The Property Management Show

Which structure works best for a property management business: Departmental or Portfolio?

This is a topic that can be pretty polarizing in the industry.

Welcome back to The Property Management Show, where we deep dive into the world of property management, marketing, and entrepreneurship.

Today, we’re talking with two prominent property management business owners in Central Florida.

Welcome to Maryann Hoffman and Andrew Dougill of Hoffman Realty and David and Stacy Wilson of Wilson Management Group. These experts are talking about the structures they’ve adopted and offering some advice to property management owners who have not yet decided on how they want to organize their businesses.

td {vertical-align: top; border:1px solid #eee;} li {font-size:15px;} .clean-td {border-bottom:none;}Podcast Summary* Each type of management structure has its pros and cons. * For property management companies that are about to build out their own structure, they need to think about the things they like to do and don’t like to do. * Deciding what works best will require flexibility. * Processes and systems are often more foundational than how a property management company is organized.

Guest Bios:Hoffman Realty* Andrew and MaryAnn Hoffman are the founders and principals of Hoffman Realty, bringing decades of leadership and experience to the Tampa Bay property management industry. * MaryAnn, a licensed real estate broker, entered the industry in 1983 and established Hoffman Realty in 1988 with a clear vision: to deliver personalized, high-quality service to small residential investors. * In 2000, Andrew, then Vice President of Engineering at TECO Energy, joined the firm to lead business operations, aligning his background as a long-time real estate investor and landlord with the company’s mission. * Together, they have built a 38+ year track record of supporting residential investors throughout the Tampa Bay area and currently oversee a portfolio of approximately 450 managed properties. Hoffman Realty’s continued success is rooted in a disciplined operational approach and a strong commitment to client service, with MaryAnn remaining actively involved in day-to-day oversight to ensure every client receives personal attention, and no property owner is overlooked. * Both Andrew and MaryAnn are deeply engaged in the professional community. Andrew is an active member of Suncoast Tampa Area Realtors (STAR), the Bay Area Apartment Association, and the Tampa Bay Chapter of NARPM. He has served as Property Management Chair for Greater Tampa REALTORS®, is a member of the STAR Government Affairs and Property Management Committees, a former Tampa Bay NARPM Board member, and currently serves as Tampa Bay NARPM Legislative Chair—advocating for landlord-tenant policy at both the state and national levels.

Wilson Management Group* Wilson Management Group was founded in Orlando in 1986 and has been family-owned and operated ever since. * David Wilson obtained his Real Estate Salesperson’s license in 1993 and began working for WMG as a property manager. In 2005, he obtained his Real Estate Broker’s license and gradually transitioned into overseeing all day-to-day business operations. * David, and his wife, Stacy, purchased the business from his parents in 2014, and they run it together with their fantastic team. They are active members of NARPM (National Association of Residential Property Managers). David has been a member since the Orlando/Central Florida chapter was formed in 1995. * They are passionate about keeping Florida a landlord-friendly state, for the benefit of their current and future clients. They participate every year with NARPM in annual legislative summits both in Tallahassee, FL and Washington, DC, advocating for the rights of landlords here in Florida.

What Do Successful Central Florida Property Management Companies Look Like?Let’s take a look at who we’re talking to today:

Hoffman Realty is based in the Tampa Bay Area. They serve communities as far north as State Route 54 and as far south as Apollo Beach and Wimauma. They’re a departmental structure and have about 450 companies under management.
Wilson Management Group is in Orlando. They’re a portfolio style management company and serve all of Orange and Seminole Counties, with part of Lake County, Volusia County, and Osceola County within their scope. They also manage about 450 doors.

How Do These Structures Differ?At the NARPM Broker/Owner Conference this year, Matthew Tringali of BetterWho presented a framework called The Team Structure Checklist, which highlighted the fundamental differences between each business structure. Here’s what Maryann reported from that event:

Departmental Structure. Most people are in the office and available for phone calls, answering questions, and serving more specialized areas of expertise. There’s one person managing inspections for all properties and another person managing the accounting or the leasing. One point of contact takes care of customer service. There are property management departments.
Portfolio structures would have one professional with a portfolio of 75 to 125 properties and they handle everything. The entire experience of that property is under their purview, whether we’re talking about maintenance or leasing or tenant management. The primary point of contact is the property manager overseeing the portfolio.

Does the Company Structure Impact Quality of Service?

When we talk about departmental vs. portfolio structures, is it merely an internal operational decision that owners don’t notice, or are there differences in how service is delivered and perceived?

It depends.

When we talk about portfolio models, we’re often talking about companies that cover a larger geographic area, and to expand the business portfolio is necessary. Departmental structures work better for smaller service areas.

Both structures can provide excellent client experiences. This depends on policies and procedures and how effectively and consistently the company can apply those.

It also depends on staff. A leasing agent having a bad day in a departmental structure will not affect an owner who calls to talk about accounting. But in a portfolio structure, the property manager may be having a bad day, and that can affect any owner who calls for help.

The answer to high-quality service delivery in either structure?

Having strong systems.

Which Model is More Scalable for Property Management Companies?Property management companies may want to know if one type of company can support growth better than the other, but the answer comes down to company goals and vision.

Portfolio property management companies are geographically based. Each property manager has a portfolio that they manage, and the properties assigned are based on maintaining boundaries geographically. There’s always a bit of overlap, but it’s not going to work to have property managers crossing counties while trying to provide great service. David and Stacy want their property managers to concentrate on their portfolios to the best of their ability. So from an expansion perspective, portfolio works for management companies that want to grow geographically. It’s possible to add another property manager when new doors are added in different neighborhoods or cities.
Departmental management companies grow best within a tight service area. Maryann and Andrew note that their employees go home at night without being on call for owners or tenants who might need them (Maryann hands out her cell phone for that purpose). The point is to have good property managers who communicate well with existing clients before growing. A new client joined Hoffman Realty because he had not heard from his previous property manager for three months. It turned out his assigned manager had left the company, but no one there had told him.

In each business structure, growth is only possible with good systems, clear assignment of duties, and smart staff.

What Are Some of the Weaknesses in Portfolio and Departmental Property Management Structures?What if a tenant doesn’t pay rent?What if there are complaints that repairs are taking too much time?What if a key property manager leaves the company?

PortfolioThe main challenge for portfolio companies is the loss of that knowledge and expertise when a property anger leaves. And it’s also important to be clear about who owns the client. In a portfolio system, you would not want a property manager to leave your company and take your clients with them. Property management is a relationship business. Internal controls are needed no matter what your structure. You will need:

Management agreements
Independent contractor agreements (this is how Wilson hires)
Policies and procedures

David and Stacy have done a great job of mitigating risk and establishing that clients belong to the company, not the property manager. Most of the professionals working for them have been with the company for over 15 years.

DepartmentalFor departmental companies, it can be a challenge to juggle all the repairs. It requires a lot of time management to negotiate every single lease renewal. Things come up and Maryann and Andrew must decide when the limits of their system have been reached and it’s time to hire another person.

Another weakness in departmental businesses is that sometimes owners and landlords can feel passed around from one person to another. They’re talking to someone different about maintenance and accounting, for example. As the Business Development Mana...

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Google Ads can be a powerful growth engine for residential property management marketing. But for many business owners, it’s also a source of frustration. Misconceptions, unrealistic expectations, and the complexity of campaign management often leave property managers saying, “Google Ads just doesn’t work for me.”

On The Property Management Show podcast, Google Ads expert Maddie Lushington shared candid insights from her five years of running Google Ads campaigns for property managers across North America. Her stories reveal why some campaigns fail, what realistic success looks like, and how property managers can avoid common pitfalls when marketing to property owners.

Why Property Managers Struggle with Google AdsMany property managers walk into Google Ads expecting instant results: a certain number of leads, a specific cost per door, or guaranteed outcomes based on what a peer mentioned at a conference. Maddie has seen this play out countless times.

I also recalled overhearing property managers comparing results over lunch at an industry event. One person bragged about generating dozens of leads in Florida, while another lamented that ads never worked for them in a smaller market. On the surface, these conversations sound like benchmarks. In reality, they’re stories shaped by geography, competition, and budget.

Comparing success in Florida to a rural town in Arkansas is like comparing apples to oranges. The market dictates what’s possible.

This misconception — that performance can be copy-pasted from one market to another — is one of the biggest reasons property managers feel let down by ads.

What Defines Success in Google Ads Campaigns for Property ManagersBeyond Cost Per LeadLeads and cost per lead remain the metrics everyone talks about, but Maddie encouraged property managers to widen their definition of success. Impressions and clicks reveal whether your brand is showing up consistently. More importantly, looking closely at the type of clicks matters just as much as the number.

Owner Leads vs. Tenant ClicksThis is where nuance comes in. Owners and tenants often use almost identical search terms. That means even the most carefully crafted campaigns will capture some tenant clicks. Maddie was quick to point out that this isn’t a failure — it’s simply the nature of how search works. Her team’s role is to constantly refine campaigns to keep the balance tilted toward owner leads.

She stressed the importance of daily click volume as a leading indicator. If a campaign generates five to ten clicks a day, we know we’re creating enough opportunities for owner leads to come through. Not every click will be perfect, but the math starts working in your favor.

Can You Trust AI Tools for Google Ads in Property Management?Automation and AI sound appealing. Google has rolled out tools that promise to “optimize” campaigns with little human input. But Maddie and I both warned against over-reliance on AI in property management marketing, and here’s why:

The Nuance Problem You Can’t IgnoreI put it plainly during the interview:

“Google has now shifted from purely keywords to intent.”

That sounds great until you remember that intent is slippery. Intent is a very nuanced thing, which robots find it hard to master.

In property management, that nuance cuts deep. Owners and tenants search with similar phrases. Maddie sees this daily:

“Tenants and owners actually search very similarly…[and] the AI isn’t nuanced enough to… know the difference… between the owner that we want and the tenant that we don’t.”

Google’s shift from keywords to intent has been one of the biggest changes in recent years. If you want a deeper dive into how Google’s constant updates affect property management marketing, check out our blog on what property managers need to know about Google’s latest updates.

When AI Goes Wrong in Google AdsMaddie shared a story that perfectly illustrates why human oversight matters. During a routine review of a campaign, she noticed something bizarre: Google’s AI tools had injected Latin placeholder text — lorem ipsum — into live ad copy.

In another case, the AI mistakenly expanded a campaign targeting vacation property management into keywords for vacation activities. This meant ads meant to capture property owners would start showing up for people searching “things to do on a trip.” Without human intervention, those wasted clicks could have drained hundreds of dollars from a campaign.

The lesson? Automation can support you, but it cannot replace human strategy — especially in an industry as nuanced as property management marketing.

Google Ads Budget for Property Managers: A Reality CheckPerhaps the most sobering part of Maddie’s interview was her explanation of budget math. Many property managers believe that $500 a month should guarantee a couple of new doors. The truth is far less straightforward.

Breaking Down the Numbers* A $500 monthly budget equals roughly $16.50 per day. * With an average cost per click of $5.50, that leaves room for just three clicks a day. * If those clicks come early in the morning, the campaign stops showing for the rest of the day.

That means potential owner leads searching later in the afternoon never even see your ad.

Competitive Keywords Cost MoreIn some markets, clicks for high-intent keywords like “property management company near me” can cost $20–$30 each.

Removing them might save money, but it also risks cutting off the very leads property managers want most. The art lies in balancing expensive keywords with more affordable ones while keeping the campaign productive.

Why Long-Term Thinking Matters in Property Management MarketingAnother trap Maddie sees is obsessing over monthly lead numbers. Property management, like many industries, is seasonal. Summer brings a surge of activity as leases turn over, while the holidays often slow things down.

One “bad month” doesn’t mean a campaign is failing. Maddie encourages clients to focus on year-to-date averages. If the cost per lead stays close to the $300 benchmark across the year, a quiet December doesn’t negate a strong July.

It’s about the bigger picture. Consistency over time, not perfection every month, is the goal.

Why Reputation Shapes Google Ads PerformanceEven the best-crafted ad doesn’t operate in isolation. Maddie described the buyer’s journey for a typical property owner: they click an ad, skim the landing page, and then — almost always — Google the company name. At that point, reviews and online reputation heavily influence the decision.

Sometimes, it’s not just about the reviews you currently have. It’s also about proactively making sure tenant frustrations don’t spill over into your online reputation. Maddie wrote a full blog on how property managers can prevent negative tenant reviews that’s worth a read if you’re looking to strengthen your reputation before investing more in ads.

Owners are likely to reverse their decision to call a company after spotting a low star rating or too many negative reviews. This is why she emphasizes pairing Google Ads with reputation management and lead nurturing campaigns. Ads are often the first handshake, but trust is built through reviews, follow-ups, and consistent visibility.

Your reputation is part of the larger customer journey, influencing whether property owners move forward with you or not. We break this down in detail in our blog on online reputation and the customer journey for property management companies.

The Future of Google Ads in Property ManagementLooking ahead, Maddie believes the biggest challenge will be rising costs. As more companies enter the market, competition drives up the cost per click. For residential property managers, this means budgets need to stretch further, and campaigns must be managed with even more precision.

Still, she’s optimistic:

“If you have the right strategy in place, you have the right audience, you have an appropriate budget, you’re A/B testing regularly, you’re doing maintenance, Google Ads is so effective.”

Should You DIY Google Ads or Hire an Expert?Running ads in-house may seem like a way to save money, but Maddie’s stories show the risks: wasted spend, missed opportunities, and costly AI mishaps.

Another challenge Maddie and I discussed was targeting investor landlords. On paper, “investor” sounds like a great keyword, but in practice, it’s loaded with spam. Search terms around “real estate investors” often pull in schemes, courses, or people looking to flip houses rather than serious rental property owners. A lot of keywords related to investments are associated with scams and spam.

That makes it tough to use investor-related keywords without wasting budget, which is why campaigns need constant refinement to filter out irrelevant clicks.

For property managers serious about getting more owner leads, working with a marketing partner who understands the property management industry provides not just technical expertise but also peace of mind.

FAQs About Google Ads for Property ManagersHow much should property managers spend on Google Ads?It’s entirely location-dependent and we recommend doing keyword research to see what the average cost per click is in your area. Make sure that your budget is high enough to generate 5–10 clicks per day. Smaller budgets can work in rare, low-competition markets, but they often run out early in the day.

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The Property Management Show returns with Part 3 of Marie Tepman’s discussion with Todd Ortscheid, which builds off the earlier discussions of fee-maxing and choosing the right revenue model. In the conclusion of this series, we focus on the importance of education when it comes to property management marketing, and how to use AI to boost productivity without losing the human touch.

Property Management Marketing Starts with Content MarketingTo someone who does not know the property management industry, the idea that a company like Fourandhalf would market exclusively to property management companies seems incredibly niche. But, the industry is big.

And, the majority of rentals in America are not even managed professionally. Marie was shocked to learn that 10 years ago when she first got started in property management marketing, and perhaps even more shocking is that this is still true today. Ten years later, many rentals are still not professionally managed.

This tells us that education continues to be necessary. It has to come first.

Property managers can educate landlords that there’s value in hiring a professional management team for their rentals. Not only does it save time and prevent errors, they can make more money.

A lot of self-managing landlords, as you know, don’t want to pay someone a percentage of their rent. But, that’s because they often don’t realize that a professional will help them earn more money, not only when it comes to rental pricing, but also with expertise and even the ancillary fees we’ve been discussing.

Education is an under-rated part of marketing. It’s not just having a well-trafficked website and running digital ads. Those strategies help to capture the bottom of the sales funnel by reaching the people who already know what a property manager does. They’re making decisions based on prices, services, and other specifics. They know what they’re looking for.

But what about the landlords and the property owners who don’t know? There’s an opportunity to capture the people who are looking for solutions. They might be having a tough time managing their own property. They’re looking for help, for answers, and for other options.

Those are the customers who will make decisions based on the criteria your educational marketing has taught them to use.

Investing in the Marketing that MattersTodd understands the need for educational marketing and has become so successful at it that he went on to bigger and better automation programs. He outgrew the basic marketing principles that he learned when Fourandhalf was helping him make marketing videos 10 years ago.

He has some advice to the property managers who are small and strapped for cash and maybe afraid to spend money on marketing.

Todd also works with a lot of clients who don’t have $10,000 a month to spend on marketing.

He tells those clients that the educational component works. It was true 10 years ago when everyone was talking about content marketing and the benefit of education. And, it’s true today.

Look at Marc Cunningham and his company, Grace Property Management. There is video after video after video on that website, and they spend 1 percent of their budget on marketing. That’s it.

Anyone can do that.

Once you start getting all that educational material out there, you’ve become the trusted source. When someone in your market looks for an answer to a question, you’re there providing it.

Todd says a blog he wrote 10 years ago on screening pets is still one of the most-viewed pieces of content on the website. This blog gets tons of traffic. Why?

Because there’s always going to be a landlord in Atlanta who had a bad experience with a tenant’s pet, so they will go looking for information on how to screen pets. And, Todd’s website pops up.
The site provides educational information to the person who needs help, and they get value out of it. And once they’re there, they are likely to see other videos and other educational content.
All of this leads to trust. They trust the information and the expert providing that information.

This means that even if they don’t pull the trigger today, when a tenant leaves at the end of the year and that owner doesn’t want to go through the whole leasing and marketing and screening process again, they’ll come back to that great video they watched and they’ll find the source.

Spending just a little money gets you to the point that you’re building revenue. Then, when you have the budget to spend $10,000 a month on marketing, you can do other things.

Content marketing gets you to the point where you can spend more on marketing later.

It Was Video Then. And It’s Video Now.Ten years ago, we were talking about videos and how important they were to content marketing. Fourandhalf was writing blogs on the power of content and education.

It’s all still true today, and it’s all still important today.

The difference is that 10 years ago, not everyone was writing blogs and making videos. If you were doing it, you were winning…no matter what the quality of those blogs and videos happened to be. Now, with every property manager in your market publishing a blog, yours have to be the best.

The top property managers are doing video.

The secret to property management marketing is video.

The best way to set yourself apart and increase ROI is video.

That’s not going to change.

As with blog, the video has to be better now because more and more property managers are using video to market their companies.

AI has, of course, opened up this type of marketing to a lot more people, too. AI can write blogs. AI can create a video with an avatar. But, you can do better than that. As a property manager with real expertise and value to provide, do you want to settle for the blog that AI spits out or the avatar that isn’t you on a video?

Todd’s Take on TechAI lets us do all these things, and that makes authenticity more important when it comes to marketing. You have to be the property manager that an owner will trust with the keys of their biggest asset.

Todd says he loves tech. He always tells people that the purpose of this technology isn’t to replace the high level stuff that can only be done by humans.

The tech’s purpose is to make it easier for property managers to do the important tasks and provide the important service. Instead of replacing yourself with an avatar, get AI to do the easy stuff. When you do that, you can record the customer-based video and spend some time building trust.

Use the tech to create time for customer account reviews, video marketing, and everything that has real value and can bring in more customers for your business. The value of AI is not to replace your maintenance coordinator or to record all your videos. People can tell when you try to pull that off. The whole purpose of video is to build that trust and to make yourself be the expert. If you replace yourself with code, that’s not doing anything. No one trusts a computer.

Remember when Marie talked to Marc Cunningham about AI being like cake? You can make a cake from scratch. You can buy a cake from a store. Or, you can buy a cake mix and make it your own.

When it comes to content, you don’t have to start from scratch. But you do have to make it your own.

Don’t Be Afraid to Get StartedWe covered a lot in this series with Todd, and what he wants you to take away is this: Don’t be afraid to get started. Don’t avoid revenue-maxing just because you’re afraid you’ll get pushback. Don’t be afraid to record a video just because you’re afraid of being on camera.

Don’t be afraid to start. You can start small and keep it manageable.

If you don’t know how to start, talk to a property manager who has been doing this. Work with Fourandhalf or with Todd. There are resources to support you.

This wraps up our three-part series. Hopefully, you now have extra clarity around revenue-maxing, profits, retention, marketing, and AI.

Sign up for Todd’s Property Assist Substack newsletter, and now that you know how to earn that extra margin, turn that money into real owner leads that are a great fit for your business by contacting us at Fourandhalf.

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Most property-management owners focus on adding new doors, or, they’re just concerned with reputation management and they don’t feel like they need to grow their business. But, they ignore the cause of lost revenue and lower customer lifetime values: annual churn that quietly erodes 20–25 % of portfolios.

You probably don’t realize just how big your churn rate is.

Welcome to Part 2 of our conversation with Todd Ortscheid, CEO of Revolution Rental Management. In this part of our series, we are talking about real world churn rates for property managers, how boosting your Customer Lifetime Value (CLV) can elevate your property management company and give you the budget necessary to effectively market your services, and some of the most threatening legislation and regulation around fee-maxing.

How Much Are You Really Losing? Getting Honest About ChurnAny industry report you read will show you that property managers can expect to lose doors every month and every year. Even if you’re doing a perfect job, your owners are going to sell their properties. They’re going to die. They might change their minds.

Todd says that when asked to estimate churn, many managers guess that their churn rate is around five percent. But really, most property managers are losing 20–25 % of their doors every year.

The latest NARPM® benchmarking guide says the average churn is at 20%, and Todd says that property management companies that can bring that loss down to around 10% can feel really good about what they’re achieving.

Some property managers might think that they’re not losing money on churn because they’ve helped one of their owners sell a property. That’s great. There are commission earnings to be made. But, they’ve lost the recurring revenue.

Never underestimate what you’re losing to churn, and even though it’s surprisingly difficult, try to bring that churn rate a bit lower. When sales are intense, churn rates will jump. Be prepared.

Increasing Customer Lifetime ValueWhen you have responsible ancillary fees in place, you’re earning extra cash to invest into better services.

Better services reduce your churn and increase your customer lifetime value.

Where should those extra earnings be spent? We discussed this a bit in part one of our conversation:

Marketing. Each new door now yields twice the ROI, making pay-per-click (PPC) or content marketing an easy investment.
Better services. Upgrade what you can provide. This might be a 24/7 maintenance line, leasing automation, and a resident-benefit package (RBP). These things are increasingly expected by tenants.

Fee-Maxing Myths and The Triple-Win ModelFee-maxing means charging more money from tenants. Won’t that lead to tenant churn? If you’re taking more money from residents, the property manager and the owner have better returns, but won’t residents leave, thus increasing an owner’s vacancy rate?

That’s a fear not a fact.

Properly structured fees don’t drive tenants away. Most ancillary charges are behavior-based or have opt-in requirements. Late fees and bounced check fees and credit-contingency fees are behavior-based. Only the tenant can prevent those fees.
Pet fees are completely optional. No one will charge a tenant a pet fee if they’re not moving in with a pet.

Todd has a client in Washington State who is the only property manager in his market to allow pets everywhere. He rents every listing faster while collecting a pet fee for the owner. The result is a much lower vacancy rate, happier owners, and grateful residents who couldn’t find pet-friendly homes elsewhere.

Tenants who have lower credit might not like that they have to pay a bit more in rent every month, but they’ll be grateful that they can rent a place, even with that low credit score. Those residents are grateful that someone is willing to work with them.

Second Nature is the company that manages Resident Benefits Packages. They have a model that they call Triple Win. The owner wins. The tenant wins. The property manager wins. That’s what happens with these ancillary fees, whether we’re talking about renters insurance that’s offered to tenants at a cheaper rate than they’d find on their own or a rising credit score that’s occurring because their on-time rental payments are being reported to the credit bureau. It’s a better deal for residents. Those tenants aren’t going to leave. They’re getting benefits.

Fee-Maxing and Regulatory ReactionsFee-maxing quickly got the attention of regulators and legislators, and they began to see it the same way they might see Ticketmaster charging “junk fees.” But it’s not the same. The airline industry has done a good job of convincing the government that their ancillary fees are necessary in keeping ticket costs down.

The property management industry needs to make the same case. Our industry has advanced. We want to fund technology and new benefits for tenants, and if we cannot provide that through ancillary fees, we’ll have to increase rent and property management fees. When those fees go up, rent has to go up. Everyone suffers. It no longer becomes a situational cost. It’s not affecting only tenants with pets or only tenants who need credit help. It’s affecting everyone.

Many areas of the country are facing legislative hurdles when it comes to ancillary fees and property management. Part of this is due to the perception that landlords are rich corporations. In Atlanta, for example, a lot of institutional investors and corporations have moved into the market. So, many people have the misguided idea that landlords are big rich billionaire fat cats. But those institutional investors are about one percent of the rental owner market. Everything else is owned by small investors. The average landlord is a blue collar person and all their wealth is in the rental property. People don’t know that.

