The Property Management Show

On The Property Management Show today, we’re talking to John Bykowski, CEO at Fourandhalf as well as Matt Simons, general manager of Abodea. Our topic is maintenance for property management companies. How can maintenance be a bottleneck to profitability, and what can property management company owners do to mitigate that risk? By the way — have you caught our other episodes on Bottlenecks to Property Management Profitability? If not, be sure to check out our episodes on: Focusing on the Wrong Activities, Poor Accounting and Leaky Sales Funnels. Alright, let’s dive in! Introducing Matt and Abodea Matt is responsible for building the customer service component of what Abodea does, and if you’re not familiar with Abodea, you might have known them as SuperTenders, which was founded as NightTenders. They were the first company in their space to provide after-hours maintenance support to property managers. Now, the company coordinates maintenance support for property management companies at all hours of the day and night. If the power goes out or the bathroom is flooding or it’s 105 degrees and the air conditioning doesn’t work, you can use Abodea to respond to the tenant, diagnose the problem, and take the appropriate action. The company was created by a property management veteran who recognized that maintenance is a major pain point for property management companies. John and Matt met at a sales conference in Nashville recently and got to talking about how maintenance can really be a bottleneck for property management companies that are trying to grow. How Maintenance in Property Management Can Hold Your Company Back A company’s scale of operations can create a bottleneck when it comes to maintenance and profitability. Abodea discovered that customers who were smaller or start-up companies were dedicating a lot of time and resources to maintenance, and not getting anything back. Maintenance is unpredictable. It’s not like collecting rent or paying owners. You can go months without any maintenance needs or have three properties need something major in one month. So, it’s hard to allocate resources to efficiently manage the repair issues and dispatch vendors. Maintenance is a delicate part of your property management business. Each maintenance call is different in its importance and urgency. A repair that’s handled the wrong way can cause long-term, sustained damage to your owner’s property. It can deplete the quality of life for your tenant. So when it’s 3:00 in the morning and you have to make a quick decision, your judgment can be difficult to trust, no matter how long you’ve been in the business. This can create customer churn. There’s also the matter of finding and retaining good vendors. You have to build a vendor list that includes professionals you can trust. It’s a good idea to have three or four vendors you can call in each specialty so you have the confidence that you’ll be able to get someone on the phone immediately when necessary. Building and maintaining a vendor list takes a lot of time and resources. Doing maintenance correctly can be an overwhelming cost, even for large property management companies. PM Grow Summit Sponsorship Building Maintenance in Property Management as a Revenue Stream On the flip side, there are revenue streams associated with rental property maintenance. That revenue can offset the cost of maintenance, and sometimes significantly. So, the entire maintenance experience for property managers is on a spectrum. It can be a big cost center or just a big cost. And, if you’re not appropriately scaled or you haven’t allocated your maintenance resources correctly, you can lose customers and create damage to properties. Usually, maintenance is separate from general property managers. A lot of companies have upcharges that are included in maintenance invoices. That’s because maintenance is unexpected and unpredictable. Each maintenance issue is a single event, so you’re being compensated for the time it takes to diagnose the problem and dispatch the appropriate professionals. If that cost isn’t property communicated to property owners, there will be issues. The upcharge has to be aligned with the market and easy to explain. Property managers face bottlenecks here if they can’t communicate the value of proper maintenance response to their customers. Moving from Big Cost to Cost Center with Maintenance: Know Your Numbers Know your numbers and your ratios if you want to move from losing money on maintenance to turning it into a profit center. Understand the costs you incur on maintenance, separate from the costs you incur on the business overall. Calculate your revenues too. These need to be separate and the only way to avoid cost creep is by staying on top of what your maintenance services are costing you and what they’re earning you. It won’t take long to find inefficiencies. Matt recommends thinking in terms of 400 units to one maintenance coordinator. If you have one staff person managing maintenance for 200 units, you’re probably not utilizing your staff in the best possible way. If your maintenance coordinator is responsible for 600 units, you may notice that details are being missed and mistakes are being made. There are bound to be distractions. If you’re not sure of your numbers or how to analyze what you’re spending or earning with maintenance, find some software or utilize a company like Profit Coach. Taking Ownership of Property Management Maintenance: Customer Service It’s not uncommon for company owners to be too involved in maintenance decisions. This can distract you from growing your business. It also leads to a poor customer experience. If a tenant is waiting for a repair because the property management company’s owner has to approve it before anyone can do anything, you can expect a damaging Yelp review before too long. As the owner, you have to be in tune with the quality of the customer experience. You don’t have to approve a sink repair. Make sure your maintenance process is confident and competent. Operationalizing maintenance is important and a good way to remove the bottleneck. You need clearly defined policies, practices, preferences, and expectations. Training, obviously, is critical. The maintenance coordinators at Abodea undergo a process of knowing how to troubleshoot and support the tenants who are calling. They need to know how to distinguish an emergency from a general repair. Your staff has to be able to do the same thing. The onboarding process that Matt uses involves 147 different questions for each customer. So, if you’re a property management company that’s going to start working with Abodea, they want to be sure they respond to each maintenance issue in accordance with your policies, plans, and priorities. So, you’ll answer 147 questions about how maintenance responses should be handled. While 80 percent of those questions often have default answers that are consistent from all property managers, the idea is to create a completely customized experience. No one gets the same exact service. Each property management company can also provide a prioritized vendor list. Responses can be consistent across a management company’s portfolio or dependent on each property within that portfolio. This sounds like a decision tree, and most property management companies have a decision tree in place when it comes to maintenance – but the maturity of that tree varies dramatically. Seacoast Commerce Bank Sponsorship Safeguard Your Maintenance Revenue Center As you’ve seen, eliminating the maintenance bottleneck requires you to know your numbers and standardize your practice. It’s also critical that you safeguard your revenue center. Every opportunity to mitigate your maintenance cost is important to pursue. Make sure you’re safeguarding the revenues that are due to you as a property manager. If you understand your market, you know what’s acceptable for maintenance charges. Find out if the standard maintenance upcharge is 15 percent or 20 percent. Make sure you’re where you need to be. Understand where your revenue can and does come from. Make sure you can explain to owners where the costs are. They won’t mind paying a maintenance upcharge only when they need it if it means keeping the overall monthly management fee lower. Know what your vendors are charging you. If you have great relationships and you’re receiving a 30 percent discount from your contractors, you can work that into a great profit margin. You have to know where your revenue is coming from just like you have to know where your costs are. Maintenance Myths: It Doesn’t Have to Be a Headache Maintenance doesn’t have to be as terrible as property managers seem to think it is. Whether your company is a start-up or very large or in the process of scaling, you can have a maintenance system that’s wired tight. Matt has seen it and he knows it doesn’t depend on business size. It depends on effort and strategy. Every successful maintenance department is different. Some property managers keep it all in-house and it works. Some companies outsource everything and it works. Sometimes, there are platforms or automations that work wonders and other companies keep it 100 percent human and that works too. You can find and maintain a positive maintenance margin. Scope of service and customer service will drive how you structure your maintenance department. At Abodea, they have done the math and with their 400:1 ratio for units to maintenance coordinators, it turns out that after taxes and payroll and recruiting fees and other hiring costs, your maintenance coordinator will likely cost you an average of $52,000 or $53,000 per year. Are you using that bucket of money effectively with an in-house maintenance coordinator? Maybe you are. Or, maybe you want to outsource it for less. Operate within the boundaries that you have. If you’re managing 25 doors, you’re probably managing the maintenance yourself. Make sure you have planned for what you’ll do when you have those 400 doors. Matt’s company handles a lot of maintenance calls. The statistics on maintenance vary wildly depending on market, tenant training, and maintenance delivery method. He does know that on average it takes about half an hour to diagnose the problem at a rental property. He also knows that about 50 percent of the maintenance requests that come through his company are emergencies. Tenant Training Reduces Maintenance Bottlenecks If your tenants are trained in how the property works and they’re aware of their responsibilities and expectations, you’ll have a lot fewer maintenance headaches. Abodea has presented a tenant training module because they know that it’s an important part of effective maintenance support. It brings down the number of maintenance calls that require a response. Not only are there fewer calls, but there are shorter calls. This enforces the idea that you can control more of your maintenance costs than you think you can. Tenant training helps. Get a better handle on your maintenance costs by reducing the time you have to spend responding to issues that tenants can take care of themselves. Matt has some ideas for this: Print up something for the fridge that walks tenants through the maintenance process. Create a separate document outside of the lease that lists the tenants’ responsibilities and where they’ll be held accountable. Have them sign it when they sign the lease. Create videos on how to handle sprinklers or garbage disposals. Make sure the tenants acknowledge that they watched the videos and understand the repair process. If the tenants know that replacing the batteries in the thermostat is their responsibility, you won’t have a call in the middle of the summer that the air conditioning isn’t working. It will save you time and it will save your owner the cost of sending a vendor out to the property to replace thermostat batteries. Don’t just promote tenant accountability – insist on it. Here’s what Matt and John want you to remember about today’s podcast: you can really remove the property management maintenance bottleneck to your productivity if you know your times. Find the wasted time and money in your maintenance process and do better so you can grow your property management business. If you have any questions, reach out to Matt at Abodea or contact our team at Fourandhalf. The post Bottlenecks to Profitability Part 4: Maintenance Limbo appeared first on Fourandhalf Marketing Agency for Property Managers.

