The Property Management Show

Growth Opportunities: The Iceberg Report Right now in the United States, there are about 22 million single family rental homes and multi-family rental properties that have up to four units. Out of these, 14.3 million, or 65 percent, are self-managed by the investor or landlord. This offers a vast opportunity to the 32,000 small or mid-sized property management companies. There are a lot of social and economic factors that keep rentals in high demand. Over the next five years, about 8 million single family rentals will come into the professional management market. The opportunity is clear, and to take advantage of these opportunities, it’s important and necessary to establish trust between property managers and landlords and investors. This is one of the divides that’s keeping property managers from growing and acquiring new business. To effectively win all the new business that’s available in local management markets, property management companies need to demonstrate their value and give landlords and investors who have been managing on their own a reason to trust that their properties are better off with professional management. Tony LeBlanc and the Need to Establish Balance Any problem in an organization can be traced to the top. If the leadership is off balance, the team will never reach its potential. The CEO’s mood or the director’s attitude affects the team. Tony LeBlanc is a successful property management entrepreneur, and he made the choice to balance himself and his team to achieve better results. The business is growing and thriving because of his efforts. He spoke to Alex about the need to balance personal and professional goals, and why it matters to property management executives. Tony is from New Brunswick, Canada. He owns and operates a property management company, Ground Floor Property Management, with three locations, and he’s been in business for eight years. He was born into the field; as a child he lived in a building where his mother was the resident property manager. Tony worked in the technology field after college and began investing in real estate. Then, he got back to property management and built a company that went from 0 units to 1,000 units in two years. Advice for Fast Growth: Call Everyone This type of fast growth came from calling everyone he knew. Tony called all the Realtor friends he worked with previously and used his relationships and connections to quickly establish himself. There was a snowball effect from picking up the phone and letting people know he was in business. Property management is a people business and a relationship business. It’s hard to earn new business sitting in the office. Go out and meet every Realtor in town and anyone associated with the rental business. Connect and create relationships to increase the amount of business you’re doing. Fourandhalf note: We were at the recent Inman Connect San Francisco 2017 – Real Estate Conference, where high-powered real estate agents meet to stay ahead of the industry. Of the real estate agents we spoke to, the majority of them did not have a relationship with any of the property management companies in their community. It is important for property management owners to be aggressive in conveying their value propositions to people like real estate agents, where there is a great opportunity for a mutual partnership. Sponsor for Today’s Podcast – NARPM Balance and Confidence – Define Your Property Management Purpose What does it mean when Tony says the property management industry is off balance? When you study this industry, you see a lot of the same trends. It’s chaotic and stressful and busy. There’s a lot of negativity associated with the work, and that negativity often comes from the property managers themselves. There is a lot going on at once in a property manager’s day. Everyone knows it’s stressful. But, if you’re in a position of weakness – either you’re having issues at home, or your health isn’t where you want it to be, or you’re not connected to yourself spiritually – you won’t be clear about where your business is going, and the stress and the chaos that comes with an average day will be magnified. You need a purpose to what you’re doing, and if you don’t have that purpose, the daily grind is going to be much harder to endure. Every day that you come into the office, you need to know where you’re going and why you’re doing what you do. Not only do you need to know that – your staff and your team need to know that as well. Everybody needs to be aligned with what all this is for. Tony has a two-year roadmap that he shared with his team and a list of goals and opportunities that he wants to achieve. But, the statistic that resonated with them more than anything else is this: Last year, Tony’s team housed almost 2,000 families. That’s the purpose that will balance and motivate a team; knowing that 2,000 families have relied on them. Well-balanced and empathetic property managers will understand that people are counting on them to take care of their homes, their futures, their safety, and the place that their children grow up. You cannot take the real–life part of this job for granted. Property management includes a lot of pushing paper and conducting move-in inspections and taking calls, but the purpose is to provide an exceptional experience for everyone you come across. You’re protecting an owner’s investment and helping tenants feel comfortable in their homes. Building a Trust Bridge Between Tenants and Owners This may remind you of the podcast conversation with Lisa Wise, who advised leading with empathy. A lot of property management entrepreneurs think of tenants as a necessary evil. They mentally set up an adversarial relationship with these pesky entities who are only good for paying rent. If you change your thinking, you change the way you provide property management, and you change the experience for everyone who works with you. Property management shouldn’t be a tenant-versus-owner dichotomy. Your business cannot be all about the owner, because if you cannot keep good tenants in place, it doesn’t matter how many new owners you start working with. You won’t have tenants to fill their properties. Taking care of tenants is just as important as taking care of owners.    This is part of the trust bridge that the property management industry needs. Policies and systems are critical, but empathy is absolutely necessary. There are a lot of different ways to say no. You can say no and still be helpful. If something doesn’t work between you and a tenant, leave them with an out and be sure to end the relationship on a positive note. If you live in a small community, word spreads fast through other tenants and property managers. Leading with empathy will build you a better business. Routines and Rituals: How to Start Balancing Personal and Professional Goals Personal lives always bleed into office lives, and balancing the two takes some work. At home, Tony has a protocol in place, which starts with waking up at 5:00 in the morning and taking care of himself and his personal priorities. He works out, drinks a smoothie, and takes the time to write appreciative notes to his children and his girlfriend. Then, he meditates and journals and reviews study material that’s relevant to his business and his professional goals. All of this is done in what he calls his morning power hour. His day is moving on a positive note before his children are even awake. At the office, the day begins with a morning huddle with his staff. Everyone gets together to review the previous day. This puts everyone on the same page and ensures the whole team is aware of any new notices, new maintenance emergencies, and new applications. Then, each team member has the opportunity to define their number one priority for the day. It might be collecting rent or making deposits. The leasing agent might have a good lead. Everyone is calibrated and ready to start the day.   Jim Kwik, a renowned mental coach, talks about the need for routine, and how a healthy brain needs one ingrained. Most people don’t have this, and it sounds intimidating when you hear about the discipline that someone like Tony possesses. Don’t be intimidated – just be willing to start somewhere.    Pick one or two things that are weakest for you and where you get the most value. Start there, and if you can build a routine with just those one or two things, they will become intuitive and instinctual, and part of your everyday life. Then, you can start incorporating more things into the routine and it will be manageable. So, if you’re thinking your health is where you’re weakest and you value being able to live a longer, healthier life – make a visit to the gym a part of that morning routine. If you can’t get a whole workout in, give yourself the opportunity to sweat hard for 10 minutes. This is a matter of taking an assessment of yourself and being real. Find that weakness and start with something simple. Healthy Leader/Healthy Staff: Centering Your Team Tony admits that sometimes his own routine is a bit over the top, and a little aggressive for most people. He doesn’t expect his team to be just like him, but he does tone it down a bit and offer tips and advice that everyone can apply to their lives. Office discussions will include fitness and nutrition and relationships. Many people have kids, and he recognizes the importance of having real conversations. There’s nothing superficial about the growth and balance that he wants to achieve. Tony is willing to ask deep questions, and he creates an environment where his team feels safe answering those questions.   The team huddle sets the tone for the day and centers everyone. From that, other things are put into place to protect that sense of balance and healthy behavior.   For example, the office hours are 8:30 to 4:30, but the doors don’t open to the public until 9:30. That gives the staff an hour to catch up and prepare. On Friday afternoons, the office closes at 1:00 for training sessions or catching up and preparing for the week ahead. Focusing and planning for the next week is a big component of the business. Those Friday afternoons are critical because everyone can decompress and wrap up from the week.   Using Gamification in the Pursuit of Balance and Success Gamification can help with motivation and accountability. Something as simple as awarding yourself points for the things you accomplish can provide a way to track your progress and feel good about what you accomplish. Tony calls his morning routine the Core Four. There are four major areas he’s touching, and he wants to do two things in each of those areas. So, he can earn up to four points per day. His goal is to reach those 28 points per week. Every Sunday night, he reviews his week and determines what happened if he didn’t reach that goal and what he has to do to correct the course for the following week. The same thing applies to his professional routine, which he calls the Key Four. Every Sunday night or Monday morning, he plans four major tasks that he needs to accomplish that week. Maybe his 90-day goal is to increase revenue by a certain amount. He breaks out his benchmarks and his targets and he establishes those four tasks every week that will get him closer to that revenue goal. Making it a game is a tactic that’s fun and simple and accountable. Consulting, Coaching, and Personal Development It’s easy to dismiss personal development and coaching as schemes designed to separate successful people from their money. However, the right coach or the right book or the right community of like-minded people can change your life and alter your path. For Tony, it was realizing his software job was setting his life off balance after he read The Monk Who Sold His Ferrari by Robin Sharma. That is when he became more interested in personal development. This is a world where it’s hard to figure things out on your own. Having a community or a coach who can challenge you to think differently and expect more from yourself makes an enormous difference in your balance and your ability to achieve success. Most people out there, professional athletes included, need a coach. You need someone to push you through these things. As a property manager, do yourself a favor and give yourself a break. You need to bestow permission upon yourself to live a great and balanced life. Property management doesn’t always feel like one of the best industries out there, but it is. Property managers are doing work that matters. It’s becoming more mainstream, and to get to the next level, property managers need to be professionals. Be accountable with yourself and others, and find your balance. If you have any questions about what Tony and Alex have talked about today, please contact Fourandhalf.   The post How Property Management Leaders Can Achieve Better Work-Life Balance appeared first on Fourandhalf Marketing Agency for Property Managers.