States like New York are especially hostile to ancillary fees, which surprises no one. West coast states like California, Oregon, and Washington, are also tightening rules on fee-maxing and capping pet fees or Resident Benefit Package fees. In Colorado, pet fees are now limited to $35 per pet. Another state that has shifted to be less landlord-friendly is Nevada.

What are some smart work-arounds that can keep a property owner and manager profitable in some of these states? Here are some of Todd’s suggestions:

Rent-inclusive RBP pricing. Bundle the benefit cost inside your advertised rent. For example, if your normal rent in Oregon is $2,000, you can advertise your property at $2,050, and provide the Resident Benefits Package. Then, earmark the first $50 as the management fee.
Provide tiered service packages. Offer “Platinum” plans that bake in formerly capped fees.
Support data-driven advocacy. Show lawmakers how fee caps backfire on residents. This is a lesson that rent control already should have proved.

It’s important to be creative and work within what you can charge. Over time, too much regulation will negatively impact residents and there will be backlash.

Be ready to explain why the fee is in place. If it’s just a money grab, you’ll have a tough time defending it. But, if you’re putting a fee in place to change behavior or provide something of value, there’s an argument that can be reasonably made in support of that fee.

The best business model will depend on your property management company. Maybe an all-inclusive plan works best for your customers. There are zero additional fees, but they’re paying you more every month for everything, whether they use all the services that the fee covers or not.

Tiered pricing is another option. It’s like buying a basic economy airline ticket and then adding the things that you want, like meals or seat selections.

There’s nothing wrong with any of the models. As the owner of a property management company, you need to figure out what will get you to the revenue that allows you to provide the kind of service you want to provide while still making money for yourself.

In Part Three, we’ll pivot from policy to practice. We’ll talk about education versus marketing, how to create video that converts, and how to use AI to be an efficiency assistant rather than a brand killer.

Stay tuned for the finale with Todd. And if you’re hungry to turn your fresh margins into high-quality owner leads, contact us at Fourandhalf.

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Welcome back to The Property Management Show!

Today kicks off a special three-part discussion on fee-maxing with Todd Ortscheid. In Part One of this important conversation, we will take a look at what responsible fee-maxing looks like, how it can double your revenue, improve your services, and ultimately increase customer lifetime value. When done right, it can also keep residents on your side.

Expect to unpack some juicy math.

Todd Ortscheid: Automation Addict and Fee-Maxing EvangelistIt’s great to welcome Todd back to our podcast. He has worn nearly every hat in the property management industry. He’s a business owner and advocate, an industry consultant, and currently the chapter president of NARPM Atlanta. He’s also the CEO of Revolution Rental Management and co-founder of PM Assist.

A bit of time has passed since Todd was last here, so let’s review who he is and where he comes from:

Todd has been in property management for about 13 years.
He started in the industry in 2012 and before that, he was an airline pilot for 14 years.
Todd’s father was in the property management business, so as he got involved in that business and grew the company, Todd also became more involved in consulting for other property managers.
He started and later sold a maintenance company.
He did government affairs work for NARPM.

Todd is still consulting, and he’s also a self-proclaimed automation addict and fee-maxing evangelist.

That’s what we’re interested in talking about today.

The A-Ha Moment for Fee-Maxing Todd began thinking about involving ancillary fees in his own property management business at a NARPM Owner/Broker conference in 2014 or 2015, where he heard Marc Cunningham talk about the ancillary fees that were available for property management businesses.

It made sense because that’s exactly how airlines work. They make most of their money not on the plane tickets but on the extras.

Later, he heard Alex Osenenko and Darren Hunter talk about this topic right here on The Property Management Show several years ago.

By 2020, everyone was worried about revenue, so he put together an entire course on fee-maxing and leveraging ancillary services and fees.

It’s been a passion of his for years, and when Lead Simple introduced what was possible with automation, he became really involved in that as well.

Fee-Maxing Can Be Polarizing (But It Shouldn’t Be)When the topic of fee-maxing comes up, it can be polarizing.

Like just about everything these days, there’s a camp that’s very much for it, and a camp that’s very much against it.

Some property managers hear fee-maxing and they imagine that a property manager or an owner is nickel-and-diming a resident to death. We’ve heard the term junk fees thrown around.

So, what does responsible fee-maxing look like?

The first thing Todd wants to point out is this is not hoarding money or being greedy. Some people get that idea, but all you have to do is gather the math and run the numbers to realize these fees are necessary in order to provide good service.

When Todd and his team first started running numbers for property managers, they found the average property management company had a single digit profit margin. It was 5 or 6 percent. That’s barely skating by, and it caused a lot of companies to struggle financially.

Fee-maxing is not about trying to be greedy. It’s about making your business sustainable.

You shouldn’t be struggling to provide the bare minimum. As a property manager, you’re trying to provide good service to owners and residents. You’re trying to hire and train better staff. You want to invest in better technology and increase your marketing efforts. To do that, you need the revenue that’s created by ancillary fees.

The primary goal of fee-maxing is to improve the service you’re offering.

Investing Ancillary Fees to Improve Property ManagementThat’s an important distinction. If you can invest more money into your business, you can run not only a more profitable business, but also a more excellent one. You’ll improve the overall experience.

Think about what property management looked like 10 years ago.

How many companies had the technology we have today? There were no resident benefit packages. It was rare to find a 24-hour maintenance hotline. Now, everyone has these things. We’ve been able to radically improve the nature of the services we’re offering in this industry, and Todd says that’s due in part to fee-maxing and ancillary services.

The boost in revenue has led to these services. If everyone providing property management has a 5 percent profit margin, you can’t do anything except collect rent and file evictions. Staffing maintenance services would be impossible.

Fee-maxing is an invitation to move beyond the basics.

Impact on Customer Lifetime ValueIn the spirit of unlocking better margins for property managers through fee-maxing, it’s also easier to increase or amplify the customer lifetime value for each client. To attract a new customer, you have to engage in marketing activities. You have to invest resources to get owners to work with you. Meanwhile, you’re trying to make ends meet just to staff your own company.

If your property owners are not happy, they leave your company. Then, you find yourself working extra hard to replenish that income and grow your business.

The simple math says you have to increase the margin so you can increase the lifetime value of each customer. You can’t have a revolving door of churn.

Doubling Your Income with Fee-MaxingTodd has lots of examples of people who took his fee-maxing course, and the average company that he works with is able to double their revenue.

Think about how revenue has always been measured for property managers: by calculating what you earn per door, per month.

All of your revenue 10 years ago might have added up to $150 or $175 per door, if you were doing well.

Now, thanks to these ancillary services and fees, companies can make in excess of $300 per month on each door. Those who do a really good job can push $500 per month on their higher end properties.

What could you do with an extra $100 per month for each door you manage?

A lot, probably.

This has changed the business. When we see property managers struggling to maintain those good levels of service, it’s usually because they’re stuck making $175 or $200 per door every month. It’s tough to provide an excellent service in that space.

It’s About Options: How to Grow with Extra RevenueWhen you don’t have money to reinvest in your property management business, service will suffer.

And so will your business growth.

At Fourandhalf, we market for property managers, and there’s often pushback when we talk about marketing because of the cost. Property managers feel like they cannot afford to spend money on marketing, especially now, when costs are high and the economy is uncertain.

People are scared to part with money. What are they willing to spend on, when fee-maxing strategies are bringing in additional revenue?

Todd says it depends on the client and their goals.

Some clients want to add doors. That makes sense, and in that case, investing in marketing is a no-brainer.

Pay-per-click campaigns can bring in new clients, and here’s an important thing to remember:

Those new doors are bringing in more revenue than what was coming in before.

The return on investment is skyrocketing when any extra money from ancillary services or fee-maxing is invested in marketing. It’s easier to fund those initiatives, and they are definitely worth the resources.

Property managers know their business is missing out if they’re not bringing in more doors. This growth is more valuable now than it was a few years ago.

In addition to marketing, Todd likes to see his clients invest in technology, specifically leasing automation. He wants to see a 24-hour call center and a resident benefits package. Everyone should be doing those things now.

Invest in fee-maxing. Put that money into marketing and services, and you’ll see new business.

Using and Understanding DataRecently, Peter Lohmann and Jordan Muela came out with PM Trends report that showed what property owners care about when choosing property managers.

Their data shows that property owners don’t prioritize Google or Yelp rankings when choosing a property manager. But, they say reputation is the second most important thing to them when making a choice.

Google reviews may be at the bottom of the list, but we can promise you an owner will notice a 2.5 Google ranking and probably not choose that property manager.

If a property manager is not reaching the bare minimum, which is probably 4 stars, it’s going to be difficult to attract new business. Everyone has a website. Everyone has a Google ranking. Of course reputation is important, and managing that reputation includes attention to website analytics and Google reviews.

Todd loves data and he loves diving into survey results, but he says that it’s important to think about what the person responding to a survey is really meaning with their answer. No, they’re not choosing a property manager based on Google stars, but if they do a bit of research online and that property manager comes back with a 2.5 score, it’s going to be a disqualifier.

Google scores still matter to your SEO, too. Where you fall on those ratings matters because Google cares. It all matters. Don’t read the wrong things into that report. Think strategically.

It’s like employees always saying that they care about being respected and making a differen...

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Ray Hespen, who is a frequent flier on The Property Management Show, joined us again to discuss maintenance metrics and how measurement improves resident satisfaction and owner NOI.

The last time he was on the podcast, in late 2023, his team was just beginning to establish this concept of maintenance analytics. He was investigating what it would look like if property managers looked at maintenance from a data-driven standpoint. He was beginning to collect all the necessary data.

It’s been more than a year now, and we brought him back to talk about what he’s seen since then.

The Evolution of Data-Driven MaintenanceIf you get good measurements, you never lose.

Property management has been in this black hole of information and according to Ray, that’s because we relied so much on having exceptional people run our business. It’s a super-high trust game. But, you can’t move what you can’t measure. So in order to scale, Ray and his team at Property Meld released a product that’s the best industry representation of the real world.

Insights and Insights Pro are basically ways to understand your own property management business against a ladder of maintenance excellence. It’s a deep diving into:

Vendor efficiency
Technician efficiency
Coordinator efficiency
Benchmarking
Finances

You know what the performance actually is instead of trusting someone’s gut.

Ray says it’s been surprising to see how the market has wrestled with some of this. There are some components of the data that people don’t like. They’d rather not look. Then, there are some customers where the metrics are so good, but they still want to get better.

Essentially, providing access to all of this data and insights has opened Pandora’s Box. There’s no going back. It’s possible to measure leading and lagging indicators. And now, it’s possible to consider how to move those numbers. Knowing they exist is one thing. Using them to improve performance is what comes next.

Geographical Insights in Maintenance PerformanceThe most interesting data gathered from maintenance requests and responses is geographical.

Ray says what’s most important in the information that’s been gathered is that property managers can see their performance against geographical regions and areas. It’s clear to see that property management companies in the southern states, which have warmer summers, have a high speed of repairs and increasing maintenance costs in May. So, it would be unfair to compare yourself to a property management company in Minnesota that does not have air conditioning repair costs until July or August.

The geographical impact to maintenance in weather regions is important. Property managers don’t want to think they’re killing it or falling behind when the data is geographical.

That’s what Ray calls a “big a-ha.”

Customer Satisfaction and Its Impact on RetentionCustomer satisfaction has become a much-discussed part of property management, and that covers the satisfaction of residents and owners. It’s important to remember that resident satisfaction also affects owner satisfaction.

Technically, property managers have multiple customers, but there’s also a hierarchy.

Would you rather lose 50 percent of your owners or 50 percent of your tenants?

Exactly.

So, the hierarchy starts at the investor. Property managers do not have a business if they don’t have an investor customer. But, if property managers can make the resident happy, it’s much easier to hang onto those investor clients. So, one of the indicators of investor satisfaction is resident retention.

One of the reasons that tenants leave is that they hate the maintenance.

In the macro environment today, no one wants a rental on the market. Avoiding that as much as possible is important. Also, maintenance costs are growing 8 percent year over year. No one wants to turn a property when maintenance costs are higher and rents are holding or even compressing.

When you’re driving investor retention, a property manager needs to look at resident retention and annual maintenance spend per unit. That’s what matters: resident experience and maintenance costs.

It’s more than just wanting to be better with maintenance. Property managers can drill down from every point in the ladder of maintenance excellence. Identify the problem so you can improve it. A resident satisfaction issue might be approval speed. If it’s taking too long to get the repairs approved, you need to get into those details instead of running after different things.

Don’t do work that doesn’t have an impact. Measuring things allows you to look at problems more critically. There’s a lot to be said for gut instinct, but once you start using data, you have to be methodical. Perhaps you’ve heard the W. Edwards Deming quote: “In God we trust but all others must bring data.”

Following your gut is important, especially if you’ve been in this business a long time. It’s probably not wrong. A lot of data has been gathered and processes created around operator gut instinct. But, your gut should lead you to a deeper investigation. Gather more information to validate it.

Key Takeaways from the Benchmark ReportRay’s team recently released a benchmark report. The Monthly Meld is released month over month and year over year to highlight the trends that have been detected.

Here are some of the key takeaways and general trends:

Everyone cares about residents staying in their rentals, more so than before. This has driven a focus on speed of repairs and an emphasis on satisfaction.
We have to sort through the concept that maintenance costs are still going up. Cumulatively, on properties, they are. BUT, the average cost of a single repair has gone down for the first time in a while. That means total maintenance spend is going up but the ticket prices are going down. This indicates people are doing more repairs, but each of those repairs has a lower cost. Owners are investing in preventative programs. Property managers are trying to save their investors from sticker shock. There’s a higher frequency but lower costs.
We’re seeing still a larger uptick of operators doing internal technician work. They’re bringing maintenance in-house. That internalizes and integrates processes, and it also controls cost of the market. You’ll find in that report that vendor invoices went down one or two percent. Internal technician repairs went down 15 percent. So, the in-house teams are being used for profitability and to control costs.

Property managers and owners have reported it’s been difficult over the last year or two to get trade people into properties. There has not been enough supply for the maintenance demand. But, hiring technicians is harder than finding vendors. The same talent pool is being hired by property managers and service providers.

The high-lever view is this: vendors are still constrained. There are great professional vendors out there, and Property Meld has a product that connects these providers. Property managers can get onto the app and check for availability by zip code.

Annual Cost of Repairs per Owner: The Magic NumberOn his previous appearance, Ray said that the magic number is 12 percent of rents collected. Staying near that magic number means that a property manager will retain that owner client. If maintenance costs are higher than 12 percent of collected rent, the threat of churn begins to grow.

Is that still true? With rents not rising but maintenance costs going up, is the 12 percent rule still accurate?

Ray says that analysis has not been re-evaluated because everything has been so dynamic and the data set needed is so large. He knows that investors will stick around if residents are happy, and now he knows that maintenance behavior impacts that.

Tenant satisfaction with maintenance is about the details. If you have a lot of plumbing issues, will that change renewals versus electrical issues? Does it matter if most repairs are within three months of move-in versus six months? The goal is to avoid whatever leads to dissatisfaction.

Imagine telling an investor that you can change lease length based on what gets done maintenance-wise, and then being able to show how much more it earns them. Your investor client will love that.

Ray intends to will go back and determine whether the 12 percent is still the right benchmark.

Trends in Repair Costs and Customer SatisfactionThe benchmarking report shows that in many cases, even where the median invoice amount was higher, customer satisfaction still went up for owners and residents. Higher costs may not mean lower satisfaction.

It’s undoubtedly true that the emphasis on resident experience is the largest focal point right now. Trying to control costs is essential, but there’s a zero tolerance for bad experiences. That reflects the market. In 2022, a property manager could rent a home sight unseen. Now, rentals are on the market for 44 days. Few things are trending down with resident satisfaction because property managers and paying attention and emphatic about that experience.

Leading and lagging indicators that get the most attention include:

Speed of repairs
Resident satisfaction
Vendor health score
Annual maintenance spends

Understanding Triage in Property MaintenanceProperty Meld recently acquired Mezo. Ray calls it one of the most impressive AI intake and triaging assistants he’s seen.

Mezo has a bot called Max, and Max is the world’s friendliest tech. It asks residents questions. It provides empathy. It gets all the necessary information about a maintenance requests and it prevents emergencies.

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Fourandhalf’s Marie Tepman, Interviewed by Marc Cunningham on the PM Build Property Management Business Podcast

Marc Cunningham, from Grace Property Management and PM Build, invited Marie onto his podcast to talk about artificial intelligence (AI) and its role in property management marketing. Specifically, the discussion revolved around getting more owner leads for property managers.

In an environment where budgets are shrinking and a lot of property managers are still unsure about AI, this discussion provides some clarity. Here’s what was discussed.

Property Management Marketing and Gaining Owner LeadsOne of the biggest challenges all property management companies deal with is bringing new owner client leads into the company. How do you drive more leads into your company? The big catchphrase now is AI. Should property management companies use AI? How can these tools be used? It’s a big umbrella in property management marketing, but first, let’s talk about the simple fact of how to get more owner leads. What’s the big picture?

Leads are online. So, property management companies need a good presence online. This starts with a website. And while some companies build business through referrals, online marketing is the next step. To really get started attracting owner leads to your property management company, you need a website and you need content.

Marc remembers saying “no thanks” to a company that tried to sell them on a website in the early 1990s. He though as long as he had his Yellow Pages ad, he’d be fine.

Things have changed.

A property management company’s website and content serve reputation.

Reputation is important because you want people to vouch for you. Before buying a product or service, consumers are going to look at reviews. They’re going to want to see how many stars are on your Google rating. If you don’t have any testimonials or reviews, people might think that’s suss (suspicious, for the over-45 crowd). If a prospective owner finds your website but no one online is talking about you, there may be hesitation. You have to show that you’re trustworthy.

After you have established your website and your reputation, you need content.

Content and Property Management Marketing for Owner LeadsThe literal meaning of content is anything with words on your website.

At Fourandhalf, we’re more interested in quality content.

When someone who has just inherited a home needs help renting that home out, they’re not going to go online and search for a property management company. A lot of them might not even know that property management is a service that’s provided professionally. Instead, they’re going to go online and search how to find a tenant or how much rent to charge.

Property management content is not selling your business. It’s not telling anyone how long you’ve been in business, and it’s not bragging about how great you are. It’s showing prospective owners that you can be trusted. It’s showing value.

Any company can say they’re great. It doesn’t mean anything to your prospect. They have a problem and they want to solve it. When you’re a problem solver, you’re providing quality content.

The hero of the story is the always the customer. When you show up to offer solutions, you want to make it obvious to the owner that this is why your service can help. That allows the owner to remain the hero. As the property management expert, you’re the helper getting them what they need.

Don’t be the hero. Be the helper.

That’s a big concept that needs to be adopted when it comes to content. Serve, don’t show off.

When an owner clicks on the how-to content, they’ll find it helpful. It’s educational. So, when they get to the end of what they’ve read or watched, they’ll see who provided the content.

Trust is established.

Should You Just Use AI to Create Content?Maybe property managers don’t have time to create content.

Is this where AI can be helpful? Can you ask AI to write a blog on how to collect rent and then throw it on your website?

You can. And this is why generative AI is so deceptively awesome.

When Marie first discovered ChatGPT and what it did, she feared the end of marketing had arrived. It seemed like original content would no longer be necessary. But, the more she dug into what this tool is, the more she realized its limitations as well as its uses.

The technology goes to its library of what’s already been written.

If you want to use content that’s completely AI-created, you’ll end up with just an okay blog.

But, we are no longer in the year 2000. Having a website is not special because everyone has one. Creating content is also not special; more and more property managers are doing it. So, if you want to put your property management company’s name on a machine-generated blog that lacks originality and authenticity, you can. But don’t expect great results.

If you want to do better than a mediocre blog that could have been written by anyone, the human touch is still required.

How to Use AI as a Marketing ToolUse AI as a sounding board or a starting off point. In trying to write content, people fail to realize it’s not about the words on the page or how many times property management was mentioned. It’s about placing the seed of an idea in your reader.

Remember that people are looking for solutions. An AI-generated blog may provide information, but it does not provide any credibility.

You want to make an impression with quality, professional content.

When you add the personal stories and your own expertise to the writing, you gain trust and credibility. AI tools cannot give you the credibility or the authenticity. They can give you words.

AI can be used when you feel like you’ve run out of ideas or when you’re not sure how to cover a topic in a new way.

As a property manager, maybe you’ve written about rent control a hundred times and you just don’t know what a new angle might be. Put your thoughts into AI and see what you get. It won’t be a blog, but it may be a phrase or a sentence that sets something off in your mind and sends you down the path towards new content around a subject you know well.

AI can help you get to your own ideas faster.

When Marie tells the generative system that she’s looking for a fresh idea around a topic, she shares all the ideas she has. It suggests a lot of things, and 95 percent is not usable.

It’s up to her, as the human, to find that grain of inspiration. Sometimes it’s a full idea that she’s able to pull out. Sometimes it’s just a phrase.

Here’s an example Marie shared:

When she was scheduled to speak at NARPM National 2023, she wanted to talk about marketing and attracting owner leads. It’s a tried and true topic that she had discussed many times, and she didn’t want to bore an audience who had likely heard her speak about this before.

She had a post-it note on her desk that she’d had for years which reads:

It doesn’t matter how good you are, because if you don’t get discovered, no one will ever know you existed in the first place.

She put that into ChatGPT as part of a bunch of other ideas she also fed to the system. It suggested, somewhere, talking about how property managers start off invisible. Marie leaned into that, and many edits later, she had a talk that started with the phrase: “From Invisible to Irresistible.”

She didn’t let AI write her speech. And she might have come up with that title on her own eventually. But, this is a good example of how AI can be a useful tool but not an author.

Think of it as a collaborator and a companion. Think of it as a tool. Just like any tool, you have to know how to use it.

Keeping Content PersonalIf you’re not doing any content creation, and you’re happy just to have a website and that’s all you want to do, then AI can create posts for your site.

But recognize that it’s not going to be the best quality. It’s not going to be personal.

Most importantly: it won’t give you the owner leads you want.

AI is not scary, and it sets a very low bar. It takes what everyone else thinks and puts it out there. Your job when marketing for owner leads is to decide how can you be different?

You can give your professional opinion in original, high-quality content. AI won’t give an opinion. It can’t because it’s not a property manager. AI cannot bring wisdom to the table. It cannot compete with professionalism or offer professional opinions.

Property managers need to remember that. Your content is your professional opinion.

Google’s Thoughts on AI and SEO Another big question Marie gets a lot is whether using AI will provide an edge SEO-wise.

The answer is no.

Google’s algorithm updates all the time, and it basically says that their algorithm prioritizes helpful content and useful, authentic content. Their stance on AI is that they don’t care.

Let’s think of it like a cake. If you’re asked to bring a cake to a potluck, maybe you’ll spend a full day making everything from scratch. Or, maybe you’ll buy a cake from a store.

When you show up to the potluck, people will be very excited about the homemade cake. They might judge the store-bought cake. But it really comes down to taste. How does the cake taste? Google doesn’t care if it’s homemade or store-bought. They care if it tastes good.

If you’re a property manager thinking about marketing for owner leads, maybe you’ll find a middle ground. You’ll buy a cake mix from the store but then add your own flavors and personal touches to that mix, creating an original cake that tastes great.

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Can vendor bidding solutions like RoDevia Brigham’s Proposabid create more transparency and detect fraud?

That’s where we left off during Part 1 of this discussion on The Property Management Show. Let’s pick up the conversation about how the bidding process is broken, and how property managers can avoid wasting time and money. Here’s Part 2.

How has Proposabid Contributed to Fraud Detection?When RoDevia was talking with her partner, they discussed how a lot of vendors would inflate pricing or maybe there would be work that was needed but didn’t really have to be done in the particular way that a vendor believed, or at a higher price point.

There are a couple of specific cases that she was able to detect, and she cautions owners and property managers that things like this could be happening without them knowing about it:

On-site staff may claim that work is necessary, or they’ll be billing you for work that may not be completed or required. If you’re an owner in Arizona with properties in Tennessee, you may not know that what you’re being told isn’t true. If your manager is overstretched and has 76 different properties to manage, she may not know that 34 doors need to be replaced in a specific way at one property.
There could also be a conflict of interest or some self-dealing going on. Staff or property managers may use companies they own. In San Francisco, we had a cleaning company that got a $15,000 per month contract at one property for 150 doors. It was on-site staff that was registered and had an EIN. Family members worked at this company, and they managed to claim contracts across other properties for almost $500,000 over three years without the owner knowing. There was no bidding process at all.