Does Your Property Management Company Have A Leaky Sales Funnel? This week’s episode of The Property Management Show continues our series on removing bottlenecks to encourage profitability in your property management company. We’re joined by two superstars from RentScale, Berit Elizabeth and Milissa Miller. No matter how outstanding your property management marketing is, if your sales process isn’t airtight, you will lose business. Milissa and Berit are going to tell us the damage to property management that a leaky sales funnel can do to your profitability, and they’re going to share a couple of secrets that can ensure you’re not losing opportunities. By the way – if you’ve missed our previous episodes on bottlenecks to property management profitability, including focusing on the wrong activities, and poor accounting, you can catch up by clicking on the links. Alright, let’s introduce these sales experts, and kick off our topic. Introducing Milissa and Berit Both Milissa and Berit are consultants with RentScale, where they work with property management companies across the country on improving sales processes. They are both passionate about optimizing the sales process. They have worked in sales and in training throughout many different industries, and they are happy to be working with property managers because of the unique business model that comes with recurring income streams. What is a Leaky Sales Funnel in Property Management? Even if you’re new to sales, you probably have some idea of what a sales funnel is. You’re putting all your leads and potential business into the top of the funnel, and on the bottom of the funnel, you’re producing customers. When lots of leads are dropping into the funnel but few customers are coming out, your conversion rate is smaller than you expected, and you need to know where those leads are dropping off. This is what Berit and Milissa refer to as a leaky sales funnel. You have leaks in the funnel where those leads are falling out. You need to identify them and fix them so you don’t lose that business. Visualize a bucket. It would be great if all your water stayed in the bucket. But, if there are holes in that bucket, you’re never going to keep all the water. That’s what a leaky sales funnel looks like. A leaky sales funnel can break the bottom line of a property management business. You’re probably paying for leads every month. If you’re putting a budget towards those leads, you want to know how much money you’re spending on leads compared to the money you’re earning on signed contracts. That means you have to look at the sales process itself. There are many stages to that process, and you need to evaluate each stage to find out where your sales funnel is leaking. Are You Closing Enough of Those Leads? Maybe you’re not even looking at your sales funnel because you’re closing a handful of great business every month, so you assume everything is working just fine. Why go looking for problems? But, you have to know your sales funnel so you can avoid lost opportunities. Look at the bigger picture of how many leads you have coming in versus what you are closing. Does it make sense? You need to make sure you’re maximizing the leads that are coming in. If you’re not looking at your sales funnel, you’re not going to know what to fix. Make your sales process visual. You want to take a look at the definitive steps you take, and you want to see how people move through the process. It won’t take long to identify where they’re dropping off. PM Grow Summit Sponsorship How to Fix a Property Management Leaky Sales Funnel: Identify Your Ideal Client You need to attract the leads you want. Maybe you want to focus on attracting investors who are hands-off, or your company specializes in accidental landlords who never planned to rent out a home. The way you approach those leads will be different. You have to speak the right language through your marketing, otherwise there will be tremendous leaks in that funnel. One of the biggest leaks is not knowing who your ideal client is. Imagine for a moment that you decide your property management company is only going to work with yellow houses that have two stories and one front door and three windows. You’d probably be more profitable than a company working with all sorts of houses. Why? Because in your marketing, you’d be putting out specific criteria for who you were willing to work with, and every owner of a yellow two-story house would likely get in touch with you. If you know exactly who you want to work with, you’ll have an easier time keeping leaks out of your sales funnel. When you’re clear on your ideal client, it’s not only easier to attract clients. It’s easier to keep them. You’re setting an expectation, and that will lower your churn. Everyone will be happier. Customers will get the services they want and property managers will be happy because they know exactly what they’re doing and why. Fixing this one leak solves a lot of problems. Systemize Your Sales Process Once you’ve identified your ideal client, you have an entire sales process that needs to be systemized and evaluated. It probably starts with a phone conversation. After the initial phone call, you may move into an onsite consultation. Then, there’s the follow-up. How many steps are between the initial contact and the closed contract? It’s hard to pinpoint where that process is breaking down if you don’t actually have a system. Can you picture that bucket where all your leads go? You need a consistent process that’s followed for every potential new customer. If you don’t have that consistent process, there will be leaks springing from everywhere, and you won’t know where they started or how to stop them. Hope is not a strategy. A lot of property managers have excellent systems for operations. There’s a process in place for maintenance, rent collection, leasing, and accounting. But when it comes to the sales side, it’s easy to overlook the value of operationalizing your sales system. Maybe you’ve hired a BDM and they are taking calls but just winging it. That’s not effective. You need a predictable system. The system you put into place needs to be teachable and repeatable. As a company owner, you might not be doing the sales work, but you do know who your ideal client is and you do know what needs to happen to bring those clients into your funnel. So, you need to be part of operationalizing the sales process. You have the vision. You know what you want for your company. Get that process down on paper and make sure everyone in a sales role follows it. The sales process has to match your vision. If you want to attract a great sales person or a top notice BDM who maybe isn’t familiar with the property management industry but is an expert at sales, you absolutely need a process ready for them. They will bring the sales skills you need. But, the infrastructure is essential. A CRM system needs to be there already. The job of your BDM is to execute that process, not create it. Establishing Conversion Standards If you’re just starting to build your sales funnel, you’ll have lower conversion rates. It’s hard to say what your conversion rate should be. There are so many variables, including your market and the types of leads you’re bringing in. Remember that not all leads are equal. A referral from a Realtor who has an investor client ready to rent out a property is a much warmer lead that one you get from a lead generator like All Property Management. High conversions with colder leads means you’re doing something right. Each situation is different. You know what kind of numbers make you feel good. If you’re curious about the industry average, it might be a conversion rate of about 30 percent. But it’s tough to rely on that number because there’s so much more involved. Even if you’re converting 30 percent of your leads – are you satisfied with that, or do you want to close more? Here’s something to remember, however: Don’t put resources into lead attraction until you’re confident you can close them with a consistent sales system. Lost Opportunities and Unasked Questions There are a lot of other problems that lead to leaks in the funnel. Response time is huge, for example. If a lead comes in and sits in the funnel too long, they’re going to leak right out. Maybe you’ll have a great first call but then you can’t get that lead back on the phone to follow up. What went wrong? Are you making it easy for people to sign a management agreement when they’re ready? It all comes back to systems. A big part of the process is asking the right questions. You have to identify the questions that aren’t being asked. You need to listen for that one pain point that the owner is asking about but maybe not really asking. If you can identify the real struggle, you’re going to be more effective at moving that lead forward than if you simply dump a bunch of information on your lead about your company. Respond intentionally and make sure you’re tracking each interaction. Use that one pain point or that important question in all of your follow ups. Tracking your process is critical. Whether you’re using a spreadsheet or a program like LeadSimple, make sure you’re clicking off each milestone that’s reached in your sales process. It will show you exactly where things may be leaking or getting stuck. Use this information to nurture the lead back into contact with you. If you can see where they’re falling off or which stage is leaking, you can plug that leak. We call it active nurturing. Sales Process and Staff There’s a trend lately where different stages of the sales process are farmed out to different people. Maybe the introductory call will be made by a junior sales person, and then it goes off to the closer. Or, the most experienced person will start the process and then hand it off to a person with less sales experience once it looks like it’s really going to close. Is this effective? There are different theories on this, and there can be leaks whether there are several people involved in the sales process or just one. It is important to have the BDM fully engaged throughout the whole sales process. If you have someone dedicated to this role, they should be present from the first conversation to the end. If you have more than one person working the sales process, however, it’s even more important that your system is crystal clear and followed. In an attempt to prevent leaks, you can create more leaks if your process isn’t in place. If you’re a property management company without a sales department yet, your first step is to build the process. Systems are important. It doesn’t have to be perfect. You’ll learn as you go. But, you need a system in place that you can follow so you know what should happen and when. Make sure you have CRM as well. There’s too much to keep in your head. If your goal is to scale, you want to have a teachable and traceable process. Final Takeaway to Stop Your Property Management Leaky Sales Funnel What you’ve learned today is that to prevent a leaky sales funnel or to minimize the impact of a leaky sales funnel on your property management growth, you need to look at your process and you need to think big. For more information on how to identify holes in your sales process, contact the team at RentScale. And if you have any questions about this podcast episode or your property management marketing, contact us at Fourandhalf. The post Bottlenecks to Property Management Profitability Part 3: Leaky Sales Funnel appeared first on Fourandhalf Marketing Agency for Property Managers.

Welcome to The Property Management Show’s second episode in our multi-episode series entitled Bottlenecks to Property Management Profitability. Today, we’re talking about property management accounting. We’re joined by Daniel Craig from Profit Coach. He is sharing some juicy details on property management accounting and how it impacts profitability. There’s a lot that can go wrong for property management companies when it comes to accounting, and we’re talking about what you should be doing to get to profitability, and the tools you need to get there. Most of you probably know Daniel. But if you’re a new listener, let’s hear a bit about why his opinions on accounting matter so much. Property Management Accounting: Introducing Daniel Craig and Profit Coach Daniel came from a traditional accounting background. He has always done business with the intent of owning outcomes for the entrepreneurs he works with. Daniel understands that entrepreneurs are in business because they want to be free. They’re seeking freedom in finances, time, relationships, and purpose. Most entrepreneurs think of accounting as a simple way to file taxes and comply with the IRS. But, accounting is so much more than that, and Daniel’s passion is to show entrepreneurs how accounting can help you know if you’re achieving your goals. It can help you measure financial performance, get clear on where you want to take your business, and achieve your goals. Daniel and his company want to help you use your resources to achieve your purpose. He soon realized the property management industry is a great business to be in, and a lot of companies were doing great. But, he also noticed a trend where a lot of property management owners were working hard and not making a lot of money. His goal is to help the industry rise and break through to larger profits. Daniel worked with Lead Simple to do a financial benchmarking study for the property management industry, and NARPM noticed. They enlisted Daniel’s help to write national accounting standards for the property management industry. The Purpose of Property Management Accounting A lot of people find accounting to be less than exciting. As the owner of a property management company, you might think of it as dirty work that someone else in the company is responsible for doing. You just want to know your financial statements will keep you out of trouble and appease the IRS. But, the primary purpose of accounting is to measure financial performance. You’ve probably heard the phrase ‘what gets measured gets managed.’ Daniel believes that anything which gets measured, also gets improved. You’re in business to make a profit. Accounting measures that goal and gets you clear on your company’s financial performance. Bad accounting creates bottlenecks to profitability and prevents clarity. You need that clarity. Remember this: Clarity Drives Commitment and Commitment Drives Change. If you have goals but you’re not clear about where you are today, then you can’t possibly know what it will take for you to achieve those goals. You cannot allow yourself or your company to stay in a financial fog. It leads to uncertainty and keeps you noncommittal. If accurate accounting can deliver clarity, you will be able to make a commitment and reach the change that’s necessary for you to achieve the outcomes that you want. People think either they’re profitable or they’re not. But, it’s not black and white. There are degrees of profitability. If you’re not making money – that’s an obvious bottleneck. But, if you’re not making as much as you could be, that’s another bottleneck and you might not know how to solve it. PM Grow Summit Sponsorship Assessing Your Need for Accounting Clarity It’s possible your property management company isn’t making any money on management services but you don’t know it because your brokerage division or maintenance division is bringing in all the profits. You need to know the performance of each division. If you’re not making good money managing properties, why aren’t you? Assess where you are with your accounting by answering these three questions: What is your average profitability over the last 12 months? If you don’t know the answer, you have a bottleneck to profitability. Or, you’re not paying attention or calculating your metrics. This is a number you need to know. Having money in the bank doesn’t mean you’re profitable. Do you know the relative profitability of the various divisions in your company? You should. It’s important to separate the profits coming in from management, brokerage, maintenance, and any other ancillary businesses. You need to know what each division is doing and if you don’t, there are reporting issues causing bottlenecks. Do you regularly review your financial statements and gain insights that change how you do business? If you don’t change as a result of looking at your financials and the statements aren’t clear, you have an accounting problem. Those statements should drive change in your organization. Average Profitability in Property Management The benchmarking study last year demonstrated that the average profitability shown on the books for property management companies was 10 percent. That’s okay for a small business. When a second level of analysis was conducted and owners were asked how they compensate themselves as owners, it was discovered that not all owners pay themselves a market-based wage. This can affect the reliability of your financial statements. A lot of owners pay themselves sub-par wages, if they pay themselves at all. The results of the benchmarking study were adjusted to show an average profitability of six percent. That’s not great, and if you listen to a lot of small business experts, you’ll know that five percent profitability is necessary just to cash flow. So, a lot of you are probably working off the belief that you’re making a great profit when you actually aren’t. Far too many people aren’t making enough money. Don’t forgo taking a salary just because you think you’re fine with the leftovers. As an entrepreneur, ask yourself if that’s why you’re in business. Salaries compensate owners for their time. Beyond that, you want to build an asset that accrues value outside of what you’re putting into the business. Pay yourself a salary so you don’t distort your financial picture. Baseline Mechanics: Adopting the NARPM Accounting Standards The most practical thing you can do to achieve more clarity is to adopt the NARPM accounting standards in your business. This is going to be the framework to provide a common language for property management entrepreneurs. You can get clarity on the performance of your business and compare it to the way other companies are performing. The accounting standards have four components. We’ll discuss three of them here, and the fourth will come later. You need a standard chart of accounts. This is the baseline. You need to organize the data and transactions of your company into a framework. Organizing financials this way will help you get clear on your business performance. It helps you to see the forests from the trees. Your financial statements may have 50 accounts or they may have 400 accounts. In any case, you need to see high level categories. There should be five to six key categories and expenses. Look at how those are tracking over time and then drill down into specific accounts when you need to see what drives any noteworthy variances. Attach a set of metrics to those