The Property Management Show

We’re thrilled to announce a new season of The Property Management Show Podcast. Watch the trailer to see what this season will be about! The post The Property Management Show is Back! appeared first on Fourandhalf Marketing Agency for Property Managers.

3 Steps to Profitability with Kathleen Richards On The Property Management Show this week, Kathleen Richards is joining us to talk about profitability. She’s been on the podcast several times, and we’re asking her a pretty simple question: how can property management companies set themselves up to make good money? Kathleen Richards: An Intro Kathleen has been a member of NARPM since 2005 and she’s the former broker/owner of a Santa Cruz property management company. She earned her CRMC designation from NARPM and owns PM Made Easy, a company providing operational documents and forms to professional property managers. In 2015, she became a certified business coach and founded The Property Management Coach. Since beginning the company, she’s coached over 450 property managers and business owners on how to be more efficient and how to be profitable. Out of that business, Kathleen developed a niche that has drawn people to her who want to start a property management company. Some of them are real estate professionals who want to expand into property management. Other clients recently bought a franchise but don’t have the necessary industry experience. Earning Consistent Property Management Profits The focus of Kathleen’s work is to make sure your property management company runs smoothly. That’s the value that leads to consistent profits year-round. There’s a lot that demands your attention when you start a business. According to Kathleen, two things are needed: Time management Having efficient systems in place The quickest way to set up a business is to create a plug and play model. So much of what property managers do on a daily basis is repetitive. People usually don’t make progress with their business because they’re just reacting to things all the time and putting out fires. There’s no room to be proactive in how the put their systems in place. Automation helps. You can create templates and not type the same letter 20 times. This impacts your profitability. Maybe you’ve been thinking about raising your property management fees or updating your property management agreement but you haven’t actually done it yet. If you don’t have the time to focus on that, it means your systems and your time management aren’t working for you. That leads to less money. Being too busy actually hurts your profitability. For example, if you’re spending a lot of money on marketing but you don’t have the time to return phone calls from new potential clients, you’re throwing away that marketing investment. It doesn’t work. Systems Start BEFORE Day One Maybe you’re just starting a business and you don’t have any clients yet. You still need those systems in place. In fact, this is the perfect time to create them. Get together a plan for onboarding new tenants. Create an application. Set up a rent collection process. This isn’t necessarily the sexy stuff, but it’s foundational and necessary. You have to be prepared to operate your business before you open your doors. There’s nothing worse than working hard and not earning money. The right systems and careful time management prevent you from spinning your wheels. Set Yourself Up for Profitability Think about your pricing – always. Trying to do property management cheaply in order to attract more doors is a mistake. You don’t have to charge the least and you don’t have to manage every property that comes to you. Set yourself up to be profitable. Price your services in a way that reflects your value, and monetize what you do. Here’s an example of how bad pricing can prevent profitability. Kathleen worked with a client who had a flat rate for everything. When they actually did the math, they discovered that she was only earning four percent of the rent per door. That’s outrageous. A lot of owners worry about losing clients if they raise their rates. Set your prices correctly from the start so the expectations are out there. Communicate what you do by charging the right prices for each thing you do. Don’t offer to do “everything” for a certain percentage. Monetize each service you provide. You have to be clear about explaining your value. For some people, only the price tag will tell them how important the work is that you do. This is how you run a profitable property management business. Carve Out Your Local Niche With her coaching clients, especially those just starting a business, Kathleen recommends avoiding a broad approach. Be specific about the neighborhoods you’re serving, and then expand into other areas when the time is right. Pick the neighborhoods or the parts of town you’re willing to work in. This will be easier to manage, especially if you’re starting out in a dense area. Be intentional about the properties you choose to manage as well. If you have an in-house maintenance team, you might want to focus on managing homes that will need a lot of rehab because that’s going to increase your revenue stream. If you don’t have an in-house maintenance team, swap out those older homes that need a lot of work for properties that require less maintenance. Think through who you want to serve. You can’t go wrong when you know your ideal client and your target market. Avoid the door grab. Even if you’re just starting out, there’s no need to gather up as much of the market as you can. Big companies can afford to do that but it doesn’t make sense in a service business like property management. Costs creep in and tenants get less easy. There’s a lot of automation in property management and small businesses can take advantage of it, but it’s going to cost money. You’ll have to pay for the software and the automated showings and the virtual assistants. Typically, new business owners are doing everything themselves. If that’s you – don’t do the door grab. Decide who you want to work for and where you want to work. An example. A prospective coaching client told Kathleen they were based in Marin County in California. Marin County has a lot of high dollar properties. Homes rent for more than $10,000 a month in many cases. The client wanted to go into that market and grab a large market share. When they said what they planned to charge, Kathleen knew right away it wouldn’t work. The price point was so low, it didn’t make sense. If you saw a brand new Ferrari for sale at the price point of $10,000, what would you think of it? You’d think there was something wrong with it. You’re coming into the property management market as an expert. You don’t want to arrive with a price so low that people think there’s something wrong with you. Don’t be the cheapest in the market just to try and attract the largest market share. This will backfire on your profitability. Webinar Announcement: 3 Keys to Generate Revenue All Year Round A successful and profitable property management company needs: The right pricing Boundaries around which properties and which locations will be served Time management In January, Kathleen is launching a webinar around her 3 Keys to Generate Revenue All Year Round. She’ll go deeper into these things, and the webinar is free. The three areas the webinar will focus on are: Planning Performance Profits Planning This part of the webinar will be all about operational logistics. Most property management companies wing it in the beginning. You’ll earn more if you have a plan for marketing and operations and how you onboard owners. It shouldn’t be complicated, and Kathleen keeps it as simple as possible. Performance The focus here is the WHY. Why do you want a property management business? You need a reason that will drive your performance and your profits. You also need to know how to handle things when they get tough. Every business owner faces challenges. A lot of real estate agents who come over from sales are often shocked at how hard property management is. This is a different set of skills for them. Profit If you’re not an analytical person, your gut will tell you when you’re not as profitable as you should be. You’ll start feeling unappreciated. You’ll feel you’re not making any money. You’ll feel resentful towards your owners and you’ll get tired of all the complaints. Property management is about solving problems. When you’re profitable, it validates that you’re doing something right. If you’re not committed to running a profitable business, perhaps being an entrepreneur isn’t for you. If you don’t have a strong WHY, property management isn’t for you. Those areas will be covered in Kathleen’s webinar. In addition the webinar, Kathleen is launching a course on how to put all these things into practice. It starts at the end of January and goes for seven weeks, until March 18. But even if you don’t do the course, the webinar will provide value to anyone thinking about property management and building a business. To sign up for training, visit pmdoneright.com and register for the webinar. Three different dates towards the end of January are available, with different times. The course and the webinar are great opportunities for new property management business professionals who might not have the budget for one-on-one coaching. By spring and summer, you’ll be ready to add revenue to your existing business or build your new business. Maybe starting a property management business is for you and maybe it’s not. Find out. Thanks to Kathleen Richards for joining us today. If you have any questions about what you’ve heard on The Property Management Show, make sure you contact us at Fourandhalf. The post 3 Steps to Profitability with Kathleen Richards appeared first on Fourandhalf Marketing Agency for Property Managers.