If you have a third party that doesn’t have a dog in the fight and can source bids for you in timely fashion and has comparables for you, the process is fully transparent. Proposabid also posts their bids online so other vendors can compare.

Any number of issues can crop up when a company is just assigning someone to source bids who isn’t qualified to do it or is too busy to give it the necessary attention.

Challenges for Property Managers in Analyzing and Comparing BidsLet’s say a property manager does manage to get some bids. Now it’s time to analyze and compare them. What are some of the challenges and issues would a company face at that point in time?

First, RoDevia would be wondering if you have enough bids.

When you do, you have to ask if the bids have expired to the point where they’re no longer viable.

One of the main things she has noticed is that property managers won’t necessarily know what the vendor does not offer.

For example, there was a hazmat fentanyl situation at a property, and the building had to be closed down. Police were involved. To get bids for the cleaning, you also have to think about what the vendors are not offering in those bids. Proposabid needed to analyze that particular piece. What all five vendors didn’t offer was to post drug testing. Can you post it once it’s clean?

Also, what about repairs and renovations after the cleaning. It might be necessary to tear into a wall. Asbestos and lead testing might be necessary depending on what’s found when you do open up the wall.

Always consider whether you know what you need beyond the bids themselves. This is the most challenging part.

Another challenge can be the number of hands in the pot.

If you have a board or an HOA, there could be some extra time needed. One HOA client had three good bids, but they wanted more. That’s fine, but the three best bids are still going to be the three best bids. So, who is making the decision? Can you get in touch with the right people at the right time? The person receiving the bid probably cannot sign off on the awarding of that bid.

Often, staff does not know what they’re looking at or what the next move is.

Another example: RoDevia had a client with seven roofs. Four had allegedly been replaced and three more needed to be replaced. But as she gathered the bids from roofers, all of them pointed out that one of the four actually had not been replaced by the original vendor. Because of her RFP process, all the vendors bidding went out to have a look, and they all reported that four roofs actually needed replacing, not three.

So, is there a lawsuit with the previous vendor, and how do we prove this?

It’s proven with the bids. Multiple roofers confirmed it. So now the owner has to decide whether to pay for three roofs or four.

The challenges are everywhere.

What you want is someone who will strive to get you in line to make the next decision and help you narrow down the options so you can make educated decisions.

Property Managers or Owners: Who Is Making Decisions?Even after good bids have been gathered and all of the information makes sense, someone has to make a decision. Marie asked RoDevia in her experience, who should bear the brunt of making the decision?

Each relationship is different, and in the property management world, it can play out any way.

The property manager is representing the property and has the authority as outlined in their operating agreement. Many owners want their manager to handle it for the purposes of efficiency and expertise. They’re just not there and they just don’t know. And, if the property manager has relationships established and the expertise that’s needed, it’s an easy call.

But, there are a lot of owners who want to make the final decision, especially if it is financially impactful. So in this case, a property manager would gather bids and present them. The owner gives the final approval.

In a mom-and-dad situation or with independent owners, it’s whoever has the resources and the bandwidth to make the decision. It’s also how did the vendor make them feel. That gut feel aspect along with the warranty and the expertise and quality assurance and safety record and insurance all counts.

Bidding and DocumentationDocumentation is always your friend, so document the bidding process.

The problem is that over the last few years, RoDevia has noticed that documentation is all over the place. It’s in emails. It’s in a text. It’s in a voicemail. There’s no real solid database where all parties will go to find the same information, and that’s something Proposabid has built in for clients.

Here’s how Proposabid works at a high level:

They get to the property and do an intake.
They create an RFP.
That RFP is marketed out to their vendors.
They gather those bids and aggregate them.
Those bids are submitted to the property and the property makes a decision.

The process is completed in 15 business days or less. This works for a $15,000 bid or a $3.5 million bid. It covers office remodels, concrete, and whatever needs to be done.

Looking to the Future for Property Management and Vendor BiddingWhat do you need to know about future trends? RoDevia shares lessons from the field:

Cash for Bids. This is starting to happen more and more, and it will be devastating for property management companies. Vendors are looking for cash deposits and payments up front to secure the bid. Those payments can be several thousands of dollars. And that’s just to get the bid. Some of these things have to do with reduced risk of nonpayment. (It’s highly recommended to pay your vendors on time). This will probably not become a gold standard. Some vendors may adopt it, but overall it shouldn’t be normalized because of client pushback.
Rising Costs. When projects are delayed or bids are incomplete, costs rise, and that is a huge burden on the budget. More so than it was five years ago. For commercial buildings, the average increase is 5 to 8 percent per year on labor expenses and materials. There are also continued supply chain challenges. For multifamily buildings, that rate of increase is 6 to 10 percent annually.
Inflation pressure is outrageous. A project costing $90,000 four years ago would be $124,000 now.

Get your properties in order.

Get your bids organized.

One big recommendation RoDevia has is to be honest with your vendors. This will protect your reputation. When you’re sourcing your bids, be honest if you’re just shopping for bids. We always let our vendors know when we’re just budgeting only. A client may simply need some numbers. So you’ll just get the quote not the full breakdown.

If you just go fishing and then never award bids, your reputation is damaged. Mitigate around that and be honest about your intentions once you do have bids.

Each estimate costs about a hundred dollars an hour, so most vendors will give a bid even if they know they won’t necessarily win the award. They know up front that they might not get any work from it, but there’s still a bid in place that may be honored later. It actually lowers costs for the client.

If any of our listeners want to learn more about the bidding process or what to look out for, visit Proposabid.com. And if you have property management marketing or reputation questions, contact us at Fourandhalf.

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It’s been a long time since we put out an episode of The Property Management Show and today we’re excited to talk with RoDevia Brigham, the founder and CEO of Proposabid.

The vendor bidding process is an entire industry on its own, and this is a topic we have not covered before on the podcast.

Introducing RoDevia and ProposabidProposabid does bids and estimations for properties and repairs across US. Their niche client base is property management companies, real estate investors, and mom-and-pop investors. They work with people who do not know how to go about sourcing bids for work.

The idea for this company came from a shower moment. RoDevia’s background is in computer science and IT, specifically cyber security. She has an approach to her work that follows an “if this, then that” process. She’s always thinking about how to automate things. While in the shower, she asked her partner an important question: What could she automate if she could automate anything in her day as a property manager?

The answer was: bidding. She said if she could just get good bids that reflected apples for apples, and those bids came in on time, and vendors would pick up the phone and submit things relevant to the work that needs to be done, then she could submit those to her property owners who could make financially responsible decisions. That, she said, would be great.

RoDevia took all of that seriously, knowing it was an everyday problem for her partner’s clients. Four years later, Proposabid is doing the work that needs to be done.

Property Management’s Vendor Bidding ProblemThe vendor bidding process in property management is essentially broken RoDevia believes. While it seems like most property managers know their vendors and have good relationships in place, why would bidding be necessary at all?

RoDevia and her company focus on projects that need three bids, minimum. The process at a high level looks like this:

A property manager has to contact the three companies
Three different prices are submitted
Proposals have to be gathered
The lowest bidder is selected

But in that process, there are some key items that a property management company’s staff might not be familiar with or cannot do.

The phone calls and the emails go back and forth. Then, there’s the hurry up and wait while those bids come in. This can be immediate, but usually it takes a couple of weeks. Sometimes, you won’t get the bids in at all.

When those do bids come in, you have to compare them:

Are they apples for apples?
Do they come with the right warranty?
Are they offering considerations or concessions?
Is scope of work correct for the price?
Are the vendors even qualified?
Are they in a database for licensing and insurance?

Then, you may need to make corrections to the bid, and that could include going back to the phone calls and the emails. Bids are re-submitted and reconsidered.

Once you have something everyone agrees on, a property manager will go ahead and submit those bids to your property owner or the landlord, and together you might decide on the vendor. That process alone can take a couple of weeks or months or in some cases, it may not even get done.

Someone has to be responsible for this process. It could be a director or an asset manager or an office manager. Maybe you have in-house maintenance folks who are taking all of these bids and working on the information. This can add up to 10 hours a week, which might cost 400 to 520 hours per year. All of that labor comes with no guarantee that those bids are even getting done, and those are hours that can be utilized elsewhere in your business.

Financially, the costs of a broken bidding process can be $30,000 to $40,000 lost purely on bid management. When you’re considering the roofers, the asphalt, the mold remediation, building codes, and things like that, you have to consider how the vendor bidding process looks across multiple owners. Property management staff is busy collecting rent and going to court and dealing with residents. They may not have the time to deal with this process across all the properties you manage.

Standardization is necessary but not always present when it comes to RFPs and bidding. If you don’t have a consistent and standard Request for Proposal (RFP), how do you attract the right vendors? You need to understand project requirements and have direct comparables, otherwise staff will have trouble closing on those bids.

There’s also the problem of limited reach. Vendors may not be responding to calls or emails, and time is wasted. Owners might find themselves facing fines and penalties because inspections and permits are expiring. You might choose the first bid that comes along out of desperation, which might not be the right one.

There’s sometimes a lack of transparency. If you don’t have the right vendors in place and the right RFPs in place, you don’t have the transparency you need. You’re getting the only bids that you can and that’s not the best thing to do.

Proposabid has two clients: the vendors and the property owners. The business is run anticipating what they each need.

That’s the part that’s broken, RoDevia says. Taking responsibility off the plates of the property managers and handing it over to a third party who can take the time to make this process work is the way to fix it. This is all they do at Proposabid; her team can allocate time and resources to some of the most important aspects of property management.

Project Management for the Bidding ProcessThe bidding process requires a lot of project management and knowledge.

Bidding happens for bigger ticket items. Maintenance coordinators within a property management company may be in charge of communicating with vendors over day-to-day preventative maintenance and immediate repairs that are needed at a rental property.

Larger projects are anything that requires three bids or more. These might be insurance claims or capital improvements. They’re often projects that will cost between $50,000 and several millions of dollars. If you have to lay asphalt or concrete or you need a new roof or you’re installing adjustable arms for your parking garage, you need to source out those bids. Property managers may have on-site staff that can do the sourcing, but it’s going to depend on the property and the project.

RoDevia offered a couple of statistics that show why time can be wasted and inefficiencies can be present in this part of the property management process.

Thirty (30) percent of vendors will actually submit a proposal when asked. Why is it that when properties are calling vendors, they’re not responsive? Part of it has to do with there not being an RFP, or the RFP is too vague. If a vendor has no information to work with, they’re not going to submit bids. It may be resource constraints, and vendors don’t have time to respond to those bids. Or, they’re focused on other bids that have a higher dollar amount, or are found in better neighborhoods. Vendors also tend not to submit to properties with a poor reputation. Let’s say you had a roofing project you needed done two years ago and you sourced and collected bids but never awarded anyone a contract. Four years later you’re re-asking for bids from these same folks, but they’re not going to trust that you’re actually going to award a bid. There’s a lack of trust.
Some bids may vary by as much as 150 percent. How can this be? It may have to do with contractor overhead, or it could be the market conditions or the bidding strategy. Insurance costs are going up, for example. There’s office space and labor to pay for. If a contractor has high administrative costs, their bid can be 30 to 50 percent higher than others. When we talk about market conditions impacting the bidding process, there might be a scarcity of materials and labor shortages. There’s inflation. Bidding is also seasonal. A roofing bid in Wisconsin during November will be much lower than it might be in the spring.

Bidding strategies depend on the company. Larger and established firms may have a 20 to 40 percent buffer while smaller and newer companies might be more competitive.

The Importance of the RFP and Scope of WorkMarie thought she had a roof issue, but it turned out to be a mold issue. Looking for roofers took time, and there were drastically different bids from two roofers. The mold problem had to be addressed immediately, so by working with Proposabid, seven or eight bids came in within a few days.

There was a discrepancy with pricing.

With RoDevia’s help, Marie could create a matrix to compare how much each company was actually charging for the inspection and all the add-ons and testing fees. After reviewing the matrix, it turned out that the vendor who seemed most expensive was actually cheaper because the quote was all-inclusive.

There was time and effort requirement for one home. For a property manager sourcing bids for an apartment complex, it can be difficult to understand what you’re looking at when you have all these bids with up to a 150 percent variance in pricing.

How do you choose?

RoDevia says it depends on who is spending the money and what that person values.

The RFP is the dog whistle that gets the clear information to attract the right vendors.

Maybe the client values expertise. Or certifications. Communication might be most important when choosing a vendor. Customer service.

By sourcing at least five to seven bids, there’s a better chance of finding a vendor that will provide what’s needed and valued. It requires the right RFP.

A strong RFP and the sequential cadence on contacting vendors and giving them what they need will make a big difference. Maybe it’s floor plans or drawings or blueprints or recommendations from state or city.

When you receive those bids, take your top four bids with the good pricing, the right warranties, appropriate itemization, and an understanding of what they do and won’t do.

It depends on what does the client value. If they’re just looking for lowest price, then it’s more about who is spending the money and what the end result is. Are you looking for long term quality over immediate need? Are you choosing based on aesthetic or for longevity?

The RFP is the request for work. The scope of work is how that work gets done.

With Marie’s mold example, Proposabid created an RFP based on the intake that was done and from the test results. That’s how the scope of work was created. The vendors knew what was needed and could respond to the RFP.

The scope of work has to be rock solid, and property management companies don’t always have the resources to come up with a detailed and specific scope of work.

The necessary components in a Scope of Work include:

Executive Summary
Project requirements
Timeline and milestones
Budget and cost constraints
Evaluation criteria
Submission instructions
What is the time frame and date line?
Vendor qualifications and experience
Legal compliance requirements

You need to provide information on how to contact you, and you need to explain the Q and A protocols.

At Proposabid, the RFP is created with clarity. Apple to apple comparisons are made. Evaluation is easier because there are clearly defined project goals and expectations. This reduces misunderstandings.

Think of the RFP as a HandshakeThe RFP builds trust. It’s Iike a handshake.

When a vendor receives the RFP, thy can say no right away. Or they can ask for more information. Maybe they’ll want to do a site visit. You’ll attract the right vendor with higher quality bids.

An RFP can also provide a foundation for the properties when team members move to another department or new team members come on board. So instead of starting all over, you can pull the RFP when someone new comes on. There’s a paper trail and extra transparency.

Some of the repercussions for skipping an RFP might be:

Misalignment with expectations between vendors and owners
Increased project delays
Difficulty comparing bids
Damaged relationships with vendors because of lack of structure

RoDevia said a good RFP helps with fraud detection, too.

Wait, did RoDevia say “Fraud”? Stay tuned for Part 2 where we continue this discussion. We’ll also talk about common issues with collecting and analyzing vendor bids, as well as future trends to watch out for.

Make sure you’re subscribed to our YT channel or the FAH newsletter to not miss the next episode!

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Welcome back to The Property Management Show.

On today’s episode, we’re talking to an expert on mergers and acquisitions, who has specific experience in property management. We’re talking to Scott Duke, of OpnRoad. He’s talking about the things that make a difference in the sale of a property management company. Your buyer and your profit will depend a lot on your contracts, your efficiency, and your team.

Introducing Scott DukeScott and his wife bought and ran a property management company in Revenstoke, Canada. They grew their company for seven years and then sold it for 10 times the amount of what they bought it for. The company was sold to Western Trust, a private equity company out of Utah. Before that, he worked at a property management company in Ontario. He has experience working with three-person companies and those that have a staff of 25.

His story of buying and selling that Canadian property management company is a bit of a cautionary tale.

When they bought the company, there were 30 properties under management. Out of those 30 properties, only six had proper contracts with the owners. It wasn’t a sellable asset when they took it over. But, what they really wanted to buy were the brand and the website, and otherwise it felt like they were starting from scratch. It was not a massive acquisition.

Scott realized that he thought property management meant taking care of people’s properties, but really, he was managing finances. It’s a cash in – cash out business model, and he had to make sure his owners had the money they needed for their mortgage payments.

One specific event triggered his desire to sell that company.

It was Christmas Day in 2016 or 2017, and he was under a trailer, defrosting pipes so the family living there could have water on Christmas. That’s when he realized he didn’t want to own the company anymore.

When the owner is under a trailer with frozen pipes, you know that the company relies too heavily on that owner.

So, he spent three years making it an acquirable asset. Scott wanted the company to be something that someone would want to buy.

The starting point? Making the business less dependent on Scott.

Making a Property Management Company Less Owner-Dependent Scott says it’s all mindset.

At OpnRoad, Scott and his team sell businesses. They work within all industries, but a lot of businesses they sell are property management companies. They all have to get to a certain size before they can be sold. So, he’s talking about owner dependency all the time.

How do you remove yourself from that dependency?

Scott says you will be trapped in your business until the business cracks through the million or two million revenue mark. Until that point, there’s just not enough cash in the business to pay to replace yourself. You are buying your time and you’re buying your freedom.

You want to focus on yourself as a business owner, not a business operator.

A lot of owners get hung up on the idea that no one can do what they do as well as they do it.

Scott tells entrepreneurs to embrace that. It’s true. But, it won’t be that way forever. The person you hire isn’t going to be as good as you on Day One. The training and the investment into that person makes them as good as you.

His slogan is this: Every Day a Step Away.

You’re getting a further step away from operating your business every single day.

How to Avoid Hiring Bad Apples

A lot of business owners worry about investing time and training into someone who may not work out. Having hired across 11 companies with a total of more than 200 staff, Scott understands that bad apples do get into the bunch once in a while. He has a specific model:

Be a good leader: Make yourself better. The people you attract to your company will be 70 percent as good as you are. Humans only want to work with people who are further along than them and achieving more. They want to grow to your level. So, to get good people, you need to be a better person. Invest in your education. Become a leader locally through volunteer work. Grow personally and develop professionally.
Have a good marketing package: You want to attract good people to your business. You’re posting a job into a competitive labor market. Stand out with marketing materials that will attract better people to your job and your company. Otherwise, you’re recruiting from other companies to find good talent.
Retain those good people: You want to keep your best employees by having consistent operations and good training within your business. You want a solid and positive company culture full of people who are happy to be there.

All of this stuff is hard, he cautions. But, the drudgery for the rest of your life is worse.

How do you avoid the employees you don’t want to work with? Scott has two ideas:

Run them through psychometric testing. You can use different models like PSIU or Myers Briggs. This will ensure you have the right person for the job. If you’ve never done this type of testing before, go into that rabbit hole. You need to know personality traits. The type of person who excels at bookkeeping is different from the person who excels at leasing and showings. And, a lot of people don’t know themselves. Test to find out what they don’t know.
Get them to do some work before you formally hire them. Offer trial work, for which they will be paid, and see how they do before you make an official offer.

When you get the A player, your life changes. So does your company.

What Property Management Owners Need to Know about SellingScott says the most important thing you can remember if you want to sell your company is that you’re selling contracts.

You’re selling future cash flow streams that come through contractual agreements. If your contracts aren’t in good shape, you don’t have a saleable company.

Contract quality matters. Recently, a sale was delayed by over 4 months because a property management company’s contracts were outdated, expired, or not even signed.

Term and contract length is the value of your business.

You need a good staff. You need a good reputation. But, your buyers will look at your contracts before they make an offer.

Scott also reminds company owners that you cannot sell to someone smaller than you. That won’t maximize your value. When you’re selling to a company that’s bigger, they’re probably more sophisticated and organized. If you don’t have everything in place, those companies won’t want to acquire you.

What about the team?Buyers are acquiring teams of people as well as contracts.

This is especially important now, when finding good talent is so difficult. Good operators of companies are hard to find. People will buy companies just to get management teams and technicians.

But, here’s the truth: company buyers are only going to care about bringing on the good team members. They probably already have good team. They won’t want your mediocre people.

Efficiency is important, too. When your profit margin is above average, you’ll earn above average on the sale. You’re showing that you’re more efficient and your buyer will know that they get to keep more of the money that the company makes.

That’s attractive.

Is technology the answer to efficiency?Technology is a big part of the efficiency bullet, especially when you’re looking at your profit and loss statement. Most property management companies can see that people are their biggest expenditure. Property management is a service business, and humans are delivering that service.

So, while technology can help you be more efficient and profitable, you need to have people in place who can leverage that technology. Otherwise, you’re just spending money on new software and systems and it’s not improving anything.

If your people aren’t being as efficient as they should be, they need to be trained better. Scott put everything on iPads so the team could take photos and notes and keep everything in the same place. Leases were digitized. He has nine people running a business that should require 20 employees. This is possible because they’re more efficient and they know how to use technology.

Preparing to Sell Your Property Management Business: Your TimelineOnce deciding to sell a business, an owner can sometimes just check out, feeling done with it all.

But, it should be the other way around. If you decide to sell and you want to maximize the value of your company, put in the work.

Scott says it depends on the timeline, and also acknowledges that most people don’t want to do the work. Property management companies are in high demand right now. So even if your business isn’t in the best shape, you’ll be able to sell it. Clean up your contracts and get the financials in order, and you can sell.

If you’re planning to sell within a year, just get the basics taken care of.

If you’re planning to sell in three to five years, it’s worth the effort to build that business into something even better. Then, sell it for more. You’ll make more money now, and as your business begins to work better, you’ll have more free time.

You can really move the dial if you have a few years to work on this. A million dollar company can increase their valuation by $200,000. If you’re a five million dollar company, expect to move that dial by $1.5 million or even $2 million. A 10 million dollar company might move the dial by $5 million.

Exit Strategies: Who Will Buy You?Scott has a guide that breaks down who the likely buyers are for your company. He offers earnings thresholds as an easy way to understand what’s possible.

If you’ve got $250,000 in earnings, you’re probably selling to an individual owner/operator.
If you have earnings that hit $500,000 to $1 million, you could sell to private equity firms as well as strategic buyers.
Anything over $2 million in earnings, and you can sell to anyone.

You unlock different buyer classes as your company grows.

These buyers are not that different under the hood, but the way you earn money will be a bit different. A strategic buyer will hold your company for the long term. They’ll pay cash and some terms for the acquisition. Private equity firms are strategic. They’ll pay a bit more because they know they’re going to ultimately sell your company for more. You’ll get cash from them at the sale, and you may get a bit more later, when the private equity buyer sells the entire fund, which includes your company.

There are claw backs and contingencies when it comes to how many contracts the new company keeps. Scott reversed that, and actually got paid more by bringing in more contracts after the sale. This is not something everyone is willing to do, he cautioned, but since he had more free time, he was able to get out there and hustle up more business for the property management portfolio he had just sold.

Scott’s big pieces of advice as we conclude this interview are:

Remove owner dependence and decide on the next strategic hire.
Systemize and organize your business. If you haven’t implemented tech yet, do it now, and here’s a tip: look at companies that are five times bigger than you. What kind of software do they use? You should use that too, because those are the companies that will ultimately buy you, and if you make tech integration easier on them, they’ll pay you more.
Keep your contracts up to date.
Cultivate a good team.

Check out OpnRoad and their approach to mergers and acquisitions. If you have any questions about Scott and what we’ve discussed, please contact us at Fourandhalf.

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Amy Harrison is a sales and marketing copywriter from the U.K. and an expert in storytelling. After hearing her speak at a marketing conference and finding the information invaluable, we invited her onto The Property Management Show to talk about the evolution of marketing content and copywriting and how AI can help with persuasive copy, as long as you’re finessing the message with the information that only you have.

Amy Harrison’s BackgroundAmy thought she wanted to be a screenwriter for film and television, but quickly burned out at a young age and decided to pursue other things for a while. Then, she found her way back to writing and began working for a private investment firm that bought and sold online businesses. She describes it as flipping businesses, and that’s what brought her back into content writing and copywriting.

When she discovered the psychology around sales copywriting, she knew she wanted to help businesses tell stories and build credibility.

Amy says that her training as a screenwriter helped with her sales copywriting because it’s always important to write for the reader. If someone does not want to keep reading, you’ve lost them. You need to make sure they’ll read beyond the headline.

Tracking the Evolution of Sales and Marketing Copywriting Amy remembers the early days of copywriting, when everything was very SEO-driven and it seemed like her job was to cram every page full of keywords. The idea was to reach people and to provide as much information as possible. It was more of a transactional exchange.

People found there were better ways to have a sales conversation, and the content improved.

Businesses have realized that not all content needs to sound like sales and marketing content.

There’s a lot more awareness of what marketing and copywriting can do. The struggle, though, has not evolved much. Amy says that large companies with million dollar marketing budgets have the same desire as the freelance photographer with no marketing budget: to sell themselves and to stand out.