standards. This is critical. Specific definitions are used so you can build off your chart of accounts. Do you know your revenue per unit? When you start to peel back the onion layers, you can calculate your metrics in a consistent way. It facilitates these true apple-to-apple comparisons between you and the benchmarks. The third component is a set of standardized benchmarks which are used to see how your company is performing compared to others. You can see how much is being spent on rent and how that compares to national averages or other property management companies. You can absolutely get clarity by comparing. Those are three primary components of the NARPM accounting standards. It’s a high level overview of the system that helps you establish financial clarity and accountability. Every residential property management company should implement them, and you can share them with your accountant. You can get the accounting standards free as a NARPM member and once you have them, you can start the initial steps of adopting a chart of accounts, using metrics definitions, and then comparing where you are. Customizing the Chart of Accounts for Your Company Part of adopting the NARPM standards is the freedom to customize your own chart of accounts. Everyone needs different levels of granularity. You can add details or not use all of them. Sometimes people look at a chart of accounts and it’s not what they want. That’s okay; you’re only going to use the structure. You don’t need all the granular accounts. Some people want them, but not everyone. Follow the customization procedure. Key Property Management Accounting Pitfalls to Avoid Whether you’re just starting a property management company or you’ve been doing this for a long time, there are several key pitfalls that are fairly common. First, there’s tolerating a lack of clarity. Don’t tolerate it. You need the clarity, so don’t let yourself stay in a financial fog. Hold your finance team accountable for delivering accurate, timely, trustworthy, and clear statements. It’s also a big mistake to not pay attention to your numbers. As the entrepreneur, you don’t have better things to do. Have you listened to our episode “Bottlenecks to Profitability: Focusing on the Wrong Activities”? In that episode, Kasey McDonald breaks down how to get clarity on tasks that truly need your attention. Your financial statements are the most important use of your time. Dial into your finances and see what the numbers are telling you. Then, use that message to enact change. The biggest mistake is not holding yourself accountable to your numbers. During Daniel’s presentation at PM Grow in Austin, he asked a few questions: First, he asked how many people wanted to grow the number of doors they managed. Everybody raised their hands. Then, he asked who wanted to grow profits. Again, every hand was raised. Then, he asked how many people had a financial game plan articulating specific and measurable growth and profit goals for the end of 2019 that mapped out monthly door commits, anticipated churn, and financial implications month by month. Perhaps 10 percent of the room raised their hands. That’s because we think we have better things to do. But, we don’t. Hold yourself and your team accountable to your financial numbers. Bring leadership to those goals and make this something you engage the whole team with. Seacoast Commerce Bank Sponsorship Accurate Bookkeeping Standards You must be doing accurate bookkeeping. The standards will only work if everything is coded appropriately. So, a few things to note: Understand the cadence of financial reporting for your company. Define the timeframe. How many days after month-end do you want books closed out? Define it and organize all the planning and the meetings that should come once the reports are available. Reconcile the bank accounts. Your bookkeeper should be doing this so your books are reconciled to your bank accounts. It seems like a no-brainer, but reconciliations are important on both the trust and corporate side. If you’re not reconciling, you don’t know if statements are accurate. It’s critical that someone is doing a check. Make sure there’s a hollow assessment of transaction coding. From time to time an owner or someone in a high level finance position should print out detailed Profit and Loss statements and review the details. Make sure it’s accurate. Risks of Bad Accounting Low profitability is the main risk to doing things the wrong way with accounting. But, that’s not the only risk. One of the more dire risks is that you’re exposing yourself to significant losses. This leads us to the fourth component of the NARPM accounting standards which we did not address earlier: a financial controls guide. This is the proper flow of money. It’s your checks and balances. Internal financial controls are critical. You don’t want to wake up one day and realize you’ve lost a lot of money. Remember that as a management company, you’re not responsible for your own money; you also have millions of dollars of trust funds that you’re managing for your clients. If you don’t have checks and balances in place thanks to great accounting, you could expose yourself to a serious nightmare. Daniel has talked to a former owner who lost almost a million dollars due to fraud and internal errors. He had to shut down. This is horrible and sad. If you’re not paying attention to financial controls, you’re not doing yourself a favor. You’re exposed and unprotected. The biggest risk to bad accounting might be this: you’ll find you’ve been working hard for years and years without ever realizing your entrepreneurial dreams. That’s the biggest risk. Often, entrepreneurs don’t slow down and revisit the big picture. Revisit your why. Why are you in business? Get clarity about what your goals are and what kind of changes are needed to achieve your why. There’s a role for accounting to play. Map your progress and celebrate your gains. If you have questions about the NARPM standards or anything Daniel discussed today, contact him at the Profit Coach. You can always reach us at Fourandhalf with any questions as well. The post Bottlenecks to Property Management Profitability Part 2: Poor Accounting appeared first on Fourandhalf Marketing Agency for Property Managers.

The latest series on The Property Management Show podcast is going to focus on the bottlenecks that keep property managers from becoming profitable, growing and increasing their productivity. To kick off this series, we have invited Kasey McDonald to talk to us about the activities a business owner needs to focus on to start or grow a property management business. Kasey is the director of the Property Management Training Academy, and she’s been in the real estate industry for 20 years, focused on property management. She began her own property management company where she organically grew the business to 227 doors in three years. Now, she’s doing what she really loves – focusing on the education and knowledge side of the industry. Her job is to help businesses be better businesses, especially if they don’t understand property management as well as they should. The discussion of the day? Removing the bottlenecks that inhibit your growth. Why Are There so Many Bottlenecks to Property Management Profitability? It’s easy to focus on the wrong activity for your market. It’s easy to misunderstand the activities that are involved in generating leads and building a sales pipeline. Before you can grow, you have to understand where you are and what’s happening in your market. There are probably 50 things you can do to grow your business in your particular market. To be effective, narrow that down to the five best things, and focus on those. It’s important to commit to a growth activity and to be consistent. A common bottleneck to property management profitability is giving something a try for a short period of time and then stopping if you don’t get immediate results. Some activities in prospecting and sales will take a lot longer. Be consistent for a long period of time. If it feels like something isn’t working, keep going. All of a sudden, the flood gates will open up and you’ll wonder why. The “why” is that you stuck with it, and you didn’t give up a month earlier. Focusing on the wrong things while you plan and build your business is common. If you know how to avoid this mistake, you’ll have a more productive time growing. Look at Your Foundation: What Works and What Doesn’t? Your foundation is your systems and your processes. Here are some good questions to ask about your foundation: What have you been doing to grow? What results have you had? What do you need to do to get the results you want? Maybe you’re making calls to prospects in your database, but you’re only making those calls once a week. To achieve what you want, you might need to increase the amount of time that you spend on that activity. You can’t do the calls once a week and then push the activity to the side when you decide it’s not working. Break it down and decide how frequently you should make these calls, how many calls you should make, and who those calls should reach. When you invest in the activity, you will get the results you want. Those results may not be immediate, however. Property management profitability takes time and consistency. In Kasey’s practice, she helps owners identify what’s not working. Usually, the problem is lack of effort. Formula for Growth: Consistency Be consistent with your time and your activities. Block out the time you need in your calendar to complete your tasks, and always leave room for growth activities. You don’t want to be multi-tasking while you try to grow. You don’t want your attention pulled towards several things at once. Any property manager who says “I’m too busy” to focus on growth is simply making bad choices about how their time is spent. You can find an hour in every day to work on generating leads. If you can’t, your day needs some restructuring. It’s easy to get distracted and stuck in the day-to-day, even when you begin bringing on team members. Delegating is hard. But, if you devote one hour every day consistently to a couple of growth activities, you’ll see the results coming in and you’ll understand the process. There is a lot of noise in your office, and if you start the day not knowing what needs to be done, you’ll be reacting all day long. So, understand your key tasks. Put everything that needs to be done into your calendar until it becomes a to-do list. Then, find the hour you can dedicate to growth activities. Property Management Profitability: Five Growth Activities Every Owner Can Try The growth activities that work best depend on your market and your goals. But, these five can help you with property management profitability, no matter who you are or where you operate. Organize your database of clientele. This should include past, present, and potential clients. Make phone calls and send emails. Keep your brand awareness in front of the people in this database. Kasey recommends a minimum of 10 calls per day. Distribute door hangers. The door hangers in your community can tell people who you are and what you do. Showcase recently rented homes in the neighborhood on your hanger, and invite people to contact you if they’d like to know how much rent their home could earn. Spend time on network referrals. Connect on Facebook and visit community forums where you can answer questions and establish yourself as an authority. Be an expert. Talk to people. Find out what they need. Showcase yourself as the resource that can help them. Build Business to Business relationships. LinkedIn is great, but face to face relationship-building is even better. You have business to discuss with tax accountants, attorneys, real estate agents, brokers, and even your vendors. A lot of property managers don’t invest the time here because they don’t get anything from it right away. But, the trust and relationships you build will ultimately end up with more business. Think about your vendor relationships. It can be easy to think about your carpet vendor as the guy who cleans your carpets. But, he’s surely talking to homeowners, landlords and tenants that aren’t yours, but might be thinking about buying a home. Kasey started inviting her vendors to a picnic every three months. It became a big event and she began offering referral bonuses to vendors who brought her new business. This is an area of growth that’s right in front of you. Your vendors can do more for you than clean the carpets and fix the toilets. Example: How Personal Videos Can Work Respond to the desire for a personal touch. People want something personal, so send a message on social media or provide a picture or a video. Educational content is valuable, but a funny video or a personal message counts, too. It leads to a better relationship. Kasey was working with a property management client who was struggling with ways to show that inspections were actually being completed. These inspection reports are often sent electronically, and owners rarely had any way to know that the property manager was at the house, doing the work. So, Kasey’s client began making brief 25-second videos while at the property that could immediately be texted to clients. When one such message was sent to an owner who happened to be in California, Kasey’s client earned five new clients because that initial client happened to be with five friends who had investment properties of their own. Property managers don’t always think like this. Open your mind and try new things. Show people what you do. Send a video text message after showing a property and let your owner know how it went. You will struggle to get to this place if you don’t have the mind space. Another good reason not to get stuck in the day to day. Setting Goals and Managing Expectations Goal setting and result tracking will depend largely on your market. You need to first understand your potential opportunities for property management profitability. How many doors are out there for you to grab? Look at what you can do and look at the activities you can implement. Then, break it down. For example, if you made 10 calls and spoke to 10 people, you might get half of those people willing to continue talking to you. Then, maybe 50 percent of those people will sign up for some sort of service with you. So, getting two new relationships out of 10 phone calls is a pretty good success rate. Out of those two relationships, if one of them gets into your pipeline, you’ve really done well. Maybe you’ll set a goal for 30 new leads a month. Break down what that means. Out of those 30 leads, if five of them sign up for an appraisal, how are you doing? If you engage in a face-to-face discussion with 10 people every day, you could end up with 10-15 new doors in a three-month period. Is this achievable for you? Once you’re meeting the initial goal you’ve set and it’s consistent success, you can raise the expectations. Find out what works and be consistent. If you’re not able to meet the goals you have set, it’s either a marketplace issue or the activity isn’t being done correctly. Sometimes, the owner can be a bottleneck if the goal that’s being set is too high. Don’t de-motivate your people. Bottlenecks in Results: What Blocks Success? Sometimes, the wrong individual is performing the wrong job. Make sure you have the right person doing your business development or your sales. If the activities are faithfully being performed and you’re focused on those top five growth activities but there are no results, it could be a person problem. Either you have the wrong person doing the job or as an owner, you have set the target too high or you’re not providing the tools and resources to support the position. Make sure you’re spending money on marketing. Make sure you’re committed to the growth practices. Make sure you’re not micromanaging. A huge bottleneck to growth is the owner who has to approve everything. Kasey worked for a business where she had to get the owner’s sign-off before she made a social media post or sent out a newsletter. It led to missed deadlines and late messages. Create a guideline and empower your people. Then, get out of the way. Make sure you understand the strengths and weaknesses in your own business. If your weakness is sales, employ someone who has the right skill set and empower them to do their job. Don’t break their hands, and don’t say no all the time. Let them flourish in the job and your business will grow. This can plague established property management companies as well as new companies. Young companies can sometimes grow faster because they’re starting out with the latest technology and the newest tools. More established companies often have to be convinced to embrace those things. What to Do Once Property Management Profitability Bottlenecks Are Identified As bottlenecks are identified, the best thing you can do is to work through them. Sit down with your whiteboard or your notepad or whatever works. Dive into your business and revisit what is working well and what isn’t working at all. Make some allowances for changes in the marketplace. Ask questions and identify priorities. Be open. Flow charts and work flows are a great way to see what you could be doing more efficiently. Writing it all down forces you to look at things objectively. If you can do things more efficiently, you’ll notice where and how when you have it written out in a flow chart. It’s also easy to turn negatives into positives when you’re writing everything out. If you don’t close a lead, put the process into a work flow and see where things broke down. Maybe you need a 24-hour contact period instead of a 48-contact period. Maybe a personal note in the mailbox as you’re leaving the home after visiting a prospect will help. Not having a work flow in place is a bottleneck. Myths can also be bottlenecks. Have you heard that a great sales person can sell anything? It’s a myth. Your sales person needs to know what he or she is selling. Make sure our people have the training they need before they make even one call. Here’s what you should take away from this conversation with Kasey: If you are an existing property management company and you starting to see bottlenecks in your growth, sit back and analyze what you have been doing. Work through it. Are you still on plan or do you need to revisit and make some modifications? The, map it out. If you’re a start-up property management company, do the same thing. You aren’t revisiting a plan, but you are writing and implementing one. Today’s podcast listeners can get a free 30-minute consultation with Kasey, so contact her at The Property Management Training Academy. Contact us at Fourandhalf if you have any questions, and make sure you stay tuned for more episodes in our Bottlenecks to Profitability series. The post Bottlenecks to Property Management Profitability: Focusing on the Wrong Activities appeared first on Fourandhalf Marketing Agency for Property Managers.