According to the Iceberg Report, right now in the United States, there are about 22 million single family rental homes and multi-family rental properties up to fourplexes. Out of these, 14.3 million, or 65 percent, are self-managed by the investor or property owner. This gives a vast opportunity to the 32,000 property management companies competing for the business. By contrast, in Australia, about 70 percent of similar properties are professionally managed. If the United States follows the Australian model, there should be about 8 million single family rentals coming into the professional management market over the next few years. Property managers can double their business by default. But – there will be a lot of consolidation in those 32,000 management companies, and the best companies will get most of the business. One of the biggest problems in the property management industry is the lack of trust between landlords, investors and professional property managers. A large portion of that potential market doesn’t see the value in professional property management and there needs to be a bridge – one that places a focus on customer experience. One way to bridge this divide, improving the customer experience, is to implement a high performing team framework. A framework that results in an engaged team with a true career path, a team motivated to work with clients at a level that is otherwise impossible to achieve. To date, the real estate business industry has been ignoring fundamental concepts like this when it comes to developing motivated, engaged employees and getting better results in both customer service and employee and owner retention – with the profitability that comes along with it. The customer experience needs to be improved for both property owners and tenants, and the best way you can do this is to empower your team. Happy employees make happy customers who make happy shareholders. Our guest today, Adam Hooley, has been in real estate all his life and has worked in many corporate environments. Along the way, he picked up some good habits concerning how to manage teams and has brought those tools to bear, helping property management companies change the way they do things. Adam recently spoke about the framework of a high performing team, and he has a lot to share. Property Management Structure: 3 Ways Companies are Currently Organized Two main business “frameworks” currently exist in property management company structures: the portfolio framework, and the task framework. The portfolio framework is one property manager taking care of all aspects of a portfolio of properties from start to finish. That one manager is responsible for leasing, property inspections, maintenance requests, inspections, and contact with tenants and owners. The portfolio system can be more efficient, but if one property manager leaves, you lose a lot of knowledge and information about the portfolio that was managed. That’s a huge drawback, especially if there isn’t a clear path to advancement for experienced employees, causing them to leave you. The task (or departmental) framework is putting individual staff members in charge of specific areas for all of the properties the business manages. There will be different people in charge of leasing, inspections, maintenance, owner and tenant contact, etc. This large number of possible contacts can create confused owners, confused staff, and a loss of efficiency. Again, neither of these frameworks provide accountability or career paths for excellent performers. In the U.S., there’s a third system, which is a hybrid of the two. In the hybrid system, there is one property manager in charge of a portfolio, who has significant support from other property managers and others who handle maintenance, inspection, late notices, and other tasks. The hybrid system is probably the best system if you had to choose out of the three frameworks – but we’re going to give you a better option. Why It’s Time to Rethink Your Property Management Company Structure We understand it’s a lot of work to restructure a team and rethink their job descriptions. But, this alternate departmental structure solves a few key problems. For one, it provides a holistic view of your business for employees and prevents people from working in isolated parts of the property management business structure, without seeing the overall picture. For another, recruiting, retention, and turnover are issues all property management companies face. One of the ways to fix this is by providing an upward career path, which this framework includes. You’ll find that when these issues improve, customer satisfaction and experience improves. This provides a higher dollar value for each customer, as you’ll keep them longer. This also means you can spend more money to acquire customers. You’ll get a more sustainable staff, eliminate the costs of the hiring process and training, and achieve more engaged clients because there’s a consistency in service. Introducing the New Property Management Structure: The Squad System The new framework is a squad system; it’s still a team structure, but the important difference is that there’s a hierarchy. Staff at the entry level roles are called property associates. Above this is the property manager role, which is someone who does most of the day to day management. At the top of the squad, there’s a property manager executive. Everyone works closely together and everyone has a role in each task. For example, the property associate may run and analyze reports to see which tenants are late with rent. The property manager will handle serving notice to the tenants. Then, the property manager executive will deal with any escalation, such as evictions or terminations. A hierarchy is in place and the organizational chart is clear. The property manager executive also takes on a leadership and mentor role. It’s a way to feed knowledge down into the squad so junior members of the squad develop along their career path. The property manager executive also takes on the accountability role. They make sure their team is on the same page, working efficiently, and has the tools to do their job. If someone from a squad leaves, you still have two people in the squad, so the portfolio knowledge doesn’t get lost. You can move the associate up to the manager role if the manager leaves. This protects your culture and keeps everything glued together. It attempts to solve the problems of the old system. Roles in the Squad System Property Associate. This is the junior role. It’s designed to let a person learn and progress. This is an entry level role that can be nurtured and trained. The employee relieves some of the pressure on the property manager, but the key here is the learning. With a clear career path, the company can get the associates to embrace their culture. It’s not just an assistant role. It’s about growing to benefit the whole company. Property Manager. Most agencies understand the concept of what a property manager does. Their core function is to manage the portfolio. So, the person in this role will be skilled in all property management tasks. They are the workhorses of the squad, and the foundation. They do a great job.  Executive. This is the senior role who will be someone good at managing the escalated parts of property management. The executive takes care of conflicts like overdue repairs, late rent payments, and managing the owners. So in the squad structure, the property manager and the executive handle the owner relationship and the property manager handles the tenant relationship. The brilliance of this framework is that it keeps everything efficient. If the property manager leaves for six weeks, there doesn’t have to be panic. This is what the squad is designed for. Everything will stay up to date and operational because the associate and executive are handling it. When the property manager comes back, not one phone call was missed and not one email was ignored. Property managers can come back to a clean desk. This is where it excels. Key Performance Indicators and How to Measure Success for Your Property Management Business There are three things to keep track of so you can measure the impact this structure has on your business. These are: Customer facing measurements, so you can make sure you’re delivering on what you promise. Team measurements so you know if your team members are doing what they’re responsible for. Financial goals. Net Promoter Score, is really important. It measures what your customer is getting from you. You’ve encountered it before; it’s the classic “one question” survey: “On a scale of 1 to 10, how likely are you to recommend our service?” A lot of companies are good at measuring what they deliver. But, you have to measure what the customer is getting and whether it matches what you promise. You’re measuring customer service. You can use any survey you like but we find that you need a benchmark so you can learn and grow from those measurements. NPS offers a benchmark. Key Performance Indicators, or KPIs need to be numerous. A good property management company will have at least 10 core KPIs. They should measure everything from lease expirations to defaults to inspections and overdue invoices. These measure how your business is operating. You can identify quickly where things are going well and not going well. If a team member is veering off track, you have the KPIs to show you the problem. Maybe it’s a personal problem causing neglected work, or maybe there are improvements that can easily be made. Champions are important. If you find a team member who is really good at something, that’s the person who trains new team members in that area. Maybe your measurements show that someone is really good at rent collection. You’ll recognize that and put that team member to work improving another team member’s ability to collect rent effectively. Instead of firing a staff member who isn’t performing, you can identify where the problems start, and improve those areas. In those cases, you can engage your staff and give them support. Team KPIs are as important as individual KPIs. It makes sure the business structure and team is efficient. This is a good way to move from a reactive business where things are chaotic to an efficient business where you have more time to do team lunches and build your culture. The property manager executive is responsible for compiling numbers and tracking KPIs. This is helpful to the business owner because the owner cannot be involved in everything. Reputation tracking can be an easy and efficient alternative to NPS. It’s a simple and accurate way to measure impact on customer experience. You just measure your reviews. If you do reputation surveys, you can find your average pretty easily. Take your benchmark, restructure, and see what the impact is. You can validate customer reaction. How to Implement the Squad Structure A lot of people may grab this and run with it, but you don’t have to start over. You don’t want to fire your team and start with new people. Instead, bring your existing team on board and decide who you can move around. Talk about who is performing better than expected. Take advantage of the climate and leverage off that. You always have those property managers who just want to do property management, but you may have a leasing consultant who has always wanted to do more. Dynamic things are happening in every business. Channel that. Instead of uprooting everything, leverage off the current assets of the business. Plan this out in advance. Restructuring means opportunities, and some of your team members will want to be involved. Others may not. If you want a high performing team, you want the team you have to be on board with you. If they aren’t, let them go somewhere else. Plan ahead, engage the team, and you’ll see progress over a period of time. If you’re a smaller business just starting out, you can build these into your business immediately. The property manager is the role to focus on. It’s the core role to build into the property management company structure first. The right person in that role will grow your business. Then, look for the associate and start protecting the property manager role so someone is in place if your property manager leaves. As your business grows, create the executive role and move everyone up. The manager becomes the executive and the associate becomes the manager. Then, you can recruit for a new associate. The culture evolves into what the team creates. There are different ways to do this depending on local market and the size of your business. It can take some time, but it may be natural to the company and can be done quickly. Most of what Adam talks about comes from a book called Building Blocks, published by Ben White. It is 450-pages of high quality, engaging content on building out a great property management team. If you have any questions about what you’ve learned today or ready to get started in marketing your property management business to receive more owner contracts, talk to us at Fourandhalf. If you liked this article, you may like these as well:  How to Restructure Your Property Management Department and Satisfy the Savvy Client Empathy’s Impact on Growing Nest-DC What if Property Management Companies Recruited Like Tech Startups? The Property Management Show is brought to you by Fourandhalf. We help property managers strategize and implement marketing plans that bring in owner leads. Get a free marketing assessment to find out how to start getting better clients into your portfolio. CommentsThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY The post The Framework of a High-Performance Property Management Team with Adam Hooley of Apmasphere appeared first on Fourandhalf Marketing Agency for Property Managers.