The process has evolved, but the problem sales copywriters are trying to solve is the same.

Umbrella Terms versus Storytelling with Copy and ContentHow is it done well?

While trying to talk about what makes them different, a lot of companies will end up sounding like every other business. They’ll use generic words, and they’ll try to talk about everything they do all at once.

Amy calls those umbrella terms, and she advises companies to be bold and to expand their comfort zones outside of those same words and phrases that are always used. The fear factor will sometime set in. You want to stand apart from your competition, but do you really want to be different?

Storytelling can be powerful, but it’s harder to write a story than it is to create a list of benefits.

You have to earn the right to get someone’s attention.

How do you do that? Amy asks us to think about it from the first piece of content – whether it’s a headline or the first few seconds of your video or the introduction in your email.

Speak directly to the person you’re trying to reach.

Think of yourself in a crowded room at a party. You’ll hear lots of conversations, and you’re not tuned into any of them. But if you hear your name, that will immediately get your attention. You cannot call your customers by their name in your content, but you can work harder to make the content more relevant. You want them to feel like you’re talking directly to them.

Think about how to write the conversation that your customer is having in their mind right now. What are they thinking about in that moment as they approach your blog or your email?

Here are a couple of examples:

If you’re trying to attract a client who is moving, your headline might be “Should You Sell Or Rent Your Home?” It’s not a dramatic title, but it is a title that will speak directly to someone who is trying to answer that very question for themselves. You’re sparking an awareness that they need you.
If you’re trying to attract people who are displeased with their current management company, your headline might be “Does Your Heart Sink When Your Property Manager Calls You?” Someone out there does experience that feeling when their manager calls. They’re going to read your blog.

Think about audience when you begin to tell your story. Are they new to renting out homes? Are they very frustrated? What’s already on their mind?

Get their attention and pull them along. This is like calling their name out in a crowd.

A story is only boring when it’s irrelevant, so think about what’s pressing and relevant to the people you’re trying to reach.

You can also use symptoms of the problem. What are some warning lights that your audience can see? You can suggest that there’s a problem they might not be aware of yet, and your copywriting can indicate that the problem is bigger than they think. That will get their attention, too.

Your prospective clients might not know what the problem is, but they’ll recognize the symptoms. A good headline might be: “Is Poor Maintenance Making You Liable?”

Artificial Intelligence and CopywritingWhen asked about AI, Amy says it’s a fantastic tool that’s interesting.

It can save time and spit out generic content. It cannot reach your audience like a person who understands the audience can.

AI can help people go from zero content to some content. But, when you read something generated by AI, there’s always that feeling that it’s not quite right. What it lacks is personal nuance.

AI will not help you write exceptional copy. And, it’s not thinking about your customer.

Think about how quickly you can recognize tone in a customer’s email. Your response has to have the context that matches that tone. As humans, we can do that in a second. All that nuance and understanding of psychology and how to apply it does not exist with AI.

You know your customer, your brand, your style, and your tone. Your content should sound like that.

AI is a good tool for getting started, but it’s similar to those umbrella terms. You’re not going to get anything original, and you’re not going to stand out if you use it on its own.

There’s a rhythm to human language that’s different from that of AI-generated language. Amy says it sounds to her like a 15-year-old is trying to write something formal and impressive.

Usually try to get AI to simplify things. If I had spent 10 minutes to simplify myself, better email.

Use AI to save time by gathering notes into a summary. But, when you’re building your messaging, don’t sacrifice that personal nuance that only you know. You need to hear the language that is used.

The summary that AI provides is often a good starting point. It’s better than looking at a blank page. If you can go ahead and rewrite what’s been provided, you can publish something that’s original and well-crafted. You need your own brain in order to complete good copy. You can ask AI to give you 10 benefits of property management. Some of it won’t be quite right. Some of it won’t be applicable. But, you can build off of that into something that’s a meaningful message for a potential client.

Writing Persuasive Copy without Over-SellingAmy reminds us that you can have quality content even if your purpose is not to persuade. Sometimes, content is just entertaining. It’s simply informational. The goal of persuasive content is to help someone feel, think, and ultimately do something. There’s an output you want.

Every piece of content we put out has to be quality, and it can also help to persuade. Answering a question is not necessarily persuasive copywriting, but it can give a customer confidence in you, which ultimately leads to them hiring you.

You don’t have to convince someone to do something in every piece of content. But, you do want all of your messaging to reinforce that you can be trusted. This will help them feel more at ease with you.

Always be driven by your customer’s needs. And don’t be too sales-driven. Think of yourself at a party. When someone talks about themselves for a full hour, do you want to talk to them again? Probably not. When someone asks you a few questions about yourself and then drops a recommendation or two, do you want to talk to them again? Probably yes.

You can have the same effect in marketing and content.

Whether you’re writing an email or FAQs, you need to ask what your customer needs to know in this moment in time. What do they need? If they’re about to sign a management contract, they need transparency and confidence.

AI can’t provide that. This comes from the research. From talking to customers. Companies that are brave enough to actively seek feedback will have better growth. Their marketing will sound different and speak to those customers.

This comes from listening.

Amy reads the freeform text from customer surveys and reviews and she lifts actual words from those reviews when she’s writing copy for customers. Those are huge insights. Amy calls it looking under rocks, and she said AI will always miss those golden moments and major message points.

This makes the difference in your marketing.

Reaching Multiple Audiences with ContentProperty managers are using their messaging to reach multiple audiences, and Amy says that the best way to reach those unique groups of customers is to keep things simple.

When they arrive on the home page of your website, make sure they know which adventure to choose.

Then, create different content for each different need.

The pain points will be different. The goals will be different. Someone renting out their first home will need different stories than someone growing a portfolio.

Think about it like this: If this person was standing in front of you, how would you speak?

You’d be more reassuring with the first-time landlord. You’d be prepared with facts and figures for an investor with a growing portfolio.

Show that your company has range. Then, offer the specifics. Provide stories that are relevant to each customer.

This takes extra work. But, the harder you work to give your customers what they need, the better your results. If you have any questions for Amy or you’d like some additional advice on how to improve your content marketing and sales copywriting, contact us at Fourandhalf.

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PJ Clay, the Director of Client and Partner Services at Rental Beast, joins us on The Property Management Show to discuss the company’s role as the rental MLS, and how they provide back-end technology to MLS associations across the United States and Canada.

We also discussed whether this type of technology can help or hurt property managers.

PJ says it helps.

Introducing Rental BeastRental Beast calls itself the rental MLS. It provides back-end technology to MLS associations in certain markets throughout the U.S. and Canada. The Multiple Listing Service (MLS) is highly customizable, but also built for the For Sale side of the real estate industry. Rental Beast knows that rentals are different. The process of renting is different from the process of buying and selling.

So, they built the technology that can integrate rental listings.

MLS members can add or search for rental listings.

The second piece of this technology is a productivity suite of tools making it easier for property managers and real estate agents to access lead generation, lead qualification, and rental applications. At the core of this technology is a very large database of rental listings. Members of Rental Beast have access to 12 million active listings in the U.S. and Canada at any given time.

Putting all the rental listings into one database is the central part of our technology. Members can get as close as possible to reaching 100 percent of their market.

Accessing Reliable Data and Listings for Rental MarketsRental Beast is currently working with MLS associations in cities like Boston, where they’re based, Chicago, Raleigh, Miami, Colorado Springs, Toronto, and other markets. They’re actively growing, too, because the demand for this platform has increased. With home sales still out of reach and unaffordable for so much of the market, people are renting. Having the technology for real estate professionals to make the rental process easier has driven that growth.

So, where does the data come from? Where do they gather their listings?

The rental market is fragmented. On the general MLS, you have 80 or 90 percent of available homes for sale on that site. Not all rental listings go onto the MLS, however. Some cities will include rentals on the MLS, but even then you’re only getting about 40 percent of the rental market listed.

Rentals come onto the database from a lot of different sources. The Rental Beast database integrates with property management software. So, platforms like Appfolio, Yardi, RentTech, and Buildium can use Rental Beast as a syndication destination. Any listings on those software sites can be shared with Rental Beast.

The other piece is more difficult and labor intensive. These are rental listings that aren’t found on the MLS or on any property management software sites. Staff at Rental Beast must find the listings and then make actual phone calls to owners and property managers to verify them.

PJ says it took 10 years to build the process the right way. They’re calling any listing that doesn’t come from the MLS or property management software. It’s a huge undertaking, but it’s necessary to avoid scams.

There are also a lot of details that are confirmed for those listings; they ask if there’s an agent compensation fee, what the showing instructions are, and how a tenant can access an application. These listings have to be updated every week or two, depending on the location. If they cannot get a verbal confirmation that the listing is active, it gets dropped from the database.

Are These Listings Professionally Managed?The majority of listings on Rental Beast are not managed by professional managers or real estate professionals.

They’re managed by the property owners themselves.

PJ believes this is hyper-local. He says that in Boston, property management firms aren’t as recognized or understood as they are in other markets. If a real estate investor owns a few properties, they might hire leasing agents to market the home and get the property rented, but then they take care of the day-to-day management. Even the National Association of Residential Property Managers (NARPM) has a limited presence in the northeast. Recently, they established a local chapter in Philadelphia, but that has only been in the last years.

Compare this to Arizona or other markets in the southwest U.S., he says, and things are different. There’s a larger percentage of listings that are professionally managed.

The estimate is that around 40 percent of the listings on Rental Beast are managed by small, mom-and-pop operations. We’re not talking about large, professional property management companies.

It could also be a terminology issue, PJ says. There may be someone who owns 100 doors, but they don’t see themselves as a professional property manager because they own those units.

Proximity can also be part of the difference. In markets like Texas and Atlanta, it can take an hour to get from one end of the city to another. There’s a concept called leasing and locating where real estate agents will get paid for showing a property without being there physically. The metro area is too spread out.

Is Rental Beast a Threat to Property Management as an Industry?With all these For Rent By Owner (FRBO) properties in the Rental Beast database and tools that make it easier for those owners to rent out a home, is Rental Beast dangerous to property managers who are trying to grow their business? It’s great to have a single source of data that’s potentially more complete, but there are also solutions being offered to an owner who may self-manage instead of hiring a professional.

PJ is quick to point out that Rental Beast is not trying to be a property management software tool. They understand that a lot of real estate agents hesitate before getting into property management because it’s so much work. Their platform, he says, is more about ease in listing a rental. No one could manage a property only using Rental Beast.

Realtors and agents on the For Sale side have been struggling to sell recently, and so they’re getting into rentals a little bit so they can preserve the relationship with their clients who might be ready to buy in a year or two. Plus, they know they can potentially list some rentals, so it’s a natural shift.

According to PJ, Rental Beast is not looking to replace property managers. They want to complement your work and make your business more efficient, especially in terms of listings. You can get access to a lot of listings, and you have an easier time listing the properties you’re renting out. You get extra syndication, and that drives more showings.

Recently, they worked with a property manager who listed 20 properties on the Rental Beast MLS in half an hour. That’s not something you’d be able to do manually. This is technology that was built for property managers in order to make listings more efficient and easy.

Rental Beast 2023 Market ReportWhat does the market look like? PJ suggests you check out the Rental Beast 2023 Market Report. He shared a few highlights:

Rental prices will seemingly increase slightly. This depends on the market, and there’s really no consensus on what’s going to happen with rental values. The data and predictions Rental Beast has gathered say that there will be slight increases, generally.
Supply is a big variable. There are additional multifamily units coming onto the market in 2024. Supply and demand will impact pricing.
The sales side of real estate will remain unaffordable for most people, keeping the demand for rental housing strong.

There’s also a Sentiment Report, which reflects what people are feeling about the market and what might happen. They’ve found that 75 percent of the people surveyed believe rents will remain unchanged. Twenty-six of those surveyed believe applications for rental homes will decrease because fewer leads are coming through.

Concessions are also something to consider. Will you have to motivate renters to apply for your property?

The national median for concessions is around 18 percent. But, in some markets, 30 to 40 percent of active listings include some kind of concession. That’s artificially creating demand because it means nearly half the listings are offering some kind of concession. But, that’s not nationwide. For example, in Boston, only 8 percent of the active listings offer concessions.

For Rent by Owner Listings: Is This a Blue Ocean?As we discussed earlier, a lot of active listings are not professionally managed.

Could this be a blue ocean situation, where property managers can target these owners who are not using professional services right now? Ten years ago, property managers chasing FRBO business would have to pull ads from Craigslist or similar sites to get owner information. Or, you could buy databases from PMLeads.

If Rental Beast can capture so many self-managed listings, however, is there an opportunity for property managers to market themselves?

PJ says property managers are already using the platform to grab leads because of these advantages:

They get as close as they can to 100 percent of a market’s listings. They’re typically at 70 or 80 percent of all active listings.
All those listings are verifiable.
Property managers can access owner information and get a sense of what type of property they’re renting out.
Listings are updated regularly.

Maybe you specialize in one part of your city. The listings in the Rental Beast database can be sorted according to neighborhood. You can also set up alerts in the system so you know when a listing that meets your criteria shows up.

Closing Piece of Advice: Watch Your PricePJ says that based on the data he’s seen, the most important thing property managers can do now when renting out their properties is to be careful about where the rental value lands. He sees wildly fluctuating prices in a lot of markets. Remember that you’re competing with an entire market. So use as much data as you can.

If you’re interested in checking out the Rental Beast report, visit their website. You can also check out the Rental Expert Series, which is updated quarterly and includes several specific markets. To sign up to receive the next report, click here.

If you have any questions about marketing your property management, contact us at Fourandhalf. Thanks for joining us on The Property Management Show.

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Two guests are joining The Property Management Show today, and they are Scott Brady and Garrett Brady from Progressive Property Management in southern California.

Scott has been on the show before, and tends to talk about forward-looking topics that involve challenging the status quo. Garrett is his son, and a big part of the company’s future.

The topic today is legacy planning, which can be rather difficult for property management companies. Scott and Garrett are sharing their journey and where they are.

Progressive Property Management Then and NowScott has a story that’s similar to many property management company owners. He began as a real estate agent and had a brokerage business. The recession arrived in 2010, and he wanted to be prepared for the next recession. So, he started Progressive Property Management in 2012. It became incorporated in 2015.

The company grew organically through marketing and relationships. Over the last 12 years, they’ve grown to about 1,000 doors under management. Garrett joined the residential side in 2018.

The business model is unique. It’s a virtual company that hires real estate agents to be property managers. Three years ago, they began an association management department, and now manage around 130 associations with about 7,000 owners, total. They use the same business model; people are hired to be off-site property managers for these communities. The team at Progressive takes care of all back office operations.

About three years ago, Scott was diagnosed with cancer, and he realized the company was not prepared to be sold or handed off. Decisions were made, and a choice had to be made: did Scott want to prepare the company to be sold, did he want to hire someone to run it while he lived off the cash flow, or did he want someone in the family to take it over?

He’s made a decision, and he and Garrett have been busy structuring their legacy plan over the last three years.

Garrett says the company – and the entire industry – was old school in 2018. There wasn’t a lot of technology, and everything was very regional. He’s been able to see the industry move from the stone ages to embracing modern technology. It’s a more appealing industry to join. So while it was a family business that he was happy to join, he now sees the value of real estate and how it interacts with so many other business sectors.

Legacy Planning: Starting the DiscussionThe diagnosis spurred the discussion around legacy planning.

Scott hired a consultant outside of the property management industry and the first thing he recommended was to have Garrett go to graduate school. This did not make sense at first, but it was pretty transformative. He earned his position with his education and his experience, not because of nepotism.

The next step was to invite Garrett to earn some controlling interest in the company. Every year that he’s worked for the company, he’s earned 2.5 percent ownership in that company. By now, he’s up to 15 percent. The idea was to have Scott maintain the controlling interest, but to give Garrett a path towards more ownership.

Garrett has skills that Scott doesn’t have, and they both recognize that.

Scott excels at sales and marketing while Garrett is all operations. Scott said he knew the future was in the company’s operations. With 130 associations under management, they need good systems.

Garrett does all the hiring of remote team members and he trains them, too. The company now has 13 remote team members and 13 full-time employees. The future isn’t expanding full-time payroll, but in hiring remote contractors.

Understanding his own skill set allowed Scott to bring Garrett in, and together they sit down and look for the next opportunities while ensuring everything is running properly.

Marc Cunningham mentioned to Garrett that he had to do a buy-in for his ownership in the family business, and so it made sense to Garrett that he would buy ownership over time with his time and with his commitment to the business. He says he gets more value out of learning how to run a business, deal with staff, and handle operations and corporate accounting. He’s happy to have that security for the long term, especially as the business grows.

It’s never a good idea to arbitrarily give ownership of your property management business to someone just because they’re family. Garrett is qualified, and that’s important. Scott says he’s the most qualified person to run the residential side of the business and manage the remote team members. He’s learning more about the association management side, and will eventually be comfortably with full ownership of the company.

Finding the Fit with Legacy PlanningIt’s a perfect fit, with Scott on top of the sales and marketing and Garrett taking care of the operations.

That doesn’t mean that Garrett isn’t prepared for marketing the business. As a high school student and as an undergraduate, he took care of the direct mail for his father’s company and for other real estate businesses and brokers.

He’s also looking at other potential income streams. Maintenance, for example, is a big passion for Garrett. He’s looking towards the future and thinking about a point in which the company can introduce their own maintenance service.

Garrett knew that to create value, he had to do what his father could not do or would not do. He and Scott complement each other, and that’s what makes them successful.

Identifying Opportunities While Planning AheadBoth Scott and Garrett see opportunities not in hiring people but in bringing on remote workers. Most property managers don’t see community associations with 8 to 20 owners as being a huge profit center. Progressive Property Management has found a way to do it.

Scott says that residential management is touch-and-go right now. No one is buying investment properties and there have been only a few sales. Association management is where new opportunities and potential earnings can be found.

Garrett appreciates that his father is willing to focus on long term goals. They’re saying within the company goes like this:

Everyone has to be on the bus.
Everyone has to be in the right seat on the bus.
The bus needs to be going in the right direction.

Garrett sees Scott as sometimes driving the bus at 100 mph. His job is to pick up the pieces that are sometimes flying off at such a high speed, and put them into place.

One of Scott’s favorite sayings is that the best times in business are when you’re uncomfortable. If you’re uncomfortable, it means you’re growing.

Balancing Growth with Core Values Both Scott and Garrett have some big ideas about ancillary companies, additional income streams, and creating new departments. How to balance innovation with the success of current operations?

It comes down to the team, Garrett says.

Team members are paid well.
Team members get the flexibility to do their jobs. Management is very hands-off.
Bad clients who take up too much time and bring in too much liability have been weeded out of the company’s portfolio.

As they progress and grow, it all seems to works out. They’re comfortable with slow growth, and that’s important considering their business model is not traditional. Scott believes in managing processes rather than people.

Formal and Informal Legacy PlanningIt’s one thing to bring the person who will take over into the company and put them on a payroll and give them a position. But, how do you document the plan for succession?

For Progressive Property Management, there’s an informal and a formal plan in place.

The formal plan includes Garrett’s 2.5 percent ownership every year. That’s well-documented.

Informally, there have been many discussions about how things are meant to happen. If something terrible happened to Scott today, Garrett would be prepared to keep things moving the way they planned. Nothing is in writing, but everyone understands what will happen.

Garrett won’t have controlling interest for a while, but he’s naturally progressing in making more decisions. He says looking at things objectively helps. They know they’re not the only ones in this position. A lot of property management companies are wondering what will happen to their businesses. The choices are to have a good process or deal with a messy situation.

No one is going to last forever.

Innovation and Property ManagementGarrett is looking forward to eventually not only exploring maintenance services but also commercial real estate. You might have heard the adage that commercial real estate a dollar business. Residential management is the dime business. And, association management is a penny business.

It’s okay to collect the pennies and dimes while everyone else is going after the dollars.

Scott says he’s always saddened by the industry and how little innovation there is. People follow the herd, and the herd moves towards residential management only.

Legacy Plan ChallengesNot a lot of challenges have popped up, but Scott and Garrett do believe in complete transparency.

Everyone knows that Garrett will take over. There’s no doubt about the company’s future, and the team members recognize that Garrett is good at what he does. They also know he’s dedicated. The company still has an emergency line that’s kept in-house. This is where they shine, according to Scott, and so they don’t outsource it. Garrett still has that phone on the weekends. He’ll take an average of five or six calls every day about water leaks and other emergencies. That shows his dedication and everyone knows he has that phone.

Garrett says he appreciates being able to spend time with his father while working and growing the business. That’s a perk that’s hard to quantify and it’s not an opportunity that most people get.

Scott acknowledges that he has always hated having business partners. But, he doesn’t mind now. Both he and Garrett know when to step in and when to step out.

Family can be emotional, but Scott and Garrett are both on the same page and in the right seats on their bus.

Scott has always been a proponent of not selling even with attractive offers out there, and he has some advice for property managers who are in a family business and thinking about their next steps: Don’t just hand it off. That’s a good way to drive your business into the ground. Make sure you’re handing it off to a family member who has bought into the business with their time and their labor, and make sure they’re qualified to run the company.

Garrett adds his own advice: have patience. Recognize what’s been put into the business and pay your dues just like you would in any other business. Have patience and know your value.

If you have any questions about what we’ve discussed with Scott and Garrett, contact us at Fourandhalf. If you’d like to hear more about what Scott and Garrett Brady are working on, or if you’re interested in some of their other business pursuits, get in touch with them at Progressive Property Management.

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Marc Cunningham is a property management consultant and he’s also the President of Grace Property Management in Colorado.

He’s joining The Property Management Show today not only because he’s a prominent figure in property management, but also because he’s one of the first property management professionals who embraced video marketing.

Marc is still promoting video marketing, and he believes it’s the most effective way to bring new business into your company.

A Bit of Background: Marc CunninghamWhen Marc started his property management career as a child going to the office with his dad, things were incredibly different. It was the 1970s and buying their first copy machine was the most technology they had. The phone with an answering machine was fancy. Ledger cards were used to manually record when rent was collected, and checks were written to owners once a month.

His father recognized that technology was a great tool, and they not only got a computer before anyone else, but they also even hired a programmer out of California to write a custom property management program for them.

In the property management industry, there’s a big scare every couple of years.

The narrative goes, if you don’t do X, you’ll be left behind. Right now, it’s AI. If you’re not using AI, you’ll be left behind.

Marc says this is not always true. Provide good customer service to owners and tenants, and you’ll be okay even without the latest tool. You won’t wake up one day and be left behind.

It’s the shiny thing syndrome. If there’s something that everyone seems to be doing, you feel like you should be doing it, too.

It’s easy to chase the next big thing because everybody is talking about how cool it is.

Marc doesn’t chase the newest thing. Technology is something to leverage in order to improve your property management business.

After graduating from college with a degree in finance and real estate, Marc worked in the industry but not for his father. This helped him when it was time to go to work for his father. He brought a different perspective and a different set of skills to the family business. He always tells people in a family business to send the young people out to work outside of the business for a few years. It generates better ideas and higher level thinking.

Marc arrived at his father’s company with more of a business mindset. His father was very good at property management, and Marc found he was very good at business management.

Pioneering Video and Property Management Marketing Marc is one of the first property management professionals to begin marketing his company with video. He still believes this is the best marketing tool for property managers.

Here’s how it happened.

He was at a conference, and on the way home from that conference, he began thinking about how much time he spent talking to potential owner clients. They all ask the same questions and he found himself having the same conversation over and over again. Wouldn’t it be great, he thought, if, instead of answering those common questions over and over again, he could put those answers in a video and have it on his website. Then, potential owner clients could watch the video and decide if they wanted to know more. Marc thought that if a video could save him multiple five-minute conversations, it would really add up to getting some serious time back.

He’s action-oriented and he doesn’t over-think.

So, when he got home, he had his then-11-year-old son stand on his desk with an iPhone and take a video of Marc talking about common property management expenses.

It was a three-minute video that included no script, no special lighting, and no microphone. The point was not quality. The point was to get it done.

This has worked better than any other marketing, Marc says, because prospective owner clients will call, and they’ve already seen the videos. That puts them at about a 7 out of 10 in terms of likelihood that they’ll come on board as a client.

Those owners feel like they already know Marc and the company. Marc says he’s not afraid to tell people to use video more because he knows they won’t do it. His competitors don’t.

The reason this works for Marc, he says, is because he’s not a perfectionist.

The Power of Action vs. PerfectionIf you believe in the power of action, you’ll get the videos done, and you’ll let the results fall where they may.