Privacy is suddenly something everyone is talking about, and as a small or medium-sized property management company, you might not think you have to worry too much about it. After all, you’re not Facebook. You’re not Google. Why would privacy for property management companies be important for you? But, you do collect information from people, and those people deserve to know what you’re doing with that information. Our guests today are privacy policy experts from Termageddon. They’re here to give us some information on what you need to do in terms of addressing privacy concerns and data collection. Introducing Atty. Donata Kalnenaite and Hans Skillrud Atty. Donata Kalnenaite and Hans Skillrud can be trusted to talk about privacy policies on websites. As the company’s president, Donata is an attorney who practices privacy law and contract law. She’s a Certified Information Privacy Professional through the International Association of Privacy Professionals, and she wrote Termageddon’s policies to keep them up to date with the current and coming laws. Her job is to follow the different laws in each state and analyze what they’re proposing and what they’re passing. She’s also an expert in federal and international privacy laws. Hans is the Vice President and co-founder of Termageddon, and works in sales and marketing. With a background in software and website creation, he has a unique ability to translate some of the complex legal content that people need to know when they’re thinking about online privacy statements. Privacy for Property Management Companies: Why Should Property Managers Care About Privacy Laws? Privacy can be a confusing topic. It’s easy to see why large companies like Google and Apple and Facebook have to be careful about privacy, but why does it matter to a small or mid-sized property management company? Most privacy bills and laws don’t have a revenue cap, which means you’re bound to the same rules and laws as companies that earn hundreds of millions in revenue. It doesn’t matter how much information you collect on people or how many people are sharing their information. If you have a contact form on your website, you’re gathering personal data. That means these laws will apply to you. Think about your tenants. You know where they live. You know how much money they earn. You probably have their bank account information, and you know if they have a dog. This is sensitive information. So, you need to take privacy seriously. Additionally, property management is a service-based industry. People care about privacy. Your tenants care and your owners care, and that means you need to care. Personally identifiable information includes names, email addresses, and phone numbers. Laws protect people from taking that information from others without the proper disclosures. With all of the inquiries you’re getting from people all over the country and even all over the world, you need to disclose what kind of data you’re collecting and what you’re going to do with it. You want your website to be viewed by a lot of people. So, you need a strategy for staying up to date with website privacy laws. Privacy Policies and Different State Laws You might have been on a website where you notice there’s a different privacy policy stated for residents in different states. It’s hard to combine the privacy laws and requirements from different states into one blanket policy. Consumers from different states currently have different rights. There’s a lot of debate about how to word everything. Your privacy policy has to make sense and it has to include all the required disclosures, and that can take some time to put together. It takes time and training. A lot of people want to know when they need to begin including a privacy policy on their website. According to Hans and Donata, you need to have one as soon as your website has a contact form. When you’re inviting people to share their information, you need to disclose what you’re doing with it. Maybe you’re a property manager with contact forms on your website, but you never sell that information to third parties. You need to disclose that. You need to disclose whether or not you’re tracking people who land on your website. There are several disclosures that you may not realize you need to include on your property management website. Are you offering a free rental analysis on your website, and asking for names and emails? You need a disclosure for that, too. Privacy, Companies, and Consumers A number of bills have been proposed to allow individual consumers to sue companies for not disclosing what they are doing or not doing with data. These laws are not on the books yet, but they are under consideration in several states. People will likely be able to sue companies for violating their privacy rights. Currently, a consumer would need to go the state’s attorney general and file a complaint. The attorney general would then decide whether or not to pursue a case. The Federal Trade Commission can also get involved if the privacy violation crosses state lines. Think about the security certificates you expect websites to have. Five years ago, no one cared about those SSL certificates. Now, if you’re on a website that isn’t secure, it feels pretty bizarre. Privacy issues are moving in the same direction. Privacy Myths: What You Need to Know Some of the most common privacy myths that the Termageddon team members hear include the following: My website is secure, so I’m fine. My company is too small, it doesn’t matter. My customers really don’t care whether I have a privacy policy or not. No one will enforce these privacy laws. No one reads privacy policies. I’ll just copy and paste a privacy template from my competitor. The myth that’s really alarming is the tendency to believe you can simply copy and paste any privacy policy that you see anywhere on the internet. You don’t know what criteria were used and what was left out. There are plenty of online templates for privacy policies as well. But, it’s not so easy. Property managers often caution landlords against downloading any lease template they find on the internet. They don’t know if it’s legally compliant in their own state, and they can’t be sure all the necessary information is included. The same risk exists with online privacy policy templates. They can also be deceptive if they’re trying to convince you they’re “free.” Copying and pasting any template you find on other sites is problematic for more than one reason. First, it’s a copyright infringement. Next, it could have been written by anyone. When it’s a policy that’s on your website, you are responsible for it. With the power of the internet, anyone can research anything with enough time. But, there are a lot of privacy laws that are different from state to state. Your website’s privacy policy has to accurately reflect them. Get expert advice. You can certainly ask your eviction lawyer for some advice about privacy policies, but make sure you seek out an expert before you adopt a policy for your company and your website. Look for someone who studies privacy legislation and case law. Most divorce attorneys don’t do eviction law. And, most landlord/tenant lawyers aren’t experts in privacy law. Are You In a State that Doesn’t Require Privacy Policies? You still need one. Here’s why: the privacy laws protect the consumers in each state, and not the businesses in the state. So, if you have a consumer from another state using your website and providing their contact information, you are accountable for protecting that person’s information. Even if your own state doesn’t require you to. About a dozen states currently have strict privacy laws. You’re bound to have website visitors from at least one of them. One of the other myths we mentioned is that if a website is secure, a privacy policy isn’t needed. Security and privacy are two different things. Even if your site is built well and fiercely protected, you still need to explain what your company is doing with data. Consumers care about their privacy. Additional Benefits to Privacy Policies for Property Management Companies Having a privacy policy raises your credibility. It also helps your search ranking. Google likes to see privacy policies; they’re a ranking factor because Google looks for trustworthy websites, and privacy is a factor in trust. As a property manager, you probably talk a lot about transparency. You’re transparent with pricing and you’re transparent with the services you offer. If this is a value that you offer your clients, a privacy policy needs to be part of the transparency you provide. Vocabulary and Definitions You probably see these terms all the time. But, what do they mean? Privacy Policy A privacy policy is a statement that talks about what data your website collects, what is done with it, and who it’s shared with. Those are the three main points that everyone wants to know. Those are the things you need in your privacy policy. Terms of service and terms of condition Your terms of service should talk about the rules of using a website and the limits to a website owner’s liability. It may answer questions about refunds and cancellations. The terms of service can offer protection for you if you include a Facebook link. You don’t want to be liable for Facebook’s data sharing policy. This generally helps limit your liability if something goes wrong. If you’re hacked or if someone loses their information or gets a virus, the terms of service will cover you. Privacy and terms of service are needed for almost every website. Disclaimer Disclaimers limit the scope of rights and obligations for site owner and user. If you have an educational page where you talk about things like eviction, you might want to include a disclaimer that you’re not a lawyer and the information that’s being provided is not legal advice. There isn’t a single place to find all the information you need on privacy, which is one of the reasons that the topic in general is so confusing. Donata recommends a few resources that she uses: Federal Trade Commission Information Commissioner’s Office (for EU) UK Data Protection Authority International Association of Privacy Professionals California Attorney General’s Office Upcoming Laws and Legislation Privacy policies don’t have a shelf life, exactly, but the law is always changing, which means your privacy policy needs to continue evolving. Two new laws are expected in the next six months, and after that, perhaps 10 proposed bills will be debated. Five of them are federal. The problem with trying to write a policy that covers all the potential issues in every possible state is that you cannot possibly predict what will be required. For example, to exercise your rights as a consumer, you have to contact a company and say don’t sell my data. So, perhaps you want to follow this law no matter what state it happens to be in, so you let all your website visitors know that by sending an email or clicking a box, you will agree not to sell their data. You might think you solved the problem. Until one state passes a law saying all companies must provide a toll-free telephone number for people to call if they don’t want their data shared. Now, you have some re-writing to do. We’re fortunate that we had Hans and Donata to talk to us about what we need to think about with privacy. The things they’d like you to remember are: When a website collects a name and an email address and a phone number, you’re collecting personally identifiable information. You have to care about privacy. Regardless of your company size, you’re never too small to afford your users the respect they want and deserve. Have questions about privacy for property management? Talk to a specialized attorney about privacy, or use a program like Termageddon to protect your company and your users. We can help you find the right solution. Contact us at Fourandhalf, and we’ll tell you how to meet your privacy obligations. The post Debunking Privacy Myths for Property Management Companies with Hans Skillrud and Donata Kalnenaite of Termageddon appeared first on Fourandhalf Marketing Agency for Property Managers.