Our guest today is Kasey McDonald, who trains Business Development Managers (BDMs) in Australia and here in the United States. She is a consultant for the BDM Academy, which helps property management companies grow and scale, paying special attention to sales.The topic we’re discussing today is how you can support your business development manager so that you can scale your property management business. Without a proper sales system and salespeople, a business will never grow to where you want it to be. In the U.S., it’s a huge area of opportunity. Kasey has been a BDM herself, and has over 19 years of experience and knowledge in this area. The Role of a Business Development Manager The role of a good business development manager is to bring new management accounts and be responsible for the complete sales cycle. This is typically done through different methods like handling telephone calls, building referrals, creating newsletters, and hosting workshops. You’ll need to be clear as to what the expectations are for any BDM that you hire. You need someone who: is organized possesses great time management skills can prioritize and delegate has fantastic sales knowhow has networking skills and most importantly, has the right attitude. Attitude is important. You can train skills, but you cannot train an attitude. If you are able to find someone with these qualities, then you will have the archetypal business development manager on your hands. If the BDM understands the direction and expectations from the business owner, you’ll get great growth, as long as they are dedicated to the process. Two Common Mistakes Owners Make When Hiring Business Development Managers Before starting on your search, be aware of two big mistakes people make when hiring and training a business development manager: First, owners employ a BDM before the business is ready. You have to analyze and assess your business. Otherwise you could think you’re growing, but properties are actually going out the back door because you aren’t providing the level of service that you need to provide. Make sure you know and understand your business and what you can take on. Have the processes, systems, and a database in place. The second mistake is not looking at targets and keeping the BDM accountable. Some business owners will employ a BDM and just let them go, leaving them to their own devices. No one is checking in or monitoring performance or keeping them accountable. Then, there’s no growth and no one knows why. You need to make sure that you keep your BDM accountable and sit with them regularly to review targets. In order to have success with a BDM, do your best to avoid these mistakes. Strongly consider the direction of your business. This means knowing what kind of income is being generated, and how much it costs to manage those properties. With this information, you’ll be able to work out incentives for your BDM as well as the Key Performance Indicators (see: Property Management KPIs) and goals. Once you have realistic goals and targets for your business, from there, you can go through individual activities that you want your BDM to handle. When Should You Hire a BDM? Kasey decided her business needed a BDM when she was at 50 or 60 properties. At that point, she herself moved from the role of property manager to the role of BDM, and hired a property manager so she could focus completely on this part of the business. It accelerated her business quickly, allowing her to add 127 new properties in a year. Where Do You Find a Good BDM? Look at your existing business. Depending on your size, you might already have a staff member in place who would make a great BDM. Maybe that person is not performing well on a sales team or property management role, or they are struggling slightly in what they are currently doing because their skill set is different. Look outside of the real estate industry. The hospitality industry is a great example; you always find great waiters and waitresses who have amazing communication and customer service skills. Deniz Yusef mentions that bank tellers are also a great place to source talented individuals. Ask them if they’ve ever thought about a career in real estate. Your BDM needs to effectively communicate with clients and deliver outstanding service. Tasks for a BDM When Starting Out As mentioned earlier, you need to be clear as to what you expect out of your BDM, or you and the BDM will find this to be a frustrating experience. When starting out, hone down what your priorities are for the first three months and then six months after that. You can even take it further and decide what to focus on in the first 30 days. These are a few things that you can have your BDM start out doing: Make sure the services you’re currently delivering are outstanding. That would be a specific task for the BDM because you don’t want to grow your business while losing business. Make sure your clients are happy with your team. Then, those conversations can lead to asking if there are other properties that need management, or if there are referrals that can be made. The Five People BDM’s Must Know Relationship building is vital to a BDM’s role. Once your BDM gets some familiarity with your company and its services, have them focus on developing relationships. There are five types of people that every BDM should network with: A BDM’s first priority is to develop relationships with existing clients and tenants. Connect with your existing database of owners AND renters. A lot of property managers don’t treat tenants as opportunities. Spend time with the company’s RE sales or property management team. Attend sales meetings to understand listings. Form a connection with other local sales agents, too. Form those relationships. If you send your BDM to other local sales offices, you’ll have a presence that will help you build your database of prospective clients. Maintain relationships with former owners. They may not be working with you right now, but perhaps they’ll have a need for you in the future. They might eventually buy another property, or maybe they’re making plans to invest again. Your BDM needs to be available to them. Pound the pavement by reaching your neighborhood. Put flyers around the neighborhoods you want to work in. Saturday mornings are a great time to do this because people are out and there’s more activity. If you recently leased a home, let people in the neighborhood know what you leased it for and how quickly you got it rented. This will put your BDM in touch with potential clients and get new opportunities in areas you’re already serving. Develop relationships with the professional services industry. These include accountants, financial planners, tax professionals, and insurance providers. They can add value to your clients, so you can have them speak at webinars, seminars, and other educational events. Your BDM can work on these referral relationships that bring clients in. At a certain point, the BDM role needs to be consistent in sales and activities. Next, we’ll go over the strategies that you can use to set your BDM’s up for success. Three Prospecting Strategies for BDM’s Having a personal brand, meeting new people, and attending networking events helps immensely, but to become a good BDM, prospecting is the main activity. They have to be comfortable picking up the phone and making those calls. They’re speaking to people they have never spoken to before. This is what property management company owners should expect from a BDM. When hiring someone for this role, consider that skill. Below are three proven prospecting strategies for BDM’s: Reach Your Prospects with an Hour of Power Prospecting doesn’t have to be uncomfortable, and there are some great methods for this part of a BDM’s role. Consider doing an hour of power, where the BDM stays late one day a week with your sales team calling your database of prospects. Have them talk to owners about whether they have any rental properties, and be willing to answer any of their questions. Make sure the BDM asks probing questions, talks them through investing in properties or tells them what happens in the process of finding a tenant. Then, at the end they can offer an appraisal. If you’re an information provider and not just giving them a sales pitch, you’ll get a better response. Provide Value with Workshops Have your BDM’s invite people to a workshop that provides information and education. Owners will be willing to spend some time learning, and this can be used as an opportunity to build a database of useful contacts. This is more comfortable than a sales phone call because you’re being helpful. It’s always a good idea to have regular seminars or webinars as those prospects will see you as the bonafide leader in the area. You’ll find the closing ratio is fantastic. Related Reading: How to Set Up Investor Meet-ups with Douglas Skipworth of CrestCore Realty Connect with Vendors By Hosting BBQ’s If you want to develop a relationship with vendors and contractors who can bring you more business, host a barbecue once a month or once every quarter. Kasey did this with the tradespeople she was already working with. She’d encourage them to bring other people, and she’d provide beer and food. It provided networking opportunities, and she’d have about five minutes to introduce herself and talk about her business. She was able to obtain new business directly from the people she worked with. This is a great way to build a referral network and establish new relationships. Three Ways to Measure and Track Success Measuring and tracking success is important because results are what you want all that work to produce. Look at breaking down your KPIs and setting specific targets: Maybe you want your BDM to connect with 10 people per day. If the target is to have those 10 physical conversations per day, they will likely have to make 20 to 30 phone calls since people will not be available and messages will be left. Look at how many people were added to the database and what kind of opportunities are present. Figure out what kinds of listings and appraisals came from the BDM activities. You want to determine how effective the calls and activities are, and if the goals are not being achieved, why not. Look at how many management agreements are signed and how many listing presentations are made. If the numbers seem low, figure out why those achievements didn’t happen. Talk through the activities with your BDM and find out what is preventing him or her from getting in front of people. Key to Success: A Good CRM A recurring theme for BDMs is their database of leads. A lot of people miss opportunities if there isn’t a good system in place. All the work that’s being done gets devalued if you’re not staying in touch with people. Follow up with individuals in the database. Track the letters you send through the mail and make sure all activity goes in the database. Track the newsletters you send every month and the seminar invitations that are sent out. There should always be some touch point. Tracking activity is crucial, so you need a Customer Relationship Management system (CRM) to track your activities. Without a CRM, you can’t track anything. Track and document everything so you can accurately assess the performance of your BDM. You need to know what’s not working as well as what is working. You need to start building a database of leads and building a sales process even if you don’t have a BDM yet. Maintaining a list of contacts is crucial to your business. Note: LeadSimple and Fourandhalf have partnered to deliver this service to property managers. Click here to learn more on how we can help your property management company. Final Words Please feel free to contact Kasey at BDMacademy.com.au. Hopefully, she will be at the U.S. to teach a session or two at the PM Grow Summit. If you have any questions about what you’ve learned today, talk to us at Fourandhalf. To receive updates on the latest episodes of The Property Management Show, be sure to subscribe to us on iTunes.  Get tips on how to handle the complete sales process for an incoming owner lead with our free eBook The Art of Winning the Sale! Recommended Follow-Up Reading:  How to Compensate a Salesperson for Your Property Management Company How to Qualify Property Management Leads The post How to Hire, Train & Succeed with Property Management BDM’s appeared first on Fourandhalf Marketing Agency for Property Managers.

