Use targeted Facebook advertising or post in local groups to reach potential clients. Consider running ads targeting landlords or real estate investors. For growing companies, use advanced targeting options in Facebook Ads to reach a more curated audience. Consider retargeting ads, which can serve ads directly to people who have previously visited your website interacted with your content. Those users already know who you are and may have been interested in your services, so advertising to them tends to have a better ROI than serving ads to entirely new individuals. 6. Podcasts Yes, we know, it seems like everyone has a podcast these days. But the truth is, podcasts can work well as an early foray into property management marketing. Whether you run a company that's just getting started, or a growing company that has plateaued, a podcast can help get your name out there. The challenge with podcasts is that they do take some time to build momentum. You're not going to get thousands of listeners on your very first episode. If you're intimidated by trying to run your own, consider reaching out to existing podcasts (like our Triple Win Podcast) to ask about being a guest. That will help get you more accustomed to the process while also getting some eyes on your brand. You'll want to discuss relevant industry topics—not just pitch your business—to establish your expertise and reach a larger audience. 7. Local businesses & strategic partnerships When you’re just getting started, it’s a great idea to partner with local businesses that serve the same market. For example, a local moving company might recommend your services to property owners who are moving out, but putting their house up for rent. Similarly, local contractors, painters, plumbers, and other local vendors may have the inside scoop on self-managing landlords who are doing turnover maintenance or other upkeep on rental properties. You can also join local clubs and the Chamber of Commerce and attend meet-ups to build a network that refers high quality leads and clients. 8. Direct mailing New companies should also consider sending targeted direct mail campaigns to potential leads. This could include newsletters, postcards, or informational brochures about your services. The biggest benefit of direct mail is that you can be confident that it's reaching the right geographic areas. While Facebook or LinkedIn could end up serving up your ads to people too far away for you to effectively manage, physical mail gives you more control. 9. Niche forums Launching a new business requires support and community. Participate in online forums related to property management or real estate. Answering questions and sharing insights can help attract potential clients. 10. Read local listing reviews Looking for your first few clients? Monitor local listing reviews such as on Google and Yelp. People love to complain on the internet, and you may just find landlords who are having trouble with their current management company. This is an opportunity to tactfully reach out to better understand their challenges, and see if you may be able to help them by offering your services. 11. Browse newspaper ads Another great way to find those early clients is to look for rental listings or properties for sale. Reach out to the owners to offer your property management services. A surprising number of people still use newspaper classifies, but don't be afraid to look toward the modern equivalents, like Craigslist. Be diligent to avoid spam ads that may just be a waste of your time, but there can be some real diamonds in the rough if you're willing to do some digging. 12. Content marketing If you have a more established company and a bit more capacity to experiment, content marketing might be for you. Start by creating valuable content on your website and social media channels. The key is to make sure that your content is educational and entertaining, but not just a promotion of your services. Your readers and viewers need to feel like they're getting real value from your content, or they're not going to come back. You'll want to try a mix of content types, including blog posts, infographics, or eBooks that provide insights to property owners. A good example of content marketing for lead generation is Realty Medics. Another, run by our Triple Win Mentor Jennifer Ruelens, is Hold It with PM Jen, which is all about educating investors on how to be successful buying and holding rental properties. While we recommend looking at examples like these for inspiration, make sure that your content brings your own unique voice and perspective. 13. Google Ads (PPC) Pay-per-click (PPC) is the backbone of Google advertising. Whether you're well established or still new, you can build campaigns on Google to appear in search results for relevant keywords. For example, you can target "property managers in Cleveland" so that your ads appear for users searching that term. This can help attract landlords or property owners searching for management services. This is one of the best online marketing strategies, in part because of its flexibility. You can set firm budgets for how much you're willing to spend, and see an estimate of how many views your ad is likely to get for that price. You can also select related keywords to capture a wider range of searches and build visibility that way. 14. Search engine optimization (SEO) A great step for companies looking to keep growing is to optimize your website for SEO. SEO is a strategic approach to writing content with relevant keywords to rank higher in search results, increasing visibility and attracting organic traffic. There are plenty of tools—both free and paid—to help optimize for search engines, and many small businesses also opt to hire SEO agencies to provide guidance on strategy and produce optimized content. 15. Email marketing Worried about your company’s growth plateauing? Nurture your existing email list with regular newsletters or updates, providing valuable information and promoting your services to encourage conversions. Email marketing often works well in tandem with content marketing, because you can use your newsletter to promote the new content you're creating and drive more visitors to your site. Make sure your newsletter is relevant and informational. Focus on giving readers content that they want, rather than just using it to advertise your company. 16. YouTube (videos and ads) YouTube is an interesting hybrid of content marketing and social media marketing. Creating educational videos on property management topics can help build your brand, but also make sure to reply to comments and show appreciation for your followers in your videos. YouTube needs to be treated as a social media platform, not just a one-way street for your content. You can also advertise on relevant channels to reach a wider audience on YouTube. Because Google owns YouTube, many of their advertising features work similarly to Google PPC ads. You can target viewers based on channels that they follow, YouTube searches they've done, or previous Google search terms they've looked up. 17. Webinars If you have an audience established, ideally through other informational content and your newsletter, host a webinar on a relevant topic to provide value to your audience. Webinars are particularly good for lead generation because users typically have to provide contact information in order to register. That means that, not only can a webinar help position your company as an industry expert, it can also provide a list of contacts that you can follow up with, either by phone or email. 18. TV ads Depending on your budget, consider TV advertisements. Although more costly, they can reach a wide audience and increase your brand visibility, while still being targeted to your geographic markets. These are ideal for large companies, but there are options available for smaller companies, too. Streaming platforms like Hulu offer advertisement spots, and because they're connected to the viewer's email address, you can often get more specific in your targeting, meaning you're not spending precious dollars advertising to contacts that aren't relevant to your business. 19. Billboard ads Like TV ads, billboard advertising can be pricey, but some property managers have seen success with it. Outdoor advertising, like billboards, can help increase local visibility for companies that already have an established reputation. It’s well suited to companies targeting property owners in specific geographical areas, and is especially helpful if you're expanding your territory or opening an office in a new city. Because of the high price, getting the messaging and design right is a little bit higher stakes. Don't hesitate to consult a design agency if you don't have the necessary skillset in-house. 20. Pay-per-lead services There are websites and services specifically designed to provide qualified property management leads. One of the most popular is All Property Management, but a quick web search will reveal plenty of options. These services typically charge a flat rate per lead, and can provide a stream of potential clients who are actively seeking property management services. They provide the contact details and background information that you need to have a successful exploratory sales call. Final Thoughts For more insights about lead generation strategies, check out our Triple Win Podcast for residential property managers. Or, consider some of our other resources for growing your PMC: How to Create a Property Management Business Plan [Free Template] 15 Strategies to Grow Your Property Management Business Marketing Ideas for Property Management Companies

Calendar icon April 23, 2025

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Your Guide to Security Deposit Laws in Florida

This post was last updated on 1/13/2025. Security deposits are an essential aspect of the property manager-resident relationship in Florida. They serve as financial protection for property managers while ensuring residents uphold their rental agreements. However, understanding the laws governing these deposits is crucial for avoiding disputes and ensuring compliance. In this blog, we’ll cover: An overview of security deposit laws in Florida Commonly asked questions about security deposits A note on language: Here at Second Nature, we prefer to use the terms "resident" and “residency” rather than “tenant” and “tenancy,” in order to emphasize the relationship building element of property management work. However, there may be instances where terms such as "tenant" are used for legal purposes within documents or communications related to security deposit laws. Disclaimer: This is not legal advice. Any information contained in this blog is provided for informational purposes only and should not be construed as legal advice on any matter. This is especially true given that laws change on a regular basis. You should review specific security deposit laws for your state in detail to make sure you have the most up-to-date information available, and consult with your local counsel for applicability to your property. Why are security deposits in Florida important? Security deposits are like life jackets. You hope you’ll never have to use it, but when you do, you’ll be glad it’s there. Unfortunately, no matter how thorough your screening process is, you may end up with a resident who makes questionable choices. And when those choices cause damage to your property you’ll be thankful for your security deposit. Imagine Brad and Tyler, two roommates who moved from Miami to Gainesville. Missing the ocean but not wanting to drive all the way to the beach, they decide to recreate the summer vibes in their rental home. They break out the beach chairs, ask Alexa to play some Beach Boys, and fill up a kiddie pool in the living room to dip their toes into. But when it springs a leak, the carpet gets soaked through and the subfloor is damaged. Now you have to do some serious renovations, and it’s going to cost you. But since there is a security deposit, that expense may come out of their security deposit. Overview of security deposit laws in Florida Florida’s security deposit laws, primarily found under Florida Statutes Section 83.49, in addition to other statutes under landlord and tenant law, outline the rights and obligations of property managers and residents concerning the handling, refund, and permissible deductions of security deposits. Below is a breakdown of the key areas covered under these regulations. Deposit laws Florida’s deposit laws prioritize clarity and fairness in property manager-resident agreements. Key requirements include: Providing written notice of where the deposit is stored within 30 days of receipt. Following legal timelines for returns and notices of deductions. Keeping deposits separate from personal or business accounts for the benefit of the tenants to ensure accessibility. These laws protect residents from unfair practices and help property managers adhere to their professional obligations. Security deposit limit Unlike some states, Florida does not impose a statutory cap on the amount property managers can charge as a security deposit. Property managers are free to determine a reasonable amount (although public listings show that they typically charge one to two months’ rent). Prospective residents should be informed of the deposit amount before signing a lease in order to align expectations. Property managers may offer a “fee” in lieu of security deposit, an alternative option for security deposits that has become more common with other states. Under Florida law (Fla. Stat. Sec. 83.491), property managers may offer this option through written notice to the tenant, providing the tenant the right to pay a security deposit instead. Storing a tenant’s security deposit Florida law (Fla. Stat. Sec. 83.49(1)) requires that security deposits be kept in a separate account to ensure they are not commingled with the property manager’s personal or business funds. Walk-through inspection of rental property While Florida does not explicitly mandate a walk-through inspection before or after a resident’s occupancy, the duty to inspect and ensure the premises are safe is implied through the property manager's obligations under Florida law. Property managers who perform these inspections benefit from clearer documentation of property conditions. A move-in inspection with a signed checklist can establish a baseline, while a move-out inspection can help identify damages beyond normal wear and tear. Photos or videos taken during these inspections are useful for resolving disputes. Inspections can foster transparency and provide evidence to justify any deductions from the security deposit. Notice of deductions When deductions are taken from a security deposit, property managers are required to provide written notice to the resident (Fla. Stat. Sec. 83.49(3)(a)). This notice must include the exact amount deducted and the specific reasons for the deductions. For example, deductions might include unpaid rent or costs for repairing damage beyond normal wear and tear. Property managers must deliver this notice to the resident within 30 days via certified mail to comply with Florida law. If the property manager does not intend to impose a claim of deductions from the security deposit, the property manager must return the security deposit, with interest if applicable, to the resident within 15 days of the resident’s surrender of the premises for termination of the lease. Learn more: How to Write a Security Deposit Return Letter + Free Template Deductions allowed When deductions are taken from a security deposit, property managers must specify the reasons (Fla. Stat. Sec. 83.49(3)(a)), such as failure to pay rent or damages beyond normal wear and tear. Other deductions that may be allowed include: Cleaning fees: Only if specified in the lease agreement. General cleaning due to normal use cannot be deducted. Unpaid utilities or other charges: Any unpaid utility bills or other charges specified in the lease agreement can be deducted from the security deposit. Property managers cannot deduct for routine wear and tear (for example, minor scuffs on walls, faded paint, or wear on carpets from ordinary use). Written notice of security deposit receipt Property managers must inform residents in writing within 30 days of receiving their security deposit (Fla. Stat. Sec. 83.49(2)). This notification must detail where the deposit is being held (such as in a non-interest-bearing account, an interest-bearing account, or a bond posted with the clerk of the circuit court). Deposit holdings Property managers may choose from the following deposit holding options (Fla. Stat. Sec. 83.49(1)): A non-interest-bearing account An interest-bearing account (with earned interest credited to the tenant – at least 75% of the average annual interest rate or 5% per year simple interest, whichever the property manager elects) Posting a surety bond instead of holding the deposit in an account. If this method is used, the property manager must pay the resident 5% per year simple interest. Security deposit deadline Under Florida law, property managers must follow strict timeframes regarding security deposits (Fla. Stat. Sec. 83.49(3)(a)). If no deductions are made, the full deposit must be returned to the resident within 15 days of the lease’s termination. If deductions are necessary, the property manager must notify the resident in writing within 30 days, specifying the amount and reasons for withholding. The resident then has 15 days to contest the claim, in writing and sent to the property manager. Other requirements apply if a fee was collected by the property manager in lieu of a security deposit (Fla. Stat. Sec. 83.491). Failing to adhere to these deadlines may jeopardize the property manager's right to make claims against the deposit. Returning a security deposit to the tenant Florida law does not mandate a specific form for the return of a tenant's security deposit. However, best practices include: Certified check or bank draft: A certified check or bank draft is often used because it provides proof of payment and ensures that the funds are guaranteed. This is a reliable method for both parties. Electronic transfer: If both the landlord and tenant agree, the security deposit may also be returned through an electronic payment method (e.g., direct deposit or payment apps). Ensure this agreement is documented and keep a record of the electronic transfer. Personal check: This can also be used but is less secure than a certified check. Whether the lease ended amicably or through an eviction, Florida landlords and property managers should maintain a record of the security deposit return, regardless of the method, including a receipt or confirmation of payment. This documentation protects both parties in case of disputes. Selling the property or change in ownership When a rental unit changes ownership, Florida law (Fla. Stat. Sec. 83.49(7)) requires the outgoing property manager to either: Transfer the resident’s security deposit (minus any lawful deductions) to the new owner, or Refund the deposit directly to the resident. Written notification of the transfer, including the new property manager’s contact information, must be sent to the resident. The new owner assumes all responsibilities for the security deposit once the transfer is complete. Failure to comply with Florida’s security deposit laws Non-compliance with Florida’s security deposit regulations can result in severe consequences for property managers (Fla. Stat. Sec. 83.49(3)), including: Forfeiture of claims: If a property manager or landlord fails to provide timely notice of deductions, they may forfeit their right to withhold any part of the deposit. Resident legal action: Residents may be able to sue for the full return of the deposit, along with potential damages and attorney fees. Fines and penalties: Breaches of trust related to deposit handling may lead to financial penalties or additional legal actions. To avoid these risks, property managers should familiarize themselves with the law, document all actions, and maintain open communication with renters. Property managers should also consult with their local counsel for applicability of these laws to their property. Additional FAQs about Florida security deposit laws What is the new security deposit law in Florida? In April 2023, Florida HB 133 was passed into law, leading to the addition of Fla. Stat. Sec. 83.491, giving property managers the option to charge a monthly non-refundable fee instead of a security deposit. Such security deposit alternatives help reduce upfront costs for potential residents. Property managers looking to charge this type of monthly non-refundable fee should refer to the specific requirements under Fla. Stat. sec. 83.491 to ensure compliance. Learn more: What is Security Deposit Insurance? Pros and Cons [+Best Providers] Does a landlord have to provide receipts for security deposit deductions in Florida? While not explicitly required under Florida law, providing receipts for deducted expenses can prevent disputes and demonstrate good faith. Florida law does require property managers to provide an itemized list of deductions in the written notice to residents required when imposing a claim for damages upon the security deposit. Can a tenant use the security deposit as the last month’s rent? Residents are not automatically entitled to apply their security deposit toward their final rent payment. Unless the lease explicitly allows this, doing so may result in legal action. Learn more about security deposit best practices: What to Include in a Security Deposit Letter How to Write a Security Deposit Letter - Templates for Full Refund, Partial Refund, No Refund, and Request for Payment How to Send a Security Deposit Letter Mistakes to Avoid When Writing a Security Deposit Return Letter Final thoughts Florida’s security deposit regulations aim to balance the rights and responsibilities of property managers and residents. By staying informed and following the appropriate procedures, both parties can navigate this aspect of the rental process with confidence. At Second Nature, we aim to help you stay compliant, recognizing that compliance with property management laws safeguards your business and strengthens relationships with your residents. Our approach centers on transforming the resident experience, a concept that has shaped every aspect of our company. The resident benefits package is a comprehensive solution designed for property management companies, offering cost savings for both you and your residents while prioritizing convenience and an exceptional resident experience. Learn more about Second Nature’s Resident Benefits Package. Legal Disclaimer: The information contained in this blog is provided for informational purposes only and shall not be construed as legal advice. The laws referenced in this blog are subject to change. Please consult with your local counsel for applicability to your property.