Today we have a pretty cool guest on The Property Management Show Podcast. Shawn Johnson of Independence Capital Property Management is an investor and property manager, and he shares a lot of golden nuggets that will help property managers attract investors, and work better with investor clients. Our focus is on the relationship between investors and property managers, and how the two worlds come together. There are a lot of misconceptions that keep investors from working well with property managers, and there are also misconceptions that keep property managers from offering more value and expertise to their investor clients. We’re talking about solutions to all of that with Shawn. Introducing Shawn Johnson Shawn bought his first house in 2002 when he was 20 years old. The market was taking off, so he lived in the house as his primary residence for two years and then sold it, netting $65,000 in profit. That experience gave him the real estate investing bug. His goal was to have three income-producing properties by the time he was 27 years old. That didn’t happen. He bought a car wash instead. After that great first experience, he bought a property to flip. But he broke even and didn’t make any money on it. This was disappointing, but it didn’t stop him from becoming a smarter investor. He decided to forget flipping and invested in long-term rental homes instead. The entrepreneurial bug took over and Shawn decided to make things happen. He began acquiring more properties, and the first few rentals he managed himself. But, as soon as he brought staff onto his property management company, he was happy to hand over the management of those properties to the team of qualified property managers he had hired. Now, he has a portfolio of properties local to Farmington, New Mexico, and he also owns rental homes in Indianapolis. Those investments are also in the care of an experienced property manager. How Property Managers Can Attract Investors Property Management Investors: Being an Investor Makes you a Better Property Manager Being an investor yourself shapes the way you run your property management company. Investors want three things: The best tenant. The fastest tenant placement process. The highest rent. Knowing this on a personal level has helped Shawn serve his investor clients better. It informs the leasing process at his company, and it allows him to share a different perspective for how to maximize investor gains. If you’re a property manager who also invests in rental properties, you should position yourself as an investor-minded property management company. This is a shift that Shawn has made in his business over the last couple of years. When current clients are asking to leverage their existing property to buy more rentals, you’re providing more value and growing your business. You can help clients with self-directed IRAs if they want to convert their 401k plan to buy investment property. Make yourself available to investors as an investor. Growing Your Business with Current Clients Knowing your pool of existing clients can help property managers attract investors. When you decide to grow your business, you can go after new clients, but you can also see how you might be able to help your current clients. Shawn noticed that his current investors were telling him they’d been thinking about selling their properties. Instead of putting those properties out on the open market, Shawn considered two things – did he want to buy the property himself? And, did he have other investor clients who might be interested in the opportunity? When the property your investor is selling seems like a good fit for your own portfolio, you can probably work out favorable terms. If it’s not the right investment opportunity for you, set up a pocket listing program for your other clients. This is an excellent way to grow your business with your existing pool of clients. Sometimes, owners learn quickly that they don’t like being landlords. Shawn had a situation where he took over an owner’s property with a $30,000 down payment. That gave him two homes worth $350,000 that immediately cash flowed because the seller offered zero percent financing for two years. These opportunities are available to you. Know how to find them and be prepared to take them. Did you catch our blog on capturing more investor leads on your property management website? If not, that’s a great place to start building your investor clientele. Changing Your Mindset to Avoid Short-Term Thinking Real estate can sometimes be a short-sighted industry. It’s hard to look at the long term because this is a sales market, and every broker or Realtor is chasing that next commission. But, if you take the $10,000 commission you earn on the next property you sell and buy a rental property with it, you’ll eventually turn that money into $300,000. Not a lot of property managers and real estate agents are willing to think this way. But, Shawn says it’s the only way he thinks. There’s a big misconception that you need a lot of cash to buy property. Shawn says he has bought a lot of houses with no money. It could be a mindset problem and it could be a priority problem. Do you want to use your money to buy a nice car now, or do you want to invest it in a rental property in which you will accomplish two things: You’ll earn a lot more than that new car will ever be worth; and, You’ll be able to provide better property management as an investor yourself. You can buy houses with zero money down. As long as you have a little bit set aside for the furnace that might break down, you can own an investment home yourself. You should own an investment home yourself. It’s important to understand compound interest and the way it can create generational wealth. Work out the numbers so you can see how well rentals perform and cash flow over time. If you invest $10,000 to buy a home and you’re earning $300 in cash every month, it might seem discouraging for a while. But, when you think about the $300 per month over the span of 40 years, you realize how much money your property is actually earning. And, that doesn’t even include the appreciation of the home. You also have a tenant who is paying your mortgage and your expenses. When you don’t have any debt, you can use your cash flow to buy additional rental properties and then you’re really leveraging what you have and what you earn. Don’t miss these opportunities to create generational wealth. Relationship Issues: Property Managers and Investors There are some misconceptions between investment property managers, and investors that can damage relationships. Sometimes, property managers get into a trap where you assume all investors have a lot of money. So, when the furnace needs to be replaced, you expect the investor to simply make it happen. But, life happens to investors, too. There can be personal problems and divorces and health issues. So they might have some financial struggles of their own. They’re not trying to be bad landlords; they’re just in a tough situation. Shawn tells all of his investor clients to take at least their first year or two of cash flow and put it into an account for savings. If they don’t touch it and they save $4,000 or $5,000, they’ll be protected if an expensive maintenance or repair is needed and they don’t have the money. Property managers need to stop thinking all investors are rich. On the investor side, they usually think all property managers are the same. They assume your only role as a property manager is to find a tenant and collect rent. You know that’s not true. Investors also may have the misconception that property managers just collect their management fees and don’t really care about the properties or their clients. You know that’s also not true. Most property managers are stacking nickels to make a dollar in this industry. Even if you’re fee-maximized, it takes a lot to turn a profit in the property management industry. This is a DIY culture. It’s sometimes hard work to explain your value to investors unless they have 10 or more properties and they can’t keep up. Understanding the perspective of both sides can help property managers attract investors. Encouraging Accidental Landlords to Continue Investing A best-case-scenario for a property manager might be having one of your accidental landlords decide to invest in another property, and then another one. This strategy depends on their success with the first property they’re renting out. If they’re upside down with their existing rental, meaning the amount they collect in rent doesn’t cover their expenses, they aren’t going to be very enthusiastic about buying another rental. But, if they see the benefits of investing with their own rental home, you should absolutely encourage them to buy additional properties, and to show them how to effectively do it. This is another reason that you need to have investment experience of your own. When Investor Clients Push Back Perhaps your investors aren’t interested in new opportunities and properties, and they tell you they just want you to focus on finding a tenant and collecting rent. How should you respond? Shawn suggests you explain that you have many processes in place to ensure you’re maximizing your investor’s long term returns. You should also explain that you want to minimize the risks involved in owning a rental property. At Independence Capital Property Management, there are various programs including: Rent Loss Protection Property Protection Eviction Protection While these protection programs are generally geared towards reluctant landlords who aren’t prepared for bad situations, many investors hesitate. So, Shawn or his BDM has to explain the rationale behind them. With these plans, investors don’t have to worry if a tenant loses a job. Something property managers might not know – credit score rarely reflects the likelihood of eviction. He looked at all of his application data, and none of the evictions he ever did were on people with low credit scores. There’s no relation. People get evicted because they lose their jobs, and that can happen to someone with a 780 credit score. It’s not just the packaging that works. It’s how you present the package to those investors who are skeptical or who think your only job is to find a tenant and collect rent. Presenting the package with all the right information will help property managers attract investors. When You Want to Invest but Can’t Go All-In There cannot be any bias or any perception of bias when Shawn’s team manages his properties as well as client properties. That expectation is set with staff from the very beginning. And, there are staff members who also own rental homes. They are not permitted to manage their own properties. This is important in maintaining objectivity and the best possible service standards. Currently, Shawn is talking about a program where more of his staff members can become investors. He loves helping to build wealth for others, and it’s a great incentive for his employees. When someone cannot put in a lot of money but wants to own a property, they can pool it with others and then everyone owns a share of the investment. It’s received positive feedback from the company so far. If you’re in a similar situation and you want to invest a little bit in rental properties but not take on all the risk, Shawn recommends you participate in syndication or a Real Estate Investment Trust (REIT). You’re still risking your capital, but the chances of the investment not performing are far less. Property Managers Becoming Investors: 3 Things to Remember Choose credible investment partners. Buy properties in LLCs and make sure you have an operating agreement. Remember that real estate is the best possible investment because you won’t ever see a zero dollar value asset. Even if the house burns down, there’s insurance. Stocks can go to zero. Or, they can turn into penny stocks and lose serious value. Real estate will always be worth something. Don’t invest if you don’t have the finances to support the home and provide a safe and functioning rental for tenants. That can get you into a sticky situation. If you have $100,000 to invest, don’t buy a $100,000 house. Buy an $80,000 house instead so you have some money in reserves. If nothing happens and you don’t need those reserves, great. You can buy another property. How to Help Investors if You’re 100% Property Management If you’re a property manager who also sells real estate, helping investors buy and sell homes is a no-brainer. But, if you’re a property manager with a company that focuses solely on property management services, how can you offer more to your investment clients? Shawn suggests two things. First, educate yourself. This is easy to do with all of the real estate investing podcasts, websites, and books that are available. Second, do an event or some kind of investor gathering. When investors find out you’re a professional property manager, you’ll be the expert in what types of properties are best and how well they’ll cash flow. Get your message out there, and you’ll attract investors who want your help. You should also build relationships with the Realtors who are investor-minded. Take them out for coffee or dinner and explain your interest. Show them you’re not a competitor and offer to talk about throwing business to each other. Today’s biggest take away: Stop thinking short-term and start thinking long-term. Other things to take with you: You can create your own wealth. You need to understand compounding interest. Investing in rental property reduces your tax liability. If you’re a real estate agent, talk to your CPA about the real estate professional’s deduction. You can create your own wealth. We hope these tips will help our property managers attract investors. If you have any questions about this, reach out to Shawn Johnson at Independence Capital Property Management or give us a call at Fourandhalf. 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 Investment Inception: How to Get Investor Owners to Trust Property Managers, with guest Shawn Johnson appeared first on Fourandhalf Marketing Agency for Property Managers.