Video marketing has been successful by keeping the acquisition costs for each client down. There’s no need to spend a lot on marketing when you have a YouTube channel full of great video content. The video version of Marc is available 24/7, and that means that the real life Marc has time to focus on other parts of his business. One video could be equal to 20 conversations he didn’t have to have in real life. Even if the video results in zero leads, he didn’t have to have all those chats with people who would not hire his company anyway.

The willingness to make videos creates a filter. No property manager is designed to serve every owner. The training Marc does with his property managers internally is called We Don’t Sell. When a lead comes in, he doesn’t want the goal to be closing the lead. The goal is to get to know the prospect and to decide if they’re a good client to do business with. There’s no starting with a sales mentality.

Videos will:

Attract new potential clients.
Filter out the clients you may not want to work with anyway.
Answer common questions.

Video also snowballs for marketing and SEO purposes. The more times those videos get watched; the more Google promotes the videos. When they’re promoted, they’re watched more. And on and on.

Remember that this is a public space. You don’t have to make perfect videos, but you also don’t want to insult anyone. Marc made a video called “Five Things to Never Say to Your Tenant.” He’s not an anti-tenant property manager, but he must have said something in that video to upset someone, because it went viral in tenant groups and he started getting really hateful messages and comments. So, he took that video down.

It’s a fine line to walk. You want to be cautious, but you also want your personality to show through. A video won’t be as effective if it’s scripted. If you want to do some bullet points for yourself before you talk on camera, do it. But don’t read a script or generate something from your computer. Talk the way you’d talk to a client. It can be intimidating, but it’s effective.

It’s effective, but people don’t do it. Most property managers don’t use this effective and untapped marketing tool because they’re too obsessed with making the perfect video and they can’t, or because it’s easier to run ads and pay Google.

What Makes a Video Educational?Marc has two distinct categories of video. One is educational and one is an FAQ that outlines how he does things. They’re separate.

Under the educational content umbrella is the content marketing that appeals to both prospective owner clients and current owners. It works to market for new business and retain current business.

Here’s a soft rule he says to remember: When you make a video, decide if you can show it to both audiences – the prospective clients and the current clients. If the answer is ever no, then it’s not providing enough education. When you have this rule in mind, you’ll keep your video from being too sales-focused. You won’t say “call us for a free consultation” because why would say that to current owners? When you can say yes, it applies to both current and prospective clients because you’re talking about tenant screening or maintenance costs, then you know it’s an educational video.

Marc believes content matters. His videos won’t be about how great his company is or how many degrees he has.

Nobody cares.

He maintained one massive email group of all current clients, all previous clients, and all prospective clients. Anyone who has ever provided an email address is in the group. It doesn’t matter if they’re working with a competitor or self-managing or if they’ve been with the company for years. These videos educate everyone.

People want to be educated. They’re not going to call you because of your great technology. They’re going to call you because you posted a video with some information on a new law that matters to them.

Marc doesn’t invest a lot of time in making videos. He began doing two videos a month and he’d record them both at the same time, and they’d end up being seven or eight minutes each.

It’s not a production.

There’s a simple backdrop. There are some good lights. There’s a tripod and a microphone. There’s usually one take. If he stumbles over a word, he reps going. It does not have to be perfect, and that’s why it doesn’t take too long.

Slight imperfections keep the video conversational. If you can pretend you’re recording for a potential client, you’ll have an easy time talking to them.

Now, there’s only one a month that needs to be recorded because quite a library has been created. One hour every month is the time investment that’s required, and the video keeps working as soon as you put it out there. Marc says this is the only true evergreen marketing there is. Blogs and videos go on websites. They get shared on social media.

Videos are converted to blogs, but Marc says the video should come first. When someone reads a blog, they don’t necessary get a sense of who you are. Video shows them. And it doesn’t take much time if you’re not a perfectionist.

Sometimes, people will give up too fast. They’ll hate their hair. They’ll hate their voice. They’ll want to re-record over and over again.

Marc says get over that. You’re not auditioning for Hollywood. You’re trying to attract a new client, and it gets easier the more you do it.

Advice to Property Managers Not Loving the Video Marketing IdeaMarc has some advice for when you’re making your video, and he even has some advice if you’re not feeling like you want to make videos at all.

Be more energetic in your video than you think you need to be. There’s something about video that sucks the life out of people. You don’t want to be boring. As you’re recording, be a bit more animated than you normally would be. Deliver more energy than you think you need to. It might feel goofy while you’re doing it, but it will come across on video the way you want it to.
If you’re worried you don’t have time to make videos? That’s not the point. If you want to have more time in your business, you need to do this kind of marketing to get there. Success comes when you follow the steps to success. You can’t wait to be successful before you start showing your stuff.

Marc reminds all of us that he began video marketing with a wall, an iPhone, and an 11-year-old. If you want to save yourself time on marketing, there’s no better way to do it.

As a property management business consultant, Marc stresses the importance of video as a marketing tool, and he has another secret weapon that he’s surprised most companies don’t realize is so important.

That’s having a photo of yourself or your company or your team on your website.

It’s a big fail if you’re not featured on your site. People want to SEE who they’re doing business with. Get your picture on your site and let people know who you are.

The mantra for Marc is to be professional yet friendly. Those are the boundaries. You know where you fall. Maybe you trend more towards professional or more towards friendly. Bring yourself back to balance.

Another piece of advice: With content, whether it’s a blog or a video or a Q&A on your website, make sure you’re answering the questions that your potential clients have. You’re attracting investors and accidental landlords. Answer questions from both types of owners.

The accidental landlords aren’t thinking about themselves as investors. They lived in the house they’re about to rent out. They want to know who will be there and if they’ll take good care of the home. They’ll have questions about screening. Investors will have money questions. They’ll want to know what they’re spending on maintenance and how quickly you’re filling vacancies.

Answer those questions in your content.

Find out what people are asking right now. What conversations are you having with current and prospective owners? What keeps coming up?

Your potential clients are making decisions based on emotions. If you’re not marketing yourself this way, with video, then you’re only competition on price. People don’t choose your company because of your price. They choose your company because they know what you’re doing. You cannot expect them to turn over the keys to their greatest asset without knowing who you are.

Find Marc at PMBuild.com, which is their property management education website. You can also visit RentGrace.com, which is his property management website. Check out his videos and see how it’s done.

Marc’s parting words?

Get it done. Get it out there.

We appreciate Marc Cunningham coming onto the show. If you have any questions about video marketing or if you need help with this part of your business, please contact us at Fourandhalf.

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Welcome back to The Property Management Show. In our previous episode, we spoke with SEO and marketing guru Rand Fishkin about the shifting tides in digital marketing and the sources of influence that are important today. On the second part of our podcast with this guest, we’re talking about money keywords, vanity metrics, and generative AI. We’re also talking about how to make those immeasurable marketing channels a little bit more measurable.

Here’s Part Two of our interview.

Money Keywords: Where Everyone Wants to RankEvery business or industry has a set of money keywords that represents where and for what everyone in that industry wants to rank. That’s the bottom of the funnel. If you’re ranking high for property management and your city, you know that people searching for you are very close to choosing a property management company. That’s a good lead.

But, why go to the battlefield and fight with every other management company that wants the same keywords? There are other marketing strategies that can be leveraged.

Remember the blue ocean strategy. Go for those keywords that others aren’t paying attention to. Then, you won’t have to fight as hard and you’ll still draw in traffic from relevant searches.

It makes sense. However, people are so drawn to that battlefield.

Rand says this is how entrepreneurs are socialized and trained. It’s a cultural battle that’s hard to overcome.

To really improve website traffic and gain more leads, results, and profitability, you can rank for more than property management plus geography. When everyone else is chasing one thing, you can beat them all by doing something that none of them are doing.

Vanity Metrics: Measuring Lift vs. AttributionAre you getting more subscribers and followers or engagement and not necessarily conversion?

In 2017, there was an article in the Harvard Business Review that talked about the actual value of a Facebook like for a business. Marketing researchers did a study to figure out whether it really contributes to a business in any meaningful way. They found that a Facebook like doesn’t necessarily reflect a change in consumer behavior or an increase in spending. Consumers who like a brand on social media, specifically Facebook, are simply expressing a pre-existing preference. If they see the brand, they like it. They were going to buy from you anyway, so of course they’ll like you on Facebook.

It’s much harder to convince someone who has never heard of you to like your page and then buy from you.

Rand points out that hidden in that study is that the measurement can be used to find out how many people are predisposed to buying from you, and who they are.

The Facebook like did not influence 300 new people to buy from you if they weren’t already planning to buy from you. So, it’s a vanity metric. It does not change behavior. But, it helps you measure.

By knowing that 300 new people liked your Facebook page in a month, you can measure the size of the pool of people who may buy from you. This can be useful in a campaign. You can measure what you’re doing that’s having a positive or negative impact. Measure those likes if you want a campaign that grows your brand’s likeability, awareness, and trust. Getting a Facebook like won’t get you more buyers. But, doing things that will encourage more buyers will result in a lift on social media. That’s notable.

This makes an otherwise unmeasurable marketing investment more measurable.

You can measure lift. If you see that traffic went up and conversion went up and the Facebook likes went up, that campaign worked, and you know that similar investments on other networks might be worth the effort. Or, when what you did last month did not work well, you’ll know to try something else. That’s where the value comes from. Instead of disproving the value of the metric, that study suggests there’s a lot of value.

If you’re focused on ranking number one on Google, that’s a problem because you want that metric to go up at all cost.

But, if you instead treat the metric as a way to measure the effect of what you’re doing, that’s going to give you some value.

Branded Search Volume on GoogleRand suggests that branded search volume is the better place for small businesses to focus right now. Instead of Hayward Property Management, he suggests working hard to rank for Marie and Brittany Property Management. When people are looking for your brand name, it means you are doing something right in terms of brand reach. More people are looking not for a generic term, but for you in particular.

Rand says he’d take one new searcher for his brand name over a hundred searches for the generic keyword combo. That’s the bottom of the funnel and the closest you’ll get to conversion. If he searches for a Google Pixel Phone 6, that’s more valuable to the brand than a search for best new android phone 2024.

One of those search terms suggests that the buyer has already made their decision. He knows what he’s looking for. That’s the most valuable kind of marketing you can do. Get people to know, like, trust, prefer your brand over others. Be present in the places they pay attention with a message that resonates with them at the right time. That’s not going to be property management Orlando, Florida.

Remember:

Measuring is different from attribution.
Attribution is what caused this person to convert.

Rand believes that it’s nearly impossible to know what causes a person to convert and buy, and that’s why he doesn’t worry too much about attribution. He returns to his basic message:

Be present in the right place with the right message at the right time.

To know if you’re doing that, you can look at your vanity metrics and look for the lift that should come before the rising conversions arrive.

Follow, Don’t Lead: Marketing’s Future and Generative AI Rand believes that marketing is a field in which you should follow crowds and not try to lead them.

What he means by that is until your audience is present and having relevant conversations in a place, you don’t need to try and reach them in that place. Why spend time there if your audience isn’t there?

In 2010, everyone thought they had to have a mobile app. They didn’t Most companies are just fine with a mobile-friendly website.

The same thing happened more recently with NFTs and blockchain. Marketers were sure they had to be using blockchain somehow but they couldn’t explain why. Does it make your customers happier or give them a better experience? If not, you don’t need it.

Now, we’re looking at the ease with which anyone can use generative AI.

Generative AI can solve some problems. If you have a database of 100,000 rental properties all over the country and you want to classify them quickly, you might want to hand-classify 100 of them, and then have ChapGPT do the rest of it based on your rules.

But, why would that be on your website?

We all know that when it comes to content, generative AI is the very bottom of the floor. It’s the worst content out there. Some humans can produce worse things, but anyone can make generative AI content for no money, so it’s the worst you can have.

Your goal, when it comes to content, must be to ensure everything you produce is better than that.

What’s wonderful for people who invest in marketing is that the more people who make their content with generative AI, the easier it for everyone who doesn’t to stand out. When you’re relying on generative AI to craft your message, you’re essentially taking yourself out of the game. You’ll be outranked and out-marketed. You’ll be the crappy competition that no one has to worry about.

Using generative AI for programming assistance or to understand a concept makes sense. It can tell you what words are likely to come after other words on the internet. It can analyze data. But, to write copy that you would expect someone to read while considering a new property management company? No.

AI looks for tokens coming after other tokens. It does that predictively. What they told you is what their suggestions told them, and it’s essentially a spicy auto complete.

It will never be unique, and the whole point of marketing your company is to be unique.

And that is all we have for our Part Two episode of the Property Management Show with Rand Fishkin. If you aren’t already a subscriber, please become one and give us a like. If you have any questions, go ahead and contact us at Fourandhalf.

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Marie Tepman and Brittany Jones are on The Property Management Show, interviewing Rand Fishkin, co-founder of Moz and founder of SparkToro, about the changing landscape of digital marketing.

This is only Part 1 of our discussion, which includes a look at the shift from SEO-centric strategies to a more diverse approach, the distinction between platforms of influence and entertainment, and the challenges of marketing attribution.

Introducing Rand FishkinRand Fishkin is a name that’s synonymous with the world of SEO and digital marketing. He founded Moz, which revolutionized SEO tools and education for marketers. He wrote a book called Lost and Founder, an honest take on what it’s like to be part of the start-up world and follows the journey of a founder.

Recently, he’s been making waves with his new venture, SparkToro, which is changing the way marketers like us understand and target different kinds of audiences.

A Changing SEO Landscape For the longest time, Rand was a prominent voice in SEO and content marketing. He was known to say that everything starts with keywords and data. Recently, there’s been a pivot to the opposite sort of thinking. We asked him to explain his pivot and his new view on digital marketing.

When you have a hammer, every problem looks like a nail. In the world of digital marketing, there are hundreds of channels and opportunities to reach an audience and build a brand and show off. Because he was addicted to and grew up in the SEO world, his focus was on:

Target keywords
Building links
Making website accessible to search engines
Optimizing everything

It was all viewed through the SEO lens when it came to marketing.

Two things happened to cause a pivot in the way he approaches digital marketing:

Over the last six seven years, and especially since the pandemic, almost everyone is doing decent SEO. There was a big opportunity from 2000 to 2015. It was remarkable what you could do if you had any kind of savvy around SEO. You could be in the bottom 40 percent of SEO skills and still get a lot of traffic. Google was growing. There was more competition. Now, every smart business owner in every region and ever industry knows what they’re doing with basic SEO. It’s not the competitive advantage it once was.
Demand is not growing. Google has acquired every human with an internet connection. There’s not a lot of growth left for them. They have 91 percent of the market share in the U.S. and about 95 percent of the market share globally. With no room for growth, Google has had to change the game. Now, we’re seeing Zero-click searches where people get information without even having to click on a link. Google provides it right there in the search results. That’s great for consumers, but frustrating if you’re a business owner looking for traffic. Google is using your own content and taking clicks and traffic away from you.

These forces combined to mean that SEO is not the golden opportunity it once was. If you’re creative and entrepreneurial, you look for other opportunities. That’s what Rand has done.

Distinguishing Online Platforms: Influence vs. EntertainmentLet’s talk about TikTok.

This has been a rising trend, and there are also reels on Instagram and shorts on YouTube that are popular. These are not sources of influence for businesses; they’re very particularly focused on entertainment.

The content there is not similar to the content that you might see if you are doing SEO things or business to business marketing or even participating in other platforms like Reddit or LinkedIn or YouTube or Threads, which is more like the old version of Twitter.

Unlike entertainment platforms like TikTok, those other platforms are serving niche functions. You might find botanists in U.K. clustering around a few account on Threads and some YouTube channels and some SubReddits. They’re all following the same sources, and all of the conversations are focused in that field.

That’s not what happens on TikTok. There, you’re looking for distraction for 7 to 70 seconds. You see a series of videos to distract and entertain. The botanists don’t cluster there. They’re on TikTok, maybe, but they’re like the rest of us, watching a chipmunk dance with a squirrel.

On YouTube or on a SubReddit, you’re subscribing to get specific and curated content. TikTok is prioritizing not what you necessarily want to see, but what will guarantee that you stay on the site and scroll to the next video.

TikTok followership is the lowest value of any social network that has existed yet. That’s the entertainment mindset that drives people there. It’s not going to help a property management company find new owners.

When we talk about entertainment networks versus networks that are a source of influence, you have to think about the places where you’re having relevant conversations. If you’re a marketer in property management, you care less about reaching the broadest possible audience for a few seconds. You want to be present in a highly relevant space where important conversations are going on.

If you’re trying to attract property owners to your rental management company, Rand would put TikTok lower on the list of platforms where you want to appear. Try LinkedIn or Reddit or YouTube. Start an email newsletter and get on podcasts.

Service businesses have a specific market, so if you’re putting all of your effort into a platform like TikTok, do you really think those TikTok followers going to work with you?

Trends like TikTok do a great job of creating a psychological panic among marketers. They think they have to chase trends.

You don’t.

Remember this:

Marketing is fundamentally about going to the right places with the right message at the right time to reach the right audience.

So, you can wait. Just because it’s popular doesn’t mean it’s for you.

Attribution Challenges in MarketingMarketing attribution is a complex problem, according to Rand, and relying solely on attribution dashboards can be misleading.

Channels that have an incentive from the platform or network to show you attribution with always be overweighed. Google or Meta advertising will show you fantastic data in the dashboard about every ad you buy. They’ll tell you who saw it, who visited your site, who converted. The tracking pixel shows you all that. Those channels look like they contribute a ton of new business to you.

BUT, here’s the thing.

You would have earned a lot of that business anyway.

Rand says that if you s hut off that marketing spend for a month, you’ll likely get 91 percent of the conversions that you were seeing with the spend.

These companies are good at knowing what the customer journey looks like.

They have data about where people go and what they do. So, they can do a great job of making sure your advertisement is seen. But, they’re taking credit for sales that were already going to happen.

These online advertising platforms do create a wider potential audience for you. But not as large an audience as they claim. Choose relevant marketing channels and focus on lift-based measurement rather than relying solely on attribution dashboards.

This attribution problem has always been a challenge. What actually changed a consumer or business owner and got them to buy? You can do all the sophisticated measurements you want, but Rand says he believes it often sounds like pseudo-science. If you’re investing hundreds of millions of dollars a year in an advertising spend, you can make reasonable estimates. But the models are not compelling if you’re a small or medium-size business.

So, you don’t have to prove every attribution. We know marketing works. You know it too, even if it’s hard to prove.

There’s a great Wanamaker quote that goes: “I know that I’m wasting half my advertising spend, but I don’t know which half.”

Rand encourages you to waste half and not worry about which half is being wasted. Put it into channels that you think will reach your audience. Occasionally shut things off to see what happens. This is the only way to truly and logically invest.

Turn off any given advertising channel for 60 to 90 days in a business to business service world. See what happens.

Forget Keyword RankingInstead of obsessing over ranking for money keywords, focus on generating leads and increasing brand strength through diverse marketing strategies.

Everyone wants to rank for the money keyword. For our industry, maybe it’s property management in San Francisco or Austin property management.

There’s an obsession with ranking at number one. It doesn’t matter what you’re ranking. What matters is the business you’re generating. Focus on that.

That’s a far superior strategy. Get more leads and you don’t have to show your competitors that you’re ranking for the vanity terms that everyone is chasing.

That’s the strongest position to be in. You’re not only competing with other property managers, now. You’re competing with the zero click search or AI-generated results or the paid searches that always go above any organic ranking.

The obsession with being ranked at the first spot is vanity, and that’s a powerful psychology. Stop trying to look good and work harder at providing the best services.

That was a lot of information. So, we’ll pause. There’s a lot more to discuss with Rand. We’ll continue our discussion on money keywords, vanity metrics, and AI. We’ll also talk about how to make the immeasurable – measurable.

If you have any questions about this podcast or you need help with your property management marketing, please contact us at Fourandhalf.

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Welcome back to The Property Management Show podcast, your go-to source for all things property management, entrepreneurship, and marketing. This podcast is proudly brought to you by Fourandhalf, a leading digital marketing agency specializing in property management. Fourandhalf has been instrumental in helping residential property managers generate more leads and attract quality property owners since 2012.

Our hosts Marie Tepman and Brittany Jones recently welcomed Courtney Wolf, founder of RentWise Property Management in Idaho, to their show to discuss Courtney’s journey to successfully creating a hands-off business.

Courtney runs a thriving property management company in Boise that she has gotten to a point of running itself. When asked to expand on the steps she took to make this dream a reality, Courtney shared that it started with big dreams that were broken down into “biteable, doable, and reachable goals.”
She explains that her process involved getting an excellent business coach to hold her accountable and provide guidance, as well as buying in critical team members like her operations manager Carly. Together, they methodically worked backwards from their vision to establish micro-goals that they could tackle over the years to get RentWise to where it is today.

Starting Out Overwhelmed and Doing EverythingRunning a property management company is an extremely demanding job. You have to coordinate maintenance, place lockboxes, do showings, answer all phone calls…the list goes on. It’s not uncommon for property managers to experience total overwhelm trying to juggle it all.

Courtney knows exactly what this feels like. When her Idaho-based company first launched, Courtney was a basically one-woman show doing absolutely everything needed to keep things running. Courtney knew something had to change for the business to be sustainable and for her to have any sort of work-life balance.

The Genesis: A Small Business Handling Every TaskCourtney started RentWise property management as the sole employee, handling all aspects completely on her own:

Placing lockboxes
Conducting showings
Checking on maintenance issues

At the same time, her eventual Operations Manager, Carly, would work at the office answering all calls and managing day-to-day relations. The lean team worked hard but constantly felt overwhelmed and overburdened trying to self-manage everything.

The Catalyst: Facing Employee BurnoutCourtney shares the catalyst for taking her business virtual was Carly approaching her, feeling completely burnt out and ready to quit. Carly felt she had no freedom or work-life balance between her full-time job and demands at home.

Facing losing her right-hand employee, Courtney realized if she wanted to retain top talent long-term, she needed to rethink how she structured her business.

Working Backwards to Make the “Hands-Off” Vision a RealityCourtney’s first step was engaging an experienced business coach. She needed someone who could hold her accountable to goals and break down her big-picture virtual vision into smaller, tactical steps.

Together they mapped out:

The Big Goals* Create a 100% virtual property management company * Design systems and processes for complete freedom from day-to-day operations

The Path to Make it Happen* Determine company values to guide decisions * Build the right in-house and outsourced team * Map all processes in extreme detail * Utilize technology for efficiency

Setting this strategic foundation with her coach gave Courtney clarity and confidence to systematically build her virtual model.

Assembling the Right TeamA key component enabling Courtney’s shift to virtual was curating the right staff across her organization, specifically:

Leadership Buy-InGetting complete support and dedication from her operations manager Carly was essential. Courtney focused on aligning their individual visions for the business and what lifestyle they wished to create.

Outsourced SupportCourtney offloaded tasks like property inspections and maintenance via her side company Taskmasters. Being able to outsource redundant or specialized work freed her core team to focus on high-level management.

Systemizing Everything Through Detailed ProcessesCourtney credits clearly defined processes as central to her eventual hands-off role. Here are the key benefits she experienced from comprehensive documentation:

Enables DelegationBy detailing procedures to a “five-year-old” level of simplicity, Courtney could easily hand off tasks to virtual assistants and Taskmaster employees without extensive training.

Creates ConsistencyHighly specific checklists and protocols allowed both in-house and outsourced staff to seamlessly meet expectations and performance standards.

Identifies ImprovementsSteps that created bottlenecks or redundancy jumped out clearly when every facet was scripted. Courtney could then refine or automate these areas to fill gaps.

Sets Team Up for SuccessWith all guidelines compiled in one place, Courtney’s staff always knew the exact requirements for any task or scenario, letting them operate confidently.

Provides LeverageOnce all critical activities were documented, Courtney could remove herself completely from day-to-day operations. Her priorities shifted fully to growth vs putting out fires.

While tedious, Courtney made writing full standard operating procedures foundational before looking to outsource or automate.

Adopting Emerging TechnologyIn addition to systems and staffing, Courtney credits technology as the third component allowing her to go virtual. When launching RentWise, solutions like self-showing lockboxes and inspection apps were just hitting market.

Being open to trying these emerging platforms (even when they seemed a “hard sell”) meant Courtney’s systems integrated cutting-edge tools from day one for maximum efficiency.

Spawning a Side Business with TaskmastersIn addition to RentWise Property Management, Courtney founded a complementary business called Taskmasters. Taskmasters offers outsourced property management support services tailored to assist busy property managers.