Calendar icon February 6, 2025

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Your Guide to Security Deposit Laws in Colorado

This post was last updated on 1/10/2025. Navigating security deposit laws can be challenging for property managers and residents alike. That’s why we’ve assembled this guide to the key rules and regulations governing security deposits in Colorado. In this blog, we’ll cover: The basics of security deposit laws in Colorado, including what they’re used for and how they’re handled. Common questions about security deposits, such as what constitutes normal wear and tear and how long before deposits must be returned. Best practices for creating clear communication around security deposits, including how to write refund letters. A note on language: Here at Second Nature, we prefer to use the terms "resident" and “residency” rather than “tenant” and “tenancy,” in order to emphasize the relationship element of property management work. However, there may be instances where terms such as "tenant" are used for legal purposes within documents or communications related to security deposit laws. In these cases, please understand that our intent remains the same—to provide clear, accurate, and meaningful information to all people involved in the business relationship. Disclaimer: This is not legal advice. Any information contained in this blog is provided for informational purposes only and should not be construed as legal advice on any matter. This is especially true given that laws change on a regular basis. You should review specific security deposit laws for your state in detail to make sure you have the most up-to-date information available, and consult with your local counsel for applicability to your property. Why are security deposit laws in Colorado important? If you’re fortunate, you’ll never actually need to touch your security deposits beyond some minor damage here and there. But much like car insurance or a fire extinguisher, you’ll be really glad you have it when you need it. Horror stories of resident damage are just a quick Google search away, and you don’t want to become one of them. Imagine you have a house that you rent to Kennedy and Heidi, two best friends who are fresh out of college. Not content with neutral wall colors, and feeling inspired by some DIY TikToks, they decide to repaint their living room. Three gallons of paint and six months later, their lease is up and you enter the property to do routine turnover maintenance. Now you have to bring in a painter to paint over their trendy artwork. Luckily, that expense may come out of their security deposit, so you aren’t on the hook for the expenses. Overview of security deposit laws in Colorado Security deposit regulations in Colorado are designed to clarify the rights and responsibilities of property managers and residents. Below, we break down the key aspects of these regulations and statutes: Purpose of security deposit The purpose of a security deposit is to provide landlords/property managers with financial protection in scenarios such as unpaid rent, damage beyond normal wear and tear, or costs incurred due to eviction. It also encourages residents to maintain the property and adhere to the lease terms. At the end of a lease, residents who meet their obligations typically receive their deposit back, minus any legally allowable deductions. Security deposit limit In Colorado, the current statute governing security deposit limits is CO Revised Statutes § 38-12-102.5. Effective August 7, 2023, this law stipulates that property managers cannot require a security deposit exceeding the equivalent of two months' rent. Please be aware that laws are always subject to change. Storing a tenant’s security deposit Colorado law does not specify requirements regarding the storage of resident security deposits. Specifically, there is no state statute mandating that security deposits be held in a particular type of account or location. Inspection of rental property A final walkthrough upon moveout allows property managers to assess property conditions and identify issues such as damages beyond normal wear and tear. The repair costs for these types of damages may be deducted from the security deposit. Note that property managers are obligated to maintain rental units in a habitable condition, ensuring they are safe and livable for residents. This obligation is outlined in the CO Revised Statutes § 38-12-503, known as "Warranty of Habitability". Written notice of security deposit Colorado landlords and property managers are required to provide residents with a written statement detailing any deductions from the security deposit, within 30 days unless the lease allows for additional time, up to a maximum of 60 days. This requirement as specified in CO Revised Statutes § 38-12-103(1), mandates that property managers must furnish a written statement listing the exact reasons for the retention of the security deposit. This statement must accompany the payment of any remaining deposit amount and be sent to the renter’s last known address. Deductions CO Revised Statutes § 38-12-103 permits property managers to retain portions of a security deposit for specific reasons, including: Unpaid rent Abandonment of the premises Nonpayment of utility bills/charges Repair work Cleaning contracted for by the resident It's important to note that property managers cannot retain any part of the security deposit to cover normal wear and tear. Wear and tear is generally considered to be signs of use, like small scuffs on flooring, carpet wear, and minor scrapes to walls or baseboards. It does not typically include more significant damage like broken windows or fixtures, holes in walls, or stains on carpet or countertops. Nonrefundable deposits Nonrefundable deposits are prohibited in Colorado and cannot legally be retained if the resident has fulfilled all financial obligations and left the property in good condition. Returning a security deposit to the tenant Property managers are obligated to return the security deposit within the timeframe stipulated by law, which by default is one month after the lease's termination or the resident’s surrender of the premises, unless the lease agreement specifies a longer period, not exceeding 60 days. Selling the property In Colorado, when a rental property changes ownership, the handling of security deposits is governed by CO Revised Statutes § 38-12-103(4). This statute outlines the responsibilities of the person holding the security deposit upon cessation of their interest in the property, whether by sale, assignment, death, appointment of a receiver, or otherwise. The individual in possession of the security deposit must, within a reasonable time: Transfer the deposit: Transfer the security deposit, or any remainder after lawful deductions, to the property manager's successor in interest and notify the resident by mail of such transfer and the transferee's name and address; or Return the deposit: Return the security deposit, or any remainder after lawful deductions, directly to the resident. Upon compliance with these requirements, the original holder of the security deposit is relieved of further liability regarding the deposit. The new owner or successor in interest then assumes all rights and obligations concerning the security deposit. Failure to comply with Colorado’s security deposit laws In Colorado, CO Revised Statutes § 38-12-103(3)(a) addresses the consequences for property managers who fail to comply with security deposit regulations. If a property manager willfully retains a resident's security deposit in violation of the statute, they may be liable for treble (three times) the amount wrongfully withheld, in addition to reasonable attorney fees and court costs. However, before initiating legal proceedings, the resident must provide the property manager with notice of their intention to file a lawsuit at least seven days before filing the action. Learn more: Security Deposit Alternatives for Property Managers and Residents What is Security Deposit Insurance? Pros and Cons Additional FAQs about Colorado security deposit laws Are deposits refundable in Colorado? Yes. Deposits must be fully refunded minus any valid deductions. What is considered normal wear and tear? Wear and tear includes minor scuff marks on flooring, worn carpet, general wear on appliance handles, and the like. Damage, like large stains/holes or broken fixtures, may not be included. Do property managers need to provide receipts for deductions? Yes. Landlords must furnish a written statement itemizing deductions, accompanied by receipts, if applicable. How long does a property manager have to return the deposit? Under Colorado law, landlords must return the security deposit to the resident within one month after the termination of the lease or the resident’s surrender of the premises, however, this timeframe can be extended to 60 days after the termination or the lease or resident’s surrender of the premises if specified as such in the executed lease. What happens if the deposit is not returned within 30 days? Property managers failing to return the deposit or an itemized list of deductions within the required period can face legal consequences and additional costs, such as triple the amount of the security deposit wrongfully withheld, attorney fees, and court costs. Best practices for property managers: What to Include in a Security Deposit Letter How to Write a Security Deposit Letter - Templates for Full Refund, Partial Refund, No Refund, and Request for Payment How to Send a Security Deposit Letter Mistakes to Avoid When Writing a Security Deposit Return Letter Final thoughts Navigating Colorado's security deposit laws requires careful attention to detail. At Second Nature, we’re here to support you in security deposit law compliance, with the philosophy that ensuring compliance not only protects your business but also fosters better resident relationships. The fact is, we’ve built our entire company on the idea that resident experience can change the game in property management. Our Resident Benefits Package is an all-in-one resource for property management companies that saves money for you and your residents and delivers the best in convenience and resident experience. Learn more about the Resident Benefits Package. Legal Disclaimer: The information contained in this blog is provided for informational purposes only and shall not be construed as legal advice. The laws referenced in this blog are subject to change. Please consult with your local counsel for applicability to your property.