Eric Wetherington from New Heights Property Management has more than 25 years of experience starting, acquiring, and managing dozens of companies. He is joining The Property Management Show today to discuss responsible property management growth. We talk about what that is, and how to maintain it when you’re growing a property management company. Introduction to Eric Wetherington Eric is the director and broker in charge of New Heights Property Management, which he started 10 and a half years ago in partnership with a large real estate firm in the Charleston area. The real estate agents realized they didn’t have a solution for the homeowners who couldn’t sell their houses during the last recession. So, he began the property management company and it quickly grew. In addition to starting and growing New Heights Property Management, Eric has helped to develop and grow other companies. He got into the real estate services industry 25 years ago, and he has helped to build business entities like joint ventures and title companies, giving him a lot of start-up experience. He likes to see growth happen and he’s learned to think on his feet. Defining Responsible Property Management Growth Responsible growth requires three things: An engaged team. Great services offered to clients. Profitability. This is what responsible growth looks like. If all of these things are happening in your company, then you’re growing. It starts with your great team, and that team has to provide valuable services that keep your customers happy. Profit is also important. If you think you have a business but it’s not making any money, then what you really have is a hobby. You might seem to be growing year over year, or month over month, but if no profit is increasing the bottom line, you don’t fit the definition of responsible growth. If your team members hate what they’re doing and they don’t enjoy coming to work every day, you’re not embracing responsible growth. Check out our episode on how to build a great property management team with Melissa Prandi for more information on this. Property management is a service industry, so if you’re not providing value to your clients and they aren’t happy or they’re in a hurry to leave you, then you’re not growing. Team, service, and profit. These are the things that define responsible property management growth. How to Balance and Master the Responsible Property Management Growth Elements Every entrepreneur makes mistakes, and one of the things Eric learned from his mistakes is that your business and your team will only grow to the level that you’re growing as a leader. You’re the cap of your business. So, whether you learn best by reading books or listening to podcasts or attending conferences – get comfortable with the three growth elements (team, service and profit), and learn how to balance them. Much of your understanding as a business leader will come to you through trial and error. You learn and grow by making mistakes. Don’t be afraid of that, and don’t be afraid to shift perspectives and make responsible growth a priority for your property management business. Leading a Team Towards Responsible Property Management Growth Every good leader knows that the team has to come first. You have to hire the right people and put them in the right seats on the bus. If you put your team first, your team will take care of your customers. When your customers are well cared for, you naturally become more profitable. Everyone is accountable for responsible growth, but the leader of the company is ultimately responsible for it. A good leader will ensure the team has bought into this growth plan. Standing up in front of the team to say “we’re going to double sales this year” is not a great way to lead. If you want to set that goal, you need to be prepared to have a plan that will support it. More importantly, you’ll need to show your team members where they fit into that goal and how it benefits them. Show your team what winning looks like and how it’s going to benefit them. When your team members are being asked to put in the time and energy that’s required to reach a certain goal, they want to know why the company is going in that direction. And, they want to know why it’s good for them individually. A good leader will cover all of that and be ready to personalize the goal for each team member’s level. Let them know how they’re impacted. That will build engagement. In the staff meeting Eric recently held, his Business Development Managers (BDMs) were sharing how easy it has become to sell their property management services. Most of the potential clients they’re calling on have already read the great reviews that the company has received online. Those prospective owners feel like they know the company already, so the BDMs don’t have to spend a lot of time making a hard sell. Those reviews are achieved by the team that’s delivering great service. You see how this is working? Everyone understands their role in producing happy customers. That makes the growth a lot easier. Think of your team as a pyramid. Each part of the pyramid is critical to its balance. You can’t remove the middle piece of the pyramid without it collapsing, and you cannot take a piece from the side without it toppling. Each team member must understand his or her unique role in creating and maintaining a stable company. Everything Starts with a Plan The planning process takes a lot of work. Leaders cannot unleash an idea and then leave the team to plan and execute it. You’ll need to have conversations and you’ll need to map out the goals and how to reach them. You’ll need large meetings, small meetings, and one-on-one meetings. You’ll need to provide constant reinforcement. In business, you have to say things seven times before people really start to hear it and understand it and buy into it. You also have to say it in different ways. Whatever the growth or the goal you’re trying to accomplish, be sure it’s a consistent message. Your team needs to hear the same thing in meetings, company newsletters, internal video messages, or whatever you’re doing to communicate. Keep the message consistent so everyone understands its value. As a leader, you need to understand the highest and best use of your time. Unless you’re the only person in the company, someone else can probably be responding to tenant complaints and calling back owners. You need to create space in your schedule to think and plan. Not a lot of property management leaders are good at this. They don’t go into that quiet room and set aside the devices and shut down the potential interruptions. Eric gets out of the office to make time for his planning, thinking, and strategizing. Leaders need to protect this planning time whether you’re thinking through growth opportunities or defining the best way to maintain your current business. Put yourself in a position where you won’t be distracted. Brainstorm. Think about the best ways to accomplish an objective. This is one of the most important uses of your time as a leader. So make the space. Eric dedicates one afternoon a week to this practice. He also has a monthly and quarterly practice where he’ll go somewhere quiet and catch up on industry reading and spend time thinking and planning. This is a critical part of his success. He’ll look at numbers and analyze metrics and determine what seems to be working and what needs help. It’s a mini strategic review. Customer Happiness (or Unhappiness) is a Red Flag During your planning and thinking time, you need to be sensitive to any red flags that might show you that things need to be re-worked. For Eric, the most important example of this is customer happiness. If there are complaints from customers that calls aren’t being returned, it’s an indicator that something is wrong. First, he’ll evaluate whether it’s a problem with a system. Perhaps there’s a technical reason that customers aren’t getting what they need. Then, he’ll take a look at the process to determine whether there’s a problem with time management or workflow. Perhaps property managers are spending too much time out of the office and cannot be responsive to their clients. If it’s not the system or the process, there may be a problem with people. Perhaps someone on the team doesn’t understand the importance of getting back to owners and tenants with a sense of urgency. Or, maybe they’re burned out and overworked. They could be struggling with issues in their personal lives and are therefore distracted. This is one example of a red flag – but customer complaints is a pretty big flag, and one you should respond to immediately as a leader. Practice Explaining Your “Why” Not all companies are run by one decision-maker. Perhaps you have a partner and you are usually aligned but one of you wants to pursue fast growth and the other wants to maintain the business where it currently is. The important thing here is to communicate and to understand why you and your partner feel the way that you do. The growth-oriented person might see new opportunities. The maintenance-focused person might want to enjoy the freedom and the success of a successful business. Partnerships can be great, but they can also be challenging. Ultimately, someone has to make the final decision and once that decision is made – it needs to come from a unified leadership presence. You cannot have your team feeling the division in opinions. Some partners work with a rotating presidency. Maybe there are three or four decision-makers, and each of them will have a year where they serve as president and their role is to make these final and difficult decisions about the direction of the company. With the right people, this can work well. You don’t have to be on the same page, always. Disagreement and debate among company leaders is healthy and it’s good. But, once you take something to the full team, all of you need to be behind it. You need one voice, saying one thing. Growing to the Point of Leadership Every business situation is different. Some owners are merely investors and they have a person in charge of the day-to-day business operations. That’s okay, and it can work. When Eric started his company, he was the only one working the business and after six months, he was already slammed with referrals and a lot of business. He knew he wouldn’t be able to manage it for very long. He was going crazy with all the work, and he knew he didn’t want to spend his time hanging signs and putting lockboxes on doors. His plan was to grow enough that he could hire someone to do all of the things he didn’t want to do. His idea was to surround himself with people who did want to do that work. Then, he could focus on strategic planning and business growth. He had to put in the work to get to the point where he could make those hires, but it was motivational. If you’re still in the beginning stages of where Eric once was, you can make some time for your long-term thinking and business planning by hiring virtual assistants and taking advantage of technology. When you can offload or automate some of those tasks, you can get yourself closer to bringing on full-time staff. Before you begin to build your staff, you need to have a good idea of what you want. Those new employees will not be able to read your mind. They’ll need the handbook. They’ll need the procedures. Give them the policy manual, and invest the time and resources to train them. Otherwise, it’s a disaster. Smart people can figure things out, but that takes time. Save time by being prepared for them to work with you. When it comes to growing your team, there’s a five-step process. Hire the right people. Provide training. Provide tools. Provide clear expectations. Get out of the way. You don’t have to micromanage the right people. Just make sure they have what they need to do their job. If something is not working with one person, you need to have the difficult conversations. Talk to your employee about what’s not working. Don’t listen to the first answer; dig and dig until you get to the root of the problem. Maybe they simply didn’t know something critical to their job. Maybe they haven’t had enough training. Maybe they’re doing the wrong job. Or, maybe they don’t belong in your company. If you notice that someone isn’t a good fit, don’t prolong the firing process. That’s not fair to you, your company, your other employees, or the person who you aren’t interested in working with any longer. That person who isn’t working well at your company can probably find something that’s a better fit. Don’t keep him or her from pursuing a better opportunity. Have the difficult discussion. Tell that employee that things aren’t working out, and why they are not likely to get better. Decide together that it’s best to shake hands and walk away as friends. That employee will find something more fulfilling and you can find someone who meets your needs. Growing a Business Means Growing a Team When property managers hear the word growth, they inevitably think of growing more doors. But, to grow responsibly and sustainably, you have to grow your team. Growing your team comes before growing your doors. This is why you have to invest in their training and their professional development. Encourage your team members to get better at what they do. Sometimes, leaders will worry that they’ll spend all this money training and improving their employees, and then those employees will leave in two years and go work for a competing company. But, what if they stay with you for 10 years? What’s worse – losing a well-trained employee or retaining an employee who isn’t trained and improving professionally? Invest in your team. Coach them. Provide opportunities to attend classes and do more. Let them follow their own path. If Eric hires a team member who really wants to be a rocket scientist one day, that’s okay. Eric’s company is never going to do rocket science. But if he supports that employee’s ultimate goals, he’s going to get the best possible work out of that team member while they are with New Heights Property Management. Responsible property management growth comes back to investing in your team. It leads to service and profitability. You don’t have to be a huge property management company. When it comes to growth, too much emphasis is often put on being in multiple markets or managing 1,000 doors. You don’t have to do all that. Don’t compare yourself to other companies and other entrepreneurs. Look at where you are and why you want to grow. Things change rapidly in the property management industry. A five-year plan used to be standard, but now you can really only plan for the next 24 months. That’s how quickly things can change. If you have any questions about responsible property management growth, please contact us at Fourandhalf. We’d love to talk to you more about what we’ve discussed today with Eric or what we can do for your company. The post Understanding Responsible Property Management Growth with Eric Wetherington appeared first on Fourandhalf Marketing Agency for Property Managers.