Two guests are needed today because our topic is complex: attracting and retaining top talent for your property management firm. The specific challenge is that, according to Forbes, 60 percent of everyone in commercial real estate services will be at retirement age in the next five years. Even if you are a single-family residential property management company, are you attracting younger talent to your company and to the industry? There needs to be a shift from hiring people who just want to make ends meet, which is transactional and creates turnover, to hiring professionals interested in growing in the industry. The guests today are Joe Killinger and George Pino, who are experts in this field. Two sponsors make this show possible: NARPM, the National Association of Residential Property Managers, and PM Grow Summit, the annual educational summit for growth-minded property management entrepreneurs. Introduction: Joe Killinger and George Pino If you visit therrd.com, Joe and George provide resources for real estate services and the property management industry. There is tenant screening, property and renters’ insurance, and other tools. It’s useful for property managers and individual investors. Like many successful Property Management company owners, Joe and George got into the industry by investing in properties themselves. TheRRD is meant to help property management companies build better communities. They understand the challenges of managing properties both as individual investors and as property managers. State of the Job Market in the Property Management Industry A lot of times, the starting pay is pretty low in property management. The numbers are tight and lean, and you won’t necessarily retire on property management unless you get to a large size. Typically, the property management industry tries to recruit people at low income levels. Employee turnover is high, and often they have no interest in growing. They are happy where they are. In order to combat this, there needs to be a fundamental shift of hiring people who are interested in the field as a career rather than people who just want to make ends meet. Turnover costs money. When you lose someone, you have to train someone new and hope they will work. Property management is not a sexy career, so you need to reframe how you’re presenting the opportunity if you are looking for people who are looking to grow. Overcoming the Challenge of Better Recruiting Property management may not be sexy, but the real estate investor is sexy. Plenty of coaches are teaching independence through real estate investing. You can connect that to hiring employees for the property management field. You can position your job offer as learning to become a smart investor on someone else’s dime. People can learn the whole industry this way, from leasing to management to identifying investment opportunities. Go after and look for people who are motivated by something other than a paycheck. Consider reaching people who are interested in property management because they want to become investors. If you can offer them an opportunity to learn how to be a better investor, how to save money, and how to learn from the property management mistakes that have already been made – you will find some great talent. They may not realize it at the time, but there is also the potential to shape the landscape of real estate. On the residential and commercial sides, you can build communities. What a property manager puts forward and how they interact with tenants and owners is reflective of the community at large. A bad property manager can pull an entire community down. How to Develop an Intern Program An intern program can work very well. Interns who start with you and learn with you tend to stay on for the long haul. They might start with tasks around the office and some leasing, then they can grow. Get to know high school guidance counselors and talk to them about property management and the growth opportunities you offer. Talk about how careers in this field can affect the community. Reach out to small colleges, and you can get some candidate referrals.   An internship program is the top of the funnel. It’s as simple as having your intern do some business development database management. You might structure your internship to be during the summer months, these can be college kids who are graduating or beginning their senior year. It starts as a daily grind and if there’s interest, you can give them additional opportunities. Someone with a yearning for knowledge is a good indicator for talent you want to keep. Have them show vacant properties or work on marketing. They can also put together ads and review information on properties as they update them in your system. From there, they can progress even further. Usually, internships are unpaid because they are gaining knowledge and experience. Sometimes, you can pay for some living expenses, but it’s not typically a paid position. You can extend an offer of employment after that, and perhaps they’ll start as an assistant property manager. They can handle leasing, work with properties, and learn bookkeeping. Have new employees do different things and make positions interchangeable so they can learn the whole of the industry and not just one part of it. This also helps when you have vacations and time off to cover. Investors can benefit from working with smart people straight out of college. These new hires have recently learned about finance; everything from mortgages to how to leverage funds. Show the employees that increasing income and keeping expenses the same will contribute to the exponential value of a property. Give them opportunities to see how that works. Give them the freedom to learn on the job. Let them hang out with maintenance guys for a few days and attend investor meetings. The goal is to show them how to connect what they’ve learned with what you do. Lead with education and information. Statistics have shown that 80 percent of residential real estate is self-managed, and over 75 percent of investors own only 1 to 4 units. So, bringing talent in right out of college and exposing them to the day to day of real estate investments with your clients is a brilliant strategy for maintaining their interest.   Word from Sponsor: NARPM NARPM has two specific designations for property managers – the Residential Management Professional (RMP®) and the Master Property Manager (MPM®). If you haven’t put yourself through these classes, you are missing out. Some of the most successful property management entrepreneurs have their MPM. These are the professionals who are always leading the pack in innovation, people, and technology. Go to NARPM‘s website to see the requirements for those designations. Maintaining a Great Culture for Retention Now that you are able to get some good, qualified talent to work for your property management company, the next challenge is to retain that good talent, so they stay with your company for the long term. Here are some tips that Joe and George recommend: Make it a Great Place to Work You’ll need ideas to keep everything engaging. If you’re going to engage and go after younger generations, you have to make it fun. It can’t just be a dungeon where people are sitting in the office typing all day long and calling tenants who are late with rent. You can learn something new from creating the right culture and space. In property management companies, you might still see the floral couches from 30 years ago and the same dusty ficus tree in the corners. Younger generations will not want to be around that every day. Make your company a destination smart people want to be. Give Employees Freedom You can create games and challenges, or give employees a paid day off to volunteer at a local charity. This is what freedom looks like to people, and creating freedom retains good employees. Keep communication open, and invite comments and suggestions on what could be done better. Treat Employees as Your Clients Treat everyone the same way. The way you speak to an intern should be the same way you speak to a client. Always be ready to listen, even if you hear horrible ideas. Treat everyone equally and with respect and ask why when you’re communicating or discussing ideas. It helps your new employees feel like they have the freedom to express themselves.    Stay Up-to-Date With Technology Always keep up with technology. Be efficient or you won’t attract young, progressive people. There are efficiencies you can create and use and embrace. It will help your business grow and attract the best people. Check TechCrunch and see what you can use of the tech that’s coming out. You’ll be amazed and you don’t want to be afraid of it. Technology is a big part of recruitment and retention. Have Room For Growth Also, make sure there’s room for growth, and show your employees there are opportunities within your company. It goes back to having these employees learn the whole of the industry rather than focusing on just one aspect. Word from Sponsor: PM Grow Summit The PM Grow Summit is the property management conference for entrepreneurs. Our 2018 summit is coming in January, and it’s for business owners and teams who want to grow. It’s in San Diego from January 31 to Feb 2, in the Gaslight District. For the price of attendance, you’ll receive education, meals, coffee, snacks, drinks, entertainment, networking, and a recording of all talks and corresponding notes.  This conference removes distractions and barriers and helps like-minded individuals learn from each other and from top speakers. Check out www.pmgrowsummit.com. Property Management Compensation That Benefits Everyone Performance compensation is important, and it starts with everyone in the company being in business development. You want to empower your team members, even the maintenance guy, to bring in management business. They should be compensated for that. You can also provide bonuses for portfolios and how they’re performing. Since this is a service industry, you’ll want to encourage good service too. Providing a bonus when you get positive feedback from a client is a good way to show that service matters to you. You want smart managers to provide good service.   Experiment with your own way of providing bonuses, and align it with the company’s growth, direction, and objectives. Remember that experiences are just as good as money. Instead of holiday bonuses, treat the employees to something special. That takes more effort and time because you need to know what they want or need. You can do something they wouldn’t normally do for themselves. No one will remember how much money they have in the bank but they will remember the amazing trip or the great dinner or the special gift. Can Profit Sharing Work? If you’re buying properties and working with investments, you can provide for potential real estate investors. It gives your employees a different perspective. Even if there’s just a small ownership stake, it’s not someone else’s money they are managing, it’s partly theirs. So limited partnerships can be useful. When employees can have an ownership interest as a limited partner, you have a unique way to compensate them. The idea is to buy properties as an organization, and bring in your best employees as part owners of those properties. It’s an interesting way to get them to understand the business and commit to it. Your goals are then aligned and you have a property manager who fully understands the end goal and how to make capital improvements work for them. There’s a new way of thinking – as an owner. Conclusion Live up to the promise of making sure your company is open and responsive in training, learning and listening or people will leave. When attracting younger talent, you need to be open to their ideas. When you were young you probably thought every idea you had was fantastic. As you get older, you may learn that only about 2 percent of those ideas were ever good. Be open to those ideas and incorporate good training. That shows employees you are listening to them, and they have value to gain by learning more from you. From there, you can reward that performance. There’s a lot more to talk about when it comes to attracting and retaining great talent. If you have any questions about what you’ve learned today, check out therrd.com, or follow Joe Killinger on Facebook and Instagram, or talk to us at Fourandhalf.com. The post What if Property Management Companies Recruited Like Tech Startups? appeared first on Fourandhalf Marketing Agency for Property Managers.