Calendar icon January 23, 2025

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

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

Calendar icon December 2, 2024

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10 Marketing Ideas to Unlock Growth for Your Property Management Company

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

Calendar icon December 2, 2024

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

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

Calendar icon October 18, 2024

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Property manager filling out rental inspection check list

Property Management Rental Inspection Checklist [Free Template]

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

Calendar icon October 10, 2024

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9 Best Property Management Podcasts to Follow in 2024

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

Calendar icon September 30, 2024

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Property Management Pest Control: Why It’s Important

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

Calendar icon September 27, 2024

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Property manager filling out rental inspection check list

SFR Property Management Problems and Solutions

In recent years, the single-family residence (SFR) rental market has seen significant growth as more property owners recognize the potential for steady income and long-term appreciation. With this rise in popularity comes a unique set of challenges for the rental property managers (PMs) who are tasked with overseeing these properties. Related: What is the resident benefits package? Unlike multi-family units, managing single-family homes can present a range of issues that require tailored solutions. Scattered-site properties also present a logistical challenge, as they are by nature harder to service and manage. From finding quality residents to handling unexpected maintenance emergencies, a strategic and proactive approach is required to ensure a smooth and profitable rental experience. Note that even though we here at Second Nature prefer the term "resident" over "tenant" in order to foster the human element, the word "tenant" may still be used occasionally due to its long-standing legal and real estate context. What Are the Most Common Property Management Challenges? The most common problems faced by SFR property managers generally fall into three buckets: finding quality residents; maintenance and repairs; and time management and communication. Let's explore each. #1 Finding Quality Residents One of the most critical aspects of managing SFRs is resident placement. Indeed, inadequate resident screening processes can significantly impact resident retention as well as profitability. That’s because poor screening can lead to high turnover rates (including evictions), increased property wear and tear, and ultimately, financial strain. Additionally, attracting responsible residents who will treat the property with care and adhere to lease agreements can be particularly challenging in competitive rental markets. #2 Maintenance and Repairs Unexpected maintenance issues are a common hassle for SFR property managers. From plumbing leaks to HVAC failures, emergencies can arise without warning, leading to unplanned expenses and logistical challenges. Finding reliable and responsive contractors who are able to address repairs promptly adds yet another layer of complexity. The inability to swiftly manage these issues can result in resident dissatisfaction as well as potential property damage. #3 Time Management and Communication Managing multiple single-family homes requires excellent time management skills. Balancing the diverse needs of residents, coordinating with vendors, and ensuring regular property inspections can be overwhelming. That’s why it’s essential to establish clear and timely communication channels to maintain good resident relationships and efficient operations. However, juggling these responsibilities can lead to lapses in communication, resulting in time-consuming misunderstandings and unresolved issues. Solutions for a Smoother SFR Rental Experience While the challenges of managing SFR rentals are significant, there are effective strategies and tools available to streamline operations and enhance resident satisfaction. Here are some solutions to common property management business problems. Strategic Resident Screening Implementing a robust resident screening process is crucial for minimizing vacancy rates and securing responsible residents. To this end, utilizing professional screening services can help identify prospective tenants by thoroughly evaluating their rental history, credit scores, and background checks. Clear lease terms and expectations should be established from the outset to ensure residents understand the responsibilities and obligations that occupancy brings. Learn more: Tenant Screening Tips for PMs 10 Steps to Onboard New Tenants Proactive Maintenance Proactive maintenance is key to preventing costly emergencies and maintaining the property’s condition. Scheduling regular preventative maintenance inspections allows property managers to identify and address potential issues before they escalate. Building relationships with reputable and responsive repair professionals ensures that maintenance tasks and requests are handled promptly. Consider leveraging technology that allows residents to conduct their own regular inspections to provide early detection of problems and streamline the property maintenance process (learn more). Vendor and Supplier Selection Choosing the right property management service providers and vendors is crucial to successful property management. Establishing relationships with reliable and responsive contractors ensures that maintenance and repair issues are addressed promptly, reducing downtime and inconvenience for renters. It’s essential to vet vendors thoroughly, checking their credentials, references, and reviews to ensure they meet the necessary quality and reliability standards. Building a network of trusted professionals can lead to better service rates, priority scheduling, and consistent adherence to due dates as well as work quality standards. Additionally, negotiating long-term contracts with preferred vendors can offer cost savings and a more streamlined management process. By prioritizing quality vendor and supplier selection, property managers can enhance the overall efficiency of their operations and maintain high tenant satisfaction. Technology and Automation Incorporating technology and automation into property management can significantly enhance efficiency and communication. For instance, online portals for collecting rent payments and addressing maintenance requests simplify transactions and ensure transparency. They can also facilitate incentives for prompt rent payment, follow up on late payments, and generally optimize rent collection with an eye to optimizing cash flow. Property management software can also streamline vendor and tenant communication, track maintenance schedules, and provide detailed financial reporting. These tools not only save time but also build trust and improve resident satisfaction by ensuring quick and effective responses to their needs. Naturally, you will need to conduct a due diligence process of technology selection and provider assessment that addresses pricing, customer support, and support for the features that are mission-critical for your organization. Related: Property Management Laws and Regulations by State Second Nature’s Outlook Effective property management is essential for maximizing the profitability and longevity of single-family home rentals. By addressing common challenges with strategic solutions, property managers can enhance resident satisfaction, reduce vacancy rates, and maintain the property’s value. Embracing technology and proactive management practices are critical components of any successful SFR business strategy. Property managers are encouraged to explore these solutions and adopt the approaches that best suit their specific needs. Learn more about property management company best practices, marketing, and more in our Second Nature Community.

Calendar icon June 7, 2024

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Property manager handing new residents the keys to their new home

Property Management Compliance with Insurance Regulations: Answers to Your Top Questions

Property management companies navigate a complex world of regulations. Indeed, ensuring legal compliance goes far beyond collecting rent and handling repairs. For instance, the tenant screening process involves legal obligations and occupancy considerations outlined in fair housing laws, along with background checks to ensure resident safety. Habitability standards and safety regulations, dictated by local landlord-tenant laws, may require meticulous property maintenance – or real estate rental properties may require improvements to meet tenant rights and safety standards as outlined in the Americans with Disabilities Act (ADA). In addition, the key areas of security deposits, lease agreements, and eviction procedures all have legal requirements that must be stringently followed to avoid legal issues. Audits can arrive unexpectedly, and failing to comply can result in hefty fines or loss of licensure. However, one of the most intricate areas of regulatory compliance involves insurance, particularly when it comes to insurance for residents. We delve deeper into this specific challenge in the following sections. A note on language: At Second Nature, we prefer the term “residents” rather than “tenants.” That’s because focusing on the people in every interaction helps us create better business strategies in the long run. After all, property management is all about focusing on what residents and investors – human beings – want and need! But throughout this article, you’ll see us use both terms interchangeably due to the technical nature of various compliance issues. Related: Notice to Vacate Tenant Free Template What Makes PM Compliance with Insurance So Complex? The biggest hurdle property managers face with insurance compliance requirements is the jurisdictional complexity. Federal laws provide a framework, but individual states and even municipalities can have their own regulations regarding insurance for tenants. Understanding these variations is crucial. Property managers must stay up-to-date on the specific laws governing their area to ensure they are not only compliant but also considering the best interests of both the property owner and the tenant. Related: Property Management Laws and Regulations by State Insurance Compliance FAQs A recent discussion between Second Nature’s very own Andrew Smallwood (Chief Customer Officer) and Rob MacKethan (VP of Risk, and the Designated Responsible Licensed Producer for Second Nature’s licensed producer subsidiary, Second Nature Insurance Services, LLC, NPN No. 20224621) highlighted frequently asked questions and issues raised over the course of a number of industry discussions. Rob has been in the insurance space for about 35 years, and worked with multiple startups in the industry prior to coming to Second Nature, where he leads the team in creating value for customers using insurance tools. Below is a summary of FAQs and responses from their conversation. What aspects of property management should PMs be aware of when offering a solution for a tenant to meet the PMs’ liability insurance requirement? The key thing to remember is that insurance is a highly regulated industry, especially at the state level. If you operate in multiple states, you need to make sure you comply with local regulations in each one. In the end, regulators are there to protect consumers from being misled and to ensure insurance companies will pay out claims when needed. Can property managers require residents to get a specific renters insurance policy? No, but, in the majority of states, they may include a requirement in the lease agreement that requires residents to carry an insurance policy that provides for tenant liability coverage that meets a minimum coverage level. Regulators don’t want residents to be forced to purchase a specific policy. They want them to have the option to shop around and meet lease requirements with a policy of their choice. Can property managers add an administrative fee on top of the premium, or reduce the premium themselves? Regulations related to PMs' involvement in premiums and fees vary by state; however, such involvement is typically limited to establishing the tenant liability coverage limits. Some states prohibit any changes to the premium, while others may allow reasonable administrative fees within certain limits. The safest approach for a PM is to not change the premium at all. Is it important to avoid inducements like discounts on rent in exchange for purchasing insurance? Absolutely. Offering incentives related to the purchase of insurance can be seen as anti-competitive or a form of rebating, both of which should not be offered by unlicensed PMs. PMs must be careful to avoid acting in a manner that may cause the PM to be considered by regulators as performing certain acts without proper licensing. Unlicensed PMs should avoid any act that may cause them to appear as though they are selling, soliciting, or negotiating insurance. What should property managers be aware of when creating marketing content about renters insurance programs? This is a crucial point. Selling, soliciting, and negotiating insurance are activities that require an insurance license. Property managers should avoid creating their own marketing materials about insurance coverage, deductibles, pricing, or comparisons to other policies. They should partner with a licensed insurance company or broker and reference them in their materials. Brochures and website content are best reviewed by legal counsel to ensure regulatory compliance. How can property managers ensure residents meet and maintain liability insurance requirements throughout the term of their lease? Partnering with a licensed company that provides policy status tracking and record keeping is key. This will help ensure residents comply with the lease requirement and that the property manager, or their vendor, is notified of any lapses in coverage and can action them appropriately. What should property managers keep in mind if residents pay insurance premiums through the property management software along with their rent? It's critical that those payments be passed through to the insurance carrier or broker promptly upon collection. Withholding or retaining premiums can have serious consequences due to non-compliance with regulations. How Second Nature Helps with Your Resident’s Insurance Coverage At Second Nature, we know how valuable your investor clients’ assets are – and how much risk you take on as a property manager. While compliance with insurance regulations can sometimes feel like a zero-sum game, we aim to make every opportunity a win for everyone involved. In the end, successful property management not only fosters smooth operations, but better outcomes for all stakeholders. That’s where the renters insurance program offered by Second Nature’s licensed insurance subsidiary, Second Nature Insurance Services, comes in. Second Nature Insurance Services offers a master policy with convenient enrollment, and a customizable HO4 policy option if residents want to tailor a policy to their needs, both of which will meet your tenant liability insurance requirement. Or they can get their own policy and show they’ve met the requirements on their own. PMs get a fully managed renters insurance program that helps ensure compliance and that you, your investor, and your residents can rest easy knowing you’re protected from key areas of risk. With our fully managed renters insurance program, we’ve seen our partner PMs go from: 41% of residents covered → 100% of residents covered Self-managed portal administration → Fully managed for you Leasing team tracking certifications → 100% certificate management Higher premiums → lower premiums Complex implementation and vendor management → 1 RBP, 1 Invoice Every property manager knows insurance matters, but that doesn’t make it any less of a headache. Learn more about how our Resident Benefits Package just makes life simpler. * Renters Insurance Program is provided by Second Nature Insurance Services, LLC (NPN 20224621)

Calendar icon June 7, 2024

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5 Best Property Management Inspection Software