Direct mail marketing for property management is making a comeback, and we have asked Brian Pavek from SmartZip to join us on the podcast to discuss the role data plays in this space. Over the past several years, the team behind SmartZip developed a scoring metric for the real estate industry that’s able to predict which homeowners will sell their home in the next year. Recently, they’ve expanded their data aggregation and analytics to serve property management companies. This is why Fourandhalf works with them to provide a data-driven direct mail marketing solution to property management companies. But before we dive into direct mail, let’s first talk about the basics. What is Data-Driven Marketing? In a nutshell, data-driven marketing means working smarter, not harder. It involves using collected information about a group of people and strategically targeting those who are qualified to work with you. Here’s an example: If the total population in a town is 5,000, how do you know which of those people actually own rental properties that you could potentially manage? The answer is data. Would you rather market to the whole town, or only to those who own the types of properties your company can manage? Data-driven direct mail marketing for property management companies helps you reach the right prospects. If you’re looking at a target market with 5,000 homes, you can take one of two approaches: The first approach is when you have a smaller budget. So using data-driven direct mail marketing as an example, you’ll send out 500 pieces of mail to homes in that market. Those are blind samples. You don’t know which 500 households will receive your direct mail, but you know that’s the number you can afford to reach. The second approach is when you can afford to reach every one of the 5,000 homes. You send your direct mail marketing to every address. This is still pretty blind; out of those 5,000 homes perhaps only 1,800 of them are investor properties. Data will help you decide who gets your property management direct mail marketing. Would you rather send out 500 mailers blindly or send out 500 mailers to people who you know may need property management services? The data removes the blind targeting in direct mail. You need three things for an effective direct mail marketing campaign: The right message The right recipients The right timing The data is valuable and it provides a greater opportunity. Consistency and Commitment: Direct Mail for Property Management is Part of a Larger Strategy By now, you know that effective property management marketing requires a multi-channel strategy. Your direct mail marketing for your property management business should fit into the rest of your marketing, and you have to commit to tracking results for a few months. If you try it in one month, you could get great results. But, you might not. This doesn’t mean it’s working or not working. Sometimes, it’s just not the right time for people to receive your piece of mail. You can always be on-point with message, and the data will ensure you’re reaching the right people. Timing is always variable. That’s why a long-term commitment is needed. Most consumers require eight touches to respond tobranding. You need repetition in order to be successful. Why are Direct Mail Campaigns for Property Management Cool Again? For a long time, direct mail marketing for property management got lost in the shuffle because online advertising arrived and it had a tremendous impact. Online advertising is still important, but a lot of people are using ad blockers because they’re annoyed by the constant online ads they see. Almost everyone has that one email account they never check but use for spam emails from companies trying to sell them stuff. Direct mail either provides people with information or triggers a desire. In either case, the goal is to get in front of potential customers. Direct mail never stopped working, it just became really tedious. Now, companies like SmartZip are helping to make it cheaper and automated. It’s making a difference. Instead of four or five steps, there’s one step. You pretty much click a button and you’re sending a beautiful piece of direct mail to a targeted audience. Consumers aren’t going to respond to your direct mail unless you are making their lives easier or providing some type of advantage. The automation has made direct mail more affordable. You know you’re only sending mail to addresses that can receive it, and your targets are relevant. Working with a data analytics company will allow you to access data that has been gathered and digested. You’ll have access to street addresses as well as email addresses and phone numbers, providing a comprehensive platform from which to build your multi-channel marketing strategy. Data is what makes direct mail worthwhile. Don’t move forward with direct mail unless your data is reliable, otherwise you won’t get much value. How to Measure Success with Direct Mail Success starts early. If you’re sending your direct mail to a more reliable list of people – that’s success. Even if you’re not closing more new leads in the first month, you’ve still succeeded by sending the direct mail only to the people who will benefit from it. Reducing your cost is also a success. When you market your business to 300 people who are definitely potential clients, it’s cheaper than marketing to 5,000 people who may not have any need for property management. That’s a success measurement. The data is making you smarter when you market through direct mail. That’s a success. Success looks like two things when you’re launching a direct mail campaign: getting what you need from your vendor, and having a plan to convert the people you’re reaching into customers. Direct Mail Trends are Rarely Consistent It’s hard to know where and when direct mail works the best. It’s that timing piece that no amount of data can predict. Perhaps your direct mail piece is landing in the mailbox of a landlord who already has a property manager. So your property management postcard will not get much attention. But, three months later that property manager has done something to irritate the landlord you’ve been sending mail to. Now, he or she may be ready to give you a call. This inconsistency is almost like a false positive on a test. You need to keep sending out your direct mail because you never know when the right time will be. You already know you’re reaching the right people. But you don’t know when the message will resonate the most. Think about billboards. Everyone drives past billboards, but no one calls while they’re in the car, looking at the billboard. It’s something that you remember. Repetition works. It eventually delivers a response. Familiarity matters. Your favorite restaurant may not be the best market in your city. But, it’s the one you know. So you keep going back. Another good analogy is the mp3 player. When they first came out, everyone called it an iPod. Not every mp3 player was made by Apple. But, they had established themselves as the brand that delivered music digitally. Message Matters: You Need a Clear Call to Action You need to create a follow up plan for after your direct mail goes out, and you need to make sure it has a clear Call to Action (CTA). Tell your potential customers what you’re offering and what they need to do. Make sure all of your property management marketing is consistent, too. They might not go to the landing page that you’ve created to go with the postcard you mail. They might Google you instead. If they see information that has nothing to do with the direct mail they’ve received, there will be confusion. Your message must: Address paint points Provide a CTA Align with your other marketing and branding You need to reach the right people with the right message at the right time. What are you doing that no one else does? Where can they go to learn more about you? Why should these customers talk to you? If you can’t answer that question, you should not be sending out any direct mail. People get marketed to so much – even subliminally – that they need a really good reason to reach out to you. Timing: When Will You Know if Your Property Management Direct Mail Marketing is Working? The amount of time you need for direct mail to work depends on the scale and scope of your strategy. If you’re working on a larger scale, it will take less time for you to see results because you’re working with a wider sample. Three or four months of direct mail should really provide some great opportunities. If you’re marketing to 500 customers instead of 5,000, you will need an extra month or two to see the same results. You may get a great response after your first flyer. But, you should plan on tracking the response rate for at least six months to a year to know that the data is really working for you. Sample size is a big factor and you have to invest more than a month. People have short term memory. If you send something every two or three months, it’s like you’re making a first impression every time. Send your direct mail every month and follow up with emails and ads. Then, you’re building a brand. Thanks to Brian for talking to us about the innovation of using data to drive your direct mail marketing campaign. If you have any questions about this topic, or you’re unsure about whether you should consider direct mail as part of your marketing strategy, please contact us at Fourandhalf – Marketing Solutions for Property Managers. 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 Deep Dive into Data-Driven Direct Marketing for Property Management Companies appeared first on Fourandhalf Marketing Agency for Property Managers.

Do you know any successful, married property managers? We do. Hoffman Realty is one of the most successful property management companies in the country, and as you’ll soon learn, the owners of that company have a marriage that most of us would envy. Why is everything working so well? We’re going to find out on today’s episode of The Property Management Show. Our guests are MaryAnn Hoffman and Andrew Dougill from Hoffman Realty, a Tampa property management and real estate company. MaryAnn founded the company in 1998, right after she graduated from the University of South Florida. There were a lot of investors who wanted her to manage their properties, so she started the company. Later, she met Andrew and got married. Now, these married property managers work together and they’re going to share some tips for success. If you’re a listener who is thinking about going into business with your partner or spouse, you’ll want to pay attention. The advice you hear will help you decide if it’s the right time. It will also help you plan for the potential rewards and challenges. How Did These Married Property Managers Get Started? MaryAnn was already in real estate when they got married, and Andrew was working for a large corporation as an engineer. He had a nice corner office downtown and even his own parking spot. Then, he got laid off in 2000, during the burst of the dot-com bubble. This was scary for MaryAnn who wondered if her business could support the both of them while he looked for a new job in his field. They created something good from a bad situation. MaryAnn needed a website and a lot of technical support. So, she suggested that Andrew work for her company while he looked for his next job. She was concerned that he was giving up some huge potential career opportunities, but after 20 years as an engineer, Andrew stopped looking for a new job and really became involved in Hoffman Realty. They realized they were having fun working together. So, they took the plunge and officially went into business together. Establishing a Routine and Setting Boundaries as Married Property Managers In his former job, Andrew did a lot of traveling and when he would return home, it was difficult for him and MaryAnn to fall back into the routine of being together. Now that they work together, there’s a lot more harmony around the house. The couple is really in sync and everything runs a lot smoother. There’s more of a connection within their professional and personal relationship. If MaryAnn is having a bad day, Andrew gets it. There’s a lot more intimacy when you know what each person is going through and what they’re dealing with on a daily basis. They help each other, and they rely on their own individual strengths to keep the company – and the relationship – on track. Setting boundaries is also important. Married property managers bringing in their spouse to work with them might be concerned that their partner will try to take over and change everything. That’s not what you want. Andrew and MaryAnn decided that they would separate which parts of the company they were each responsible for running. MaryAnn is the people person and makes routine decisions about the business. Andrew handles the technology and the high level decisions and everything related to their marketing systems and processes. In 20 years, these married property managers haven’t stumbled, and it’s largely because of those clear boundaries. MaryAnn says she admires Andrew’s ability to handle what he handles, and she loves managing her end of the business. She doesn’t flinch when angry owners yell, but she has no interest in figuring out why a computer isn’t working. Their strengths are much different, and they use those differences to make their company run better. An organizational chart is more important than ever when you’re married property managers, even if you’re the only two people in the company. Write your name in each box that represents your responsibilities, and make sure you’re not both in the same box. That’s where conflicts can arise. If you listened to our recent podcast with Melissa Prandi, you’ll remember what she said about putting together a great property management team. She said make sure you hire people with different strengths. At Hoffman Realty, Andrew and MaryAnn value the separate things that they each do best. When you decide to work with a spouse or a partner, make sure you can identify which jobs you are each responsible for, and then don’t creep over into each other’s areas. If you have the same strengths and weaknesses at your spouse, maybe you shouldn’t work together. Or, you should be prepared to hire people who can fill in those blanks. Do These Married Property Managers Ever Get Tired of Each Other? Working as married property managers doesn’t necessarily mean that you’re together 24 hours a day and seven days a week. While there may be challenges to sharing both a home and a business, you can make it work. MaryAnn and Andrew think it’s fun to be together. They like laughing about work things at home. They enjoy opening a bottle of wine when necessary to talk about challenges or issues that are happening at the office. It’s also important to maintain separate identities outside of work. You each need your own passions and hobbies. For example, Andrew loves sports. He’s always at football games or watching hockey. MaryAnn has a great circle of her own friends and is very involved with her children. You can’t be together all the time. MaryAnn and Andrew have managed not to bring work home unless they want to work on something together. They respect each other’s private time and passions. When you have other interests, you’re not in danger of getting tired of each other at home or at the office. Working together makes both of them happy. They have a good relationship in the workplace and romantically. Part of the reason is that they have their own separate identities when they’re not working or together. Time Management and Work/Life Balance Working together also allows MaryAnn and Andrew to balance their time better. When she was doing real estate and property management but Andrew was working his corporate job, he would rarely understand why she had to take work calls on the weekends. He didn’t understand then what he understands now. If an owner calls at 7:30 in the morning and is ready to sign a management agreement, MaryAnn is ready to get over to the property, and while Andrew might have once suggested that it wait – he now understands the urgency. Andrew says that when they had separate careers, it was difficult to understand the work/life balance challenges of the other person. Now, they understand each other completely. They can also be as flexible as they want with their schedules. Sometimes they’ll take a few days off where they check their emails and handle urgent business early in the day and then spend time bike riding or swimming. When One Manages the Other In the beginning, MaryAnn was Andrew’s boss. He didn’t know the industry, and he had to learn a lot. For example, Andrew has a need to fix things right away. MaryAnn had to coach him in and show him that sometimes people just want to be heard. If they’re upset and complaining, you need to let them keep talking because the problem they’ve called to complain about isn’t always the real problem. You need to give it time and dig a little deeper. It’s possible to give feedback without being negative and critical. This is something you should set up as a rule. They give each other structured feedback in a way that doesn’t blame or accuse. They adopted the same practice with their employees. It’s effective and it’s kind. It also helps their employees. They can understand things from many different sides and attack a problem without feeling defensive. MaryAnn, who has a psychology degree, says it’s important to say: “When you do ______, I feel _______.” People you disagree with aren’t necessarily doing something wrong. They may just do things differently. Figuring out the Financials One of the most important things for married property managers to think about when they go into business together isn’t necessarily the company or the relationship – it’s financial security. When both of you are in one industry and there’s a downturn, you’re both going to be affected. This happened from 2007 to 2009 when things became difficult in the real estate world. Andrew and MaryAnn had a nest egg, but they were concerned about keeping the company afloat, and they stopped spending money that they didn’t have to spend. The couple had just completed construction on a house that they planned to move into, but MaryAnn had a gut feeling that they should sell it. So, they did, and they made a great profit. That profit saw them through the hard times of the real estate downturn. When you work together, you don’t have any diversity of income. That can be a risk, and you might not realize how likely it is to happen. A lot of this will be completely out of your control. In 2017, it looked like Tampa was going to sustain a direct hit from Hurricane Irma as a category 5 storm. The hurricane turned and the Tampa area got soaked but they were spared the damage they were expecting. It would have been devastating to Hoffman Realty and many of the properties they manage. A lot of property managers in Tampa were wondering if they would be out of business after that hurricane. The lesson? Plan for what will happen if and when both incomes are lost. Things to Consider Before you Work Together Andrew and MaryAnn have some things for couples to think about before they go into a property management business together. Do you get along now? Do you enjoy working long hours? Are you ready to hire more people? Do you have insurance? Are you financially secured for this risk? You have to get along already. If you don’t, this isn’t going to fix your relationship. Andrew suggests putting your foot in the water before you take the plunge. He helped out in the business while he was still looking for other work. So try it out if you can. Have a Plan B if it turns out you’re not meant to do this together. The insurance is a big deal. When Andrew worked as an engineer, they enjoyed his corporate benefits. When he joined Hoffman Realty, they had to find health insurance and other benefits. Make sure your company is profitable enough to offer strong salaries and good benefits. What will you do for retirement? Think about the long term. MaryAnn recommends having enough money saved to get through at least two years of an industry downturn. When they suffered through the slow period, they wanted to preserve the business. They cared about paying their employees even when business was lacking. Make sure you’re in a strong position personally and as a company. Making a Family Business Attractive to Owners Another benefit to working together is that owners love the idea of working with a family business. They feel better about leaving their biggest asset in the hands of a locally owned and family-run company. Everyone tells Andrew and MaryAnn that they want local management, not a huge national company. Most owners know that a family business is going to care about their reputation within the community. When Hoffman Realty selects vendors, they always look for mom and pop businesses instead of huge companies where the customer seems to matter less. While Andrew is often the face that potential owners see in the blogs and marketing videos created by Hoffman Realty, they are moving to a new, larger space and the plan is to have MaryAnn more visible as well. They also want to have their employees contribute to future blogs and marketing materials. It’s hard, though, because Andrew’s British accent makes him sound like he knows what he’s talking about. Of course he does know what he’s talking about, and so does MaryAnn. If you have any questions about how to work with your spouse or run a successful business while maintaining a successful marriage, these two are the people to speak with. You can contact them at Hoffman Realty. Thanks for joining us. Be sure to contact us at Fourandhalf if you have any questions about growing and marketing your property management business. The post So You Married a Property Manager? How to Run a Property Management Business with Your Partner or Spouse appeared first on Fourandhalf Marketing Agency for Property Managers.