Catching Up with NARPM Women’s Council for Property Managers Christina Wade and Kesha Jenkins of the Women’s Council for Property Managers join The Property Management Show to talk about the progress that’s been made since the last time we talked about the launch of this initiative. We’re revisiting the mission of the council and talking about some of the things that have come out of it. There’s a lot of insight and many success stories that have really empowered women in the property management industry. Women’s Council for Property Managers The Women’s Council for Property Managers is a NARPM group that was founded with the goal of equipping women to grow professionally and personally. The council enhances professional development and networking opportunities for women in property management so they can step into leadership roles that they may desire to fill but don’t feel prepared for. This is for any woman with any role in any property management company. All that’s needed is a desire to grow and expand in any way. It’s a challenge to step out of their comfort zones to access the tools that are needed to succeed. Success Stories and Successful Events Kesha’s first event happened to be a fair housing event, which was extremely informative and shared lots of knowledge. The event itself went off without a hitch and she was surprised that after 22 years in the property management business, she still managed to learn a lot during that event. This is why the Women’s Council for Property Managers is holding these meetings. Even though everyone in the room has been in the business for some time, there’s so much yet to be learned and discovered. By learning together, the women in the council are supporting their own careers and they’re supporting one another. After joining, Kesha quickly felt empowered to step out of her comfort zone and lead the Sacramento NARPM chapter. During another event, a property manager was really struggling because she could not find the answers she needed to a particular challenge within her own company. No one was willing to help her, but the women at this even surrounded her with support and encouragement. They provided referrals to specific people who could help her and get her the answers she needed. This was transformative: understanding that even when it seems no one is willing to help, there’s a support network willing to provide direction. Everything that had been envisioned for this council is actually happening, and Kesha and Christine say it’s been uplifting to witness. The purpose and the mission of the group is actually coming to fruition at these events. Taking Risks to Yield Results Anytime you start something new – whether it’s a company or a podcast or a group, you don’t know how it’s going to turn out. Maybe no one will show up. Maybe no one will get involved. Maybe it will be a complete flop. That’s a risk in trying something – but for the Women’s Council, it’s exactly what women in the industry have needed. Any backlash against the group has been due to people not understanding the mission. It’s not intended to put any one group ahead of another. It’s supporting people who want to step into leadership positions within their industry and their community. Community is at the core of this movement. Like-minded people are getting together to share knowledge and tools and they’re lifting each other up. Property Management Communities are Out There Something that may not be obvious to all property managers is this: There’s always a community that’s willing to help. If you approach one community and it’s not a good fit, keep looking. Many smaller groups and communities can be found within the industry. You’ll find the right fit. Generally, people in property management are accommodating, and once you find your tribe, you will notice a big difference in what you’re able to do as a group. This is especially true within an organization like NARPM, which fosters a true feeling of camaraderie among professional property managers. Christine and Kesha recommend looking for local groups and online groups. Facebook groups can be great, as long as you’re cautious. There’s a lot of hate and negativity on social media, but you can quickly find the same handful of people who are genuinely helpful and always positive. They’ll be willing to help, and instead of being combative, they’ll want to assist you in finding solutions. Don’t be afraid to reach out to people personally. Christine notes that Brad Larson was extremely helpful in getting the Women’s Council started because she got in touch with him to talk about it. If someone doesn’t respond, don’t take it personally. It doesn’t mean anything except that you aren’t meant to connect. Keep looking and keep trying. As you take steps forward, the right people will show up to help you meet your goals. Start with your local associations if you’re not already a part of them. And, if you don’t see a group out there, why not start one? Be the person who helps someone else, because what you put out there is what you’ll get back. That’s an important thing for everyone to hear. If you drop in and out of professional groups and associations, you won’t be nearly as successful as if you become fully engaged. How to Be a Force for Change Not every market in the U.S. has its own NARPM chapter. So, if you want to gather a lot of talent together, start locally. Talk to other property managers in your area. Those who belong to NARPM are there because they want to change the industry and make it better. You can start right there in your hometown. Get together with other property managers and start something. If they don’t want to work with you, move further out until you find the people who do. Kesha is actually doing this. In Alabama, Brian Jenkins has been trying to establish a NARPM chapter in Birmingham because there’s a real need for it. The industry is growing in Birmingham and Mobile and Montgomery, but right now local property managers have to drive to Atlanta for their regional chapter meetings. Kesha is working with Brian and local Alabama management companies to set up a NARPM chapter. There’s a huge community of residential property managers who need this resource. You’ll find that once you get a few people willing to work on something, it snowballs. Momentum is built – even after some initial hesitancy. Encouraging people to step out of their comfort zone once you’ve done that yourself is really encouraging. The status quo is comfortable. It’s tempting to stay there. But, as the Women’s Council and its members have realized, there might be something better on the other side. Avoiding Burnout and Doing Too Much Maybe you want to get involved and access resources like what’s available at the Women’s Council, but you’re just too overwhelmed. How do you move forward when you’re burning out? This will depend on what energizes you. Maybe there’s one person in your life who can lift you up and get you moving in the right direction. Maybe you just have to do it for yourself. Kesha says that she came very close to burnout because she was putting 100 percent of herself into everything she was doing every day. She was a property management superhero and the president of Sacramento NARPM, sometimes working until midnight. She talked with her husband, she began working with a therapist, and she learned how to make some space for herself outside of the work so she could save her strength and her peace of mind. Taking some time away, traveling, and building a support system made all the difference. If you’re bogged down and overwhelmed, do what you need to do to find balance. Start somewhere small. You’ll get your insight back and you’ll find your people. A lot of the typical property management groups you may find are hyper-focused on growing the business and getting more doors. On the surface, it seems like what all property managers are supposed to do, but it doesn’t have to be your priority. Those doors will come. Revisit your priorities as a person and as a business. You don’t have to play the grow game just because everyone else is. Christine says it’s important to remember that you’re more than a property manager. You might also be a wife or a mother or a partner. You may have other priorities. That’s okay. She says that if she’s not raising good humans, what’s the point of being a good property manager? A lot of women have a strong desire not to fail. Women want to prove they’re worthy to be in their position and that they are capable of wearing multiple hats while being successful. Don’t fall into that trap. Learning More about the Property Management Industry Kesha says she was surprised to learn how many men in property management are actually supporting the women leaders they work with. Her boss Ted has been helping and encouraging her for 15 years. Brad Larson has been a huge supporter and Tony LeBlanc has been extremely helpful in providing support and resources. Men attend the events hosted by the Women’s Council, and they are proud to do that. If you like what you’ve heard in this podcast, and you’re interested in joining an event or being involved in the Women’s Council for Property Managers, make sure you’re following the upcoming events. Stay tuned because as the council gets bigger and stronger, the growth will provide new opportunities. If you have any questions, please reach out to us at Fourandhalf, and we’ll put you in touch with the leadership at the Women’s Council. The post Catching Up with the NARPM Women’s Council for Property Managers appeared first on Fourandhalf Marketing Agency for Property Managers.

This week on the Property Management Show Podcast, Marie and Brittany are joined by Michael Lushington, CEO of Fourandhalf, and Ethan Lieber, CEO of Latchel, to discuss PM Grow Summit 2022. Fourandhalf and Latchel are co-presenting the upcoming conference, which focuses on the future of property management. How is the future of property management relevant now? This topic is on everyone’s mind right now. Many things are shifting in the property management industry, and everyone is wondering what’s going to happen next. The goal of PM Grow 2022 is to bring everyone together and pose that question. The conference centers on people and relationships and the future of technology. With the new landscape being created by COVID and the influx of money coming into the PropTech space, we have shifted the way we have to think about the future of the industry. It is important for property management companies to think strategically about growth and how they are going to scale their business. Michael & Ethan’s Vision for the Future of Property Management There are so many possible directions the property management industry may go in. PropTech money is going to keep changing things and this will drive small businesses to be better as they figure out how to compete with larger, VC-backed companies. How can you be more efficient? What kinds of technology should be put in place? It’s possible that 1 person with a sophisticated network of technology and personal connections could manage 100 doors by themself. There is a trend of management companies leveraging tech and people in new ways to bring down operational overhead. Better profit margins also mean more opportunities for marketing, new technologies, and new services. It’s going to be crucial that companies have the skillset to adopt these new technologies. This is driving how Michael and Ethan are thinking about this PM Grow Summit. Competing with VC-Backed Companies As Ethan mentioned, Latchel itself is a VC-backed company, although it is not a property management company. Similar to Fourandhalf, Latchel works with property manages to help them grow and be more efficient. PM Grow Summit intends to talk about how small companies can scale in the same ways as VC-backed companies using new technologies. The industry is trending toward more accessible tools for companies of all sizes. They can access the same operational efficiencies, they just need to know how to utilize them and create more efficiency. Why is this PM Grow a “must-go”? According to Ethan, coming to PM Grow 2022 or not is going to be the difference between achieving 4x profitability or not in the coming years. It will be the difference between growing your company and remaining stagnant. They have set out to make this show a real “difference-maker” and a “key point in the timeline of the property management industry”. This is a completely different kind of event. PM Grow 2022 will be filled with opportunities to learn things that can make a transformative difference to your property management business. The property management world is already shifting. There is no time to prepare for it, you need to embrace it now. For more information about PM Grow 2022, visit the PM Grow Summit website. The post What to Expect at PM Grow 2022 with Michael Lushington and Ethan Lieber appeared first on Fourandhalf Marketing Agency for Property Managers.