Property management inspection software is designed to simplify and streamline the process of conducting property inspections. Typical features of this property management software include customizable inspection templates, mobile compatibility, photo and video capture, scheduling capabilities, and report generation functionality. More broadly, inspection software is an important tool for establishing "Triple Win" conditions that benefit residents, property managers, and investors alike. That's because it improves overall operational efficiency and promotes proactive/preventative maintenance, while also helping to improve transparency. In a nutshell, it’s an indispensable tool for property management companies looking to deliver high-quality services and maintain property value. Today, we’ll provide an overview of some of the best property management inspection software currently available. A note on language: Developers of property management inspection software often refer to "tenants” in their workflows, and for the sake of cohesion, we’ll be picking up on that term in this software review. But here at Second Nature we regularly see the incredible work property managers do day in and day out to make renters feel like they’re so much more than just a tenant – they’re residents. Making renters feel like residents isn’t just a philosophy, it’s also a business decision that encourages them to invest in care for their home and add value to the property. This is why, at Second Nature, we prefer to call renters “residents.” Like you, we think of them as people first – making your property their home. Related: Best Single Family Property Management Software Our Criteria for Choosing the Best Property Management Inspection Software The inspection solutions on this list were selected from top-ranked inspection software on sites such as Capterra and G2, as well as sites devoted to property management solutions. Note that all inspection tools come with pros, cons, and distinctive features. In today’s overview, we’ll confine ourselves to outlining core features, as well as positioning and pricing. However, for true apples-to-apples comparisons of property management inspection software, you should evaluate its performance in the context of real-life requirements and conditions. In particular, focus on the following aspects in your assessments: Workflow templatization Workflow templatization in property management inspection software refers to the process of creating templated automations that sequence common inspection tasks and steps. Essentially a user-friendly "smart inspection checklist," these workflow templates reduce the likelihood of inspection oversights or errors when assessing property conditions. They can include areas and elements to focus on during the inspection process, as well as evaluation criteria. Ideally, users can customize workflow templates as required. Ease of tenant communication Features that focus on ease of communication are central to improving the resident experience, as they streamline communication, save time, and enhance the overall process for both parties. Examples might range in complexity from simple direct messaging capabilities to automated translation features. How fast it is to complete an inspection While workflow templates can help make inspections more efficient, other factors also considerably impact overall process optimization, including features like automatic appointment scheduling, the extent of offline data access, the degree to which report generation is automated, and more. Inspection report readability Readability is key to creating transparent communications and positive overall experiences for everyone involved in the process. Different factors include the general layout and formatting of property inspection reports and inspection data, clarity and concision of language, and accessibility considerations that promote inclusivity for any reader. Customization options No one size fits all out of the box. That’s why inspection software ideally allows user to tailor the app to their specific requirements. Customization capabilities might refer to branding options, changes to the user interface, reporting format, workflow triggers, and more. Ease of syncing between mobile and desktop Not all server capabilities are created equal, which is why it can be helpful to evaluate whether or not information can be seamlessly accessed, updated, and shared across the software’s mobile app and desktop platform. Ultimately, seamless syncing enables better property management practices. Areas to consider include data update latency, offline functionality, consistency of feature accessibility across platforms, security of data transfer, and conflict resolution in case of simultaneous data changes. Value-add services In the context of property management inspection software, "value-add services" refer to any additional services that complement the core inspection capabilities of the software. These services can be offered by the software vendors themselves, or via third-party partnerships. Examples might include yard services associated with HOA compliance, pet screening, or Second Nature’s very own air filter delivery service. Best Property Management Inspection Software 1. zInspector Billed as “the most powerful and affordable property inspection toolkit in the market,” zInspector is designed as a collaborative field-to-office solution for the property management, real estate, and construction trades. Features include the option to upload unlimited date- and time-stamped photos and videos, offline inspection capabilities, and unlimited options for customizing templates. zInspector also provides a number of tenant-directed features, including move-in/move-out inspections as well as periodic and renewal inspections, and remote tenant signing. Property inspection companies can brand zInspector capabilities within their own app, or simply customize zInspector with their logo and color palettes. Featured zInspector integrations include AppFolio, Rent Manager, Rentvine, PropertyWare, Rentec Direct, and Google Drive. Pricing ranges from free (for up to 5 doors) to the “Max” plan at $110 per month. 10% discounts are provided for annual subscriptions. According to users on G2.com, the zInspector property inspection app is “super easy to learn and use,” with “thorough options for evaluating all our units upon turnover, from our smallest and most basic efficiencies to massive 6-bedroom single-family homes.” Learn more about zInspector 2. RentCheck RentCheck is a popular solution for the scattered site property management market. It’s designed to help save time for property management teams by eliminating the need for in-person inspections. In that vein, the mobile app version (available in Android and iOS versions) allows residents to complete inspections (move-in and move-out as well as periodic) using their mobile devices, without having to coordinate with a property manager. Features of the software include the ability for property managers to customize home inspections, set reminders, generate reports, and compare new and existing reports side-by-side. Pricing options range from a free version for up to 10 doors to an enterprise tier that includes advanced API and customization features. Per Capterra, RentCheck scores extremely well (4.7 out of 5) for ease of use, value for money, and customer service. Learn more about RentCheck 3. HappyCo HappyCo is more fairly characterized as a platform rather than an inspection software solution. It’s billed as a “real-time multifamily operations platform” that aims to help property owners and managers unlock more accurate valuations, better returns, and higher property value. The function of its Happy Property suite is to streamline leasing, renewal, and maintenance tasks, and this includes core inspection functionality, including scheduling, notifications, and work order generation. It integrates with several other technologies, including AppFolio, MRI, RealPage, Rent Manager, and Yardi. Pricing is determined based on a consultative process with the HappyCo team. Reviewers on G2.com call out its simplicity and ease of use. Learn more about HappyCo 4. Onsight PROS OnSight PROS is an in-person service for property managers, landlords, and insurance companies. However, they leverage an app to streamline the inspection process. Different types of inspections include move-in/move-out (MIMO) inspections, periodic inspections, acquisition inspections, and exterior inspections (roof, gutters, landscaping, and fencing). Inspection reports can be customized and branded as needed. The service coverage area is nationwide, and pricing for the service is determined based on a consultative process with the OnSight PROS team. Learn more about OnSight PROS 5. SnapInspect Designed for a wide range of markets, including multifamily, residential, commercial, vacation rentals, and student housing, SnapInspect incorporates features such as video recording, custom reports, and custom property inspector workflows. A free trial of the software is available, and multifamily pricing starts at $199 per month, which includes iOS and Android apps, Google and Dropbox sync, report customization, and scheduling & automation options. SnapInspect reviews on G2 describe SnapInspect’s customer service as “above and beyond,” and refer to the app’s user-friendliness. Learn more about SnapInspect Property Management Inspection Software by Second Nature Inspection software by Second Nature is currently in the works! As always, our goal is to create an experience that will benefit property management companies, residents, and investors alike. Drop us a line if you’d like to be among the first to learn about our upcoming release - or take a tour of our Resident Benefits Package to explore the Triple Win experience we’re offering you right now.

Calendar icon March 13, 2024

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How to Start a Property Management Company in 13 Steps [Startup Checklist]

From the Second Nature perspective, focusing on a high-quality resident experience is the secret sauce to standing out in a crowded property management industry. That’s because happy residents lead to higher retention rates, more on-time payments, better care for the property, and shorter vacancies. Our property management checklist can help ensure you build that strategy into the DNA of your company from the beginning. This property management startup checklist is intended to help you orient your company toward a resident focus from the get-go. In the absence of a checklist, it’s all too easy to get caught up in real estate and rental property considerations that do not reflect long-term winning conditions for all stakeholders. Related: Best Property Management Podcasts 1. Write a Property Management Business Plan In some ways, a property management business plan is a document intended for potential clients and investors. And certainly, it can help you concretize start-up costs and get funding for the business (learn more on what’s needed to get SBA financing). But in many more important respects, it’s a structured foundation for you to gain insights into what residents are looking for, which in turn will help crystalize the type of clients you want, what types of property you’ll manage, and what kind of property management company you are. You’ll find a property management business plan template here, but in broad terms, here is a framework of the distinct components: Executive Summary Company Overview Market Analysis (Industry, Customer, and Competitive Analysis) Services Marketing Plan & Sales Strategy Operations Management Management Team Financial Plan Growth Opportunities Each component will lay the foundation for your future resident-focused success. Related: Property Management Business Plan Template 2. File Your Property Management Business In order to correctly file and pay your business taxes, you’ll need to register your property management business and choose a type of legal entity. This step is important, as it can also impact the protection/exposure of any personal assets, associated paperwork, or even the way in which you raise funds for your business. Note that it is certainly possible to change your business structure once it's established, but this can be a convoluted and high-stakes process. For property management businesses, different legal entity options are possible. Common legal structures include Limited Liability Company (LLC), S-Corporation (S-Corp), and C-Corporation (C-Corp). An LLC offers personal asset protection, while S-Corps and C-Corps provide additional legal safeguards. The choice involves considerations such as pass-through taxation for LLCs (where business income passes directly to the business owner's personal tax return) or potential double taxation for C-Corps, which can be mitigated via accounting measures. Other options include sole proprietorships as well as partnerships, where taxes and business liabilities are the responsibilities of the individual owners. Once you’ve identified your new business for tax purposes, you can get a free Employer Identification Number from the IRS. Which type of legal entity you select ultimately depends on your appetite for control, flexibility, and complexity. Learn more about how to structure your property management company. 3. Setup Bank Account for Your Property Management Business Opening a business bank account will help you build credit for your own property management company, maintain separation between your personal and business finances, and streamline tax accounting. It may also be required by law, depending on state laws applicable to your business structure. Some banks offer account features, flat fee or zero fee structures, and services that are particularly beneficial for new businesses and small businesses, so it is worth taking the time to shop around rather than defaulting to the same bank you use for your personal accounts. 4. Setup Accounting for Your Property Management Business With the help of OnSightPROS, we've developed a rental inspection checklist template for single-family rental property management companies. Use this template to build out your checklist. Not all accounting is equal. Property management accounting deals specifically with the financial management of rental properties. It helps property managers track rental income, manage expenses, handle tenant deposits, and produce financial reports. Essentially, property management accounting helps you maintain accurate and comprehensive financial records for each property you manage. Property management accounting consists of two components. The first is corporate accounting, which is similar to the kind of accounting done at any company. The second is trust accounting, which is specific to property management. This kind of accounting relates to the client funds that you hold, including security deposits, rent, and funds intended for property upkeep and repairs. Managing rental properties can be daunting when it comes to accounting and finance management, but that certainly doesn’t make it a show-stopper. Learn more about property management accounting, as well as accounting software and single family property management software that can make it significantly easier. 5. Obtain Required Licenses and Permits for Your Property Management Business The licenses and permits required for property management businesses vary depending on your location, but common requirements can include a real estate broker license (which often involves an exam-based accreditation as well as potential background checks), a property management license, a leasing agent license, and a business license, as well as any other locally required permits. 6. Secure Liability Insurance Liability insurance is important to keep your business running on solid foundations. In fact, it’s essential, as it protects not just you but your investor’s assets and your resident’s safety. At Second Nature, insurance is so important to us that we incorporate an insurance product into our resident benefits package. General liability insurance for property managers safeguards against potential financial liabilities arising from physical risks. It typically covers expenses related to repairs, replacements, legal fees, and medical bills, and is applicable to both residential and commercial properties. Coverage can include bodily injury, medical payments, physical damage, reputational harm, and even copyright infringement in relation to marketing efforts. Note that Second Nature's renter insurance program ensures 100% compliance and liability coverage protecting you, your property investors, and your residents. 7. Hire Your Team Hiring the right team has a huge impact on your ability to achieve the business targets you’ve established in your business plan. Note that “right” doesn’t simply mean “qualified.” That’s because who your employees are is fundamentally more important than what they’ve achieved. After all, you’re setting the stage for them to deliver the best work they’ve ever done in their careers to date. The hiring process begins by understanding what characteristics you’re looking for. For any given candidate, how do they build the new skills required to address new situations? How do they handle challenges when things get tough? And perhaps most importantly, what is their response to failure? Insights into these questions will help galvanize a people-focused approach that is truly a value-driven team. After all, at Second Nature, we want to generate value for ourselves, our investors, and our residents—and we want people who buy into that approach. Get more Second Nature hiring tips on building a people-focused team. 8. Create Solid Pricing Structure and Property Management Contracts Once you hire a team. establishing a good pricing structure for your business and creating all the legal documents required to run the business should be the priority. That's because the right approach can generate value beyond management fees for property managers, their investors, and their residents, which reflects Second Nature’s “triple win” focus. General rental property management fees include collecting the month’s rent, following up on arrears, organizing property maintenance and repairs, and keeping up-to-date on legal issues. Much of the profit in property management comes from driving better value for investors and residents, and pricing for that value. After all, people are willing to pay for better quality experiences in their homes. Additional fees, which will help drive company growth, should be communicated during the onboarding process and lease agreement. In other words, they are never about hidden markups. They’re about charging for value and driving great habits. Fees can be applied on the resident side (for instance, paper lease setup fees, lease renewal fees, late fees, or special programs fee) as well as on the investor side for a number of property management services (inspection fees, vendor screening fees, rent protection or eviction fees). Again, fees help you drive value for both your investors and your residents, and support your business at the same time. Note that because regulations vary across regions, it may not always be possible to charge fees for certain types of services. That's why it's important to discuss any fee and contract proposals with an attorney before implementing them. 9. Execute the Marketing Plan Set Out in Your Business Plan While it’s true that businesses thrive on referrals and word of mouth, it’s executing on your marketing plan that will help drive more consistent revenue — and help you capitalize on the market research you conducted to assemble your business plan. As with so many other things, the marketing landscape has changed enormously in just a short time. We’re now living in an era when an active, well managed online presence is critical. This means that a robust marketing strategy is more than simply managing a social media account (although this too is important). It also includes investing in search engine optimization for your website, executing on content creation and distribution strategies, conducting networking events, and advertising online. For optimal property management marketing, where work often stays within specific regional areas, it’s also important to maintain a presence in local business listings. 10. Network with Fellow Property Managers and Owners to Expand Your Business We touched on networking in the context of a marketing plan, but for new business owners in particular, networking can be a valuable source for those first few clients. There’s certainly no shortage of opportunities for establishing your business name, ranging from local vendor fairs to national property management conferences and events with thousands of attendees. In addition, there are numerous property management associations that provide opportunities for networking, education, and advocacy for property management professionals. The business and personal development opportunities available through such options present great avenues to expand and optimize your property management business. 11. Write a Resident Retention Strategy - and How You Can Improve the Resident Experience You should be thinking about the resident experience from the very start. After all, in an industry where churn is the norm, an effective retention strategy pays its own way. To be truly effective, however, it’s key to recognize that “resident retention” is not simply a one-dimensional number at the bottom of a spreadsheet. The “triple win” approach to resident retention asks the question: “How do we create experiences so good that residents never want to leave?” Answering that question maximizes residential property owner ROI and boosts property manager success. In other words: A win for residents is a win for investors is a win for property managers. In the same vein, we often hear from professional property managers that a Resident Benefits Package (RBP) is a powerful way to retain residents over the long term. RBPs can help with resident satisfaction and resident retention rates. After all, a proactive, differentiating approach to resident retention means building experiences that people will pay and stay for. This is a useful lens with which to examine the full property manager/resident journey, from move-in to collecting rent payments to move-out, for opportunities to generate resident retention ideas—and deliver those wins. 12. Create SOPs to Handle Complaints, Disputes, and Requests Once you have the first few properties under your management, it’ll be important to ensure processes and procedures are in place to handle complaints, disputes, excessive maintenance requests, rent collection issues, and tenant problems. In such cases, rather than automatically assuming the resident is the problem, some property managers approach resident issues as behaviors that can be changed. That’s because the root cause is often addressable and the behavior changeable. This emphasis on the people element pays off — and lets you focus on how to adjust “bad” behavior through benefits and rewards, rather than just being transactional. This reframing aside, one of the best ways to deal with complaints and disputes is to avoid them in the first place, which often comes down to non-discriminatory tenant screening processes and background checks. Other standard operating processes include documenting all incidents and updates thoroughly, calling law enforcement in the case of illegal activity, implementing eviction processes if necessary, and staying current and compliant with local laws and regulations. 13. Create and Execute a Strategy to Improve the Resident Experience Once again, improving the resident experience goes a long way in retaining the residents and creating ancillary revenue streams. From the get-go, you can actively ensure great first impressions with services such as move-in concierges or coordinators. After all, a resident who's had a positive move-in experience is a happier one. Happier residents stay longer, pay on time, take care of the property, and make positive recommendations. Throughout the residential journey, other strategies for improving the resident experience include pest control for property management, credit reporting, and resident rewards. Above all, one of the cornerstones of a great resident experience is responsiveness. This responsiveness is a two-way street! It covers improved maintenance service and response times, as well as opportunities for residents to provide feedback through resident surveys. By setting up this kind of feedback loop, you demonstrate to your residents that their voices matter, which instills a sense of ownership and care that often lead to better property care and longer tenancies. Property Management Startup Checklist It’s famously said that property managers are in the business of helping many different people with many different things. And sometimes, this can feel like a lot to tackle, especially at the startup phase. That’s why we’ve assembled this property management startup checklist to help you begin: Write a Property Management Business Plan File Your Property Management Business Set Up a Bank Account for Your Property Management Business Set Up Accounting for Your Property Management Business Obtain Required Licenses and Permits for Your Property Management Business Secure Liability Insurance Obtain Required Licenses and Permits for Your Property Management Business Hire Your Team Create Solid Pricing Structure and Property Management Contracts Execute the Marketing Plan Set Out in Your Business Plan Network with Fellow Property Managers and Owners to Expand Your Business Write a Resident Retention Strategy — and How You Can Improve the Resident Experience Create SOPs to Handle Complaints, Disputes, and Requests Create and Execute a Strategy to Improve the Resident Experience How Second Nature Helps Run a Property Management Company Profitably At Second Nature, we focus on creating “triple win” experiences for residents, property managers, and investors. This helps property management companies go beyond transactional basics and create new, professional, and holistic experiences that generate growth all around. We didn’t invent this stuff, and we’re certainly not rowing against the tide! Companies like Google, Uber, and Amazon have already changed how consumers think. A convenient experience is no longer a luxury—it’s an expectation. Accordingly, for property management profitability and growth, experience is the winning strategy. That’s the insight that led us to create the Second Nature resident benefits package (RBP). It’s a foundational tool to create unforgettable resident experiences and keep your property management company on a growth path. Learn more now.