Michael Lushington, the COO of Fourandhalf, joins Brittany and Marie on this week’s episode of The Property Management Show podcast. The guest is Will Gunadi of nextCoder, and the subject is workflow automation for property management companies. You might have read or watched Michael’s blogs about workflow and how to use it as a business owner when you’re growing your property management company. If you haven’t seen them yet, be sure to check them out: Workflows Part 1: Get in Touch with Your Property Management Company Through Workflows Workflows Part 2: Elements of a Good Workflow for Property Managers Workflows Part 3: Implementing Property Management Workflows without Being a Micro Manager Will is an expert on workflow automation, and we asked him to explain in simple terms what it is, and how it works. Understanding Workflow Automation Workflows are a series of steps. Those steps are repeated again and again. That’s why this particular process is so relevant to property management. If you think about it, your whole property management operation is full of workflows. Things are repeated. For example, tenants are always moving out. Each time that happens, you have to repeat the same steps. So, it makes sense for property managers to put an effort into automating the workflow. It’s natural. You might have heard about business process management or even robotic process automation. Those are big terms, and they’re related, but workflow management is a discipline in itself. Workflow automation is a combination of business process management and robotic process automation. There are smaller programs that are written to contribute to the overall automation process. Will jokingly calls those programs “minions.” So, with a robotic process automation, the “minions” are executing and overseeing the workflow steps. The diagram is what ties business process management into the whole scheme. If you search online for business process management, you’ll see a workflow diagram. The diagram is a big part of automation. Workflows are not useful to you as a company owner if you cannot see them visually. So, combining business process management with robotic process automation is really what we’re talking about when we discuss workflows. Automation: What it Is and What it Isn’t There’s work that cannot be automated. Sometimes, people will have a vision of automating everything. They imagine they’ll just be able to press play and that’s it. But, this isn’t the real purpose or function of automation. Automation does not mean hitting play and sitting back. That might work when you’re listening to music, but when you’re managing 400 houses or even 1,000 houses; it’s not going to work. There are two types of automation: Automate the steps of your workflow where it makes sense. Automate the notifications and alerts. You can broadcast steps to people executing. Forget the idea that automation means computerized. That makes no sense. For property management companies, the workflow has some steps that have to be done by a real human. That’s how you think about automation – it’s still a human function. In property management, you can automate triggers to remind you to execute things. You can automate the steps of your workflow and the orchestration of the teams involved. Is Your Property Management Company Ready for Automation? If implemented correctly, automation will help a property management company scale up and grow. If you’re currently managing 100 or 200 properties, this is the time to start thinking about the workflow process. Start documenting what needs to happen. If you wait and start at 500 or 600 properties, you’ll find you’re too busy to put out fires and manage processes. So, start early. Workflow automation is applicable to any property management company as long as it’s understood and acknowledged that it doesn’t mean computers take over everything. The steps are still extremely human. Here’s an example: locks will always need to be changed on apartments or houses between tenants. No matter how good a computer program you have, it’s still going to be a person who goes to the property and changes the lock. It has to be documented. Automation can send you reminders and notifications when those locks need to be changed. But a human being has to go there and re-key the property. Building relationships with your owners and tenants is also something that cannot be automated. You can automate the way that relationship is orchestrated. You can make sure your owners get the right information at the right time. You can automate alerts and accounting statements. That’s the value of workflow automation for property management companies. Automation is not a Magic Bullet The technology behind automation is excellent, but there’s often a gap between what the company knows about how it works and the automation the company wants to put in place. You cannot decide to implement workflow automation if you don’t first understand how your work is moving around. This is not a magic bullet. You need the support of the toolmakers. When Will talks to property managers about his automated workflow process, he asks if there is any documentation of the workflow. The answer is either yes or not really, and the not really response usually comes with a lot of hesitation. Will shows the graphical representation of the workflow that his automation product can provide. There’s something very serious that he has to explain about that diagram: It’s living. The workflow will change as your business changes. If your business isn’t moving, it’s dead. So the diagram will never be static. It’s the toolmaker who needs to show you how it is maintained and how it is evaluated. As a property manager, you can really benefit from the expertise and the help of the toolmaker who designs your automation process. If you’re going to embrace workflows and workflow automation, you need to understand your process. Put those processes down, and understand how they move. These are living tools that will shift the outcomes you desire. Workflow automation helps you identify which parts of the process aren’t working. Make sure you have the tools that can identify when you hit a snag in your process. Think of it as an audit. You’ll have a visual log that you can go back to look at. You want a workflow that presents your property management team with an idea of what has happened when the outcomes aren’t measuring up with the expectations. Do You Understand Your Information? Make sure the automation tool you’re using speaks your language. If what you’re looking at makes no sense to you, it’s going to be difficult to glean any useful information from your dashboard or your workflow. If you don’t understand what you’re reading in your reports or on your screen, talk to your toolmaker. You can only keep track of things if you recognize the language. You’re entitled to something that’s customized for the way you work. Property managers are busy. You are managing hundreds of properties and whatever comes with those properties. So, there’s very little time or capacity or energy to manage the automation itself. A client of Will’s recently asked him why there aren’t more people in the property management community managing workflow automation processes. It requires a completely separate discipline. To manage the workflow process, you have to know the system and understand business process management. You have to understand efficiencies and how to achieve them. These skill sets may not be possessed by property managers. Even if you do have the right skills and personality, there are only 24 hours in a day. Both workflow management and property management take time. You cannot run a property management company and a software company. Profile of a Property Management Company Ready for Workflow Automation A property management company that’s ready for this automation process understands who is accountable for which tasks within the company. They have documented those processes. This isn’t a requirement to get started, but it helps. When Will begins working with a property management company, he’ll ask about who is responsible for which tasks: How many departments do you have? Who handles sales? Who handles marketing? Who works with tenants? Who works with owners? Sometimes, it’s one person who does all of that. The profile provides a good recipe. You’ll start by establishing who is responsible for a tenant moving in. Who is responsible for a tenant moving out? How does the accounting work? Create a visual of your team and their responsibilities. Understand the accountability. This is the best way to begin documenting your workflow. When you have a good idea about who is doing what, you can see which steps belong in each box, and then you’ll draw lines between the boxes. Even here at Fourandhalf, we have identified what could be automated or passed on to other people. It’s separating each task by outcome. It’s achieving accountability by outcome. After you create the workflow diagram, you may start to see six different departments that are handing off tasks and steps to each other. Even if you have one person doing all of this in the short duration, you’ll have a clear picture. It doesn’t mean you have to go out and hire six people for each department. But with the process in place, when you do start hiring people, they’ll be able to come in and do the pieces of what that one person did. There’s a training benefit, too. With workflow automation, people can come and go within the process and the process still moves along efficiently. Profile of a Property Management Company NOT Ready for Workflow Automation The property management company that isn’t ready for automated workflows is the company that thinks this is a magic sauce. If you’re an owner who just wants to sit back and hand everything over and think that it’s all going to flow through some system that you didn’t have a part in creating yourself, you need to re-think this. As a property management company owner or operator, you need to be ready to commit. You might think that automation looks and sounds great. But, if you’re not willing to play a large part in making this work, it’s not the right time. Automation isn’t something that happens outside of you. It includes you. It has to. If you want an outcome, you have to make an effort. You need to be invested, and your team needs to be invested. If your team is broken and no one in your company communicates well with each other, there is no amount of automation that’s going to fix things. Investment. Passion. Commitment. Those things are needed for workflow automation to succeed in your property management company. Getting Your Property Management Team on Board Adopting workflow automation is easier in the property management industry than in other industries. That’s because things happen daily. You’ll know immediately when your system is being neglected. Things move a little slower in other industries. Property management is well-suited to workflow automation. Sometimes, your team members who don’t yet understand automation worry that your new workflow will replace them. It’s important to educate them about workflow automation and how it can help them complete their tasks. They can look forward to shorter meetings and automated notifications and reminders. The purpose of workflow automation in property management companies isn’t to replace team members, but to replace the grunt work and the menial tasks that hold them back from the valued work that they really need to do. Change management is a big part of workflow automation. Some jobs will shift and so will tasks and eventually, it will become intuitive. A lot of explaining will need to happen, but if you can get your team members attached to the outcome, you’ll have success getting them on board. Make sure you’re automating what you should and not what you shouldn’t. You don’t want to be that property manager who is on the phone with a prospect at the same time that prospect is getting an automated email from you apologizing that you weren’t able to connect. Removing the human element is not the goal of automation. Workflow automation allows the human element to shine. If you’re at the point where you want your operation to grow, or you see that it’s growing on its own, join this trajectory and start thinking about workflow automation. Find out more about what Will does for property managers by visiting Bionicpm.com. If you have any questions or you’d like to share some thoughts about this or any topic related to property management marketing, contact us at Fourandhalf. The post Understanding Workflow Automation for Property Management Companies: When it Works and When it Fails appeared first on Fourandhalf Marketing Agency for Property Managers.