Do Guarantees Work? Chuck Hattemer of Poplar Homes is on The Property Management Show today, talking about the property management guarantees his company implemented more than six years ago, and how they’ve helped him build a better property management business. The Idea behind Making Guarantees a Marketing Strategy Chuck and his business partner have been running Poplar Homes since 2014. When they started the company, they quickly noticed how much anxiety there was around income stability for real estate investors. A lot of the landlords they were marketing to relied on timely rent payments to pay their mortgage, insurance, and maintenance. They heard horror stories around evictions. There was a situation in which Chuck and his partner had to help a new owner with an eviction. The tenant had managed to completely steal someone’s identity and moved into a home with an $8,000 per month rent payment. After the eviction process had begun, they went into the home to make sure the tenant had moved out. Ever since that experience, Poplar Homes has gone above and beyond what is necessary to make sure properties are secure and owners feel safe with their investments. The owners involved in that eviction became immediate advocates for their property managers, and it demonstrated to Chuck that if property managers can take care of the root of that uncertainty that so many owners and investors feel, it could become part of their process. That was the beginning of the guarantee program: income stability and evictions. It’s a perfect example of turning a common pain point into a unique sales proposition. Rent Guarantee and Eviction Guarantee: How They Work Chuck’s company implemented these guarantees before they were common: Rent is guaranteed to arrive to the landlord by the third business day of every month. Evictions, if necessary, are covered for up to $15,000 of legal fees. To implement these guarantees, risk assessment is necessary. But the results have been pretty clear. Most customers surveyed name these guarantees as the reason they chose to work with Poplar Homes. While a lot of companies throw guarantees around when they’re marketing their services, for Chuck it works because this service aligns with their brand. Their mission is to be a partner with the property owner throughout their real estate journey. All the other services you provide have to be solid before you can start making guarantees. Check out the Poplar Homes website, and you’ll see that their guarantees are front and center. The storyline throughout the website content is that their services are guaranteed. This messaging mentality is also part of who they are, and why they’re so successful with this unique point of service. Chuck says it’s about reaching their audience. The majority of single-family rentals are managed independently. By having guarantees, they’ve been able to reach into that audience of DIY owners and show them a new style of property management that they can trust. They’re guaranteeing the residents they place, which helps them address some of the negative emotions that a lot of landlords still hold when it comes to property management. Implementing Technology to Support Property Management Guarantees A lot of property management companies have begun guaranteeing rent no matter what. That’s dangerous and difficult to sustain. Chuck does not guarantee rent during vacancy periods, for example. There’s too much risk there. Instead, their rent guarantee is pretty specific to what owners really want: timely payments. It’s hard to imagine how they can promise that rent will be deposited by the third business day of the month. What about grace periods and processing times? They’ve built the technology to support that guarantee. The payment processing hurdle is easily managed because rent is due on the first of the month, and late fees are charged if it comes in after that. They’ve we’ve built the tech payment processing and grace periods on rents. We work with 12 month leases built a payment system that’s directly integrated with their bank. Renters can set up automatic payments, recurring payments, and even split payments if there’s a roommate situation. On-time and online rental payments are incentivized. When tenants pay online, they earn other benefits. With 80 percent of their residents setting up recurring payments in their system, rent is almost always paid on time. After the money is collected, the payment system is on top of what the bank uses, allowing for same-day ACH payments. The money moves faster and takes one day instead of three to seven days, which is typical with most property management software. Another process that supports the rent payment guarantee is tenant screening. They automatically screen incoming residents on credit and financial criteria. The system weights all of that, and there’s a lot less risk in these guarantees. If you’re a property manager using third party software, you can still offer a rent guarantee, but it may be difficult to guarantee that is’ paid by a certain date. Incentives to Increase On-Time Rent Payments You can’t guarantee rent if rent doesn’t come in on time. Chuck provides tenants with incentives to pay online and on time. They’re working on a program to report rent payments to credit bureaus, which helps renters build their credit. That’s one upcoming incentive. Another is a program they call Street Cred. This is a home savings program where every month that rent is paid on time, a credit is earned. Tenants can build these credits up over time so that if they want to buy a house in the future and they use Poplar Homes as their agent, they’ll be able to redeem that credit as cash back. Recently, a renter moved from San Francisco to Pittsburg and got $8,000 cash back after purchasing a home with Chuck’s team. This was after renting for only two years. This concept incentivizes tenants to pay on time and it also tells their renters that they do sales. A lot of property management companies who do real estate sales could do a better job of informing everyone they work with that they also do home sales. Sales should generate leads on both the owner side and the tenant side. Return on Investment: What is there to Gain with Guarantees? The ROI can be measured in a higher sales conversion rate. More leads are converted when they come in through the website because these guarantees give people a sense of wanting to know more. This is a nonstandard service. So, the sales conversion rate has increased and there’s a lot more brand loyalty. The conversion rate, after the guarantees were first launched, was more than 50 percent. Property management is a sticky business, but the customer retention rate at Poplar Homes is pretty solid. These guarantees have built trust and extended the lifetime value of every customer. When the pandemic hit, there was a pause on these guarantees because of the eviction moratorium. But, customers knew they would return eventually. Even early in the pandemic, there was a 97 percent rent collection rate with Chuck’s tenants. His clients stuck around even though there was more income instability. What Types of Owners are Attracted to Guarantees? Chuck identifies The Far Away Frieda as the owner profile most likely to benefit from a guarantee. These owners often have a geographically dispersed portfolio. They’re investing further from where they live. Investors don’t have a lot of standard practices when they have rental properties all over the country, so this structure gives them a solution. There’s a higher risk of surprises, and the pain is amplified when you have 10 single-family homes in different locations instead of one rental home close to home. They appreciate and look for less risk when they’re choosing property managers. The largest group of owners in Chuck’s portfolio are those who never used a property manager before. They will also be drawn to the guarantees because they go against everything that those owners expect from traditional property managers. These are accidental landlords or investors with one or two properties. They don’t have a lot of cash and wiggle room to float their mortgage payments, so they like hearing that their income is guaranteed and they won’t have to pay for evictions. There’s always a chance that fake landlords will try to game this system. But, it’s easy to catch fairly quickly, especially with the technology and the process that’s in place. How Property Managers Can Create Their Own Guarantees Chuck implemented the guarantee program within the first year of business. It was a pivotal experience in helping Poplar Homes stand out from the competition. His most important piece of advice is to know your risk model. First, make sure you have a reasonable guarantee that you can use over a long period of time. Find the risk factors you can control, such as tenant screening. De-risk your own guarantee so you know what you can actually deliver and what would only require backtracking. Explore insurance options. In the last few years, companies have begun offering insurance that you can attach to your property management agreement or leases which essentially helps you insure against these guarantee. Where might new guarantees start showing up? The next big pain point and area of uncertainty is maintenance. There can be surprise issues that come up, and that creates a lot of anxiety for owners. Poplar Homes has started rolling out a 360 service, which includes a maintenance credit each year. It even helps landlords invest in improving their property at the end of each year when they’re renewing the contract. Like the other guarantees, this profile fits the hands-off owners who want to de-risk their investment and have their real estate asset perform more like a stock, where they don’t have to worry about surprise costs. Wrapping maintenance into that inclusive fee is something Chuck and his team are testing in California and Washington. They want to explore how they can build on that going forward, especially with labor costs for maintenance going up. The eviction guarantee was paused during the moratorium, but business was not impacted too much. The team reached out to each client to let them know that they couldn’t continue to offer that guarantee because of the moratorium. Some owners were upset, but most were understanding. They’re still getting great day to day service, especially during the pandemic. Property managers were taking care of payment plan, evaluating the impact of COVID on leasing and ensuring maintenance was done safely. Such uncertainty made professional property management even more important. If you’d like to talk more about guarantees and how to implement this in your own property management business, get in touch with Chuck or contact us at Fourandhalf. The post Do Guarantees Work? with Chuck Hattemer appeared first on Fourandhalf Marketing Agency for Property Managers.