Our topic today is maximizing fees, otherwise known as value-added services. The main revenue source for most property management companies is their management fee, but there are many value-added services that can be incorporated to increase revenue. Our guest, Darren Hunter, specializes in this and is a household name in the Australian property management community. He has spent most of his professional life helping property management companies figure out their business and today he’ll go over fee maximization for property managers.  Learn: The typical profit margin of property management companies in the United States. The psychology behind landlords and three-part pricing strategies. How you can implement 3 different value-added services today. Who is Darren Hunter? Darren Hunter began as a property manager in 1989. A consultant and trainer now for the last 11 years, Darren works with property managers and their companies in Australia, New Zealand, and the United States. He has specialized in helping real estate business owners earn more money not only with new business but with their current business as well. It’s called fee maximization, which is the ability to increase and add fees with current owners. An Overview of Value-Added Fees In Australia, there is a mentality on the east coast that the management fee should cover everything. Property managers are afraid to charge for things other than management and leasing. So, those companies typically earn 15 percent of their revenue outside of management and leasing fees. On the west coast of Australia, however, you find 50 to 60 percent of income coming from fees outside of management and leasing. Those are the best earning companies in Australia. In the United States, most of a management company’s revenue is coming from management fees and tenant fees, but not anywhere else. It’s an interesting breakdown, and sets you up to easily double your profit margin. NARPM did a survey that said 20 percent of the average property management company’s revenue is profit. If you are earning a total fee income per property of around $2,000 per year for one property, and your profit margin is 20 percent, it means you’re only earning $400 on that property. With traditional thinking, to double your profit margin, you need to double your roofs and front doors. But, all you really need to do to double your profit margin is find another $400 a year in these extra value-added fees. That’s a more efficient way to double profit. You won’t need more doors and more staff and more overhead costs. On DarrenHunter.com, you can find a knowledge library that includes 11 Profit Laws Regarding Fees. The first one is easy. Two people meet each other at a barbecue and discover they own investment properties and they each use different management companies. Those two people will talk about what they’re charged in management fees but not any other fees. That’s not as high on their radar, and it’s not as important as management fees. Focus on getting the management fee to be the market rate. Then, maximize the leasing fees. A lot of areas in the U.S. don’t have leasing fees at all. But, if you maximize that fee to the accepted market rate, you can then do the work in the add-on fees. That’s where you get your results. Property owners really focus on the management fee. You can work with add-on fees because your owners are not thinking those are as important. Three-Part Pricing Strategies Some management companies will set up a tier system where they have a low fee option that comes with optional add-ons, a middle fee option that includes most of the management services but still leaves room for add-ons, and the highest tier, which is one fee that includes everything. People often go to the middle and they tend to negotiate which package they want instead of negotiating fees. There are also two-tier systems with a lower package and a higher package. Two package systems still offer a choice, so there’s not just one fee structure. You can usually get a property investor into the top package, where one management fee covers everything. Just make sure that the fee is high enough to cover all your services. Price anchoring plays to psychology. In a three-tier property management pricing structure, you’re really expecting to sell the middle package. The top tier package might not sell as often and the bottom tier package is the anchor against that popular middle package. There are different market cultures at play, and you have to go with what works. Do your best to limit pricing choices to three. The more packages you have, the more confused people can get. That’s going to prevent them from making a quick buying decision. If you structure three packages right, you can succeed as long as it’s easy to understand. If it’s too confusing, you can lose business because people won’t be in the mindset that’s required to make a purchase. Experiment and see what works. Testing and measuring is the key to reading what people will accept in your market. High Ticket Property Management Items: Lease Renewals After management fees and leasing fees, you can charge a lease renewal fee. If the average rent is $1,500, and you charge $750 for a leasing fee, your renewal fee might be $375, roughly half the cost of the leasing fee. That fee alone, when done properly, has the potential to increase your profit margin by 50 percent. This fee comes up once a year. If you’re managing 250 properties and you expect half those tenants to renew, you’ll earn $46,175 on that fee alone, which looks like a healthy boost to your bottom line. It’s a pure profit strategy. You aren’t taking on extra work that will cost you more resources. How would you go about explaining this to your clients? Well, another of Darren’s 11 Profit Laws is the Law of Alternative Cost. This is what it would cost if the service was not provided. So, if you didn’t provide a lease renewal and the tenant just went month to month, what would be the cost to the owner? The tenant might move out during the winter months and the owner may have a vacant property for longer. There will also be new leasing fees. So, the owner loses the cost of one month’s rent plus leasing fees. The alternative cost could be thousands of dollars. When the alternative cost is thousands of dollars you can justify a quality leasing fee. Don’t fail to express that alternative cost, or your fee will look too expensive. NARPM Sponsor NARPM has close to 7,000 members and their designations – RMP and MPM are invaluable. The MPM – Master Property Manager –is graduate level work and the RMP – Residential Management Professional – is great for property managers who are starting out. These designations will do wonders for a property management business. You get coached, and you’ll be able to learn from people like Darren. You’ll discover new revenue streams and build a support network. There’s lots of value to studying for your designations. Check out NARPM.org. High Ticket Property Management Items: Inspection Fees Inspections or assessments should be another service you offer. This is when you go to the property during the lease and make sure the tenants are following the terms of that lease. Many managers aren’t charging for this service as all. Property managers ought to visit the property once or twice a year, and you shouldn’t avoid charging for that service. If you sent a plumber to a property to fix a leaky faucet, what will that plumber charge? The plumber might charge $150. You wouldn’t call the plumber and complain about the cost. You pay it because that’s what a plumber is worth. In the property management world, what is your time worth for conducting that inspection or assessment? You are spending time: getting to the property inspecting the property and documenting the process. This is a difficult job with a lot of risk management and compliance. Your time is worth something. Don’t charge cut-rate fees. Some property managers might feel like property inspections are the essence of property management, and should be included. But, what does the rule book say? There is no rule book. The management fee does not have to cover the inspections. If you believe you’re worth it and you know how to justify it, you can charge for anything. You can even charge a rent collection fee on top of the management fee if you know how to justify it. So, if you think that the management fee must cover the inspections, then that’s your mindset and you believe it. But, if you think it’s separate, you can charge it. You’re competing against other property managers who do include inspections as part of their management fee. However, the mindset is still more important than the market. If all your competitors are not charging for a routine inspection fee and you are charging a quality fee, your owner might question it, especially if competitors are not charging it. You’ll need to convey that your inspections are high quality and prioritized. Maybe the competitors aren’t actually doing those inspections because they aren’t charging for them.  The amount of revenue you can earn depends on how many inspections you conduct. Inspections are typically done at least once a year, and if you can justify it, try to get two inspections a year. If you charge $100 for each inspection, and you have 250 properties that are inspected twice a year, you’re going to bring in $50,000. There is some labor and time involved, so your cost might be 50 percent, and you’ll have gas and mileage. So, you’ll have a 30 percent profit margin, which is $15,000. High Ticket Property Management Items: Administrative Fees Some management companies will charge a monthly administrative fee. This will cover postage and technology like your software costs. It might be $10 a month per property. Justify this by explaining your office operations and the costs that are associated. You can sell that you’re charging a flat rate on this fee rather than tracking and charging more or different fees every month. So, that might be an extra $120 per year per door. If you have an owner with multiple properties, determine whether you’ll charge this fee per property or per owner. But it’s fair to say you can charge this $120 annual fee on 75 percent of your properties. That’s another $21,000 per year, which is pure bottom line. Again, this is a mindset. When an owner gets a letter or a notice about business expenses and overhead increasing due to compliance and the fact that the fee structure hasn’t been revised for the last five years, it will be accepted. Owners value their peace of mind over paying a little bit extra. A large majority of clients will accept the fees as long as you can justify them. 2018 PM Grow Summit Many of you probably attended the PM Grow Summit last year. This year it will be January 31 – February 2 in the Gaslight District of San Diego. Check out PMGrowSummit.com and look at the speakers and talks from last year. The PM Grow Conference difference is that everything is included. It’s a VIP experience. You pay for your hotel and flight, and everything else is provided. All of the sessions are recorded, and you’ll get your conference notes as well. In 2018, we’ll be talking about how to learn to build, manage, and lead a team to scale.  High Ticket Property Management Items: Additional Fees Here are some other fees you can charge in addition to your management and leasing fees: Move in and Move out Inspections Photography and Video File Transfer fee on account set-ups when you inherit a property or a tenant in place Internet Marketing fee Eviction Protection Program Repairs and Maintenance fees Outside of Normal Duties fee Insurance Claim fee The biggest impact from this list will be the marketing and maintenance fees. With maintenance, property managers will charge a percentage of the maintenance invoice. If you send a plumber out, you’ll charge a percentage of the plumber’s fee for your organization. It’s not popular, and you have to know how to present it. Change the mindset that the management fee should include this. If you have an owner who pushes back against 10 percent repairs, maintenance fees and etc. and other agencies don’t charge anything, talk about your value. Properties that are old and neglected are usually managed by companies that don’t pay attention to maintenance. If you can demonstrate you’re proactive with repairs and maintenance, owners will see they have benefits. The property will be in better condition and its value will increase. You can frame it as reactive repairs versus proactive repairs. The best vendors are worth your maintenance fee. If you can point out that vendors are charging you less than they would be charging outside of your property management relationship, then that management fee will make sense. The revenue here depends on a property’s condition and age. Maybe you could expect to earn $100 on a property’s maintenance annually. With 250 properties, that’s another $25,000 to the bottom line. This is much better than growing with rent roll growth. Rent roll growth requires extra overhead and additional costs. Implementing the Value-Add Services With all of the fees that have been discussed here, you could have more than $107,000 coming into your property management business. It’s up to you if you want to do this for you. You can increase your fees. You can earn more money with the business you currently have. All of the mindset issues you have are dragons in the mist. They don’t actually exist. There are three actual circumstances where you can’t do this: If you’re offering bad service and you’re asking customers to pay more, it will not work. If you don’t believe what you’ve read here, you won’t be able to do it. If you wait and think about doing this in six months, you won’t be able to do it. Do it now. For more information from Darren, please visit DarrenHunter.com. If you have any questions about growing your property management business, contact Fourandhalf.com. People also read:  10 Mistakes in Running a Property Management Business Different Pricing Structures for Your Property Management Business The post Property Management Fee Maximization with Darren Hunter appeared first on Fourandhalf Marketing Agency for Property Managers.