Calendar icon February 13, 2024

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6 Reasons Property Managers Should Choose Clients Carefully and Why

Finding the right property management clients can make or break your business. Experienced property managers often declare this with vigor: “Be very specific and selective about who your customers are.” A simple idea, yet one that can feel tricky to execute. And like many things, there is no one-perfect-strategy-fits-all here. The right action plan likely depends on your situation. So here are six next-layer ideas that might help. 1. Push up or push out toxic property management clients Ok, let’s say you’ve made that grit-your-teeth, pain-in-the-keester client list. What’s next? Sure, you could just politely fire them. And if nothing is stopping you, then nothing is stopping you. But there’s another approach that doesn’t torpedo all your revenue all at once: raise prices. Some will leave. Great. Some will stay and pay. This makes it easier to afford resources that mitigate the distraction. You can keep doing this until the premium is worth it or they’ve parted ways. 2. When the exact opposite advice might work best (for a stage) Let’s say you haven’t been at this for years. You’re newer, just starting out. Being super specific about a customer this early could work. But it also could be the right advice at the wrong time. Yes, you could say you’re only working with class-A, single-family rentals with intentional investors who have 2-20 units and don’t live in your market. Yet, while you have a specific idea, the reality is that it usually takes time and hard work to hone your business to actually deliver a service distinctly for this customer. And after getting some reps in, you may learn that you have strengths and competencies naturally built for a different investor profile, a different asset type, etc. Or, you discover a new market opportunity you didn’t see before. I heard an analogy once that early on, you try a wider net. The net pulls up all kinds of fish. Grouper, tuna, mahi, probably seaweed too. Then you start to realize which one you’re really a match for. And you start adjusting your net and where you fish, just for tuna. Or, you realize you want a different net tailor-made for shrimp or crab. Doing this for months can be a good way of learning through doing what’s good and bad. What complexities do you want to take on, and which do you want to avoid? But be sure you do start tightening the net eventually. The suffering comes from not monitoring and tightening when you’re ready. This wide net approach not being time- or stage-bound turns a thoughtful trade-off into the drag weight everyone warns against. 3. Powerful team incentives Maybe you’re in the owner's seat, less involved in the day-to-day. It’s your team that’s bringing new clients on, and they’re responsible for handling good and bad-fit customers. So, let’s say you want to drop bad clients because they’re keeping you from the next level, but you’ve invested in staff and need to replace the revenue. Raising prices is one way. But here’s another: For every 2-4 good-fit clients the team adds, they get to drop one bad-fit client. It may feel good to fire bad clients all at once, right away. But if the business is in the investment or break-even stage, tying it to replacement clients can be a responsible way to mitigate risk to cash flow. This approach motivates the team to not just find any new client or just the ”easy” client. It focuses them on the most valuable clients. And as more are brought in, you can responsibly filter out the worst fits. Empowering employees to improve their own experience at work by putting clear guardrails in place can be a powerful motivator for change. They now have a productive path that gives them agency, as opposed to feeling hopelessly stuck with a bad client until one of them leaves. Perhaps commission changes for better-fit clients are a worthy consideration. A great incentive structure is usually marked by whether or not people “game it.” And your business still wins. That’s a good segue to… 4. Shift your marketing and sales You can address the existing client base, but if your acquisition strategy never changes, they will keep coming in. So, how do you get upstream of the problem in your sales and marketing? Great marketing attracts who you are for and repels who you are not. Help your team understand both the ideal profile AND the anti-profile. Green flags and red flags. And it’s not just about what you’re messaging, it also can tie to where you find clients and invest in acquisition channels. Ask yourself: Do your best-fit customers come from realtor referrals? Client referrals? Which realtors or clients? Do they come inbound from your content marketing? Instead of spreading your budget all around, focus resources on places and programs that attract your best customers and tighten up less reliable channels. This doesn’t have the immediacy of other approaches, but the impact over time can be significant. The same applies to sales. Great sales processes quickly qualify out vs. wasting time with poor-fit prospects. And they prioritize the Glen Garry leads. Even a simple A-B-C grading with entry and exit criteria is a great place to start. When tracking marketing and sales KPIs as blended, it treats all activity as equal. Reality is different. Some leads are 20%-1000% more valuable. Putting policies and processes in place to prioritize and treat them appropriately is a win. 5. Is it possible to be too specific? Most property managers say they once worried about being too specific with ideal client profiles but then were surprised that the problem was almost always in not being more specific. Well, it’s a balance. Here’s an example description: “We work with rental property owners who want a more passive experience in real estate.” That’s very broad. This sounds like a sea of other companies trying to win the same customer. That makes it harder to pick you. How about his: “We work with Cincinnati SFR owners who are full-time OB/GYNs and want to hold for at least a full market cycle.” Ok, this is much more specific. Probably in ways that don’t really matter. For example: Why OBs vs. doctors in general? Or doctors vs. busy, high-income professionals? Do they really have different problems that would materially change your offering or go-to-market? But let’s stick with it, for example’s sake. Your messaging could definitely sound like nobody else. Let’s say it did work more efficiently, and you win 40% of leads instead of 25% with this targeting. I asked Perplexity AI (replacing Google search for me) how many OB/GYNs there are in Cincy. It’s 322 or 478, depending on the source. Let’s say 200 own or would invest in real estate. Some number less for just single-family rentals. Some already have a PM and are happy. How many are willing and want to hold for a full market cycle? This is likely not a viable business strategy for a dedicated PM business. It’s too specific a pool, and growth will likely be too slow even if you close 50% of leads. 50% of 100 is a lot less than 25% of 10,000. So, it helps to think about the tension between the size of the prize (market opportunity) and the opportunity to design and earn a distinct position in it (differentiation strategy). Thinking about both sides can help you find a sweet spot to commit to and focus on organizing around. If you map your market, you can ask and answer: What’s the smallest niche of the market that supports your business goals and model? What’s the biggest opportunity you can credibly develop and win in the near term? How might you expand as you win to keep growing toward your ultimate vision? You can see how a couple of years later, you can expand or add an adjacent customer profile (accidental landlords, new location, new property type, etc.) or adjacent new services (RBP, brokerage, in-house maintenance, etc.) to add dollars to the same customer base to grow. 6. Focus on wallet-share vs. market share Ok, so what if you want to remove problem clients but don’t want to raise prices, risk cash burn, wait until the team can add better replacement property management clients first, or test changes in your funnel or team’s comp? You might feel stuck, but there’s another way to add the revenue and profit you need to confidently pull the trigger without investing more in acquisition or relying on efficiency improvements to justify it. That’s adding more revenue per unit in a way that increases your customer lifetime value. If your ancillary revenue and profit per unit go up, you can afford to let clients go without risking churn. Second Nature helps property managers do this through a fully managed resident benefits package. Industry benchmarking studies show the average PMC profits $10-17/mo per unit. Every lease with an RBP can replace the profits at risk or more. And RBP isn’t the only ancillary revenue opportunity. Pet rent is another good example if you haven’t implemented it yet, amongst others. What are your thoughts? The goal of this article is not to be prescriptive; it’s to spark thinking about key considerations and paths to get there. To that end, did you find this content useful? Anything you can add that’s missing? Connect with us in our Facebook group or get in touch! We’d love to hear your input.