Misconceptions about Property Management Leasing Automation We’re talking about leasing automation today on The Property Management Show, and our specific discussion centers around what it is and what it isn’t. We’re also talking about how it can help property managers save time and improve their reputation. Our guest is Abi Wasserman, sales manager at ShowMojo. What is Leasing Automation? Simply put, leasing automation is the removal of any manual effort from the leasing process. With automation, you’re reducing the cost of manual effort that you put into the entire leasing process. From the moment the listing goes on the market to the way the application process begins can be completely automated for property managers. It includes syndicating the listing, screening a potential resident before they even visit the property, and coordinating showings. That’s the scope of leasing automation. One of the main misconceptions about leasing automation is that it simply means lockboxes or self-showing technology. Those things can be one component to leasing automation, but there’s more to it. Automation contains a lot of the self-showing process. It covers the way prospective tenants see a property. You can also still automate your leasing process without using lockboxes or self-showing technology. For example, for an occupied property a lockbox isn’t going to work. You can’t have prospective tenants showing up to take a tour of a home where your tenant still lives. Not owners want self-showing technology available, either. Showing technology might be part of what you do, but it’s not the entire automation process. What Leasing Automation is NOT There are some property management companies that have taken steps to implement workflow automation. A lot of sales people use canned responses to emails. That makes your process similar, but it doesn’t mean you’re automating that process. If you’re still picking up the phone to schedule and reschedule appointments or manually checking your calendar for times that are available to you or your phone is still ringing with inquiries – you’re not using an automated leasing process. If renters cannot self-screen before scheduling a showing, that’s not leasing automation. To be fully automated, you need to incorporate an entire process instead of taking one or two steps towards it. From the moment a property is available all the way up to a prospective tenant filling out an application, you can automate the process without any of your own labor. Once the screening starts and the move-in checklist comes out, you’ll need a high-touch plan to work with your tenants. The tech moves aside to the high-touch property management. Automation Does Not Mean Artificial Intelligence Maybe you’re worried that automated pre-leasing means people will try to call about a listing and get caught in an automated phone tree that takes forever to navigate and still ends up at someone’s voicemail. That’s a misconception. It’s also a misconception that robots will take over all of the pre-leasing work if you automate. According to Abi, you have to set up your process for best practices. Some property management companies want prospective tenants to be able to schedule their own showing online, without talking to anyone. Others prefer to have interested tenants talk to a live person. The automated process does not take out the human. It’s instead a prospect-driven leasing process that allows the renters to be in the driver’s seat. There’s an immediacy to it that prospective tenants want. A lot of times, tenants aren’t looking at listings during business hours. They’re scrolling through sites at 8pm or 11pm. When tenants schedule a showing or express an interest in replying, automated systems will still send a personal reply. It won’t be from ShowMojo if you’re a property manager using that software. It will be from a human inviting that tenant to schedule a showing. Most tenants prefer to schedule online. They’re more likely to use an automated form than they are to call the management company and spend 10 or 15 minutes trying to find a good time to see a property. They’d rather answer the five questions on a pre-screening questionnaire and move on. Automation Saves Property Managers Time For ShowMojo customers, the average amount of time saved is about four hours per day. That’s how long it takes to answer calls, coordinate showings, respond to voicemails, answer emails, and then reschedule showings. A lot of time can be wasted showing up at a property and having the tenant not be there. The automated process includes a rigorous confirmation procedure. Those tenants are more likely to show up and there are steps to manage cancellations or notify property managers if a tenant is running late. Less time is wasted. Instead of an inbox with dozens of emails that say showing requested, property managers using automation will have dozens of emails saying showing confirmed. They don’t have to do anything. Another misconception is that automation will reduce the need for people. That’s not exactly true if you’re a growing property management company. Take a look at the strength of your team members. Now that they have more time available to you, how can you best use their talents to grow your business? If you’re a smaller company or you’re doing all of this yourself, you can avoid the need to hire extra people. Automation and Reputation There’s also an impact on leasing automation and property management reputation. Many times, property managers get negative reviews from prospective tenants who are upset they applied for a property, paid an application fee, and then got rejected. Automation can make expectations more reasonable. Automating every part of your process provides a better experience for prospective renters. It starts with sharing your criteria and expectations. Each interested tenant will get a pre-screening tenant questionnaire before a showing is scheduled. That questionnaire can candidly lay out the criteria you will require tenants to meet before they’re approved for a home you rent. This can cover: Pets Income requirements Credit score minimums Rental history This information will depend on your standards and even where you are, because you don’t want to ask a question that violates the law. With this type of self-screening, you’ll have only qualified renters coming to the showing. The people filling out applications will be those who know they’ll meet your standards. This can prevent negative reviews. Automation also allows you to ask for feedback throughout the process. When a potential renter finishes a showing, you can ask about the property and you can also ask about the showing agent. You’ll get valuable feedback on rental value and you’ll also have some insight about whether your agents are showing the home the way you expect. Asking for feedback provides an outlet for tenants to vent before they go to a public review site. You can also uncover things you might not know are happening. Automating your pre-leasing process allows you to save time, improve tenant relationships, and increase your reputation. Those are wins whether you’re a growing property management company or a small business looking to maximize what you can do with the hours available to you and your very small staff. Questions? Contact us at Fourandhalf. The post Misconceptions About PM Leasing Automation with Abi Wasserman of Showmojo appeared first on Fourandhalf Marketing Agency for Property Managers.