Humble BeginningsTaskmasters began organically when Courtney realized performing routine site visits herself was an ineffective use of her time and capacity. She started training her existing handyman to conduct inspections to her exact specifications.

Once the handyman demonstrated consistent success inspecting based on Courtney’s guidelines, she considered turning this outsourcing solution into an actual business venture.

Gradual Growth Fueled by Industry ShiftsInitially Courtney deliberately kept Taskmasters small, serving just her inner circle of property manager connections. However, over time as more property management companies embraced outsourcing for supplementary services, interest in Taskmasters picked up.

Seeing tangible results from delegating tedious property visits gave Courtney inspiration that formally offering these type of outsourced field services could benefit numerous property managers facing similar capacity issues that she once did.

While still focused on gradual, organic growth for now, Courtney has bold plans to eventually scale and franchise the Taskmasters model into new markets nationally. Her first-hand experience identifying gaps as a property manager owner enables her to craft solutions uniquely tailored to this industry’s needs.

The Power of Community ConnectionsAt multiple points in the interview, Courtney emphasizes the importance of building strong networks and surrounding yourself with the right community to accelerate success.

Specifically regarding the property management industry, Courtney highlights NARPM as an invaluable network that has facilitated much of her growth and enrichment over the years.

Overcoming Challenges Through Shared WisdomCourtney shares that initially she struggled for three years trying to “do things the hard way” before discovering NARPM. Connecting with this network helped her identify solutions already in existence rather than attempting to reinvent wheels.

Having a community to tap into for guidance supports overcoming recurring pitfalls through shared wisdom.

Cross-Pollinating InnovationCourtney also notes the power of brainstorming ideas within a mastermind of peers familiar with industry-specific pain points. By coming together to explore common problems from different angles, new concepts and technology often emerge organically.

As an engaged member early on, Courtney was able to ride a wave of innovation as property management platforms rapidly advanced over recent years.

In summarizing key catalysts behind her success, Courtney firmly lists surrounding herself with collaborative groups like NARPM as instrumental. The intersecting perspectives within these communities consistently sparked breakthroughs to progress her business.

Foundational Blocks Enabled the “Hands Off” VisionCourtney summarizes the key building blocks central to her eventual self-managed enterprise included:

Coaching for accountability: Held Courtney responsible for forward progress
Aligned, invested team: Leadership and staff bought into central vision
Outsourcing: Leveraged external teams to capture redundant tasks
Systems: Comprehensive SOPs enabled freedom and leverage
Technology: Early adoption of automation & emerging solutions

With these pillars serving as foundation, Courtney successfully shifted RentWise’s operations completely off her plate, freeing 100% of her capacity towards growth efforts. Use Courtney’s blueprint to examine your own business processes and team dynamics assess what components need addressed to construct your own “hands-off” property management company.

Key Takeaways: Systems and Support Are KeyCourtney Wolfe’s journey shows that with the right systems and support team in place, property managers can transform into CEOs of streamlined, scalable companies.

By identifying areas of overload and redundancy, Courtney was able to break down day-to-day tasks and build processes to outsource what bogged her down. Detailed procedures allowed her to leverage assistants to capture back time. And embracing new technologies maximized efficiency allowing her core team to focus on big-picture strategy.

Courtney’s message is clear: freedom requires a foundation. Construction begins as simply as documenting your procedures from a to z as if training a child. The clarity and insight uncovered in that exercise can spark incredible transformation.

Thank you for joining us on this episode of The Property Management Show podcast. If you have any questions, comments, or need assistance with marketing your property management company, please don’t hesitate to reach out to us at Fourandhalf!

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Hello and welcome to The Property Management Show podcast, your go-to destination for exploring the dynamic world of property management, entrepreneurship, and marketing. Brought to you by Fourandhalf Marketing Agency, a leader in the industry since 2012.

Fourandhalf helps residential property managers get more owner leads and improve their online presence through website design and development, SEO, online reputation management, video and blog content, social media, and targeted advertising.

Recap of Part 1: Establishing the Foundation of Mid-Term RentalsIn Part 1 – Maximizing Profits with Mid-Term Rentals: Property Management Blue Ocean Strategy, our guest speakers Jessica Schirmeister and Jason Zimmerman from Trend Property Management in Texas discussed the growing trend of mid-term rentals. These types of rentals, also known as furnished rentals, have become increasingly popular in recent years.

That episode highlighted the unique niche that mid-term rentals occupy, situated between short-term and long-term rentals. Key focus areas included the demand for these types of properties, their profitability potential, and the evolving rental market trends influenced by remote work and lifestyle changes. The episode provided foundational insights into the benefits, challenges, and operational dynamics of managing mid-term rentals.

In this episode (Part 2), we’ll delve deeper into the operational challenges and strategies for managing mid-term rentals. We’ll discuss finances and the subtle art of balancing tenant rights with property management objectives.

Evaluating Investment in Mid-Term RentalsPart 2 starts with a discussion about the financial feasibility of investing in mid-term rentals and ensuring a reasonable return on investment (ROI). Jessica shared an example of how a month-long tenant could provide up to four times the revenue compared to a traditional annual lease. However, she also emphasized the necessity of factoring in additional costs such as furnishing, utilities, and cleaning fees when evaluating the profitability of mid-term rentals.

Jason stressed that property managers should be strategic in their investment, considering the demand and market conditions. It’s important to understand potential risks and always have a backup plan in case the rental doesn’t succeed as expected.

Financial Considerations and Return on InvestmentInvesting in mid-term rentals is an intriguing proposition, blending the stability of long-term rentals with the higher earning potential typical of short-term stays. For property managers and investors, understanding the financial landscape is key. This involves assessing the initial investment costs against the potential returns. Mid-term rentals often demand a higher rental rate, reflecting their furnished status and flexibility. This can be an attractive proposition for tenants looking to avoid long-term commitments.

Cost-Benefit Analysis: Investing in Furnishings and AmenitiesWhile discussing the financial aspects of investing in mid-term rentals, Jessica and Jason also shed light on the pros and cons of furnishing a property.

Furnishings can attract more tenants:* Mid-term renters are often looking for fully furnished properties to make their stay comfortable and convenient. * Furnishings can add value to the rental experience and justify higher rent prices. * In a competitive market, furnished properties may stand out and attract more tenants.

Furnishings can also come with additional costs:* Investing in quality furniture can be expensive upfront. * Managing and maintaining furnishings requires time and effort. * There is always the risk of damage or wear-and-tear from tenants, which may require replacements or repairs.

To get an initial understanding of whether furnishing a rental makes sense, evaluate if the property in question can generate an additional $4,000 or more each month. Jason says that after evaluating over 50 deals, this seems to be a key threshold for justifying the investment in furnished rentals.

Here are some other key financial aspects that were discussed during the interview:

1.) Fixed Costs vs. Property Value:It was noted that the fixed costs associated with a property do not necessarily decrease with a less expensive property. These fixed costs can erode the benefits of furnishing a property if the additional revenue generated doesn’t sufficiently cover these expenses.

2.) Revenue Threshold for Profitability:Looking at the big picture, furnishing a property starts to make even more financial sense when it can generate significant additional revenue – in the range of $50,000 to $70,000 a year. This extra gross revenue is needed to cover all additional expenses such as utilities and other costs associated with furnished rentals.

3.) Increasing Rental Value Without Increasing Taxes or Insurance:One of the strategic financial advantages discussed was the ability to significantly increase the rental value of a property through furnishing without correspondingly increasing the property tax base or insurance expenses. Most property improvements and upgrades can translate to higher insurance or property taxes, and this puts furnishing in a unique spot.

This aspect is particularly important as it implies that furnishing a property can lead to higher income without proportionally higher ongoing costs.

What are the Goals of the Property Owner?In addition to financial considerations, you should also think about the long-term goals of the property owners. Key points from this part of the conversation include:

1.) Owner’s Net Profit Goals:The decision to convert a property into a furnished rental is often influenced by the owner’s specific financial objectives. For some, an increase in net profit of around $5,000 a year is a benchmark that makes the investment worthwhile. However, this threshold can vary among different property owners, depending on their individual financial goals and circumstances.

2.) Long-Term Strategic Planning:Another critical factor in this decision-making process is the owner’s long-term strategic plan for the property. If an owner intends to keep the property in excellent condition for an extended period, such as for inheritance purposes, they might be more inclined to furnish it. The rationale is that a furnished property can be maintained at a much higher level, ensuring its longevity and preservation over the years.

These considerations highlight the importance of aligning the decision to furnish a rental property with the owner’s long-term financial and strategic objectives. It’s not just about the immediate returns but also about how this decision fits into the broader picture of their property management and investment goals.

Having explored the financial considerations and owner’s objectives in detail, it becomes clear that the decision to venture into mid-term rentals is multifaceted. Now let’s dive into the nitty gritty of what types of furniture will and will not work for a furnished rental property.

The Art of Furnishing Rental PropertiesWhen it comes to furnishing rental properties, it’s a delicate balancing act between expense and attractiveness. Quality furnishings and amenities can significantly increase a property’s appeal and rental value. The key is in finding the sweet spot – investing enough to make the property desirable and competitive, while ensuring that these costs are recouped through higher rental income and occupancy rates. This strategic approach to investing can lead to enhanced long-term profitability.

Can I Use Old Furniture in the Rental Property?We know the thought of using old furniture may have crossed your mind, or at least the property owner’s mind. We don’t blame you. Jessica shared that it’s common for property owners to consider using their existing furniture to save costs. However, several important points were raised about the potential drawbacks of this approach:

1.) Quality and Aesthetics:It was emphasized that for rentals charging higher rates (e.g., $4,000 and above), tenants expect a certain level of quality and aesthetics. Using old furniture with visible wear, like stains or damage, could lead to negative reviews and dissatisfaction among tenants.

2.) Why Does the Owner Want to Part With It?The conversation also underscored the importance of effectively communicating with property owners about the standards expected in furnished rentals. It’s crucial to explain why old furniture might not be suitable and how it could impact the tenant’s experience and the property’s appeal.

Our guests suggest asking a very simple question “Why don’t you want to use this in your own home?” This straightforward query can help property owners understand why it may not be suitable for a rental.

3.) Cost of Replacement or Repairs:It’s also essential to consider the potential costs of maintaining and repairing old furniture if it breaks down during a tenant’s stay. These expenses could add up over time, making it more cost-effective to invest in newer, higher-quality furnishings.

The speakers discussed the possibility of using some of the owner’s existing furnishings, but not all. The selection process involves assessing each item to ensure it meets the required standard for the rental market.

The Best Furniture for Rental PropertiesPart of the property manager’s job is guiding owners through the process of updating their furnishings, including providing them with estimates for new furniture. This helps owners understand the financial implications and the value added by investing in quality furnishings.

Here are several tips and tricks to help identify the best furniture options for mid-term rental:

Durability is Key: Mid-term rentals are subject to more wear and tear than traditional long-term rentals, making durability a top priority when selecting furnishings. Investing in quality pieces that can withstand heavy use can save money in the long run, as they will require fewer repairs and replacements.
Make Practical Choices: When selecting items, practicality is a key consideration. For instance, choosing white towels and linens that can be bleached between guests was cited as a beneficial practice. This approach adds value for guests while simplifying maintenance and upkeep.
Neutral Designs with a Touch of Personality: When it comes to furniture design, opting for neutral colors and styles can appeal to a broader range of tenants. However, incorporating small touches of personality, such as through throw pillows or artwork, can add character and make the space feel more inviting.
Multi-Functional Furniture: With space being a premium in many rental properties, it’s essential to maximize functionality. Multi-functional furniture, such as a pull-out sofa bed or storage ottoman, can provide additional sleeping or storage options without taking up extra space.
Consider the Location: It’s also crucial to consider the location of the rental property when selecting furniture. For example, a beachfront property may benefit from more casual and comfortable furnishings, while a city apartment may require a sleeker and more modern design.

In conclusion, furnishing rental properties requires a combination of strategic planning, understanding market demands, and investing in quality pieces that will withstand heavy use. By aligning the owner’s objectives with these factors, mid-term rentals can provide a profitable and attractive option in the evolving rental market. So, property managers need to stay updated with industry trends and continually adapt their strategies to cater to emerging demands.

Treating Furnished Rentals as a BusinessMid-term rentals require a business mindset. This means understanding the financial aspects of investing in furnishings and ensuring that these costs are recouped through higher rental rates and occupancy rates.

Additionally, treating furnished rentals as a business also involves focusing on guest satisfaction and continuously making improvements to the property to meet market demands.

Our guest, Jason, provided the perfect analogy to help drive home the point. He likened starting a furnished rental business to opening a restaurant, emphasizing the need for good-quality furnishings, much like a restaurant needs good tables and chairs. This analogy highlighted the importance of viewing furnished rentals not just as properties but as full-fledged businesses that require investment in quality assets.

Depreciation Is On Your SideOne significant advantage of furnished rentals is the potential for tax benefits. Property managers and owners can take advantage of depreciation deductions on furniture, effectively reducing taxes owed on rental income.

Jason suggested that property owners consult with their CPAs to understand how investing in furniture (e.g., a $45,000 investment) can be depreciated. Unlike real estate property, which is depreciated over several decades, furniture typically has more favorable depreciation schedules, allowing for faster recovery of investment through tax benefits.

Buying Furniture – A Great Investment OpportunityInvesting in furniture for a rental property can be a smart way to add value to the property, especially if the owner has funds available for investment but is uncertain about the best way to utilize them. The depreciation aspect makes this investment more financially attractive and can be a strategic way to enhance the property’s value. Additionally, furnishing a rental property can also increase its overall appeal and attract more desirable tenants.

Viewing mid-term rentals as a business opportunity that requires strategic planning, understanding market demands, and investing in quality furnishings can lead to success.

Now that we’ve talked about the business side of things, let’s talk about the other piece of the puzzle: your renters.

Resident Rights vs. Property Management ObjectivesIn the realm of property management, especially in the context of mid-term rentals, a crucial yet often delicate aspect is striking the right balance between tenant rights and property management objectives.

The core of this discussion revolved around the principle of ‘quiet enjoyment,’ a tenant’s legal right to use and enjoy a rented property without undue interference. This principle is a cornerstone in real estate and applies universally, regardless of whether the arrangement is short-term or mid-term, and whether the occupants are referred to as guests or tenants.

Understanding ‘Quiet Enjoyment’Quiet enjoyment refers to the tenant’s right to use the property as intended without unnecessary restrictions or intrusions from the landlord. It’s a foundational concept that underscores the tenant’s autonomy over the rented space during their tenancy.

Marie and Brittany shared a recent Airbnb experience where they were not allowed to wear shoes inside the house and they were also not allowed to adjust the thermostat freely. These seemingly minor restrictions significantly impacted their overall experience and their satisfaction with the property.

The Landlord-Tenant Relationship in Property ManagementA critical insight from the podcast was the emphasis on recognizing the inherent landlord-tenant relationship in property management. This relationship holds, irrespective of the rental’s duration or how the occupants are labeled. Every tenant, whether in a short-term Airbnb setup or a mid-term rental, is entitled to specific rights, which include the use of the property as designed.

Challenges for New Property ManagersThe discussion highlighted a common challenge for those new to property management or hosting. Many enter the field without a formal real estate background, which can lead to a lack of awareness about fundamental tenant rights. This knowledge gap can inadvertently lead to infringements on tenant rights, such as unnecessary meddling in the tenant’s use of the property.

Striking the Right BalanceFor property managers, the key takeaway is the need to balance effectively managing their properties while respecting the tenants’ rights. This balance is essential not only for maintaining a positive tenant relationship but also for adhering to legal standards in property management. Recognizing and respecting tenant rights, such as quiet enjoyment, plays a crucial role in successful property management and ensures a harmonious landlord-tenant dynamic.

Property managers must navigate the fine line between upholding tenant rights and ensuring their own objectives are met. This may involve setting clear expectations from the beginning, regular communication with tenants, and addressing any issues promptly and professionally.

Resident Privacy in RentalsPrivacy is a fundamental aspect of the rental experience, especially in mid-term rentals that serve as a temporary home for renters. It forms a crucial part of the tenant’s right to quiet enjoyment, and violations can significantly impact their satisfaction and overall rental experience.

As a property manager, you should ensure that the tenant’s privacy is respected at all times. This includes avoiding unannounced visits or inspections, and not restricting tenants’ use of the property unless necessary for maintenance or other justified reasons. Respecting privacy not only helps build trust and a positive relationship between the tenant and the landlord, but it also contributes to attracting and retaining quality tenants. A rental arrangement that respects privacy can set your property apart in the competitive rental market and help enhance your overall business success.

Video Surveillance in Rental Properties: Yay or Nay?An interesting anecdote was shared by Jason Zimmerman about his personal experience with video surveillance in a rental property. This segment of the conversation sheds light on how surveillance can impact the guest experience and, in turn, the property’s reviews and reputation.

Jason Zimmerman’s Creepy AnecdoteJason recounted an incident that occurred while he was staying at an Airbnb for a funeral. He had family members come over to the rental property so they could travel to the funeral together. However, the rental’s host sent him a notice, having observed six people entering the property through the doorbell camera. This intrusion prompted Jason to unplug the modem, essentially saying, “leave me alone.” His reaction stemmed from a feeling of being monitored or stalked, which is a common discomfort among guests in such scenarios.

The Unintended Consequences of SurveillanceThis story highlights a crucial aspect of guest relations in the rental business. Surveillance, intended for security purposes, can often cross the line into privacy invasion, leading to guest discomfort. Such experiences can be particularly jarring for guests who are there for sensitive occasions, like funerals.
Jason shared that there is data showing that a staggering 98% of Airbnb guests dislike any form of video surveillance in rental properties. This strong aversion to surveillance cameras, including popular devices like Ring cameras, was emphasized as a major concern for guests.

Balancing Security with Guest ComfortThe conversation points to the need for property managers to carefully consider their approach to security measures like video surveillance. While ensuring property safety is important, it’s equally crucial to maintain a level of privacy and trust that guests expect. Infringing on this trust can lead to negative experiences, as demonstrated by Jason’s reaction to being monitored.

Implications for Reviews and Property ReputationInstances like these can significantly affect a property’s reviews and overall reputation. Guests who feel their privacy is invaded are more likely to leave negative feedback, which can deter future potential guests. The story shared by Jason underlines the importance of respecting guest privacy and carefully evaluating the use of surveillance equipment in rental properties.

Prioritizing Tenant PrivacyThe key takeaway from this discussion is the importance of prioritizing tenant privacy in furnished rental properties. While security is a valid concern, it must be balanced with the need to provide a welcoming and private space for tenants. Intrusive surveillance measures can undermine this balance, potentially harming the relationship between the landlord and tenant, and ultimately affecting the property’s appeal and reputation.

Reviews Can Make or Break SuccessIn the rental industry, particularly in furnished and mid-term rentals, guest reviews play a critical role. Positive reviews can significantly boost a property’s reputation and desirability, leading to higher occupancy rates and rental income.

Attention to detail and responsiveness to tenant needs are paramount. Property managers are often tasked with addressing maintenance requests promptly and efficiently. This proactive approach not only ensures tenant satisfaction but also helps in maintaining the property in top condition, thereby enhancing its long-term value.

Strategies for Positive ReviewsTo encourage positive reviews from guests, it is essential to:

1.) Provide High-Quality Furnishings:Furnishings should not only be functional but also aesthetically pleasing. This enhances the overall appeal of the property and contributes to a positive guest experience.

2.) Prioritize Comfort and Convenience:Comfortable furniture and well-equipped properties are more likely to receive positive feedback from guests.

3.) Respond Promptly to Requests:Addressing maintenance issues and guest queries promptly shows attentiveness and care, leading to better reviews.

4.) Ensure Transparency and Communication:Clear communication about property rules and amenities helps in setting the right expectations, thereby reducing misunderstandings and negative reviews.

5.) Solicit Feedback Proactively:Encouraging guests to share their experiences and suggestions can provide valuable insights for improvements and also show guests that their opinions are valued.

Legal and Regulatory Landscape for Mid-Term or Furnished RentalsAs with any business, it is essential to understand the legal and regulatory landscape that governs mid-term rentals. This understanding can help property managers ensure compliance and avoid potential legal issues.

In the podcast, when asked about the potential for increased regulation in mid-term rentals similar to what has been seen in short-term rentals, Jessica Schirmeister and Jason Zimmerman provided insights into the current state and future possibilities.

City and HOA RegulationsJessica Schirmeister, one of the speakers, highlighted that regulations over rentals could come from two main sources: the city and homeowners’ associations (HOAs). She emphasized the importance of being aware of the specific rules and regulations set by these entities. In client meetings, they often check the city’s regulations and the HOA rules to ensure compliance.

She urges other property managers and investors to conduct diligent research and compliance checks with both the city and the relevant HOA as a starting point.

The Significance of the 30-Night ThresholdA crucial point noted in the discussion was the prevalence of a 30-night minimum stay requirement, often seen in both city rules and HOA regulations. This requirement seems to be a common benchmark distinguishing short-term from mid-term rentals, with mid-term rentals typically starting at stays longer than 30 nights.

Property managers and landlords must be aware of this threshold to ensure compliance with regulations.

The Future of Mid-Term Rentals: Trends and OpportunitiesJason Zimmerman provided insights into the anticipated trends in the mid-term rental market. His perspective was rooted in the current usage patterns and market developments.

Stability in Tenant ActivitiesOne of the key points Jason raised was the similarity in tenant activities between mid-term rentals and traditional 12-month leases. Whether it’s for six months or a year, the impact on neighborhoods and the way tenants use the properties are quite alike. This observation suggests that mid-term rentals are unlikely to cause significant disruptions or attract undue regulatory attention, maintaining a level of stability akin to long-term rentals.

Regulatory OutlookGiven these similar usage patterns, Jason expressed his view that mid-term rentals might not face the same level of regulatory challenges as short-term rentals. Short-term rentals are often scrutinized for their potential neighborhood impact, but the consistency in tenant behavior in mid-term rentals could spare them from such intense regulatory focus.

A Rising Trend in Furnished HomesLooking towards the future, Jason highlighted a growing trend: the increasing demand for furnished homes for various lease durations. This trend, particularly evident in college markets and upscale areas over the past decade, points to a robust and expanding market for mid-term rentals. The demand for furnished homes, suitable for a range of leasing terms, is on the rise, signaling a significant growth opportunity in this sector.

ConclusionAs we wrap up this episode on the vibrant world of mid-term rentals, it’s clear there’s a lot to get excited about. From savvy investment strategies to the fine art of balancing tenant needs with business goals, mid-term rentals offer a world of opportunity for the savvy property manager.

We’ve navigated through the nuts and bolts of furnishing, tenant privacy, and the all-important reviews that can make or break your property’s rep. Plus, we’ve tackled the ever-changing legal landscape to keep you in the know.

Thanks for diving into this rental adventure with us!

If you haven’t subscribed to our newsletter yet, head on over to https://fourandhalf.com/subscribe/ to make sure you don’t miss future episodes of The Property Management Show Podcast.

P.S. If you are looking to get more owner leads, improve your online visibility, and grow your property management business, fill out the form below to see how Fourandhalf Marketing Agency can help you reach those goals.

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Welcome to The Property Management Show podcast, where we delve into the ever-evolving landscape of property management, entrepreneurship, and marketing.

This show is presented by Fourandhalf Marketing Agency. Since 2012, Fourandhalf has been helping residential property managers get more owner leads by helping with their website, SEO, online reputation, video and blog content, social media, and paid ads.

For this podcast episode, we were fortunate to have Jessica Schirmeister and Jason Zimmerman from Trend Property Management in Texas join us for this discussion. With their extensive experience in the field, they brought a wealth of knowledge, particularly in managing and optimizing mid-term rental properties. Their insights are especially relevant for real estate investors and property managers looking to expand their portfolios and increase profitability.

As you can imagine, there was a lot of information to unpack which is why we divided the interview into two episodes. This is Part 1, where we explore the rising trend of mid-term rentals and their advantages over traditional rental models.

Understanding Mid-Term RentalsWith economic and regulatory factors pushing both short-term and long-term rental property owners and managers to panic, it makes sense to start looking for more lucrative and sustainable alternatives in the market. This is where mid-term rentals come into play, offering a sweet spot between short-term and long-term rental properties. But what exactly makes a rental, well, mid-term?

What is a Mid-Term Rental Property?Traditionally, short-term rentals are fully furnished properties renting for less than 30 days, whereas long-term rental properties are typically unfurnished and covered by a 12-month lease. Mid-term rentals are those that fit somewhere in the middle — fully furnished properties that can be rented for 30 days up to a year.