Calendar icon January 4, 2024

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Property manager handing new residents the keys to their new home

What is Security Deposit Insurance? Pros and Cons [+Best Providers]

Security deposits are an industry standard for property management. But new innovations are helping reduce some of the traditional pain points associated with security deposits. Here’s the thing; For property managers and investors, security deposits provide critical protection from financial fallout if the rental property is damaged. For renters, though, paying a security deposit upfront can pose a prohibitive cost, and an expensive security deposit can make it harder for the property manager to fill vacancies. Enter security deposit insurance – a modern solution that's reshaping rental agreements. We’re diving into everything you need to know about security deposit insurance: how it's different from the traditional security deposit, the pros and cons, and the scoop on the best providers out there. So, whether you're a seasoned property management business owner or just getting started, we’ve got you covered. (And that was an insurance pun.) What is security deposit insurance? Security Deposit Insurance is a coverage that residents purchase, which covers potential damages or unpaid rent during their lease period. Instead of paying a hefty upfront cash deposit, residents pay a fee for this insurance, which typically costs a fraction of the traditional deposit amount. For example, imagine a tenant moving into a home where the usual security deposit is $1,000. With security deposit insurance, instead of paying this amount upfront, the tenant might pay an insurance fee of $50 each month for a 12-month lease. This fee provides coverage to the owner for the duration of the lease, similar to a standard deposit, but at a lower cost to the tenant. This system not only eases the financial burden for tenants but also provides property managers and owners with coverage against potential lease violations, making it a potentially attractive option for both parties. What is the difference between a traditional deposit and security deposit insurance? A traditional security deposit is a lump sum paid by the resident to the owner (or held by the property manager) at the beginning of the lease. It’s often the cost of one month’s rent or another negotiated amount. The security deposit acts as a safeguard for the property manager in case of any damage to the property by the end of the tenancy. If there is significant damage, the property manager and owner can withhold refunding the deposit, depending on local and state laws that govern the use of security deposits. Security deposit insurance, on the other hand, gives residents a way to avoid paying that large lump sum at the beginning of their lease. Instead, they can pay for insurance. Like any insurance policy, they pay a monthly premium for coverage. The premium will be considerably less than a one-time security deposit. When a resident has security deposit insurance, their property manager can file a claim to the insurance company over things like lost rent or damages. The resident doesn’t get any of their monthly payments back at move out. Let’s go over some of the pros and cons of security deposit insurance. Related: How to Write a Security Deposit Return Letter + Free Template What are the benefits of security deposit insurance? Security deposit insurance provides benefits to renters, property managers (or a landlord), and property owners. Here are a few of the top benefits. 1. Reduces the upfront cost of move-in and protects residents' ability to pay rent We’ll just say it plainly: Moving is a huge, stressful life event that costs a LOT of money. One of the major costs of moving into a new rental home is the traditional security deposit. Renters may be paying two times or more the amount of monthly rent just to sign a lease. Security deposit insurance solves that upfront-cost challenge by providing a service at a much lower monthly cost. From the property management perspective, that means residents can keep more of their money to ensure they pay rent on time, and they may be happier to cover other fees like pet deposit fees, a resident benefits package fee, etc. 2. Helps reduce vacancies Because security deposit insurance removes one of the biggest financial barriers to signing a new lease, it can be a great way to reduce a property’s time on the market. By advertising that you accept security deposit alternatives like insurance, you can differentiate your properties on listings and fill them more quickly. 3. Covers unpaid rent This is one of the best benefits for property managers and owners. Traditional security deposits typically can’t be used until the end of a tenancy. But with security deposit insurance, property managers can file a claim over unpaid rent. The insurance typically will cover this. Some states allow property managers to cover missed rent payments with a security deposit, but some do not. If you’re in one of the states that don’t, you may want to consider allowing security deposit insurance. 4. Claims can be made at any time during the lease Like the coverage for unpaid rent, security deposit insurance can cover claims at any time throughout a resident’s lease. You don’t necessarily have to wait to be reimbursed for damage. What are the drawbacks of security deposit insurance? Of course, there are a few risks to security deposit insurance and reasons you may not want to make it an option for your residents. Here are some of the cons of security deposit insurance. 1. Not all claims will be accepted When you, as the property manager, submit a claim for coverage of unpaid rent or property damage, the insurance company may not decide to cover it. Each claim is evaluated at the time of loss to determine if coverage is applicable. Things like normal wear and tear are not covered. Plus, you’re not the one who gets to make the final decision. 2. Not all insurance providers or products are reliable This is true particularly because the industry itself is a newer innovation. Residents may pay monthly premiums but then find the coverage is not all that great. All of us have probably had some kind of experience like this with other types of insurance, too. Some claims aren’t covered, and some insurance companies promise a lot and deliver very little. 3. Residents are on the hook for monthly payments Generally, security deposit insurance is cheaper than a cash security deposit. But if the lease is long-term, the monthly payments may end up being more expensive than just paying a lump sum at the beginning of the lease. For property managers, you want to consider if it’s ideal for your residents to have an additional monthly fee they’re responsible for on top of rent. 4. It can be a hassle Nobody likes submitting or following up on insurance claims. It’s a hassle! The process is often clunky and slow and requires a lot of management. It may take weeks or months to get paid for a claim. Property managers may also need to put time and energy into educating residents or clients about how the security deposit insurance works and the differences in their options. (Or you could show them this article!) Best security deposit insurance providers Security deposit insurance is fairly new to the SFR property management world. Here are three of the best security deposit insurance products on the market right now. 1. LeaseLock LeaseLock is the category leader in this particular security deposit alternative space. In October 2023, the company surpassed $9 billion in insured leases. LeaseLock offers a modern solution in security deposit insurance, replacing traditional cash deposits with a unique insurance model. Their insurance coverage provides property managers with protection while easing the upfront financial burden for residents. The monthly cost to the resident is generally around $30, with $5,000 in coverage for unpaid rent and damage. 2. Obligo Obligo was launched in New York and helps property managers reduce their risks while making security deposits more affordable for renters. Residents pay a small monthly fee for the service while Obligo sets up secure billing authorization between property managers and the resident. The property manager is then authorized to charge the resident for damages up to a pre-set maximum. It’s essentially the same as the type of pre-authorization hold that a hotel might place on a guest’s credit card. Residents won’t be charged unless they cause damage or miss rent, and they will only be charged up to a certain amount. Some residents will not qualify for Obligo’s services, depending on credit rating, etc. The company has a high trust rating on Trustpilot. 3. Rhino Rhino offers a slightly less straightforward insurance model but is a leading solution in security deposit alternatives. Through a surety bond model, their service provides robust protection for property owners while significantly reducing move-in costs for residents. Rhino is sued in over two million homes in the U.S. and claims to save renters over 90% on moving costs. Some former customers complain about unreliable costs and being on the hook for claims. Final thoughts Security deposit insurance is reshaping the rental landscape, offering benefits for both residents and property managers. Providers like LeaseLock, Rhino, and Obligo are at the forefront of this change, providing innovative solutions that ease financial burdens and streamline rental transactions. As the industry evolves, these services may become a new standard in property management. The goal is to make life easier for renters, owners, and property managers. At Second Nature, our goal is the same. We help property managers provide the best residential services and solutions, all while building opportunities for ancillary revenue. We provide a package with solutions like renters insurance, credit reporting, and resident rewards, all built to help protect a resident’s financial stability and reduce risk to your property management company. Plus, it’s completely handled for you, so your team can focus on what they do best: manage your properties.

Calendar icon December 21, 2023

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Tenants holding their cat

Pet Screening 101: How Top Property Managers Do It

Pet screening: it’s a big part of a property manager’s responsibilities, but – as any PM will say – it can also be a major headache. More residents have pets now than ever before. According to the 2023-2024 American Pet Products Association’s (APPA) National Pet Owner Survey, 66% of U.S. households own a pet. That means property managers are dealing with pets more often than not. On the flip side, investor clients may be reticent to allow pets on their properties. The result? It can be tough to fill vacancies in properties where pets aren’t allowed or the screening standards are too restrictive. So, how do you handle these situations? How do you push for more pet-friendly policies if you need to fill vacancies? How do you protect yourself and your investors from risk? In this article, we’re sharing the best advice we’ve gotten about pet screening, why it’s important to do it well, the steps to a good pet screening process, and a pet screening checklist. What is pet screening? Pet screening is the thorough evaluation of a prospective tenant's pet before approving their lease application. Essentially, it’s a pet background check. It's not just about keeping furry friends out of your pristine property; it's about minimizing risks, following any service animal requirements and ensuring you are protected from any potential damage. A thoughtful pet screening process allows you to delve into the true compatibility between a pet, its owner, and your rental property – and to ensure you’re prepared for any associated risks. A note about assistance animals: It’s important to distinguish that we’re talking about pets not assistance animals. If you’re dealing with an assistance animal, you should not have the word “pet” anywhere on the lease. This may sound odd to laypeople, but an assistance animal is legally considered a disability device, not a pet. Assistance animals include service animals, emotional support animals, etc. How you deal with assistance animals – both service and support – is guided by your local laws. Property managers should familiarize themselves with the Fair Housing Act, specifically the FHEO-2020-01 Assistance Animals Notice from HUD, for guidance on assistance animals. These animals are regulated through guidance by the ADA and ESA. But for animals that are simply there as beloved pets, you need to set up your own standards for pet screening – and understand where reasonable accommodation must be made. Why is pet screening important? Properly setting expectations and standards for pets – and screening any new pets at the home you manage – creates a number of benefits for you, the resident, and the investor. Here’s why it’s so important: Property protection One of the primary reasons for pet screening is to protect the property from potential damage. Pets can sometimes cause significant wear and tear beyond the usual scope, like scratched floors, damaged fixtures, or stained carpets. By conducting a thorough pet screening, property managers can assess the risk each pet poses to the property. This process often involves checking the pet’s breed, size, temperament, and history of behavior. Understanding these factors helps in making informed decisions about whether to permit the pet and setting appropriate pet deposits or pet rent to cover potential damages. Neighborhood comfort and safety Ensuring the safety and comfort of your residents – and their impact on the neighborhood – is a top priority, and pet screening plays a crucial role in this. Some pets may pose a safety risk, especially if they have a history of aggression. By screening pets, property managers can prevent potentially dangerous situations, ensuring that you don’t end up having to deal with complaints or legal repercussions. Other pets may simply be a nuisance. Excessive barking in the backyard can bring noise complaints, etc. Risk mitigation Pet screening is a proactive measure to mitigate various risks associated with allowing pets on the property. These risks include potential legal liabilities in case of pet-related incidents, such as bites or property damage. Having a detailed pet policy and screening process in place can protect the property management company from legal disputes and financial losses. Moreover, it ensures that pet owners are responsible and aware of their obligations, which include taking care of their pets. Incorporating a comprehensive pet screening process not only safeguards the physical property but also contributes to the overall well-being and safety of the home, neighbors, etc. Related: How to Write a Pet Violation Letter to Tenants + Free Template How to conduct a pet screening According to Victoria Cowart, Director of Education and Outreach at PetScreening.com, the most important factor in your pet screening process is consistency. “The best policies are the ones consistently applied,” Cowart says. “That’s the greatest challenge I see in the industry.” Here are the steps to a successful pet screening process. 1. Document all pet rules and regulations Start with establishing the rules on your properties. Remember, you should be consistent in how those rules are applied across all of your portfolio, so don't make a rule unless you’re willing to enforce it equally. Make sure that all prospective residents are clear on the rules, restrictions, and fees associated with pet ownership. Do you charge a pet fee like a pet deposit fee? Make that clear from the start. 2. Have the right tools at your disposal While the pet screening process is very precise and should be taken seriously, you can also use tools and third-party services to help make it easier. PetScreening.com is one pet screening service that supports property managers in pet screening. Instead of leaving you with all the decisions to make, Pet Screening does it all for you. They have an in-depth questionnaire and screening process. In the end, they provide you with a FIDO score that assesses everything you need to know about the pet. 3. Provide a pet screening application For any prospective residents who are pet owners, the next step is to have them start the application process. This is the key part of the pet screening process. When outlining the content of your pet screening application, Cowart says to focus on two pillars: liability and responsibility. Liability will focus on the animal’s history. Responsibility is more like a “tenant screening” that will focus on the owner’s habits. “You need to know how much the resident is doing to ensure their pet doesn’t have an adverse impact on the rental and on the community,” says Cowart. “Are they picking up after their animal? Do they walk them on a leash? Do they take them to the vet regularly?” The application should include pet profile details like: Age Height and weight Breed/type of pet Medical history Spayed/Neutered Length of ownership Housetraining status History of obedience training Behavioral issues Vaccination status (and proof of vaccination) Previous history of aggression Veterinarian information (See our full checklist below for more.) Many property managers focus on breed restrictions, but the evidence shows that breed is less of a factor in a pet’s behavior than you might think. The animal’s history and the owner’s behavior are more important to look for red flags of whether a dog is aggressive or not. Breed or weight questions should always include greater context. 4. Conduct a pet interview Not all property managers will feel the need to do this. However, having a member of your team meet the animal in person may be something your investor-clients want or that you feel helps establish a better relationship and limit liability. This is also more common in apartment complexes or multifamily housing. For single-family property managers, the pet interview isn’t necessarily as important. However, if you do conduct a pet interview, it’s important to confirm that the pet you’re meeting matches the description in the application. Pay attention to how well it listens, how it approaches you, and whether it shows any signs of aggression. 5. Ensure you are complying with all laws Before approving or denying a pet, do a final check to make sure you’re following all local, state, and federal laws. This is most important when considering assistance animals. Even homes with a no-pet policy will often need to accept assistance animals. 6. Include pet rules in the lease You should have a pet addendum ready for your lease signing. Walk the new residents through these. They shouldn’t be surprised by anything if you follow Step 1 and are clear with them on rules and fees from the beginning. If you require a pet security deposit, that should be given at this time as well. 7. Make sure pets are covered through insurance A big reason people deny pets is because they feel unsure about the risks and they don’t have a way of addressing them. That’s what insurance is for, but here’s the rub: A lot of pet owner policies exclude a lot of breeds, which can limit the number of residents you can approve at your properties. At Second Nature, we provide a renter’s insurance program that covers dog bits for all dog breeds. It’s one of the few programs on the market that doesn’t include breed restrictions. Second Nature’s renter’s insurance program (a part of our Resident Benefits Package) covers all breeds that the property manager approves. What are the benefits? Residents with household pets have stronger lease retention than residents without pets as a group. Furthermore, residents with aggressive breed dogs have a higher lease retention than residents in general. Fewer properties are available to those residents because most people are saying no to their pets. You can be the one who says yes – and gets a happier resident who wants to stay longer and be a responsible pet owner. With the right coverage, you can: allow more residents to apply reduce vacancy costs fill homes faster have a stronger lease retention over time increase opportunities for ancillary revenue. It’s a win for the pet owner, a win for you, and a win for your clients. Pet screening checklist Here’s a brief checklist to help you keep track of what you need to know about pets. Share this with prospective residents to help them prepare what they’ll need. Pet Resume: Include your pet’s breed, age, weight, and a brief description of their temperament. Mention any training your pet has received, especially obedience or socialization training. Vaccination and Health Records: Provide up-to-date vaccination records. Include any regular flea, tick, and worm prevention treatments. Spay/Neuter Confirmation: If applicable, provide documentation confirming your pet is spayed or neutered. Behavioral Information: Disclose any known behavioral issues and the steps you’re taking to address them. Include information about your pet’s typical behavior around people and other animals. References: Provide references from previous landlords or neighbors, especially if you’ve lived in a rental with your pet before. A letter from a veterinarian attesting to your pet’s good health and behavior can also be helpful. Pet License: Show proof of a current pet license, if required by local laws. Pet Insurance: Consider obtaining pet insurance that covers any damages your pet might cause. Second Nature provides this as part of a Resident Benefits Package. Residents can opt into the coverage or provide their own. Photos of Your Pet: Include recent photographs of your pet for easy identification. Agreement to Rules and Regulations: Acknowledge and agree to any pet policies or rules set by the property management. Final thoughts Pet screening doesn’t have to be a major headache. With the right tools and a standardized process, you can make it easier on your team and easier on prospective residents. The goal, after all, is to find residents who will care well for their pet and the property – and hopefully stay for the long term. At Second Nature, we provide extensive pet coverage in our Resident Benefits Package. The goal is to reduce liability for you and make it easier to accept good pets, regardless of their breed. Rest easy knowing you and your residents are covered.