The podcasts we publish on The Property Management Show usually inspire us to talk about the topics that we cover, long after the guests have left us. On today’s show, we’re sharing some of what we captured when Marie and Brittany were discussing the most common blind spots that property managers miss when it comes to marketing their business and their services. Two stand out: Positioning and Data. Most Common Property Management Marketing Blind Spot: Positioning Positioning can be a big blind spot for business owners and property managers. Here’s a question that we often pose to owners of property management companies: “What makes you different from your competition?” There are three common answers that we hear a lot: I am an investor myself. We care for your property like our own. We deliver peace of mind. These are great reasons for an owner to work with you. But these are not competitive advantages. They’re more like value propositions. They’re selling points, but they don’t necessarily set you apart from other companies. It’s important to communicate that you invest in your own rental homes and provide peace of mind and treat clients’ homes the same way you treat your own. But, you also need a differentiator, and these qualities are not that. You might be surprised at how many of your competitors claim those same three sales points. If you’re trying to position yourself as being better than your property management competition, you need something else. What does it feel like to work with you? What do you want your owners to feel like when they know you’re taking care of the leasing, management, and maintenance of their investments? Think about the experience of buying a used car. No one likes to do it because you know an over-aggressive sales person will approach you almost immediately, try to upsell you, and then keep you there for 12 hours while the financing is figured out. People hate that. So, you can position yourself as a used car company that offers 0 percent financing (which all of them do), or you can do what CarMax does, and solve the pain of used car buying. They know the process isn’t the best, so they allow you to do everything online and then arrive to pick up your car curbside without ever talking to a sales person. That’s a differentiator. Used car companies aren’t going to double their sales by offering 0 percent APR. But they might by positioning themselves based on their truly unique qualities. Property managers aren’t going to double their doors by offering peace of mind. These are the little things that make a big difference. Think outside the box when it comes to your market and what you can offer. Two things will help with this blind spot: Observe your competition. What are they doing and what aren’t they doing? Know your perfect client. Elevate Your Positioning Beyond Table Stakes This is hard. It takes thinking and creativity and brainstorming. We’re in a time of property managers offering guarantees. We did a whole podcast on that recently that will publish soon. When no one was offering guarantees – that was a competitive advantage. But, now that most management companies offer the same guarantees – it’s become table stakes. In other words, it’s so common now that many property managers feel they have to offer guarantees, just to be on level playing field with their competition. Sometimes it can seem like you’re running out of ways to make yourself stand out. What’s interesting is that reputation has a huge impact on whether or not those table stake offerings matter. If you’re a company that has a great reputation, it won’t matter as much if you don’t offer guarantees like other management companies do. People are going to want to work with you because of your reputation. But if you’re suffering from poor reputation management, offering guarantees and following through with them may play a bigger role in lifting your reputation and thus, your ability to grow. (Learn more about reputation management). These shiny new sales pitches – like guarantees – can help you gain some visibility. But, sooner or later you need something else. We recommend looking inward. It can be harmful for your business if you’re always chasing the next shiny object and the next big thing. You can overextend your team or put your business model at risk. Don’t lose sight of who you are. Guarantees are accessories for your business. But if you don’t know who you are and you bounce back and forth between what you offer, it’s hard for customers to get to know you. When you keep changing your offerings and they have no connection to each other, and they’re not tied to those core values, then it sounds like a gimmick. Beating the Positioning Blind Spot When you’re positioning your company, you have to ask yourself some key questions: Who are we and why are we here? Is this who we want to be? What do we already have in place? What do we need to stand out? If you’re positioning yourself in a gimmicky way that includes new and unrelated promotions every month, that’s going to define you. It could hurt your brand. Instead, figure out what makes your company tick. The way you position your company also influences the type of people you attract to your company. So if you’re positioning as a boutique company, or if you manage luxury estates, the types of clientele who call you will be different from the company that positions itself as property managers who promote affordable housing and Section 8 homes. Every business is different. Be clear on your strengths. Get over this blind spot on positioning with branding and messaging. Figure out who you are and figure out what’s important to your perfect client. Don’t forget to reach out to professional resources when they’re available to you. Collaborating with your team and hiring experts can make things easier as long as you’re willing to do the work to get to the place you want to be. The Property Management Show is brought to you by: Another Property Management Marketing Blind Spot: Data Another big blind spot is data, and part of the problem may be that data can be polarizing. Some people love data and others don’t want to be anywhere near it because they don’t know what to do with it. A lot of property management companies have access to a wealth of data and they don’t even realize it. That’s a huge blind spot. There are three specific areas where data can help. Reputation Management for Property Managers Reputation is a pretty low hanging fruit when it comes to your data. All those online reviews, whether they’re positive, negative, or neutral, are data points. Data isn’t always a number. It doesn’t have to show up in a chart or graph. It’s any input of information. Reviews are data, and you need to know how to utilize that data. You can make decisions based on that data that will help your business. First, make sure you’re asking for reviews so you have access to the data. Lots of software systems will automatically send requests for reviews to owners and tenants. When it’s automated, you’ll always have that data. Then, use the data to examine your process. If there’s a one or two star review that provides feedback, you can perhaps identify a problem with your process. Don’t assume the negative review is false. Do some research and see if you can use it. You don’t have to blame someone on your team, but take a critical look at the process that led to the bad experience. We know sometimes those bad reviews can come from difficult tenants or endless complainers. Typically, negative reviews will be maintenance-related or have something to do with the leasing process not meeting an applicant’s expectations. Maybe their application was declined. Sometimes it’s process and sometimes it’s perception. If expectations were different from what actually happened, that might tell you that you need to revisit your communication. When multiple people report the same experience, you know you have to look at what’s going on. But look at the single reviews, too. Others could have the same issues but choose not to leave a review. Book some time in your calendar to read those reviews. They are data points, and your business will be better. Tenant and Owner Retention Understanding how long you retain owners and how long you retain tenants is not difficult. Most software systems provide statements that show average relationship lengths. Tenant retention will depend a lot on your market. If you’re in a college town or a city with a lot of digital nomads, you’ll have different tenant retention rates than an area with families who are nesting. Understand the normal length of tenancy for the types of home you manage. Then, compare those numbers to your own numbers. This data will give you insight; are your tenancy numbers where they should be or is there something you can do to increase retention? Then, you have to look at your owner retention. When someone terminates a contract or doesn’t renew, do you ask them why? A lot of property managers just move forward, but this is valuable data that you want to access. You need to know how long you’re able to keep an owner. More importantly, you need to know why you lose them. Quantitative data is numerical. Qualitative data is more nuanced. You need both. Track this information and look at trends. If, five years ago, the average owner stayed for four or five years but recently they’ve only stayed for two years, what has changed? This tells you something. Evaluating your Owner Lead Volume When it comes to leads and how you use data to evaluate your lead volume, a huge blind spot is quantity versus quality. The number of leads you receive can often be a vanity metric. Of course you want more leads, that’s usually good. But, it’s important to look at your close rate as well. If you’re getting a lot of leads but you’re not closing them, either there’s a sales process issue or a problem with the leads themselves. Make the analysis and draw the connections. Maybe you think you need more leads. Just remember that more leads does not necessarily mean more contracts. Dive into your numbers and get an idea for which leads deliver new clients. Quality is far more important than quantity when we’re talking about leads. (Want to know more about identifying different kinds of leads? Check out our interview with Jeremy Pound, “Good vs. Bad Property Management Leads.“) Data is not as complicated as you think. It’s just information. These blind spots are common and you may have your own when it comes to property management marketing. If you’d like to talk about any of this, please contact us at Fourandhalf. The post Blind Spots in Property Management Marketing appeared first on Fourandhalf Marketing Agency for Property Managers.