How do you restructure your property management company or property management department to satisfy a savvy client? Rhys Standley, Owner of Just Property Management in Australia, has a creative solution that has increased his company’s client satisfaction and employee satisfaction. We met Rhys at the recent LPMA event in Australia, where the best minds and operations in property management meet once a year. Rhys started his property management company six months ago and manages 1,000-plus properties. He has also founded an outsourcing company called qResults. Today, we go over what Rhys did to restructure Just Property Management. Property Management Clients are Savvy There’s a new economy compared to what has been standard in the past. Customers and clients have a lot more information at their fingertips than they have ever had before. Now: they want to know more they do know more, and they want instant answers. The days of making a phone call and waiting a few days to get a response is unacceptable in today’s climate. Because of that, a lot of property management companies are forced to change the way they do things. A process that once worked doesn’t work anymore because clients are able to expect more. Unless you adapt to new expectations, you’ll become extinct pretty quickly and you won’t grow your business. Perception of Being a “Specialist” in Property Management The typical real estate office is set up like a general practitioner’s office. There’s a lot going on; residential sales, commercial sales, auctions, homewatch services, residential and commercial leasing. That was the way Rhys had his company, until he completely rebranded his company by doing just property management. Doing only property management in his market was unique at the time, and landlords reached out to his company more often. Embracing that one specialty will shift the way your customers see you. You’ll no longer be a general practitioner – you’ll be a heart surgeon. People were happy to pay Rhys a little extra as they expect better service and advice because he’s a specialist, not a generalist. This will create a culture shift in your office and in your marketplace. At that point, reality changes. You need to have the expertise you claim to have. Your systems must be on-point and your checklists have to be thorough, and everyone needs the right training. Going against what everyone was doing at the time has allowed Just Property Management to manage 1,000 doors in a relatively quick time. If you already only do property management and your competitors do too, see if there is an opportunity to dig deeper and see what you can offer that the rest of your competition isn’t able to. Revolutionizing the Property Manager Job Function In your quest for efficiency and the best customer service, the role and the job of the property manager has to evolve. In the past, property managers have done everything, they’ve: shown prospective tenants their properties processed applications for properties completed property condition reports and entry reports typed lease documents conducted inspections and coordinated maintenance. All these tasks help contribute to a high turnover in the property management industry, due to the stress that comes along with the job. So, Rhys asked himself: What is the one main thing that a property manager should do? It came down to communication. Communicating with your clients is a manager’s most important role. If all a property manager had to do was take phone calls from investors, all of the other issues would take care of themselves. Owners would be a lot less likely to complain, and tenants would be happier too. Owners and investors don’t care who is taking care of maintenance or typing up lease documents. They do care when their property manager can’t be reached. Here’s a typical situation. A property manager is out of the office doing inspections or dealing with a tenant issue at the property. An owner calls because he drove past his property and noticed the lawn is overgrown. He tries to reach the property manager, but can’t, so he leaves a message. By the time the property manager resolves the issue in the field and returns to the office, there are dozens of emails to respond to and phone calls to return. That owner doesn’t get called back, and then the problem is not an overgrown lawn – it’s a lack of communication and responsiveness. When property managers are time-poor, customer service suffers, and the property management business suffers. The issue for the owner is that he’s paying a property manager but that manager doesn’t have the courtesy to return his call. That makes the owner feel like the manager doesn’t care about him or his property. If you can cut that off and take the call, you prevent a lot of brush fires from occurring. Internal communication is important for the property manager to focus on as well. Delegating tasks in the office is essential. The manager is not giving those tasks away. There will still be follow up, and the property manager will be aware of the maintenance, inspections, and other things going on at a property. But the manager’s role is to be the conduit to the owner; the front of all knowledge. The property manager needs to know what’s going on at the property, but doesn’t have to personally do every task. That saves a lot of stress and heartache. Outsourcing Your Property Manager’s Tasks At Just Property Management, outsourcing has been a major part of restructuring the property management business. Outsourcing helps with cost and productivity when a property management company can’t afford layers of full time management employees. You can outsource both documentation and physical tasks. For documents and data entry, outsourcing to another country can be useful. Using a company in the Philippines gives access to people who have really clear and efficient English skills. They prepare lease documents, send out notices, and update reports. The owners you work with don’t care who is doing those tasks, they just expect that it gets done. It also frees up time for the property manager to do the things that matter most: communicate with owners.   Outsourcing the physical tasks is a little different because you need people who are physically present. That’s where contractors come into play as they can help outsource entry report updates, and inspections. When property managers do inspections, it can actually be a conflict of interest. They are inspecting a property that has been occupied by tenants they have worked with for years. So, they might not give an accurate report if they feel intimidated by a tenant or they really liked a tenant. An independent inspector will give an impartial inspection report. You’ll also have someone doing these reports who specializes in the work and is able to dedicate the necessary amount of time. Final inspections are time consuming, and they occur when a tenant vacates and it’s time to go through the property condition report. Typically, this process should take two and a half hours. If a busy property manager is doing it, they will feel pressured to get back to the office, so they’ll give only an hour to the process. That’s going to create conflicts, especially when things get missed. With an independent inspector, there are no time pressures. The property manager can show up at the very end and see what kind of damage was left behind so that the owner can get a full report. A good inspector will blend mechanical knowledge with an eye for detail. Recruit good inspectors, train them, and have them document everything they do. Streamlining Operations with Job Sharing When your business grows from 100 doors to about 300 doors, you face some new challenges. When you’re smaller, you’re doing everything yourself. You’re in the trenches. Then, when you get to the point that you really become a business, you have staffing issues to manage and these structural things become more important. At Just Property Management, there are full-time property managers and then there are part-time assistant property managers. Rhys used to employ full-time assistant property managers, but with employee turnover, it forced him to get creative. He now only hires part-time staff members who will work for one week and then take the next week off. This type of job sharing ensures that you can cover all the gaps that might occur when someone takes a day off or goes on vacation or gets sick. The office is a lot more streamlined, and there’s really no downtime. That reduces complaints from both tenants and owners. It’s something to consider as you’re shaping your own management company. If there is any feedback or questions, please contact Rhys at Just Property Management. If you have any questions about property management marketing or what is in the works for the 2018 PM Grow Summit, please contact us at Fourandhalf. The post How to Restructure Your Property Management Department and Satisfy the Savvy Client with Rhys Standley appeared first on Fourandhalf Marketing Agency for Property Managers.

The topic today is how to sell property management services by building a powerful local referral network. Our guest, Joe Stokley, can speak intelligently on this subject because he is a master networker. Joe runs Stokley Properties, a successful property management business in Walnut Creek, California. Joe and his wife began as real estate investors, and Joe worked for a large real estate investment company until the recession in 2009. Their own rental properties were facing foreclosure, so they learned how to do loan modifications and worked with banks to restructure. After fixing their own personal portfolio, they decided to start a property management company as they felt their skills were needed in the market. The business started at home, and within seven years Stokley now manages 500 properties. The key indicator to their success? Joe was able to build a third of his business through local networking. Below, you’ll learn Joe’s advice for any property management owner that is looking to gain business by being involved with the community. Committing Time and Expertise The most important thing to understand is that you can’t expect to show up to a meeting and expect business to come to you. It’s important to really jump into it and get to know the people and the process. Take advantage of the forum, and let the membership get to know who you are. This will help your networking plan take off. This is a community, and word gets around quick about who you are and what kind of work you provide. So take it seriously and get involved. People will get to know you, and that translates into business. If you want to bring half a million dollars in lifetime revenue, you’ve got to do it right. Where to Look to Find Existing Networking Groups You might find a Business Networking International (BNI) group that allows you to meet people from different industries. That’s where Joe started, but it felt limited for his needs. There was one Realtor and one lawyer who could help him bring in business, but he wanted more exposure. So, he got involved with the Contra Costa Association of Realtors, and an affiliated group within that organization called the Contra Costa Real Estate in Motion, or CCRIM. They met weekly and had 150 members, all of whom were Realtors or associated with the real estate business. There are local organizations similar to the Contra Costa group across the country. Lots of areas have a Board of Realtors, and there are networking groups that grow from there. They are specific to your local community, and it’s a great way to build a Realtor network. You need to show up to the meetings and see what sprouts. The Board of Realtors in your community may have their own networking group that goes on property tours or meets regularly. They can refer you to an existing group that is thriving, and that’s where you’ll begin to build your network. These are not the only groups we have seen property management companies have success in. Consider these groups, if they are available in your local area: Rental Housing Associations Chambers of Commerce Rotary Clubs A website like meetup.com is also a great outlet to help you discover networking groups within your local community. Getting into a Leadership Position As you network and share your particular area of expertise, there’s no reason why you can’t move into leadership positions, especially if you’re willing to put in the work. It’s as simple as sharing advice, and being proactive because when you do something for nothing, people will reciprocate. If you don’t do that, it’s easy to get discouraged and drop out. Consider doing a sponsorship so you can give a presentation. When you sponsor a breakfast or something similar, you get an infomercial-type opportunity where you can give a presentation about the advantages of having a property management partner. That allows you to teach other people your trade. See yourself as an educator, and your audience will respond with questions. The Realtors Joe was speaking to wanted to sell houses, not deal with property management. As a trustworthy resource, he was beneficial to them.   Moving from sponsorship to leadership is a pretty natural progression. Many of these groups have board elections, so you can run for office. Talk to people, be friendly, and be open to others. It’s helpful to ask questions and listen to people. Make sure you’re prepared, whether you’re giving a presentation or simply networking. Be ready and be practiced because it shows. This is serious and it deals with the professional lives of the people you’re meeting, so respect the organization. The ROI on Joining Local Business Networks At the networking group that Joe discussed, he paid $3,000 a year to be an annual sponsor. That investment plus the investment of 100 hours a year on meetings and events resulted in a lot of business. Joe said about a third of his business came from these networking events and the contacts he made through this organization. If you qualify that and break down the numbers, it’s pretty astonishing: With one-third of business, or 150 properties coming from this network, and 6 years being spent there, the average is 25 properties per year that were acquired this way. Joe’s annual contract value is $4,000 per property, per year. Grab your calculator, and you’ll see Joe made $100,000 per year each year by spending 100 hours and $3,000 every year. And that’s just an annual value. In lifetime value, the number is closer to $800,000. It’s a recurring stream that comes from healthy networking relationships.   Networking in your local community within local organizations is good for your reputation and an excellent way to earn money and grow your business. This episode of The Property Management Show was brought to you by NARPM and the 2018 PM Grow Summit. Make sure you subscribe to The Property Management Show on iTunes and on YouTube. If you have any questions about growing your property management company, contact us at Fourandhalf – Internet Marketing for Property Management Companies. The Property Management Show is brought to you by Fourandhalf. We help property managers strategize and implement marketing plans that bring in owner leads. Click the image below to get a free marketing assessment and find out how to start getting better clients into your portfolio. The post Building a Powerful Local Network for Your Property Management Company with Joe Stokley appeared first on Fourandhalf Marketing Agency for Property Managers.