If you’re a bit confused, you are not alone. I (Marie) was confused as well. You see, the label “mid-term” makes it seem like the term or the length of the lease defines what category the rental property belongs to. But if a mid-term rental can be rented for up to a year, then doesn’t it fall under the long-term rental category? According to our guests, that is a “no”.

As it turns out, even they don’t like using the label “mid-term rentals”. Instead, they prefer the label “furnished rentals”. This is because lease duration can easily be shifted, but renting a property as furnished vs. unfurnished offers a clearer way to categorize them.

Now you might be thinking, who would want to rent a furnished house anyway? Don’t people typically have their own stuff to fill a house with?

Let’s dive deeper into this.

Who Typically Rents Furnished Rental Properties?In the world of furnished rental properties, the tenant pool is as diverse as their reasons for renting. From this podcast interview, we learned that furnished rentals are a hit among various groups — and despite what you may have heard before, it’s not just for travel nurses anymore!

Here’s a rundown of who these tenants are and why they choose furnished rentals:

Traveling Professionals: Often on temporary assignments, these individuals prefer furnished rentals for their convenience and home-like feel compared to hotels. Yes, travel nurses fall into this category. But so do film crew, actors, and even digital nomads.
Individuals in Transition: People relocating or in transitional life stages choose furnished rentals for their flexibility and the ease of not having to move furniture.
Patients and Medical Visitors: In areas like Rochester, MN near medical facilities such as the Mayo Clinic, patients and their families opt for furnished rentals for the duration of medical treatments and even as they are recovering. Some people prefer not to travel right after a major medical procedure, and may seek comfortable accommodations near the medical facility. Typically, areas that have sought after medical services or facilities would attract a similar kind of group.
Corporate Groups: Companies often find it more economical and comfortable to house employees in furnished rentals for projects or training programs.
People Affected by Insurance Claims: Those undergoing home repairs due to insurance claims may need temporary housing, making furnished rentals an ideal solution.
Families: Larger furnished rentals are attractive to large families visiting extended family members and may need space and amenities that mimic a home environment.
College Students: Jason also mentioned an increasing interest among college students in furnished rentals. This introduced additional ease and convenience in college housing, where furnishings are often included or can be added at a minimal cost. This trend is planting the seeds for future rental preferences, with students getting accustomed to the idea of not having to acquire their own furnishings for their living spaces. The implication is that this experience in college is influencing their future housing choices, making them more inclined towards furnished rentals even after college.

Each group’s unique needs make furnished rentals a versatile choice in the housing market.

Short-Term vs. Mid-Term vs. Long-Term Rental PropertiesSo now that you know who typically rents furnished rental properties, let’s explore how these types of rental properties compare with more traditional ones.

The landscape of property management has witnessed significant shifts, and understanding these comparative dynamics can empower property owners, property management businesses, and real estate investors to make informed decisions.

The table below offers an easy way to compare the mid-term rental properties against short-term and long-term properties:

| Criteria | Short-Term Rentals | Mid-Term Rentals | Long-Term Rentals | | --- | --- | --- | --- | | Duration | Typically <1 month | 1 month to <1 year | 1 year or more | | Income Potential | High with premium nightly rates | Moderate stable monthly income | Lower but stable and predictable | | Turnover Costs | High due to frequent guest changes | Moderate fewer turnovers | Low least frequent turnovers | | Wear and Tear | Higher due to frequent turnovers | Lower than short-term higher than long-term | Lowest due to stability of tenants | | Regulatory Challenges | Often stringent with zoning and hospitality taxes | Generally fewer than short-term | Typically minimal regulations | | Tenant Base | Tourists short-term travelers | Professionals students transitional phases | Families long-term residents | | Pricing Flexibility | High adjustable for demand and season | Moderate set for the lease duration | Fixed set for the lease term | | Market Dependency | Dependent on tourist flow and events | Varies based on local demand and conditions | Steady less influenced by short-term market changes | | Operational Demands | Intensive due to guest management | Moderate occasional tenant interactions | Least mainly maintenance and renewals | | Seasonal Variability | High with peak and off-peak periods | Moderate less influenced by seasonality | Low typically unaffected by seasons | | Community Impact | Potential resistance from local communities | Usually well-accepted | Generally accepted and stable |

Now that you have a better understanding of these three categories of rental properties, let’s talk about why property managers should consider managing mid-term rentals.

Should Property Managers Consider Mid-Term Rentals?Mid-term rentals present a ‘blue ocean strategy’ for property managers. They fill a unique market gap, catering to clients like traveling professionals, medical patients, and people in transitional life phases. This market is less saturated compared to short-term and long-term rentals, offering new avenues for growth in the property management business.

Moreover, mid-term rentals offer higher profitability potential compared to long-term rentals. Property managers can charge a premium for fully furnished and flexible living options while avoiding the high turnover and maintenance costs associated with short-term stays.

Here is a list of reasons why venturing into mid-term rentals (aka furnished rentals) is a good idea for residential property management companies:

Filling a Market Gap: Mid-term rentals cater to a diverse tenant base, bridging the gap between short-term and long-term rentals. These rentals offer a more economical option than hotels, especially for longer stays, appealing to both individual tenants and corporate groups.
Reduced Wear and Tear: They experience less wear and tear compared to short-term rentals, leading to lower maintenance costs.
Regulatory Benefits: Mid-term rentals often face fewer regulatory challenges than short-term rentals.
Improved Neighbor Relations: Longer rental periods result in fewer neighbor issues due to less frequent turnovers and less disruptive behavior.
Diverse Tenant Base: Attracts a broad range of clients, not limited to traveling nurses, but also including professionals, families, and individuals in transitional phases.
Increased Demand Post-COVID-19: The rise of remote work has boosted the demand for flexible, mid-term living arrangements.
Improved Lifestyle for Tenants: Provides a more comfortable and homely living experience compared to extended hotel stays.
Profitability and Simplicity: While they may not generate as much monthly income as short-term rentals, mid-term rentals offer a more straightforward, profitable model in the long run due to minimized vacancies and reduced maintenance.

Getting Started in Mid-Term Rental ManagementMid-term rentals offer a more profitable alternative to traditional long-term rentals by charging higher rates and reducing vacancies. But is it all smooth sailing? Like any business venture, there are several factors to consider before diving into mid-term rentals.

Understand Your Local Market for Furnished RentalsEffective property management strategies require an in-depth understanding of the local housing market, tenant demands, and supply trends. These factors play a crucial role in determining the feasibility and profitability of mid-term rentals in a particular location.

Property managers should conduct thorough market analysis to identify potential demand for longer term furnished rentals. To start off, you can ask yourself the following questions:

Is my area a popular location to film movies or shows?
Do I manage properties in “college towns” or near college campuses?
Has there been an influx of “digital nomads” (tech workers who don’t want to be tied down into one place) in my service area?
Are there local businesses or facilities in my area that would attract people who tend to rent furnished mid-term rental properties?

Moreover, understanding the rental rates and vacancy rates in the area is crucial for setting competitive prices and optimizing occupancy.

But knowing who your target market is is just once piece of the puzzle. Property managers should also consider what amenities and services their potential tenants would be looking for in a mid-term rental.

Understand Expectations of Mid-Term RentersProperty management strategies that work for traditional long-term rentals may not be as effective for mid-term rentals. It’s essential to note that mid-term renters have different demands and expectations compared to long-term renters. Therefore, property managers must adapt their management strategies accordingly.

What Amenities Are Expected of Mid-Term Furnished Rentals?During the interview, there was a detailed discussion about the amenities typically included or expected in mid-term furnished rentals. Here’s a breakdown of what was mentioned:

Comfort-Oriented Furnishings: The emphasis was on providing super comfortable furniture. And for rentals near medical facilities like the Mayo Clinic, furnishing that support recovery and relaxation, are especially important for residents who might be recovering from surgeries.
Accessible Floor Plans: Properties with floor plans that minimize the use of stairs, like ranch-style homes, were noted as essential. This is particularly significant for tenants with mobility issues or health concerns.
Cozy and Homely Additions: Comfortable blankets, pillows, and other such items that contribute to a ‘home away from home’ experience are crucial.
Appeal to Working Professionals: In areas like Fort Worth, the target demographic includes working, traveling professionals. The focus here is again on comfort and convenience, offering a space where these individuals can unwind after a day’s work. Make sure you offer high speed wifi as well.

The overarching theme is creating a comfortable, convenient, and homely environment, catering to the specific needs of mid-term tenants, be they medical patients or traveling professionals. This approach differentiates mid-term rentals from the more transient nature of short-term rentals, which often cater to vacationers.

Do Residents Expect Kitchen and Bathroom Supplies in Mid-Term Rentals?In the podcast, we also delved into the topic of amenities in rental properties, discussing the common practice in short-term rentals of providing essential items such as toilet paper, paper towels, shampoo, conditioner, and basic kitchen supplies like salt, pepper, and cooking oil. This led to an exploration of whether mid-term rentals should offer a similar level of provisions.

While there’s a recognized overlap in amenities between short-term and mid-term rentals, underscoring the importance of ensuring basic comforts for tenants, the conversation revealed that there isn’t a clear consensus on the extent to which these supplies should be provided in mid-term rentals.

So if the minimum stay is a month long, is the property manager expected to provide a month-long supply of toiletries and kitchen essentials? According to Jessica, although there is no hard and fast rule about this, it’s good practice to give your residents enough to start off. Providing a couple days’ worth or a week’s worth of supplies can go a long way. You don’t want your residents complaining because there was no toilet paper when they used the bathroom upon arriving, do you? Talk about starting off on the wrong foot.

Remember that in the mid-term rental business, residents are expecting a higher level of service and a positive experience. Speaking of which, let’s talk about housekeeping services.

Housekeeping ServicesUnlike long-term leases, which may involve minimal interaction with residents, mid-term rentals require more hands-on management.

People who choose to rent mid-term rentals or furnished rentals will likely have similar expectations as guests at an extended-stay hotel. So unlike long-term tenants who may tolerate minor inconveniences, mid-term renters may not. They are looking for a hassle-free living experience during their temporary stay.

That’s why having a cleaning crew regularly maintain the property is a key aspect of managing these rentals. This regular maintenance not only helps in keeping the house in top condition but also plays a significant role in preserving the property’s assets.

Jason and Jessica highlighted that furnished rentals, particularly those that are well-maintained and offer premium finishes, tend to attract tenants who are willing to pay a premium.

These tenants generally have higher expectations regarding the upkeep and condition of the home. This includes not only the standard maintenance but also responding to specific work orders, such as sweeping out the garage or changing a light bulb (Jessica wasn’t kidding. This really happens).

This level of service and attention to detail justifies the extra expense of maintaining such properties and contributes to long-term savings by preserving the property’s value and appeal.

Mid-Term Rental Properties: Investment and ReturnsInvesting in furnishing properties might seem like a substantial upfront cost, but the returns justify the investment. You can get higher rental income than in a long-term lease while getting less frequent tenant turnovers than short-term leases. These two things could nicely balance out upfront costs.

Moreover, the “higher touch” level of service can reduce ‘normal wear and tear’ because of the following:

Residents are more likely to report even minor issues before they become big problems
More frequent property visits let your team see the condition of the inside more often, and catch problems sooner rather than later.
Residents are less likely to throw parties (and potentially trash the place).
Residents are more likely to treat it as their temporary home and respect the space.

The Future of Mid-Term Rentals in Property ManagementMid-term rentals offer a unique blend of flexibility and stability, making them an increasingly attractive option in the property management landscape. They represent a significant opportunity for property management companies to innovate, diversify their portfolios, and enhance profitability.

As the property management industry evolves, adapting to new trends like mid-term rentals is crucial. They offer a fresh perspective on rental management, meeting the changing needs of tenants and providing a new avenue for property managers to grow their businesses.

Teaser: What is Part 2 About?In our next episode, we’ll delve deeper into the operational challenges and strategies for managing mid-term rentals. We’ll discuss finances and the subtle art of balancing tenant rights with property management objectives. Stay tuned for more expert insights that could transform your approach to property management.

If you haven’t subscribed to our newsletter yet, head on over to https://fourandhalf.com/subscribe/ to make sure you don’t miss when Part 2 of this interview goes out.

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Welcome back to ‘The Property Management Show,’ where we deep-dive into the world of property management, marketing, and entrepreneurship.

Your hosts are Marie Tepman and Brittany Jones from Fourandhalf Marketing Agency. Since 2012, Fourandhalf has helped hundreds of property managers get more owner leads through digital marketing. Whether you need help with your website, SEO, online reputation, content, video, social media, or even advertising campaigns – we can do it all.

Our guest today is Jordan Bennett, who is the Senior Director of Network Risk Management at Nacha, and a former Risk Analyst at the Federal Reserve. We are discussing ACH fees and payment fraud, and to put the entire discussion into better context, we asked Jordan to explain what his job entails.

Management Payment RisksNacha is the rule-making body and trade association for ACH payments. They are always promoting ACH, and Jordan’s job is thinking about how to prevent risk. He wants to keep people’s money in their accounts, and he wants to stop the schemes that can rob them of that money.

Not only does he want to make payments safe, but he also wants to educate consumers on the fact that ACH is one of the safest payment methods they can choose in the U.S. He works with banks and companies to decide how to utilize it and better manage any risks that may be present.

ACH Transaction FeesFor the longest time, ACH has been popular because it’s free. It’s always been the free option versus credit cards, where consumers have to pay transaction fee. Some companies, however, are beginning to charge transaction fees for ACH payments.

Why is this shift happening?

Jordan reminds us that there has always been a cost to run an ACH system. It’s a low cost because it’s a batch system, so it doesn’t cost as much as credit cards, which operate on an interchange system.

With ACH, there’s a lower cost to the financial institution and the property manager who is accepting the payment, but there is still a cost to running the network. So, it makes sense that a property manager and their financial institution may want to recoup these fees.

A lot of systems and anti-fraud tools and infrastructure needs to be maintained with ACH. It’s never been free (even though the customers see it as free).

Nacha cannot suggest or encourage or discourage fees. With antitrust laws what they are, Nacha cannot tell an industry whether they should or should not charge a fee. However, it’s important to remember that this process does not automatically happen. People get paid to do their jobs, and it takes jobs to keep these payments safe.

What we don’t want to do is set a precedent where it’s preferable to pay with a check to avoid the ACH fee.

Consumers who do not want their information available and want the convenience of an ACH transfer will continue to use this method and not return to the days of using checks. Even from a management company or HOA perspective, accepting checks means you physically have to open an envelope and process the payment every time it’s made. If you have hundreds of rent checks coming in, that’s going to take time and require personnel. There will be a transaction cost regardless of how the payments come in. Your check fees may be higher from the bank than the ACH transfer fee.

Property managers should not encourage checks. When a check is paid, the consumer knows they have money in their account, but they may forget. And, if that check takes a few days to get through the mail and be deposited, the consumer might have forgotten about the rent check that was written and they’ll spend the money that’s in the account. Everything could bounce.

That’s an unnecessary risk that landlords and property managers don’t have to take. ACH can be a regular recurring payment that comes out every month on the same day. It takes a few minutes to set up, but once it’s there – it’s there. Unlike checks, there’s not another entire process every month.

Checks have routing and account information printed right on them. It’s an opportunity for fraud. When an employee is processing an ACH payment, however, there’s no visible access to the routing or accounting numbers.

Online Payment Fraud and How to Prevent ItNacha has put out a framework for risk management in order to fight fraud. There are several fraudulent scenarios that are addressed.

Debit fraud causes most of the problems. Usually, the fraud begins when someone debits an account from the information found on a paper check. Or a consumer continues to be charged for a subscription that they let go. Rules have changed on the ACH network in order to get those bad actors off the network. The banks have also been enlisted to help fight this type of fraud. Previously, banks said they were not responsible for those originator issues. But, if someone is debiting without authorization, it’s a problem that comes with consequences. There will always be debit fraud, but Nacha has worked hard to minimize this problem.

A lot of check fraud can also be found in the industry. Don’t use checks. Fraudsters are conning businesses and consumers into sending them money. They aren’t creating a debit with a routing or account number; instead, they’re convincing an employee to pay them by pretending to be a vendor. Let’s say your company does a trade show, and the cost to rent space at the trade show is hundreds of thousands of dollars. If someone dishonest knows that you’re planning this, they can call and represent themselves as working for that venue. They might tell you that they’ve changed their account number, and when you think you’re paying the convention center, you’re actually paying the fraudster. Tenants and landlords can get scammed this way too. Tenants can be fooled into believing a landlord has changed their account number, and then all that money goes to someone else instead of their landlord.

Accounts takeover fraud is when someone accesses an account within your company system and authorizes payments.

This is preventable with education, proper policies, and dual controls.

These schemes are out there, and they’re targeting everyone.

Prevention is better than the cure. Sometimes there’s insurance, but not always. If a vendor calls and says they’ve changed their account number, the process should be that you call them back at the number you have on file. Communicate in a known way. Put together a policy and a procedure.

Business emails can be compromised. Email addresses can be compromised in subtle ways so that you don’t notice the difference in the person who is corresponding with you. Fraudsters can log into an inactive account that once belonged to a former employee. If you’re not checking that inbox or if you have not disabled the account, it’s easy for them to hack in.

Make sure all of your employees are educated. They should know that the CEO is not going to reach out and tell them to pay an invoice. An employee’s emails and accounts should be inactivated when they leave. There must be dual controls – even for a small company. You don’t want just one person creating and paying invoices and accessing the bank accounts. The Nacha website has a lot of detailed accounts on schemes and how to prevent them.

How Are Property Managers Setting Up Payment Controls?Be consistent with all of your protocols and payment controls. If you only allow your employees to set up an ACH transfer up to $10,000, why would you allow them to send a $100,000 wire? If two people need to approve a payment, why would only one person be able to sign a check?

Be consistent across all payment methods.

Most fraudsters always act with a sense of urgency. If there are two business partners with dual controls, and one of them sends a text saying that a typo was made and a payment needs to be sent to a different account, you want the business partner to call the other party immediately after receiving the text. There’s always a sense of urgency with fraudsters, but no payment needs to be made immediately.

Fraudsters look for opportunity. They look for businesses without good controls. They want to target businesses that aren’t paying attention. They’re looking for CEOs who are on vacation and things are out of the ordinary.

It’s important that all of your business policies are written down.

Recourse for Victims of FraudWhat happens if they get you?

Jordan says it’s not helpless or hopeless. Nacha has been working to help the industry recover from fraud events, and it’s not always a total loss.

Work with your financial institution and remember that the faster you respond to a fraud event, the more likely you are to recover what you’ve lost. So, don’t wait. Recovering your funds is less likely if you wait, because fraudsters are working as quickly as they can. As soon as they have your money, they’ll move it somewhere else.

Here’s a scenario that may affect property managers. Let’s say a tenant has paid rent for six months or a year, and then they dispute the charges with their bank, claiming they were not authorized. Who will the bank favor in such a dispute?

Jordan says this is more common with credit cards, but ACH payments can be disputed.

In a situation like this, banks are more likely to be consumer friendly. If a renter claims their withdrawal was unauthorized, the money will probably be returned to them. In low value cases, the financial institution or the merchant losing the money won’t choose to go after them. But they can take the matter to court. They can file a claim and fight to get the money back. Landlords and merchants can also go to the policy if this type of fraud occurs.

Jordan wishes there was a better way to stop consumer fraud of this kind, but the rules are generally there to protect the network as a whole. If a consumer claims there’s fraud, a statement has to be signed saying that a charge was unauthorized. They’re signing off on their own fraud, and there could be repercussions for that.

This isn’t a common scenario. Plenty of laws are in place to combat fraud, but the rules are generally consumer-friendly to protect people from unscrupulous originators. There are more bad actors on that side. A long time ago, it was easy to get rid of these guys. We could see that an account was being debited $29.99 a month for no reason. The amount is small enough and normal enough that it looked legit. Resolving such situations is a huge priority.

No payment method is immune to fraud or risk. Given the risk associated with online payments, it’s easy to feel spooked.

Just remember that online methods of payments are far more secure than cash or checks. The physical movement of funds is out there, and it’s dangerous because it shows your routine and displays your account number on a check. There’s no recouping actual cash that’s stolen; it’s not secure. Check fraud is on the rise. Your electronic payment methods are much much safer. It’s easier to control your own personal information. There are rules around keeping that data secure.

Checks travel. You have to walk it to a mailbox. If you leave it in your own mailbox with the flag up, you’re signaling to fraudsters that there might be something inside the mailbox, with your personal information on it.

If you absolutely must mail a check, take the envelope into the post office and hand it to an employee.

But who has time for that? Electronic is the way to go, whether it’s a wire or ACH or credit cards or any of the new online payment platforms. Those are protected, and you should always use all of your authentication methods.

Listeners who have questions can reach out to Jordan at jbennett@nacha.org. Emails get quick responses.

For fraud incidents, report them to your bank.

And that’s all we have for this episode of The Property Management Show brought to you by Fourandhalf marketing agency. Since 2012, we’ve been helping property managers get more owner leads through marketing – from websites, SEO, videos, content, reputation, social media, pay-per-click ads, you name it. Visit fourandhalf.com to learn more.

As always, feel free to send us your feedback and thoughts by emailing marketing@fourandhalf.com. And, if you’re enjoying our show, show us some love by leaving a review on your favorite podcast app. Thanks, and see you next time!

First Name(Required)Last Name(Required)Email(Required)Phone(Required)Company NameComments or QuestionsHiddenDate MM slash DD slash YYYY CommentsThis field is for validation purposes and should be left unchanged. 974 The post Understanding ACH Fees and Payment Fraud with Jordan Bennett from Nacha appeared first on Fourandhalf Marketing Agency for Property Managers.

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Welcome to the latest episode of the Property Management Show, presented by Fourandhalf Marketing Agency. Since 2012, Fourandhalf has been helping residential property managers get more owner leads by helping with their website, SEO, online reputation, video and blog content, social media, and paid ads. In this episode, we’re excited to host Jennifer Merritt, […]

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In typical fashion, we ended up covering so much ground with Ray Hespen of Property Meld that we had to split our full conversation into two episodes. In Part 1, we discussed what maintenance analytics is, why it’s important, and what it can do for a property management business. This is Part 2 of […]

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On The Property Management Show, we recently had a conversation with Ray Hespen, the CEO and co-founder of Property Meld. We always find ourselves talking to him a lot – and about a lot. This episode is no different. We covered so much ground that we split the interview into two episodes. Here’s part […]

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Byron Thompson from Monument Real Estate Management is joining The Property Management Show to talk about a subject we’ve never addressed on this podcast: urban real estate markets. Byron has been a listener for a long time, and we’re happy to have him in the guest seat today to talk about the unique challenges […]

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During Part One of our conversation with Heather Nicely, we talked about the pros and cons of adding short term rental (STR) properties to an established portfolio of long term rentals. Today, we’re getting more into the state of the STR market and how you can set yourself apart and serve owners better. Market Saturation […]

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Heather Nicely is a Realtor, broker, and loan officer, and also the president of the Arizona chapter of NARPM. She’s been on all sides of property management and today, she’s joining us to talk about short term rentals and how managing those properties are different from managing long term rentals. Heather’s Journey to the Short […]

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Hello to all our loyal listeners and property management enthusiasts! You must be wondering about what’s going on with The Property Management Show podcast. We’re here to give you the scoop! We’ve been busy with pre-production for our upcoming season. After a brief hiatus, Brittany is back with a bang! Yes, that’s right! Our beloved […]

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Our guest on The Property Management Show today is the legendary Deb Newell, of Real Time Consulting Services.

She has a lot of experience as a consultant and a property management business owner, so we wanted to get her thoughts on the state of the industry and what property management companies need to do to prepare themselves for the future.

Deb Newell: A BackgroundDeb began renovating homes as a hobby in 1998. That grew into buying rental properties, which was a matter of wanting to get out of debt. This was the best way for her to do it, so she partnered with someone and they bought property, did all the work to renovate it, and then sold the home. Deb says she learned a lot about maintenance and she made a lot of mistakes.

She kept buying more properties and eventually instead of selling them, she began to hold onto those assets and rent them out.

It escalated, and that’s because she enjoyed the recurring income.

At this point, Deb wasn’t thinking too far ahead. She didn’t even realize there were resources out there that could help her do this more profitably. But, she treasures the mistakes that she did make because they made her a smarter business owner today.