Brittany and Marie joined Ethan Lieber on the Latchel podcast to discuss marketing gaps and how property managers can compete in an industry that’s only growing more crowded and more competitive. Ethan wanted to know how a property management company can position itself and build relationships to add the marketing fuel that’s needed to grow. Here’s what they had to say. Fourandhalf as Property Management Experts Fourandhalf is a marketing agency that creates and implements owner lead generating plans for property management companies. The main goal is to help property management companies grow through owner acquisition. They partner with their clients to get found online by property owners, which requires marketing strategies that target their ideal owners. Some of the marketing campaigns Fourandhalf manages include blogs and content creation, websites, SEO ads, and reputation management. Most Fourandhalf clients already have the foundation of their business set up. A good marketing campaign will work best when the operational side of your property management business is ready to go and ready to grow. Marketing and leads need infrastructure to be effective. Even the best marketing plans won’t work if no one is there to answer the phone and engage with leads. Over the last five years, a lot of people have wanted to get into the property management space to build a monthly recurring revenue model. Fourandhalf can work with people who are starting from scratch, but it’s a challenge because marketing takes time. Sometimes, newcomers to the industry believe that property management is just managing homes, but there’s a lot more involved, and that’s why Fourandhalf has also served as a connection hub for people in the industry. If you’re not ready for marketing, this company will put you in touch with the people who can help you build your foundation and prepare for the marketing component. Acquiring a New Client: Close the Holes in Your Funnel Most property management companies can think about their marketing and sales process as a funnel. At the end of the funnel is the client. The top part gathers everything that’s needed for marketing. You’re bringing people into the funnel, and you want to make sure there’s not a hole in that funnel. You want to make sure the funnel goes somewhere. That’s how you get marketing to work. When people come to Fourandhalf, they’re usually doing some sort of marketing already, even if they don’t realize it’s marketing. Most business owners reach out for help when they realize they aren’t sure of what they’re doing, or they don’t have the time to do it right. The first step of the onboarding process with Fourandhalf is to look for problems in the process that a property management company already has. It might be an unstructured sales process or a simple training issue with their Business Development Manager. Trends and Mechanics in Property Management Ethan sees management companies with a demand and appetite for growth. Increasing doors and revenues is a huge topic in the property management industry. Has this led to an investment in property management marketing? Yes, and for a couple of reasons: The real estate market is crazy right now. The higher demand for marketing is partially driven by the fact that house prices are high. With such a hot real estate market, rental property owners are starting to cash out on their investments. While word of mouth and referrals once made up for any natural attrition with a property management company, marketing is necessary now because that attrition is growing. It’s a little bit of panic for some companies. Competition is growing. More and more property management companies are arriving in markets every day. Companies have to offer competing prices and services, so that requires a marketing strategy that gets existing and new businesses in front of people. You cannot control that your clients are selling their home. But, if you’re a property manager who also offers brokerage services, you want to make sure your clients know you can help them sell. That’s part of marketing. The worst case scenario is finding out you’re losing a client after the house is already sold. It’s easy to forget that providing a service is holistic. It starts with marketing and runs through the entire property management lifecycle. It’s all interconnected. You aren’t going to provide every service for every client by default. You have to let them know what you’re capable of providing, and you have to market yourself all the time. When property managers think of owner marketing, they often think about marketing as something that happens before the contract is signed. But, you can’t stop thinking about the owners you already work with. You continue winning their business throughout the contract period. You can make sure they’re happy with you and you can upsell other services, especially if you have a brokerage. Act as a consultant, not just a property manager. Educate those clients on upgrading properties for better rental values, accessing equity, and other potential wins. Your marketing should talk to your current clients – not only your prospects. Find out why they’re in real estate in the first place. Get to know the why and the goals. This makes it easier to communicate with them. A final reason that marketing is more important than ever is that a lot of property management companies are being more selective about who they work with. They’re choosing to drop clients that aren’t ideal so they can focus on the clients that are going to make them money. How to Out-Compete the Property Managers in Your Market Property managers have a lot of local market knowledge. Ethan discussed this with Brittany and Marie on The Property Management Show. This advantage can be used to their benefit when they’re competing with venture capital companies and other competitors. There are other ways to position yourself to win more business. First, look inwards. Know who you are and what makes you special. Often, you’ll have a list of things that sound great to you but if you do a bit of research, you’ll see that those same things are listed as benefits for a lot of your competitors. You have to make yourself and your services really unique. It requires a deeper dig into who you are and what you do, and it’s hard. A lot of property management websites will talk about providing peace of mind, handling tenant relationships, and increasing ROI. You do those things and you should advertise it, but what benefit do you add that’s different than everybody else? Recognize what’s unique to you. Example: Realty Solutions Fourandhalf worked with Dave, from Realty Solutions, on the company’s new website. He’s a smart guy with a marketing background and when he gets a lead, he trains his team to ask that lead about their exit strategy. He wants to know the end goal. That’s pretty unique, so we advertise it on his website. Dave wants his customers to feel like Realty Solutions is on a journey with them. They talk through the end goal, providing a more consultative role than simple property management. That brings in new business. Connect branding to a feeling How do your prospects feel when they leave a meeting with you? Show them how you provide your management services, but make sure you’re letting them know what it feels like to have a property managed by your team. Explaining all this in your marketing materials is the hard part. It’s a creative process and you have to test and monitor it constantly. It’s important to be flexible, too, and to be willing to test different messages. Fourandhalf uses Unbounce, which is an interesting algorithm that puts one version of a page in front of a test group and allows you to choose the best version based on different test phrases and explanations. Reviews Can Show You How You’re Different It’s hard to find hacks that help a property manager come up with their unique competitive advantages. It usually takes time. However, you can always put your reviews to good use. If you don’t have a lot of reviews, conduct a survey of your current clients and find out what they like best about you. It’s easy to feel bad about the negative reviews. But, you should use those, too. Prospective renters and current tenants can be ruthless, so it’s hard for property managers to look at negative reviews without a bias. But, if you look at them objectively and identify the holes or opportunities in your process to make experiences better, you’re closing a big marketing gap. Fourandhalf works with someone who invites people to have a conversation with her when they leave a bad review. If an applicant leaves a bad review because they paid an application fee but didn’t get approved for the unit, she calls them in and explains exactly what their application was missing or where it was deficient. This helps them. She’s had people go in and completely change their review. It’s not always reasonable to sit down with everyone who is unhappy, but making time to use those negative reviews can change the experience people are having. Latchel and other platforms can often protect you from bad reviews. Those reviews are collected before they’re published. But, in some places anything can be written and companies have little control. This is why it’s important to set expectations early. Let applicants know, in writing, what your criteria are and that application fees are nonrefundable. How to Evaluate What You Should Spend on Property Management Marketing What you should be spending on marketing is relative. It depends on your business and it largely depends on your area. Marketing a property management business in a state like California is different from some of the markets in the Midwest. Before labeling your marketing spend as too high or too low, know your business numbers. You need to understand: Your annual contract value – how much is a property management contract worth to you? Your lifetime customer value – how long do owners stay with you and how much money do you earn from owners over the time period? These two numbers in particular will give you an idea of what you need to spend. If each owner brings you X dollars over the course of five years, how much should you spend to acquire them? Go as deep as your data will allow. If Property Owner A costs $500 to acquire and stays with your company for one year but Property Owner B costs $1,500 and stays with your company for 10 years, you’re working with different marketing spends. What do you care about more – growing by doors or growing your profit margin? Most property management companies will care about profits. But, you might be thinking about selling that business in five years, and you want as many doors as possible so you’re acquired at a higher price. Otherwise, the number of doors you have is really a vanity metric. You’d likely rather have higher profits. A lot of management company owners are shifting priorities and seeing this as the