The topic of preparing your property management company for a successful exit is a big one, and our guest today is one of the brightest minds in property management. Andrew (Andy) Propst has experience in taking his company, Park Place Property Management, from 200 properties to 4,000 properties in eight years and in just the last year, he has added 700 doors organically, and another 400 through a local portfolio purchase.  Andy is also a NARPM past president, and he is now the CEO of HomeRiver Group, a nationwide company that acquires property management companies and their portfolios.  Andy will share with us his insights for any owner who is looking to position their property management company for a successful exit. What Size Do You Need to Be to Meet Your Financial Goals upon Exit? It’s an important question that 80 percent of property managers don’t ask themselves. People see property management as a source of income, which it is. But everyone who owns a business should eventually prepare to sell it and the sooner you start to prepare, the better. Let’s say you want to exit with $5 million, and the average rent you collect is $1,800. On the open market, you would need 2,000 to 2,500 doors to get out of the business with $5 million. Some people have a lot of doors but don’t earn as much on those doors and that’s going to alter your number. 5 Things to Avoid When You’re Planning an Exit There are some things we see that trip up the acquisition process. Try to avoid these to make a smoother transition. Accounting struggles. Your property management company must reconcile accounts on a monthly basis. Get good reports from your system. Have a trust account balanced and a historical units report available. You need clean financials. Unclear data. You need to know how many units you managed six months ago or two years ago. Have transparent, accessible data. Inconsistent Formatting. Sometimes, formatting gets in the way. Something as simple as not being consistent with St. versus Street can throw off a whole system. Lack of strategic planning. It is rare to see a strategic plan or a budget. These things are important as buyers want to see your future. Too many receivables. When owners and tenants owe you money and you’re not collecting, you could have hundreds of thousands of dollars outstanding. That’s a problem when you’re trying to sell your business. What’s More Important to Buyers – Top Line Vs. Bottom Line Revenue? When you’re building a business to exit eventually, you need to focus on both top line revenue (gross sales) and bottom line revenue (net income). People base the success of their companies by the number of doors, but who cares how many doors you have if you aren’t making money on them? If you want to sell your company, you need to have a healthy bottom line. A company like HomeRiver Group buys or evaluates on EBTDA – which stands for Earnings Before Taxes, Depreciation, and Amortization. You get a dollar amount based on your profitability margin. The higher the profitability means a higher payout for your company. The bottom line really matters. The door count doesn’t matter as much as the overall performance of the company. In Andy’s experience as an acquirer, there is the potential that HomeRiver Group can take a company that’s underperforming and add some efficiencies to make it more profitable. If they can change the performance, they will pay for a brighter future and not focus on profits. There are other companies that do buy per door or based on gross revenue. However, the typical model is to look at the bottom line, add a multiple, and figure out the value of the business. It’s best to not overcomplicate it. The Flaw in Evaluating Based on a Dollar per Door Method Some companies have a portfolio of scrappy B or C level multi-family properties. There will be a difference in value for those businesses versus someone who has really paid attention to what they manage and has the best properties. Buying a property management company in an area where the rent is a lot lower and is generally a rougher area is a lot different from buying a property management company that handles rental property in the suburbs of San Diego. It’s important to grow your business door-wise, but it’s more important to have high-quality properties. Ways To Increase Value in Your Property Management Company Increase Worth with Value-Add Services Value-added services are sometimes called ancillary fees and are also a great way to increase a property management company’s market value. It shows continuity and opportunities. The common ratio is 60 percent of revenue from property management fees and 40 percent of revenue from value-add services. Try to aim for a 50/50 ratio when it comes to these figures. Some people might diminish such services, but it’s starting to change as the buyers now value those fees. Property management is an amazing business with recurring revenue that’s hard to match. Increase Value with a Maintenance Company Having an in-house maintenance company is valuable as it brings in ancillary business and profit. If it’s done right, it will be attractive to someone interested in buying a property management company. Right now, with the housing market doing so well, it’s hard to find maintenance professionals to do work. Being able to turn over houses in five days is a huge value add and it goes hand in hand with property management. Fewer people are willing to make this work because maintenance is difficult. You can fake it till you make it with property management. You can’t do that with maintenance. It’s easy to lose your hat. If you want to do something in maintenance, have a great strategic plan in place, have a budget, hire the right people, and do it right. Don’t be afraid to spend money up front. If you don’t get the maintenance part right, your business can suffer. Consult a tax advisor and an attorney and find a mentor who can show you how it’s done successfully. Having a great maintenance company is about making good hires, utilizing technology, and having excellent systems in place. Track your revenue so you can be sure it’s profitable. Increase Value with a Real Estate Sales Division Many smart property management owners also do real estate sales. They see that they have clients who are investors, and also tenants who might want to own a home. So, they help their current customers buy properties. If a brokerage division within a property management company drives revenue, it will get the attention of companies buying portfolios. It can be a huge value as acquisition, management, and disposition are three huge revenue sources. Andrew has not done real estate in Boise in the past with Park Place Property Management, but with the sales market as it is, having a brokerage is the next opportunity. Increase Value By Investing in Technology and Your Employees It’s never too early to invest in technology and get your systems organized and in place. Some people are successful with virtual assistants. You need a happy team in place, too. A happy team means happy customers and happy shareholders. If a company is going to be purchased, team members can worry about downsizing. But a good team that cares about what they do will be reflected in the bottom line. People are the most important part of your company. HomeRiver has bought companies strictly for the people before. The doors were just a nice bonus. So, cultivate your people and your business and it will reflect in the bottom line. Other Little-Known Factors That Influence Buyers This isn’t a make or break decision for your business, but when people evaluate a business to buy, they do look into several factors such as the marketing you do, your growth over time, your future plans for the business, how you position yourself in the market, and your reputation in the area. If you struggle in those areas, it doesn’t mean your business isn’t worth a lot of money. But for companies like HomeRiver Group, it does mean a lot. Post-Exit Involvement for Property Management Owners Some property management company owners will still want to contribute, even after selling the business. People who want to exit are not necessarily ready to retire. They simply want to be part of something bigger, because when you’re running a business, you feel lonely. Having that outlet to be heard and have peers is an attractive option for many small business owners. On the flipside, these owners are appealing to companies like HomeRiver Group because their talent is needed.   If you are thinking about selling your business, and would still like to be involved in building it up; it is best to have great operational instincts, be able to communicate effectively, have accounting know-how, and be good at building relationships. If you are able to really participate in the process, and grow the business organically, then you are at a premium. How to Prepare for an Exit Within a Year If you want to sell your property management company within the next 12 months, you need to start by going to the trade organizations to which you belong. Go and talk to other property managers, and see what’s going on in the market. See what people are paying for property management companies so you can get an idea. Talk to people trying to do this on a national basis. Have those initial conversations. You can talk to business brokers, accountants, and bankers. All these people are good at helping you understand what your business is worth. Once you come up with a number, let people know what’s happening. You don’t have to contact a business broker. There’s a fee, so if you’re a good salesperson yourself, you may not need it. That’s a brief look at the value you want to have in your company when you’re getting ready to exit. If you want to talk to Andy, contact him at HomeRiver Group. If you have any questions for us about marketing your property management business to raise its value, contact us at Fourandhalf. The post How to Position your Property Management Company for a Successful Exit appeared first on Fourandhalf Marketing Agency for Property Managers.

Hosting events that educate real estate investors will increase your visibility in the local community, position you as an expert, offer major credibility, be a potential boon for referrals, as well as get you in front of an ideal customer.  Needless to say, it is a great way to drive new business, and we have an excellent guest that will offer their advice on how you can successfully use it for your property management company today. We bring in Douglas Skipworth, Executive Broker at CrestCore Realty in Memphis, TN. Douglas has found seminars to be a great way to establish trust in a very competitive market, and this has helped CrestCore Realty grow into the business it is today. About Douglas and CrestCore Realty Douglas got into buying rental houses, and that evolved into managing property and helping other people buy homes. Today, his company owns 800 properties, and they manage around 2,600 homes in the Memphis area. He believes he is a better property manager because he’s an investor and he is a better investor because he’s a property manager. This episode is brought to you by the 2017 PM Grow Summit, gain access to 26 videos, 21 slide decks & 100 pages of notes for only $299. Click here to sign up for the exclusive material. Investor Education Topics of Discussion Putting together the content of your presentation is both an art and a science. When you’re trying to set up a class or a meet-up, choose topics that will attract people. You can: Go based off FAQs. Poll people and see what interests them the most. Think about what you wish you had known, what you want to know, or what people are asking you. Teach people what you have learned yourself. If something fascinates you, start digging. Then, share it. When you find a topic, don’t be afraid to ask for help. Reach out to your current circles and recruit some of your best investors to talk. People can learn from any expert who has deep-seated experience in real estate investments. Use Data and Statistics Your presentation will need to include data that is applicable to the topic. The data might be trends in specific areas of your local market or what you’ll see over the next 12 months. You can: Talk about what financing looks like and pinpoint where foreclosures are. Look closely at price points and determine whether it is a buyer’s or seller’s market. Report on areas that are really performing and providing cash flow. CrestCore makes sure to report back statistics they’re reading or data they have internally that they can relay to potential investors. They give them lease rates and rental rates and how much turnovers are costing. They’ll talk about evictions and challenges or how long properties are on the market. You can get as detailed as you want and provide ideas per neighborhood for returns and trends. Potential investors will find this information very valuable. To Pitch Your Services, Or Not to Pitch? For a property manager, you can occasionally pitch your services. You’re building your business by making these relationships and providing your content. You don’t want to sell your own services too hard in these types of events. Get in the frame of mind of doing your best to help people, this will indirectly help you. You are helping people become investors. But if pitching works for you, go ahead and pitch. Sometimes you want to sell and that might work for you. Figure out what you’re comfortable with and create something that fits. It’s possible to gain hundreds of houses a year, and many of those will be related to your investor education. CrestCore Realty grew by 700 houses last year, and probably at least 30 of those came through these educational opportunities. Then, there were indirect conversions. Ten to twenty percent of his new business can be tied to that investor education. The Not-So-Obvious Reasons Local Investors Benefit From These Seminars Providing crucial insights and knowledge isn’t the only benefit your attendees will gain from these educational events. Think about this: You’re sharing knowledge and materials as well as resources. There are reference materials so they can take deeper dives on their own. They are also getting contacts with peers. One of the things that’s most important for newer investors is they get confidence. They learn that it’s not rocket science. Provide a friendly environment, contacts, and resources, and people will feel they are capable of becoming real estate investors. You can see if people are ready to buy properties by sharing specific deals. There could be deals that close or get started just from your presentations. It’s a great way to help people become financially independent. No matter the location, people will always be interested in learning about real estate in their local area. Holding educational classes helps you stand out from your competitors, especially if you are just breaking into the property management industry. Getting People to Join Your Investor Education Event The fun part is gathering the investors to your event. You have something you want to share – so, use word of mouth, email lists, and invite former attendees. Be active in newsletters, reach out to friends of friends, and invite everyone. Use social media and suggest that everyone you invite bring someone. People who don’t have a list and want to try this for the first time can start small. Invite your clients, leads, employees, real estate agents, and those who referred you to others to your seminar. Maybe in a room of 20 people, you know 19 of them but at least you have one new person. It starts like dry leaves that become twigs and branches and then eventually it becomes a fire. You don’t start with 200 people. You start small and you build. This will also give you an opportunity to vet your content and learn as you go. There are services like pmleads.com where you can buy a list of landlords and investors who own rental property in the areas you want to manage. You could cold call them to invite them to your presentation. Tell them it’s free for investors and you’re going to teach them about a specific topic. From that one list you’ll maybe end up with four or five attendees. You can also run a Facebook Ad campaign specifically targeting landlords in your area and generate leads that way. For invitations, there are many avenues. It’s a good idea to have a website splash page where attendees can go to sign up. Where to Hold the Investor Education Events You can hold your investment presentations anywhere. Living rooms, offices, conference areas, restaurants, coffee shops, and places where you can have a lunch and talk about real estate investing. Use larger venues if you have a national speaker coming in. Action is a big part of your success here, you’ll be surprised at the locations that will let you host an investor meet-up. You work with vendors like maintenance companies, banks, insurance agents, and attorneys. Their space is a great location if they have boardrooms. They may be happy to host, as the audience you’ll be bringing in will be great for them as well. They might pay for food or provide space and materials in order to get that exposure. Leverage your partnerships. Costs of Setting Up Investor Events You can pay for speakers and rent venues or provide food and books, which may cost up to $1,500. However, in most cases, you can get by for just paying for materials like copies and brochures. You can provide cookies and drinks or appetizers or sandwiches, which will keep you under $100 to do something small. The majority of the time, you don’t spend a lot. The cost isn’t high, but you will spend time on it. The biggest time investment is the content creation. Getting the course together and making sure it’s usable will take up a few hours. You want your attendees to feel like they got a benefit from attending. So make sure you invest some time into it, and they will think about you going forward. How to Market Your Event Once it is Completed Once you have your presentation, that’s evergreen content you can continue to use. Have someone record a high-quality video, put it online and write up an article for it. Or you can use it as a webinar and collect email addresses. Lots of opportunities are there. A five-day investment in building top notch content is worth millions in the future of your business. It’s reusable and you’ll get a lot more visibility through the Internet. Pro-Tips for Even More Success Make sure you’re not one expert who does everything and gets overwhelmed. Let other people take the stage and speak about topics they are interested in and know about. When your employees participate, they will be able to invest in preparation and become experts in these areas. This will help inspire confidence in not only you, but your company as well. When it comes to your current clients, stay in front of them with this new information and help them grow, even if they don’t attend. They’ll think of you as thought leaders in the industry. That leads to referrals and new opportunities. Hold these events. To stay in the loop for future episodes of the Property Management Show, be sure to subscribe to us on iTunes. And if you have any questions about how to get started or how to leverage your content to build your property management business, contact us at Fourandhalf.  The post How to Put Together Real Estate Investor Education Events with Douglas Skipworth of CrestCore Realty appeared first on Fourandhalf Marketing Agency for Property Managers.