Calendar icon December 20, 2023

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Preventive Maintenance Checklist for Property Management

A big part of property management is prevention. Property managers anticipate issues, plan for problems, and execute solutions. For some, a key part of this prevention is to develop a property management preventive maintenance checklist. For multi-family property managers, a regular preventive maintenance check is standard–and easy. Their properties are often all contained to one apartment building or community, and it’s easy to do a walkthrough to ensure everything is as it should be. For single-family property managers, it gets a lot more complicated. With scattered-site properties, regular inspections are impractical and expensive. In fact, one of the best ways to approach prevention is to help equip residents to take preventive measures themselves. At Second Nature, that’s our approach: “How do we make it easy for residents to handle preventive care of the property?” In this article, we’ll explore both approaches to preventive maintenance: Doing inspections as a property manager – or finding solutions where residents support the process. Let’s dive in. What is Preventive Maintenance? Preventive maintenance is a proactive approach to keeping a property in good condition with the purpose of preventing unexpected failures and maximizing longevity. This type of maintenance encompasses a broad range of activities, from routine inspections (more common in multifamily) to air filter delivery services that keep HVAC systems running smoothly. By implementing preventive maintenance tactics, property managers aim to prolong the lifespan of property components, maintain property value, and provide a safe, functional, and appealing living environment for residents. What is a Preventive Maintenance Inspection – and Who Conducts It? A preventive maintenance inspection is a regularly scheduled, systematic evaluation of a property designed to identify and rectify any emerging issues before they escalate into serious problems. In other words, a preventive maintenance inspection is like a health check-up for a property. A well-documented inspection also provides a record of maintenance that can be valuable for insurance claims, move-outs, etc. Generally, SFR property managers find themselves in three different camps when it comes to property inspections: Those who visit sites only when an issue arises. Those who conduct scheduled annual preventive inspections, whether there are issues or not. Those who conduct biannual or seasonal preventive inspections, whether there are issues or not. In fact, we conducted a casual Facebook poll to see what single-family property managers said about the frequency of their property inspections. Most PMs who responded said they conduct an annual inspection. A smaller amount said they conduct two inspections per year, and another group said they do it only when needed. A very small amount of property managers polled said they conduct quarterly inspections. (To get more community insights and tips like this, join our Triple Win Facebook Group.) But there’s also a fourth option: Those who rely on a partner who helps manage prevention for them. There is so much residents can do themselves to prevent larger issues from ever developing – they just need a little support. For example, if a resident is changing their air filter on time, the property manager is going to get fewer HVAC tickets, and the HVAC system is going to last longer. If you can provide scheduled air filter delivery, residents can stay on top of their filter changes. Whichever of the camps you fall into, we want to provide you with resources in this article to make preventive maintenance easier. If you’re the type of property manager who prioritizes regular preventive maintenance inspections, we have a checklist template for you below. If you’re the type of property manager who prefers to react when issues arise (often more cost-effective), we have some suggestions for how to help residents manage preventive measures on their own. What to Include in a Preventive Maintenance Checklist Let’s say you do prioritize regular inspections. Crafting a preventive maintenance checklist for property management is all about anticipating needs and averting potential issues before they arise. Building your checklist begins with a thorough assessment of the property's unique features and vulnerabilities. By understanding the life cycle of various components of a property across the seasons – from HVAC systems to appliances – you can prioritize tasks and schedule maintenance in a way that minimizes wear and tear. Your checklist will likely include the following categories: Structural Maintenance Electrical Systems Plumbing & Water Systems HVAC Systems (Heating, Ventilation, and Air Conditioning) Appliances (if provided) Lawn & Outdoor Areas Pest Control Safety & Security Systems Interior Checks Miscellaneous (Garage, waste disposal, etc.) Sample Preventive Maintenance Checklist for Property Management Companies With input from OnSightPROS, we’ve built a preventive maintenance checklist template for single-family rental property management companies. Use this template as-is or tweak it to fit your property needs! If you want a downloadable and more in-depth template for all types of rental inspections, check out our original post on rental inspection checklists and Get the download here. Structural Maintenance Roofing: Inspect for leaks, damaged tiles, or shingles. Check gutters and downspouts. Foundation: Check for cracks, water damage, or shifting. Walls and ceilings: Look for cracks, dampness, and signs of mold. Electrical Systems Safety checks: Ensure that outlets, switches, and wiring are in good condition. Lighting: Regularly test all indoor and outdoor lighting fixtures. Inspect circuit breakers and panels. Plumbing & Water Systems Drains and pipes: Check for leaks or buildup. Water heater: Test hot water temperature and pressure relief valves and inspect for signs of wear. Faucets and fixtures: Ensure proper flow and check for leaks. HVAC Systems (Heating, Ventilation, and Air Conditioning) Filters: Ensure they are up to date. With Second Nature’s Air Filter Delivery, you’ll have the date stamped right on the filter itself. Ductwork: Check for mold or leaks. Seasonal checks: Ensure the heating system is ready for winter and cooling for summer. Appliances (if provided) Oven, range, microwave: Check for cleanliness and ensure they are working efficiently. Refrigerator: Check coils and inspect seals. Washer and dryer: Inspect hoses and ensure the resident is keeping lint and drainage clean. Lawn & Outdoor Areas Landscaping: Ensure that the landscaping is tidy and up to HOA standards, if applicable. Paths and driveways: Check for cracks or tripping hazards. Pools: Ensure safety measures are in place. Pest Control Notice any signs of pests With Second Nature’s Property Management Pest Control, you can be sure residents can call a professional immediately if they ever have issues. We handle it for you. Safety & Security Systems Smoke and carbon monoxide detectors: Ensure residents have kept up to date and they are installed properly. Fire extinguishers: Check expiration dates and ensure they're easily accessible. Emergency exits and paths: Ensure they're clear and well-marked. Interior Checks Floors: Look for damaged tiles, caulk problems, carpet wear, or wood floor issues. Windows and doors: Ensure they open and close smoothly, and check seals. Miscellaneous Garage and parking areas: Check for proper lighting, security, and cleanliness. Waste disposal: Ensure trash bins are clean and in good condition. The Importance of Preventive Maintenance Did you know that something as simple as getting air filters delivered on time can reduce HVAC costs by hundreds of dollars annually? More on that in a minute, but it’s clear that for property managers, preventive maintenance isn’t just about keeping the property in good shape—it's a strategic approach that yields all kinds of benefits. By prioritizing prevention, you can: Minimize costly repairs: Regular maintenance can prevent small maintenance issues from escalating into expensive emergencies. Extend asset longevity: Helping residents proactively care for components like HVAC systems extends their lifespan, saving money in the long run. Enhance resident satisfaction: Supporting a resident in maintaining their property means fewer complaints and issues, leading to higher retention rates. Ensure safety: Regular checks keep safety hazards at bay, reducing the risk of accidents and liability. Improve property value: Consistent upkeep maintains or even increases the property's market value. Stay compliant: Keeping up with building codes and safety regulations is non-negotiable, and preventive maintenance ensures compliance. By incorporating a preventive maintenance strategy, property managers not only safeguard the property's physical health but also its financial viability and desirability in the market. It's a proactive measure that resonates well with residents and investors alike. Best Tools to Support Preventive Maintenance Here’s the big question: How can property managers for single-family homes make preventive maintenance easier? Scattered-site properties don’t lend themselves to regular inspections. So, the best solution, as we mentioned above, is to help your residents do it themselves. Here are three of our favorite products to get that done. Second Nature We’ve built a Resident Benefits Package with proactive property management in mind. Each feature – from renter’s insurance to on-demand pest control to air filter delivery – aims to address ongoing needs and prevent common issues from escalating. Let’s take air filter delivery as an example. In the largest HVAC data study of its kind, filter delivery service reduced HVAC ticket requests by 38% Just by including a filter subscription for your residents, you can help them cut energy costs and ensure your HVAC system lasts for the long term. Learn more about all of the features of our Resident Benefits Package and how it delivers results for residents, property investors, and property management companies. RentCheck RentCheck is a property inspection app built to help residents do inspections on their own. The property manager can request and track routine inspections from the resident. You can set up any cadence you want and customize the self-guided inspection requirements. RentCheck will fully automate reminders and support residents in completing a video inspection that then gets sent to you as a shareable report. zInspector zInspector is another very popular rental inspection app in the SFR property management space. Like RentCheck, property managers use zInspector to schedule, customize, and receive inspections conducted by residents themselves. The app also includes a toolkit with an evolving set of property and task management tools. You can get 360 photos and virtual tours with a compatible 360 camera and printable, customizable inspection reports. FAQs Q: What are the benefits of preventive maintenance? Preventive maintenance offers a multitude of benefits, including: Cost Savings: It reduces the likelihood of incurring expensive emergency repairs and extends the life expectancy of property assets. Efficiency: Regular maintenance ensures that all systems and appliances are running at optimal performance, which can lower energy costs. Tenant Retention: A well-maintained property leads to higher tenant satisfaction, which can decrease turnover rates. Safety: It helps identify potential safety issues before they become hazardous, promoting a safer living environment. Value Preservation: Ongoing care maintains and can enhance the property's value over time. Compliance: Ensures that the property remains in compliance with the latest building codes and safety regulations. Overall, preventive maintenance is essential for maintaining a property's integrity, ensuring tenant satisfaction, and optimizing operational budgets. Q: What is included in basic preventive maintenance? Basic preventive maintenance for property management typically encompasses: Routine Inspections: Regularly checking the structural integrity of the property, including roofs, walls, and foundations. HVAC Maintenance: Ensuring heating, ventilation, and air conditioning systems are clean and functioning properly. Plumbing Checks: Looking for leaks, clogs, or wear in pipes and fixtures. Electrical System Audits: Inspecting electrical panels, wires, and safety systems to prevent malfunctions. Groundskeeping: Checking outdoor areas, including landscaping, gutters, and drainage systems. Appliance Upkeep: Servicing provided appliances to prevent breakdowns and extend their lifespan. Safety Inspections: Verifying that all safety equipment, like fire extinguishers and smoke detectors, is in working order. These tasks are designed to identify and address issues before they develop into more significant problems, helping to ensure the property remains safe, functional, and appealing to tenants. Q: What’s the ideal schedule for preventive maintenance? The ideal schedule for preventive maintenance can vary depending on the specific needs of a property, but a general guideline is as follows: Weekly/Monthly/Quarterly: Regular checks on a weekly to quarterly basis are more common for multifamily properties and apartment buildings, with quick checks on high-usage areas and equipment, such as communal spaces and gardening upkeep. Quarterly maintenance inspections could include more in-depth inspections of HVAC systems, plumbing and electrical systems, and seasonal preparations. Annually/Seasonally: A small number of SFR property managers will conduct seasonal or semi-annual inspections. A few more conduct annual inspections (unrelated to move-in or move-out, which always includes inspections). These are more in-depth inspections to keep an eye on potential issues.