ultimate goal. Here’s some math to help you see how the numbers are so important in establishing what you should spend: You close a contract and, based on the rent you’ll bring in, you can expect to make $10,000 a year on the portfolio. Your operating margin leaves room for a 20 percent profit, which means you earn $2,000 every year on this one contract. You put that money towards marketing. You paid $2,000 to acquire the new client, so you’re not making any money in Year 1. But, in Years 2, 3, 4, and 5, you earn $2,000 every year. That’s a profit of $8,000 on this one client who stays with you for five years. Property management clients who don’t have this data available to them can request a workbook from Fourandhalf. It’s easy to gather the information and you’ll see what kind of calculations to use. You may be wondering if there’s a rule of thumb for what your ratio should be. Here’s what Fourandhalf recommends: A healthy ratio, in general is 3:1. So, your lifetime customer value would ideally be three times the amount you spend to acquire that customer. You’ll have to adjust for your unique goals. Maybe you want something more aggressive. If your lifetime customer value is five or 10 times what you’re spending to acquire new business, it’s a clue that you could be growing more, and a larger spend might be a good idea. (for more on Lifetime Customer Value and other property management KPI’s, check out our KPI blog series!) Remember that lifetime value needs to be inclusive of your operating costs. A better operating margin gives you room to increase the acquisition costs and you can spend more on marketing. Ethan stresses this because it explains why and how venture backed companies spend so much on marketing. They’ve invested so much in automation, and they have a higher operating margin. When Should Property Managers Begin Marketing? It’s never too soon to launch some marketing initiatives because you can start small. Marketing doesn’t have to be all or nothing. Building your reputation is something you can start right away, and you don’t have to have 5,000 doors to do that. The biggest mistake management companies make is starting too late. They’ve already lost money in client attrition and they’re climbing the wall to dig out of a hole. Start wherever you are. It’s going to be hard to grow if you’re a property management company without a website or a GoogleMyBusiness page. Automation isn’t always necessary in the beginning. Foundational pieces can bring in new business as well. Once a company knows who they are and the audience they’re speaking to, they can begin thinking about automating this to do as much as possible with the dollars they have. Marketing isn’t something you do once and then forget. It’s also not cookie-cutter. Your branding and positioning strategies depend on who you are and your market. Something that works for a business in Florida won’t work for a business that’s in Nebraska. Property management marketing is a time and financial commitment. Make sure you have the budget to invest long-term instead of starting something and then ending it after a few months. More established businesses understand that better than companies that are brand new and want to hit the ground running. There is a marketing mindset. If you think you can do marketing for three or six months and that’s all, Fourandhalf will often recommend waiting until you can afford a real commitment. It takes some time for you to reap the benefits of your marketing plans. You can have the best message in the world but if it hits your perfect client at the wrong time, they won’t buy. You cannot think short-term when it comes to marketing because your expectations won’t meet reality. Sales Cycles and Property Management Marketing The length of a sales cycle really does vary. Lead Simple runs some great reports and one of the metrics is the sales cycle. It’s hard to track when an owner first saw the direct mail you sent out, but understanding your sales cycle has a big impact on marketing results. If your sales cycle is 90 days, you won’t know for 3 months if your marketing is working. It’s a grind and it takes time. This is even harder in property owner marketing. There isn’t a large pool of data to pull from, so a 90-day cycle is the earliest you’ll see any results. It could be six months or a year, and that’s hard to wait for. It’s why Fourandhalf tracks what’s working in different areas and for different clients. Outsourcing your marketing is often more effective because experts can go through the analytics with a comb. If your website is getting high traffic numbers, that’s great. But, if owners looking for property managers only make up five percent of that traffic, you need to make an adjustment. You don’t want to attract tenant leads when you’re looking for owners. Marketing Success Stories: Real Estate Gladiators Real Estate Gladiators is a Fourandhalf client with the correct mindset in terms of thinking about marketing as a holistic thing that’s sustaining and not temporary. They doubled their portfolio after a one-year marketing strategy. Tracy and Katherine took the advice they received and they were engaged throughout the process. But they didn’t stop at marketing. They also understood the value of a solid sales process. Fourandhalf was helping with the marketing, and Real Estate Gladiators understood the importance of finding clients that fit. They also put processes into place so that when the leads came in, it was clear who on the team was accountable and who should follow up, and when. There was a smooth transition from the sales team to the operations team. That seamless onboarding process helped to boost reviews because owners were impressed from start to finish. It fed back into the marketing organically. New business was created based on their great systems and processes as well as the marketing. It’s hard to trust a company for over a year, but when the business doubles, you can’t really question the results. The lesson of Real Estate Gladiators is to trust the process. Recently, they’ve been acquiring books of business for less because they know their numbers. If they want to buy a certain number of doors from another property management company, they can show the seller exactly how long it will take them to acquire an equal number of doors, and how much it will cost. That has inspired sellers to drop their prices dramatically. They have a stellar reputation and Fourandhalf loves using them as an example because it demonstrates that marketing results reflect what you’re willing to put into it. This is a collaborative effort. You can’t throw money at a marketing plan and expect it to work. If you’d like to talk about property management marketing, contact Fourandhalf. Your journey starts with an initial consultation that’s all about where your business is now, and where you want it to go. The post Closing Marketing Gaps to Compete in the New Normal appeared first on Fourandhalf Marketing Agency for Property Managers.

Summary: The Property Management Show is back this week to continue our conversation with Ray Hespen of Property Meld. In the last episode, we talked about property management maintenance trends and increasing costs. Today, we’re mostly talking about how property managers can position themselves to have effective conversations with owners about maintenance. Key Takeaways: Talk to owners openly about the fact that maintenance costs are rising. Explain that it’s happening everywhere – not just to them. Communicate. Educate. Don’t leave them to draw their own conclusions. It’s costly to lose owners, and to keep them your message needs to be that you can help deliver better ROI, even with the property management fee. Owner engagement has to move beyond a simple monthly accounting statement. It needs to be a live updated and ongoing conversation. You can prioritize keeping costs down for owners while still making money on maintenance. Property Management Messaging We learned last week that a 10 percent increase in costs is likely to drive an owner away from property management in an effort to lower costs by doing it on their own. Like all of us, most owners don’t like to admit when they’re wrong. So, even if they begin managing on their own and realize they can’t keep costs down, they’re unlikely to return to their property managers. The property management industry needs to pivot when it comes to messaging. Stop talking about obvious benefits to property management – like peace of mind. Instead, the constant message needs to be that you can deliver better ROI by managing lower maintenance costs. Talk to owners openly about the fact that maintenance costs are rising. Explain that it’s happening everywhere – not just to them. Talk about the things you can do that they can’t: Increased buying power Access to vendors they can’t access on their own Long term relationships with vendors and contractors and suppliers. Internal maintenance teams You have to share the right message and you have to make sure your owners believe what you’re telling them. This is all about perception. Your owners need to believe that even though prices are higher, you’re still doing it for less than they could do it. Communicate. Educate. Don’t leave them to draw their own conclusions. Stepping Up Your Owner Engagement It’s costly to lose owners, and to keep them your message needs to be that you can help deliver better ROI, even with the property management fee. The only reason anyone wants to manage their own property is because they believe they can do it cheaper than a property manager. Your job is to change this perception. It has to be the conversation you have with existing owners and new owners. Selling new owners on peace of mind isn’t wrong. It’s true that you deliver peace of mind and protect their investments. But, you have to tell them what else you do. ROI is what matters, and right now you’re losing clients and not getting new clients because of maintenance costs. You have to address that. There’s a huge landlord market in the U.S. Check out these statistics from Ray: 8 million rental homes are professionally managed in the U.S. 23 million rental homes are self-managed by landlords. Retaining clients and acquiring new clients line up together behind messaging. If the industry can show landlords that property managers maintain homes at a cost that’s better than what they’re doing, there won’t be a self-managing landlord left in the U.S. Messaging includes knowing your audience and their hot button issues. Throughout 2020, property managers had an opportunity to market themselves as experts in the complex legal situation that the pandemic brought about. Landlords didn’t know if they could collect rent or send a notice, and property managers were relied upon to take care of that for their owners. Now, we’re coming out of that. Courts are opening and evictions are happening. Rent is more consistent. Maintenance costs are now