Today, we are talking about maintenance services and how you can turn it into a competitive advantage for your property management company. Here with us to answer our burning questions on the subject is an expert in this realm: Curt Fluegel, the CEO and founder of PM Toolbelt. About Curt Fluegel, the Founder of PMToolbelt Curt started in the industry as a property manager, mostly fixing and flipping property during the recession. Maintenance is his specialty and had been a core part of his business — until he lost a lot of money on it. To combat this, Curt systematized his business and created PM toolbelt. PM Toolbelt is a software platform that helps property management companies manage maintenance services. Below are Curt’s tips for property management owners that are considering on providing maintenance services: When Professional Property Managers Lose Money on Maintenance If any property management company provides maintenance services without thinking it through or having a process in place, they would most likely make more money by not providing it. A lot of companies have lost money this way, and it’s often due to lost receipts or not tracking expenses well enough. You may not realize you’re spending more on parts and labor than you are earning. You have to make sure your maintenance personnel are busy working and not spending extra time at Home Depot. Fixing homes and providing a good maintenance service is great, but to avoid losing money, you need to track better and charge more. Managing Your Time with a Property Management Company and a Maintenance Business As a CEO you shouldn’t spend any more time on this than you do on other tasks. The amount of time a CEO spends on a maintenance business depends on communication and scheduling. There are tools that can help with the actual oversight of routine maintenance. You can look at profitability by property or by tech from a CEO level; it’s no different than spending time on anything else. To control scheduling, getting the right systems is key. You can get away with a lot until your company grows too large. If you can alleviate the pain points like confirming that specific work has been done, or making sure maintenance coordinators, techs, and clients are all in the communication loop, then everything else can get pretty easy. For maximum convenience, your software should allow you to drag and drop to schedule a work order. That way, there’s not a lot of task management activities except on your bookkeeping side. But, if you don’t have a dedicated bookkeeper, you may have a bigger load. How a Maintenance Company Allows You to Take on Any Property Curt managed to pull in 50 percent of his revenue last year with his property maintenance company. A lot of factors accounted for that, especially the property choices that were made. Because he provides maintenance services, Curt’s company has the flexibility to work with both carefree easy-to-manage properties and properties that would make the maintenance company a lot of money. So that opened up what they could go after, increasing his revenue. Everyone wants the high rent/low maintenance properties in their portfolio. But, you’ll see other properties a little differently when you have a maintenance company to run. Adding an older home with repair needs to your portfolio means that the maintenance division will make a lot of money – money you wouldn’t make offering nothing beyond standard property management services. Curt took on a lot of properties from new property managers who felt overwhelmed with the amount of preventive maintenance their investments needed. You can get away with a different management cost when you can come in as an expert and explain why the owner’s property will be a struggle to manage. Also, you can manage it better than a person who doesn’t know as much about maintenance. You can charge a higher rate and still bring in more profit from that investment because you bring stability to the property and to the owner. What to Track to Start Saving on Maintenance Services You need to track the location of your service technicians and where your parts are. If you don’t know how much time is spent on each project and you can’t say where each penny went, you’ll lose money every month. So you have to be firm with your service technicians. Service technicians are thinking only about what they need to do – you need to be planning their next move. Tracking can be made easy; there are GPS apps or vehicle trackers you can use. There are cheap or free apps to help with time clock tracking such asTime Clock Wizard. QuickBooks allows for time tracking as well. The key is to track your employees. Software like PM Toolbelt helps property management owners achieve just that. Your service technicians are getting paid by the hour and you’re supposed to be making a profit. You need to know if they’re spending 30 or 60 percent of their time driving and what they’re spending on parts. Get very granular with it by tracking the details. What details? You need to tie their hours to your money. Simple division can show their efficiency. If someone is working 40 hours a week, how many hours did he actually bill to you and how many of those hours are billable to charge back to the owner? If you get that one right, you’ll be in good shape. Look for efficiency in the 90 percent range. Think of this not as a side business, but a good business in its own right. Everything should scale, including the number of workers you employ. While tracking is the biggest problem to solve, it can be simple to do with the right tools. Communication, Reviews, and Customer Feedback The next problem with providing repairs and maintenance services is communication. Generally, if someone is leaving you a bad review or thinks they received bad service, it’s probably for a reason you can understand. A tenant is usually happy until for some reason they don’t feel you did what you’re supposed to do when something in the home breaks. It’s typical for property managers to get bad reviews. It’s an odd metric, but make sure you’re tracking your level of service. Be aware of the quality of communication your employees provide. For example, maintenance coordinators need to make sure the tenant knows maintenance techs are coming and/or that their comments and complaints have been heard. Tenants want to be kept in the loop, and they will appreciate the company that keeps open communication with them. Find a good way to track and improve that sort of communication because when your service quality goes up, everything else becomes easier. With local businesses, customer experience is crucial in this day and age. People don’t choose a service until they see good reviews. Fourandhalf has a service where tenants and owners are surveyed any time there’s contact; whether it’s right after a move in or a move out, or once tenant placement is completed. It’s an excellent way to get reviews and to be aware of your customers’ experience with your business. The good reviews are made public and bad reviews will be sent to you so you can correct bad service. Efficiency When Dispatching Techs Your efficiency depends upon your scheduling. So, no matter how many technicians you have, you have to be able to dispatch them based on job priority. Decide what’s a priority, what’s past due, or what’s within 10 minutes of a tech who is currently in an area. For instance, in Minnesota, markets cover a large area, and some properties can be over 60 miles apart. That’s doable as long as you’re not sending someone 60 miles every time. Scheduling is less of a metric and more of an efficiency. If you can’t create a good schedule, you’ll lose money, and the bigger you get the more challenging that becomes. We recently ran across an article about why UPS drivers never turn left. It was about how, to save money, UPS’s dispatch software routes drivers so that they (almost) never turn left in traffic intersections. That’s extreme, but you want to route your service technicians so they aren’t driving around all day or sitting in a parts store all day. Know how much of their time is billable, and if you can only bill for three hours in an eight hour day, you need to fix that. Providing Maintenance to Other Property Management Companies If other companies can’t make money off proper property maintenance, you should take it off of their hands. That business opportunity is a “low hanging fruit” if other property management companies trust that you won’t try to steal their clients away. Getting local customers is no more difficult than attending NARPM meetings, making friends locally, and having a couple of people trust you first. Everyone needs a qualified maintenance vendor, so you have a competitive advantage. If you spend the time to get good techs on your side, you’ll sell your maintenance services more easily. The demand for property maintenance services is already there. Hiring good techs is often the hardest part. Someone at a NARPM event said they simply never close their job posting for techs. That’s good advice. There’s more of a demand for good techs than there is a supply. So qualifying the first tech is the hardest part and it’s like any skill; you’ll learn who to look for. When to Start Your Maintenance Division It depends on more than the size of your company. The type of properties you manage will impact that. If you’re in the downtown of a major metro area, you’ll have properties needing work all the time. People who are successful at this can start when they are at about 200 properties, but those who have 400 properties do even better. This part of your business takes up very little office space and you don’t need a whole different infrastructure when you incorporate a property maintenance team. It’s a great opportunity, and when we talk about doubling your recurring revenue with maintenance, the opportunity could be worth the work. If so, PMToolbelt.com is a service you should check out. Reach out to Curt if you have any questions. Subscribe to be in the loop for more episodes of The Property Management Show. If you have any questions, you can contact us at Fourandhalf. CompanyThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY The post Property Management Maintenance Company: Systemizing for a Competitive Advantage appeared first on Fourandhalf Marketing Agency for Property Managers.