Calendar icon November 15, 2023

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Property manager meeting with future tenants

10 Strategies to Become a Successful Single-Family Property Management Business

Navigating the world of Single-Family Property Management requires a blend of industry know-how, proactive strategies, and a keen understanding of both investors and residents. What is a single-family property management business? At its core, the business revolves around managing standalone properties for individual property investors, ensuring the rental property is maintained, tenanted, and profitable. But how do you optimize for success in this space? In this post, we'll uncover 10 pivotal strategies to elevate your single-family property management business, from staying updated on industry trends to streamlining your operations for maximum efficiency. Related: Best Property Management Podcasts 1. Keep up with the trends in Single-Family Property Management The dynamic landscape of single-family property management is constantly innovating and growing in response to various economic, technological, and societal factors. Property managers in the single-family space (vs. multifamily properties or even commercial real estate) also tend to be entrepreneurial, innovative, and adaptive. It’s what we love about this community! But some "trends" have staying power, and the key to long-term success is identifying those and adapting your services to the modern consumer. Over the past decade or so, the way we do commerce and services has been upended by technology and the convenience economy. The same is true in property management. In the words of Jonathan Cook at Revolution Rental 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.” So, let’s look at several trends that have emerged that are shaping the industry’s direction. The Convenience Economy: Sometimes we call this "the Amazon effect." Consumers and residents alike are looking for the easy button. They're looking for everything from online rental listings they can scroll from their couch to online rent payment services that make paying as easy as the click of a button. Technological Advancements: Today, property managers are leveraging technology more than ever. From smart home systems that enhance resident experience to advanced, AI property management software that streamlines operations, staying abreast with technological trends is crucial. The key to staying on top of these transformations is to ask the right questions. Pay attention to general business trends. What are consumers demanding? What is new in technology that you could adapt to your business strategy? Running a property management business is just that: a business endeavor. Keep your eyes sharp on trends in commerce and get involved in the conversation of how that affects good property management. 2. Understand your ideal investors in single-family property management When diving into professional property management, just like any other business, it's essential to identify your ideal customer profile (ICP) early on. You will get so much further by "niche-ing down" than spreading your company too thin. What kind of property and client are you ideally set up for or prepared to work with? Once you define your target audience, you can then be ruthless in saying no to anyone who falls outside that definition. Here are a few ways to explore the various dimensions of property investor clients: Level of Experience: Property investors are not all created equal. Individuals get into property ownership for different reasons. You can see experiences ranging from an accidental landlord who never intended to be an investor all the way to a sophisticated or institutional investor, and every shade of the spectrum in between. It's very difficult to build a business that serves all customers across all levels of sophistication. They'll have different needs for how much education they need, how they want you to handle things, and how they want pricing to work. Property Types: You should also define what type of property you want to manage, which will help you assess if a new investor is a fit or not. We're assuming since you're reading this that you're interested in single-family rentals. But within that category, there is still so much variation. Are you looking to manage luxury homes with higher rent, lower demand, and longer vacancies? Are you more interested in workforce housing with more demand and lower rents? Or maybe you're a specialist in Section 8 housing. Whether Class A, B, or C housing, it's very hard to specialize in all property types. Sure, all SFR homes are unique, but it's key to identify the general characteristics of the homes you'd like to manage (or already excel in managing). Then, you and your team are dealing with more consistent situations. Compatibility Fit: You also need to make sure the investor as an investor fits with your approach. And we don't just mean personalities. Have a list of questions that help define what type of investor you can work with. In his podcast Owner Occupied, Peter Lohmann (co-founder & CEO of RL Property Management) talks to Marc Cunningham (President and Owner of Grace Property Management & Real Estate) about their lists, which include questions like: 1) Is the investor financially stable? 2) Is the investor emotionally stable? 3) Are they realistic in expectations? 4) Are they willing to trust us as the expert? Cunningham says his company can manage any property if the owner is right. Define what's important to you and stick to your guns. As Lohmann says in the podcast, "The easiest way to deal with a horrible owner client is to never onboard them in the first place." The goal is to filter out the people who are not a fit before you get into a contract with them. "When you're first starting out in this business, you chase everything," Cunningham says. "But as you grow and become successful, you need to slide that bar on your 'yes' and 'no' and start saying no." In short, nailing the definition of what type of investor and property you want to work with will help you find the right clients and ultimately succeed with them. You're not saying yes to every person who is looking for property management; you're looking for a specific type of customer. 3. Make sure your rental application requirements are clear Are you getting applicants who don't end up being a fit for your properties? It's possible the requirements are not clear on the listing or application. Is your advertising penetrating where it's going to reach qualified residents? Do potential applicants know what credit score they need, income requirements, and more? Of course, how you advertise and where varies widely by the market in your area. Some property managers say they would never use Craigslist, and others swear by it. Understand the market in your area and make it clear from your listings what is required to be accepted as a renter. You'll save everyone frustration with transparency and clarity. 4. Simplify rent collection and accounting processes You know the old saying, "Time is money.” It's particularly true in the rental property management game. Think about it: Every hour you spend chasing down a rent check or struggling with complex accounting software is an hour taken away from growing your business, networking, or improving other operational aspects. Simplifying your rent collection means introducing online payments, setting up auto-pay options, and even mobile payment methods. Modern residents love the ease of digital transactions. Making their lives easier often equates to faster, on-time payments and a heightened sense of trust. One way to simplify rent collection is to incentivize on-time rent payments. Second Nature’s Resident Benefits Package does just that by offering credit reporting and rental rewards to ensure that residents receive value for paying on time. As the property manager, it’s work off your plate! It's also a good idea to standardize your rent collection and use tools to support your team. New tech services like Colleen.ai and EliseAI can fully automate your rent collection communications. As for accounting, streamlined property management software solutions can auto-generate reports, offer real-time financial insights, and make tax season a breeze. By embracing these upgrades, you’re not just benefiting internally by saving time and resources – you’re showing current and potential residents that you value efficiency and are in tune with modern conveniences. The result? Higher resident satisfaction, a more enticing pitch to potential property investors, and an overall smoother business operation poised for growth. 5. Prevent vacancies with effective resident communication and engagement activities Remember when you first fell in love with your favorite coffee shop or that little bookstore around the corner? It wasn't just about the coffee or the books—it was the overall experience, the atmosphere, and the feeling of being recognized and valued. The same principle applies to a residential property management company. Resident communication isn't just about sending rent reminders or maintenance updates. It's about cultivating a relationship. Providing resident benefits, gifts, support services, and timely communication go a long way to showing residents you care about their home. Engagement programs like loyalty rewards or recognizing special occasions can also be game-changers. Looking for more inspiration on resident retention? Dive deeper into our resident retention ideas article to explore various strategies that will help keep your properties filled and your community thriving. 6. Automate single-family property management workflows Ever find yourself drowning in spreadsheets, buried under a to-do list a mile long, or juggling multiple software platforms? Surely we all have! The solution? Breathe easier with property management automation. The beauty of running a full-service property management firm in the 2020s is that there's likely a tool or system for nearly every task in property management, from rent collection to resident communication. Our best single family property management software article is a treasure trove of tools and platforms designed specifically for property managers. By implementing these solutions, you can automate repetitive tasks, reduce human errors, and free up time to focus on more value-driven aspects of your business. Think about it: a streamlined application and screening process, automated rent reminders, and digital maintenance requests—all working like clockwork without your constant intervention. Beyond the tools themselves, consider the integration possibilities. When your property management company software talks seamlessly with your accounting system or marketing platform, the result is a cohesive and efficient workflow. Need more insights into the power of automation? Dive into our in-depth automation-related articles to discover how you can revolutionize your day-to-day operations. 7. Invest in regular rental inspections Investing in regular rental property inspections isn't just about ensuring your property is in good shape—it's also a strategic move to bolster the relationship with your residents and maintain the value of your client’s investment. Here's the deal: Consistent inspections offer a proactive approach to property maintenance. They can catch small maintenance issues before they balloon into costly repairs. Got a minor leak? Catch it early, and you're saving both money and potential damage to a resident's belongings. But it's not all about damage control. Regular check-ins also send a clear message to your residents: you care about their well-being and the condition of the property they call home. It's an opportunity to foster open communication, showing residents that their feedback is valued. Moreover, well-maintained properties tend to attract and retain quality residents. Those who know their property manager is on top of things will likely stay longer and treat the property with respect. Plus, when it's time to find a new resident, you've got a spotless track record of upkeep to show off. In short, consider inspections as a small investment now that can yield big returns in resident satisfaction, property value, and overall peace of mind. 8. Create a referral program to increase your portfolio Word of mouth? It's powerful. And in the property management game, it's gold. Imagine this: your current clients, satisfied with your stellar services, singing your praises to friends, family, and colleagues. Now, what if you could incentivize that process? Enter the referral program. Happy real estate investors are your best brand ambassadors. They've experienced firsthand the quality of your management, and their endorsement carries weight. So, why not reward them for bringing in new business? A referral program can do just that. Start by offering incentives. For your investor clients, perhaps it's a discounted management fee for a month. The point is to offer something tangible that'll get folks talking and referring. But there's more to it than just the direct business benefits. A referral program demonstrates that you value the relationships you've built. It tells your clients that their trust and loyalty don't go unnoticed. Lastly, an added bonus: with every successful referral, you not only grow your portfolio but also create a network of investors who are invested in your success. It's a win-win, driving growth for your business while strengthening the bond with your current clientele. 9. Find new investment properties and pitch them to your current clients You're already managing a portfolio of properties for your investors, ensuring they get solid returns and have few hassles. But here's the question: What if you could amplify those returns for them and simultaneously grow your business? Actively seeking out new investment properties is more than just scouting real estate; it's an art of opportunity. By identifying lucrative properties that align with your investors' strategies, you're essentially providing them with golden opportunities on a platter. And guess who they'll want managing these new assets? That's right, you. When you present these potential investments to your current clients, it accomplishes a few things. Firstly, it reinforces your role as a trusted partner in their financial journey, showing them that you're proactive and always on the lookout for ways to amplify their wealth and boost their cash flow. It's not just about maintaining what they have; it's about growing it. Secondly, every new property they acquire based on your pitch naturally expands your management portfolio. This approach helps scale your business, fostering client trust and loyalty along the way. Remember, in the property management world, being static isn't an option. By constantly seeking growth opportunities for your clients, you're also carving out a pathway for your own business's expansion. 10. Invest in marketing activities for short vacancy cycles Imagine a prime property in a stellar location, decked out with all the bells and whistles...sitting vacant. The eerie silence echoing in those empty halls isn't just the sound of missed opportunities – it's also the sound of revenue trickling away. Maybe that was a little dramatic. But the real estate game is as much about visibility and appeal as it is about bricks and mortar. The quicker you can get a property off the market and into the hands of a reliable resident, the better for everyone involved. This is where strategic marketing steps in. Investing in a robust property management marketing strategy does more than just showcase a property; it strategically positions it in front of the right eyes. With targeted campaigns, engaging visuals, and compelling copy, you can ensure your property doesn’t get lost in the sea of listings. Use social media, virtual tours, and local advertising to create a buzz. Moreover, effective marketing helps paint a lifestyle. When potential residents can visualize themselves in a space, they're more likely to take the leap. By consistently shortening vacancy cycles through effective marketing, you not only ensure a steady revenue stream but also enhance your reputation as a go-to property manager who gets results. In essence, marketing isn't an expense; it's a pivotal investment. It's the bridge that connects empty properties with eager residents, ensuring your business always stays on the move. Increase revenue from your SFR property management business with Second Nature Optimizing your single-family property management business is not a one-size-fits-all solution. From engaging with the right investors to fine-tuning marketing endeavors, the path to success is paved with multifaceted, dynamic approaches. But the key to it all is creating a better experience: for residents, investors, and your property management team. That’s why, at Second Nature, we’ve built a Resident Benefits Package that supports SFR property management businesses. Each benefit is designed to meet resident needs and investor priorities while taking work off your team’s plate. In the dynamic world of SFR property management, adaptability and efficiency are kings. With Second Nature by your side, you’re not just keeping pace with the industry; you’re setting the benchmark. So, as you work towards crafting a business that stands tall and resonates in the market, remember: Your success is our second nature.

Calendar icon October 31, 2023

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