front and center. It’s a new fear that property managers have to be prepared to talk about. How Property Managers Can Position Themselves Hopefully, you caught the podcast with the Real Estate Gladiators. Tracy Minick and Katherine Swanberg talked about how they constantly communicated with their owners everything that they were doing for them, even during an eviction moratorium and a difficult period in rent collection. Talk to your owners about what you’re doing to save them money – even while costs are going up. Ray has some additional recommendations on how property management companies need to position themselves right now. Here are his tactical suggestions: Explain what’s happening – maintenance costs are rising, and here’s why. Provide education. Talk about what you’re doing about it. Solicit preventative programs. Make this an active conversation at least once a month. The owner engagement has to move beyond a simple accounting statement every month. It needs to be a live update and an ongoing conversation. Not all your property owners are going to complain about rising costs. They’re just going to leave without any explanation. Get ahead of these conversations. Owners need to see you doing things they wouldn’t have done themselves. A good example is preventative maintenance. The team at Property Meld is encouraging their customers to solicit for owner approvals to adopt preventative programs. Maybe you can offer an annual HVAC inspection in March for $99. Explain why that expense is worth it: because the average air conditioning call in the summer is a $500 repair and you want to prevent that expense. This is part of how you keep costs down. Owners wouldn’t do this on their own. It’s how you show them that you care about their money. Work-From-Home Tenants and Maintenance Costs With tenants still spending more time at home, appliances are being used more and wear and tear is happening a lot faster. Should owners invest in high-end materials and more expensive systems to avoid frequent replacements and repair costs? It’s not much of a trend yet, especially among independent landlords. Institutional investors have access to the data that tells them exactly which model of which dishwasher will save them the most money in a rental home. Owners who are worried about costs can’t make it over this hurdle without the same data. One thing a property management company might consider doing is buying appliances and items in bulk. For example, if you can buy a stockpile of toilets, you’ll save 30 or 40 percent on what you’d pay to replace toilets one by one. Use your buying power. Making Money on Maintenance You can prioritize keeping costs down for owners while still making money on maintenance. Maintenance is a huge cost center – a $75 billion industry. Property managers who run high-performing maintenance teams make the most money in property management. Property Meld recommends using technician utilization rates as a KPI. If you want to be profitable with in-house maintenance, you need to keep your people busy doing work. Track it. You don’t want to bring maintenance in-house and hire an arbitrary six people just because you expect that’s how many employees you’ll need. Start incrementally. Hire a handyman. When they’re at an 85 percent utilization rate, hire someone else. Remember that you can always backfill with outside vendors. A hybrid system of in-house contractors and outside vendors usually works best for most management companies. Messaging is tactical – that’s the message of today’s podcast. Make sure you’re positioning yourself so that owners know you’re getting them the best returns. Check out the information Property Meld has on their website and contact us at Fourandhalf if you have any questions.   The post How Remote Work Is Impacting Property Management Maintenance | Part 2 appeared first on Fourandhalf Marketing Agency for Property Managers.

Summary: It’s been a year since we had Ray Hespen, co-founder and CEO of PropertyMeld on The Property Management Show podcast to talk about COVID-19 and its impact on property management maintenance. The last time he was with us, we discussed ghost maintenance – the idea that all these tenants were at home with the pandemic and no one wanted maintenance technicians or vendors in their property. So the theory was that a backlog of unfulfilled maintenance would develop in the early days of the pandemic. We have him back today to find out if that happened. Key Takeaways: As predicted, maintenance requests in 2020 dropped off in March and April, and then saw a huge uptick beginning in June. Maintenance requests in 2021 have stabilized, although Ray has seen a rise in maintenance cost and a rise in the number of requests, which he believes is a result of more folks working remotely from home. The rise in maintenance costs is due, in part, to the disruption of the supply chain and the fact that vendors and technicians want to be paid more. Ghost Maintenance and Rental Properties As expected, there was a huge drop off in service requests in the beginning of the pandemic. Then, as vendors and maintenance companies began putting safety protocols in place, the repairs requests began to pick up again. The 2020 year was not business as usual in property management. Ray was on the show last year because he saw a significant reduction in the volume of maintenance requests. Requests began to drop off in March and then in April they were at a complete standstill. In May, people began to feel better about reporting those critical repairs and allowing maintenance teams into their homes. By June, there had been a large backlog created, but there was an increase in work that was being completed. Through the rest of the year, service professionals were working through that backlog. An equilibrium was reached around October, and more maintenance issues were being generated. The power of data allowed Ray and his team to make these assumptions, which turned out to be completely accurate. Property Managers and COVID Maintenance Safety protocols for vendors and technicians were a big part of managing maintenance needs during the worst of the pandemic. Property managers were also proactive about soliciting their tenants for any known maintenance needs. The concept was that even if the tenants didn’t want someone in the property to fix the problem, property managers still wanted to know there was a problem. The goal was to help tenants feel comfortable submitting the requests. This was helpful in managing the backlog because once things opened up again, they could prioritize the work needed. Soliciting maintenance request requires a balance. Property managers don’t want to generate extra costs or invite unnecessary maintenance work for their owners. However, maintaining the property is important, so focusing on those preventative issues and making sure small problems can’t become large problems is important. Property managers understood this. Replacing a leaking toilet can cost thousands of dollars while fixing a gasket is relatively cheap. Property managers serve their owners by paying attention to those things that protect them against larger costs. Shifting from 2020 Maintenance Trends to 2021 Things are stabilizing in 2021 with maintenance requests. Vaccinations are available and infection rates are not as high. Tenants are generally more open to having people in their homes. The changes that were made in 2020 are still in place. Vendors are mindful of safety protocols and property managers are still soliciting if they’re worried a tenant isn’t reporting necessary maintenance. Comfort levels have changed, and residents are communicating with their property managers and their maintenance providers about scheduling. It’s systematic and these things will likely stay in place even post-pandemic. Remote Work and Rental Property Maintenance The data shows a couple of interesting points. First, there is a slight uptick in maintenance and service requests overall. These increased maintenance requests are consistent with a culture that’s increasingly working remotely. Residents are in their homes more, so there are going to be more toilet flushes and door handles turned. Statistics show a six percent year over year increase, which is statistically significant. Second, the invoice costing is up. Rising costs are a big issue for property managers and their clients. Invoices for maintenance are around 18 percent higher. This is statistically significant and it’s also something property managers need to pay attention to. Why? Because an owner will leave a property management company if there’s a perception that maintenance costs are too high. Any property manager will understand that. Studies show that if annual maintenance costs exceed 10 percent of the rent roll, the likelihood of customer churn goes up significantly. Invoices that have increased by 18 percent will lead owners to believe they can do it cheaper. They probably can’t – but they don’t know that yet. This is what has property managers most worried. Explaining the Higher Maintenance Costs Lumber prices are maybe 300 percent higher right now than they were 12 months ago. Parts costs more. There have been serious disruptions to the supply chain as well that are driving prices higher and creating a spike in invoice costs. We’re also seeing vendors and technicians who want to be paid more. These things have created maintenance costs that are 15 to 22 percent higher than they were a year ago. As an industry, we should be prepared for these higher prices to stay. The rental industry is nuts right now. Buying rental units as an individual owner right now is nearly impossible. There’s a ton of institutional money coming into markets all across the country. They’re paying for properties in cash without actually seeing them or requiring an inspection. There’s also a build-to-rent movement that’s gaining steam. They need plumbers and electricians and construction workers, so the competition for labor is also going to keep prices higher. Property managers cannot just pass these costs off to the owner because they’ll risk losing business. It’s a big deal, and something we all have to be prepared to deal with going forward. Maybe a blended maintenance team provides property managers with the lowest cost offering. There are constraints, and smaller companies can’t afford to keep a maintenance professional on staff full-time. Driving down the costs of delivered services will be difficult for property managers who provide value to their owners. We’ve got more to talk about on this subject, so join us for Part II next time. Before then, always feel free to contact us at Fourandhalf with any questions you might have about The Property Management Show podcast or anything pertaining to property management marketing. The post How Remote Work Is Impacting Property Management Maintenance | Part 1 appeared first on Fourandhalf Marketing Agency for Property Managers.