From there, she became a third-party property manager and from the beginning understood the importance of setting boundaries. She took on owners that she probably should not have, but she learned from those experiences, too. And then she kept growing.

Deb managed properties for over 20 years. Then, personal circumstances required her to sell her company. In 2013, she began a consulting company because so many people had been asking her to help with their businesses. She grew organically, went back to school for her MBA, and is now in a Ph.D. program.

Her goal is to keep expanding so she can help others.

Real Estate Recessions and Property ManagersDeb was in Minneapolis in 2007 to 2009, when the last recession hit the real estate industry.

She points out that these downturns can sometimes be a win for the property management industry because people always need a place to live. What matters is how you create the narrative.

Recessions are a good time to consider investing in the market. This is the story you need to tell when you’re protecting and building your business. What we learned from the last recession is that markets bounce back. Maybe not to the level that we would want, but it’s an opportunity for property managers.

Owners are not equipped to manage themselves.

Or, they do a poor job of it.

Rising Regulations and the Need for Professional Property Management Deb believes the industry is in a stronger position now, thanks to the regulations and new laws that have arrived over the last 10 years. This is especially obvious in states like California, Oregon, and Washington. It’s painful for property managers to deal with these laws, but it positions you well. You’re the experts. You’re able to capture new business because dealing with these regulations is a huge headache and a big risk for landlords and investors.

Owners don’t want to make mistakes. They don’t want to make bad decisions. Property managers who are prepared to help them and make sure their needs are met will win new business, especially and even during a recession.

Show these potential clients what you can do to help with licensing and rent control and eviction.

You need to know what’s coming, as a property management business owner. Always be aware of the legislation that’s being proposed. You have to understand what’s going on in order to paint yourself as an expert. Even locally, make sure you can speak intelligently on what new laws mean. Sometimes, inspectors don’t always understand what’s changed when new regulations are passed. Property managers can be a partner instead of an adversary.

Deb talks to a lot of people who are trying to start property management companies, and sometimes they can’t even get started because the licensing rules have become so strict. She always advises them to first make sure they can start a company. You need to know what might prevent you from getting started, and only a handful of states don’t require a real estate license in order to run a property management business.

Property management is not a passive business.

How Disasters (Recessions and Pandemics) Impact Property ManagementDeb says her business wasn’t big enough to be too impacted by the recession in 2007 – 2009.

She does recognize the damage that was caused by the pandemic, though, and believes that the pandemic was harder on most companies than the recession. During the real estate meltdown, a lot of people lost their homes to foreclosure. It was detrimental, but it was an external factor that impacted businesses. The pandemic, however, did the unthinkable and actually shut things down.

It was always more of an unknown.

But, Deb reminds us, everyone needs a place to live. We recovered from the pandemic and from rent that wasn’t paid and from waiting for rental assistance to kick in. If you can weather these storms, you have a solid business that can withstand such economic struggles.

How NOT to be VulnerableDeb consults with a lot of property management clients, and the one piece of advice she can give for not falling victim to external emergencies like recessions and pandemics is this: Be involved.

You don’t want to NOT be involved in the operation of your business. Lots of property management owners want to get out of the day to day management of their company. That makes sense. You shouldn’t be in the weeds. But, you shouldn’t not be involved.

At least understand the company’s metrics and where you are at all times.

A lot of people don’t know where they are with profitability. They don’t know what their acquisition costs are or what their profit margins are. They don’t know how many people they should hire and what those people should do.

KPIs and metrics have been buzzwords for a while. But, they’re important.

The way you operate your business and the company culture you establish will make a difference in how you’re able to respond to something like a recession.

Always have your pulse on how things are running. If the right people aren’t in place, you’re going to have to stay over-involved more than you expect. Sometimes, business owners are afraid of people quitting. But, if the wrong people are in place, having them stay on is far more dangerous than having them quit.

Most companies have a version of a strong foundation, but not the whole foundation.

People don’t always know what they need to know, and there can be a disconnect between the thing that needs to be done and the way you interpret how to do that thing.

Deb’s advice is to work backwards. Figure out what you want and work backwards to get it. If want a particular profit margin overall, start there and figure out what you need to do to make that happen. It gives you a starting benchmark, and then you can build out the rest.

Growth and the Future of the Property Management Industry Growth will happen.

People are focused on growing the business, and according to Deb, sustainable growth will happen when you fix the internal operations piece.

What about the future of the industry? Will big mergers swallow up the small property management companies who say they refuse to sell?

Deb says no. She thinks there’s still a need for small companies.

Owners want service. They understand that larger companies cannot pivot as quickly as smaller companies to deliver what they need.

A.I. and automation won’t solve all the industry’s problems. Some things can be done that way, but in the end, people want to see a face and they want service.

People are trusting you with a large and valuable asset. They don’t want to hand that investment over to an iPad. They want a person to manage it, and that’s the difference between a transactional experience and a recurring experience.

A recurring experience is happening all the time. You’re managing someone’s property every month. You’re charging that fee every month. When you become more of an asset manager for your clients, you’re more like a partner.

Look at financial advisors. With all the retirement calculators and online tools available, A.I. could have taken over financial management years ago. But, people like the relationship they have with their financial planners. It’s meaningful.

If you’d like to reach out to Deb to talk more about this, please contact her at propertymanagementconsulting.com. And, if you have any questions about property management marketing or The Property Management Show, get in touch with us at Fourandhalf.

First Name(Required)Last Name(Required)Email(Required)Phone(Required)Company NameComments or QuestionsHiddenDate MM slash DD slash YYYY PhoneThis field is for validation purposes and should be left unchanged. ABOUT MARIE LIAMZON-TEPMAN: As the Director of Marketing for Fourandhalf Marketing Agency, Marie considers herself as a problem solver and storyteller at her core. She’s passionate about giving people the knowledge they need to succeed. She has been in property management marketing since early 2015, and has authored many blogs about the subject. She also hosts the longest running property management podcast called “The Property Management Show” where she and Brittany Stephens have fun examining all the nooks and crannies of running a successful property management business. When she’s out of the podcast spotlight, she works with the wonderful Fourandhalf team helping property managers grow their business and juggles that with being a new mom.The post Building a Rock Solid Property Management Company: Advice from Business Consultant Deb Newell appeared first on Fourandhalf Marketing Agency for Property Managers.

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The Property Management Show is pleased to welcome Matthew Kaddatz onto the podcast. He’s the senior director of product at Appfolio, and before joining Appfolio, he co-founded a property management company in 2006, right before a major recession.

We’ve been talking to property management experts about how they moved through that recession and what they’re planning for the potential new recession that is coming for the real estate industry.

We asked Matt to tell us about his property management company and what things were like when he got started.

Remembering Real Estate and Property Management 2006 – 2008Matt was just getting out of college in 2006, and real estate was red hot. His degree was in computer science, but he knew he didn’t want to be a programmer. So, he found an opportunity to grab a management agreement from family friends who were developing a property. He managed the properties they developed for them.

Admitting he was a bit naïve just out of school, Matt says he imagined he was going to be a millionaire making money in real estate. But, about a year and a half in, he realized he had no idea what he was doing. He spent some time learning the business.

Those first couple of years were not about growing a business but about learning how to do property management.

Then, the 2008 recession arrived, and the housing industry fell apart.

Identifying the Signs of TroubleSomething weird was going on in 2008, Matt knew. He wasn’t as connected to the industry as he is now, but Matt knew something was wrong when his dad was laid off. Matt’s father had his own business and then sold that business and began working for the company that bought it. It was an insurance company he worked for, and they were in front of the rest of the recession.

He had never seen his father without work – ever. Matt realized that things were going to get a lot worse before they got better. His dad being laid off was the canary in the coal mine.

Soon, there were foreclosures and an astonishing number of people simply abandoning their houses. They just disappeared.

Matt lived in a second-home community. There weren’t a lot of permanent residents in the neighborhood, and a lot of people were willing to give up their second home in order to save their primary home. Around 20 percent of the homes were simply left, and the home values in the area were cut in half within 12 months.

This was a scary time to be in real estate.

Matt was managing properties right over the border with Mexico, in Rosarito Beach. The drive from San Diego was about 45 minutes. It was a high growth market in 2006, but in 2008, construction crews had stopped building and sales teams had stopped selling.

Everything changed substantially.

The property management industry is resilient, and Matt had plenty of business with community associations as well as property management contracts. And, he was running a maintenance business, too. While the market stopped growing as aggressively as it had been, the business model they were working with was sound. They got through the recession.

Making Difficult Decisions During Real Estate RecessionsThe business Matt was running was built with a partner, and around 2008, it became clear that growth and expansion was not going to happen. They had been banking on a lot of new construction, and that wasn’t going to happen.

Matt’s partner left the business to pursue other opportunities. This was challenging for Matt because the partner had been leaned on as a fluent Spanish speaker. He had also been running most of the maintenance activities.

It was a hard decision, but for the business partner, it was the right one. There was enough recurring revenue coming in that the business could still support itself. Anyone who was in foreclosure was hesitant to make any kind of move with their homes, whether it was going to be to rent them out or try to sell.

Matt survived and then exited the business himself.

Going through the recession as an entrepreneur didn’t necessarily drive him out. He loved building the business, and it was fun to learn how to run a property management company. Matt liked solving complicated logistical problems.

But, he missed working with a larger group of people. He missed collaboration and colleagues.

The company was small; they worked about 450 units and had 30 employees, most of whom were on the maintenance team. Matt wanted to be part of something bigger, so he joined a large firm out of Texas. They had done a great job building a business, and Matt was happy to be offered an opportunity with them. They had more resources and a lot of colleagues. Matt felt like he could continue to grow.

He was also happy to utilize his software engineering background. The software he had used in his property management company was what he had cobbled together. Some of it he built from the ground up and some of it was integrated with Quickbooks and other existing programs.

Property management software is much different now than it was 10 years ago.

Working with AppfolioNow, Matt is on the vendor side for one of the biggest property management software companies in the country.

He’s a product leader, and he likes being in a position where he can deliver products that his clients really need. He enjoys finding the product that’s most successful for his customers.

Matt knew he had grown his company as much as he could. He was looking for something outside of property management. And then, he ended up at Appfolio. The company resonated with him because they’re customer-centric and trying to build really good products.

It’s rewarding to impact small business owners.

How to Prepare for a New RecessionWe may be at the cusp of new recession. What is Matt’s advice?

Matt says this is different from the 2008 recession. In 2008, no one knew what was happening. However, we’ve been talking about the coming recession for over 12 months. It’s unlikely this one will be as bad as the last one. The fundamentals are also different. The housing market is intentionally being slowed down by the Fed to ease inflation.

If you can hold on, Matt says, it will be a different world at the end of this. There’s lots of cash on the sidelines waiting to see what happens. Some people, he says, are excited about the recession. They know it will be a good opportunity to buy.

Don’t put all of your eggs in one basket, Matt advises. For example, running a maintenance operation with your property management company can be profitable. Homes will always need maintenance.

Thanks for listening to the podcast. If you have any questions about Matt or his stories, please contact us at Fourandhalf by filling out the form below.

First Name(Required)Last Name(Required)Email(Required)Phone(Required)Company NameJob TitleComments or QuestionsHiddenDate MM slash DD slash YYYY NameThis field is for validation purposes and should be left unchanged. ABOUT MARIE LIAMZON-TEPMAN: As the Director of Marketing for Fourandhalf Marketing Agency, Marie considers herself as a problem solver and storyteller at her core. She’s passionate about giving people the knowledge they need to succeed. She has been in property management marketing since early 2015, and has authored many blogs about the subject. She also hosts the longest running property management podcast called “The Property Management Show” where she and Brittany Stephens have fun examining all the nooks and crannies of running a successful property management business. When she’s out of the podcast spotlight, she works with the wonderful Fourandhalf team helping property managers grow their business and juggles that with being a new mom.The post What Matthew Kaddatz Learned Running a Property Management Company Through the ’08 Recession appeared first on Fourandhalf Marketing Agency for Property Managers.

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We’re talking to one of our long-time clients, Jeff Hacker, who runs Bayside Management and Leasing. He was on The Property Management Show three years ago, and we love talking with him because he’s been in the property management industry for 20 years.

He was with Bayside during the great financial meltdown between 2007 and 2009, and we asked him to come back and share with us some of what he learned as that crisis unfolded. We also wanted to know what he’s doing to prepare for another potential crisis in the industry.

Learning from the Past: How the Crisis Unfolded in 2007Jeff recalls the crisis building slowly the last time.

Interest rates were going up and the news grew more negative over time as he tracked real estate industry trends. People were not able to make their mortgage payments. The default rates were rising. Most people had an inkling that something was going on, but no one expected it to be as severe as it was. People generally try to be optimistic. Everyone remembered the savings and loan debacle, and there was a general sense that whatever crisis was looming, it would pass and not be too significant.

But, as 2007 and 2008 and 2009 wore on, it became clear that this was something truly catastrophic. The significance of this economic event was pretty widespread.

From a property management point of view, the industry was lucky in some respects. While there is no industry that’s truly recession-proof, property management in general can weather a financial storm better than other industries because people always need a place to live. Even if they’re not owning homes, they need a place to rent. So, while not completely insulated from the effects of a huge recession, property management usually does not go to pieces.

Jeff said that what he noticed early is that as the crisis was unfolding, applications were coming in for vacancies from people who had owned homes. They defaulted on their mortgages or their mortgage companies foreclosed on them.

Some of these homeowners purchased a home with an income-only loan. They put five percent down or in some cases, they put zero percent down. So, there was not a lot of skin in the game. They borrowed up to 100 percent of the mortgage, so when the house was suddenly worth less than the mortgage, people walked away.

One of the things that Jeff learned was to be significantly more proactive with landlords and investor clients at Bayside.

A surprise during the last recession was the number of layoffs that came from the financial meltdown. Jeff would have liked to have been more prepared for the number of job losses that impacted the industry. This led to more vacancies.

When a tenant loses a job, they may be okay for a month or two. But then, they’ll vacate because they’ll need to move in with someone else to save money on housing. Or, they’ll move for a new job.

Homes sometimes have to be rented out for less than an owner would like in a business environment such as this. Jeff learned the importance of being proactive with owners; to explain this situation and to let them know what to expect. There may be less rent. There may be multiple vacancies.

Jeff said another thing he would have liked to have done better is to suggest that owners lower their rent in order to keep tenants who were struggling. While no one wants less rent coming in, it’s better than a vacancy during a recession.

Current Layoffs and Recession FearsIn the San Francisco Bay area, where Bayside Management is located, there have recently been mass layoffs in the tech industry. Jeff said this has led to layoffs, and proactive steps have been necessary.

Local tenants who have been laid off by a tech company could move out of state. They might take a job Texas, Florida, South Carolina, or one of the areas where companies are relocating. There has been a lot of migration out of California.

On the flip side of that scenario, there are still a lot of start-ups in the area, and tech employees who were laid off from large companies can quickly find new jobs with smaller companies. That allows them to stay in the area and continue paying rent.

Jeff is talking to his owners about these potential issues. He’s discussing ways to prepare for every possibility. Ideas include:

Possibly holding rents flat instead of raising rents.
Maybe reducing rents in order to keep tenants in place.

There has been a positive response from owners, especially after they see the data and understand the numbers. It’s difficult to accept; costs are going up and every owner wants to maximize what they earn. They look for increases every year. This makes sense. While there has been some push back, there has not been a loss of any accounts. Jeff and his staff are talking to owners in order to prepare them. It’s an ongoing conversation.

Owner Outreach during a Potential New RecessionJeff is worried about churn with the real estate industry on the cusp of a potential new recession.

In 2008 and 2009, a lot of investors began self-managing just to save some cash every month. All of us know that property management services aren’t expensive, and they’re worth the investment, but some owners feel a need to save that hundred or two hundred dollars every month.

At Bayside Management, there’s an outreach program in place to avoid this kind of churn as a new recession approaches.

The objective is to not lose owners to self-management, even if this means reducing their management fees for a little while.

The proactive outreach is important. Getting in touch with owners to talk about the market has become a priority, and they’re feeling out how the owner is likely to respond.

This began for Jeff’s team in August or September of 2022, and there’s been a staff training built around it. They have a script. They have talking points. They have come together as a group to talk about how to handle these conversations.

Each owner is contacted by the person on the team who has the best relationship with that owner. Since Bayside operates within a portfolio system, it’s usually the property manager assigned to an owner who makes the call. In some cases, Jeff gets involved because it’s a larger client.

Lowering Property Management Fees to Keep Business Jeff isn’t offering lower fees across the board.

It’s a part of their effort to avoid churn when it’s absolutely necessary. He knows which clients are likely to leave when they get nervous about spending money. These are the owners who will invest in the properties as much as they need to in order to keep the property in decent shape. But, they won’t do any remodeling or bring in new amenities and improvements.

After the experience of 2008 and 2009, Jeff knew that those owners most concerned about costs would be the ones to leave if another recession approached.

Dropping fees for a temporary period of time might save them from self-management.

Jeff said that Fourandhalf has helped him look at the cost of acquisition really well. They know that it takes thousands of dollars to acquire a single client. So, instead of spending that money to find new clients, they’re willing to drop their management fees in an effort to keep the clients they currently have.

The reduction is temporary; no more than a year. It isn’t discounted forever. This is offered as an acknowledgement that there may be a recession coming and that inflation is hurting everyone. It’s a real possibility that rents will remain flat.

Property Management Industry TrendsWe asked what has changed in the property management industry, and what Jeff believes property managers should be looking out for. He highlighted two specific things:

A lot of people were chasing investment properties. Whether they had big pockets or small pockets, everyone was trying to buy investment homes. This drove up property values substantially around the country, and especially in more desirable cities. Home prices kept going up. That’s not sustainable, and there’s only so much inventory. This drive in investment buying kept a lot of first-time homebuyers from getting into the market.

If you’re a property manager in one of the markets that really benefited, you probably brought in a lot of business. But, those market conditions cannot last forever.

Automation. Almost everything is automated in property management, now. Whether we’re talking about showing vacancies or using management platforms for rental accounting and maintenance work orders – it’s all automated. That makes the property management experience better for owners. It’s more transparent. It also provides tenants with new ways to communicate. Property managers can track everything and really show owners all the work that’s being done.

Growth is expected even with a possible recession. Jeff said he likes to focus on growing the company five to 10 percent every year. They’ve been pretty successful in the past, and they’re also very focused on keeping their client base. This year, they want to maintain their base of clients and avoid churn.

Which is another good way to grow.

Retaining your current clients is growth. A lot of property management companies are hyper focused on getting new clients in, but watch that leaky bucket. You don’t want to lose existing clients, otherwise you’re not really growing.

Thanks to Jeff for talking with us. If you have any questions about his work at Bayside Management and Leasing or you’d like to talk to us about your property management marketing plans, please contact us at Fourandhalf via the form below.

First Name(Required)Last Name(Required)Email(Required)Phone(Required)Company NameJob TitleComments or QuestionsHiddenDate MM slash DD slash YYYY EmailThis field is for validation purposes and should be left unchanged. ABOUT MARIE LIAMZON-TEPMAN: As the Director of Marketing for Fourandhalf Marketing Agency, Marie considers herself as a problem solver and storyteller at her core. She’s passionate about giving people the knowledge they need to succeed. She has been in property management marketing since early 2015, and has authored many blogs about the subject. She also hosts the longest running property management podcast called “The Property Management Show” where she and Brittany Stephens have fun examining all the nooks and crannies of running a successful property management business. When she’s out of the podcast spotlight, she works with the wonderful Fourandhalf team helping property managers grow their business and juggles that with being a new mom.The post 2024 Property Management Outlook with Jeff Hacker appeared first on Fourandhalf Marketing Agency for Property Managers.

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We’re welcoming MaryAnn Hoffman and Andrew Dougill back on The Property Management Show. They are the couple behind Hoffman Realty in Tampa, Florida, and they were with us on a previous podcast, where they discussed how they got started in the property management industry as a husband and wife team.

One of the things they said during that discussion was how scary it was to have all their eggs in one basket during the Great Recession of 2007 to 2009. We asked them to come back and talk about how they managed that crisis and how it affected their business, especially since there’s talk of another real estate crisis looming.

Business Lesson: Learn to Be Prepared MaryAnn says she has learned to be prepared. She recommends having some extra money in the bank because it will be tough for a while. During any recession, you’ll be white-knuckled and wondering what’s going to happen next, but always remember that the market comes back.

Last summer was wonderful in the Tampa rental market. They were renting houses easily and the rents were going up. Now, the market is adjusting. Prices are coming back down. You have to be prepared for that, and you have to remember that when things are really good – they’re not always going to stay really good. And, when they’re really bad – they’re not always going to stay really bad. Nothing lasts forever.

Andrew remembers that in 2005, they began working with an older couple who had about a dozen rental properties to be managed. Everyone could see, at that point, that the real estate market was potentially going to tank. Everyone wondered when it would happen, and as Andrew was talking with this couple, he asked for some advice since they had been through three real estate recessions in their lives.

They told him that it would be scary, but that he’d get through it and the market would recover. When it did recover, they said, it would recover better and grow even more than before. They advised him to be prepared and to know his financials.

So, Andrew and MaryAnn took a hard look at their financials. They are real estate investors, too, and they had their own rental properties to evaluate. They decided that they’d probably be fine if the recession did arrive, but they might struggle a bit if rents dropped.

They made the decision to sell three rental properties so they’d have enough cash on hand to keep their business alive. It may be what saved them.

In 2008, rents dropped 10 percent. They dropped again in 2009 and in 2010.

Andrew reminds us that the great thing about getting loans for real estate is the leverage that provides. They increase your yields when things are going well. Cash on cash returns are better with a loan. But, when things go bad, you find yourself with negative leverage, and that can sink you quickly.

The number one lesson, then, is to have enough cash on hand so you can make it through the worst of the recession.

Making Recession-Proof Business Moves: Deciding which Properties to SellOne of the properties they sold was actually their dream home. It was a gorgeous house they had just finished remodeling, and the idea had been to move into it themselves. But, knowing what was potentially coming, they sold it instead. This made them a lot of money and helped them get through the economic downturn. They had to give up a dream home, but they kept their business running and they paid their staff. And, they built another dream home after the recession.

The experience of MaryAnn and Andrew is interesting because the negative leverage and dropping rents weren’t just their own concern – it was a concern of their property management customers.

These investors began giving up on their homes. So, they lost some property management business but they were able to make some short sales for those clients. A lot of accidental landlords began to come through the doors of Hoffman Realty. They could not sell their properties for the amount of money they had invested. The logical alternative was to rent until the market improved.

The diversity of the business at Hoffman Realty – having a real estate sales division and a property management division – as well as the surplus of cash from a few key sales helped them stay afloat during some very difficult times.

Educating Property Management Clients on Market ShiftsAs early as 2005, Andrew and MaryAnn started talking with their clients about the market dropping. This wasn’t just something they had to prepare for. It was also something they had to prepare their clients to manage.

When you own a property management company, you have to see yourself as an advisor to your owners.

Let them know what’s happening.

Even now, Hoffman Realty is telling their owners to be careful using comps from last summer. They’re not accurate anymore. Those owners who are listening are doing fine, but they also lost two management contracts over this message. The summer was a different market, and MaryAnn says she’s committed to being honest. If there are owners who don’t want to hear what she’s saying about where rents are right now, she releases them and wishes them well.

You want to provide your owners with the best information you have. You do not want to waste your time arguing with customers who do not value your expertise.

Worries Around a Potential RecessionThere’s less worry for Andrew and MaryAnn this time around. They know the market comes back.

They’re also in a stronger financial position with their own investments. They aren’t heavily leveraged anymore, and they understand the cycle of real estate. Investors have a lot of debt when they get started. Then, tenants help pay down the mortgage and before you know it, you’re debt-free.

The Hoffman Realty customers who aren’t in such a strong position are what worry Andrew and MaryAnn. Some of them are completely unaware. Some of them are making aggressive moves right now, despite the advice they’re providing.

They would not have done anything differently the last time, even knowing what they know now.

Neighbors called to complain about the dream house they sold in 2005, because they didn’t believe the price was high enough and it was messing up their comps. This did not bother Andrew and MaryAnn. They knew what was coming, and they didn’t want their property to languish on the market.

Trusting your gut can sometimes feel like an emotional, knee-jerk response. But, if it’s a gut instinct based on what you’re seeing in the market, you’re probably on the right track.

Protecting and Growing Your Property Management Business While discussing what types of things can be done to protect yourself against the coming shift and potential recession, Andrew and MaryAnn remind everyone to invest in real estate when you can.

They believe Realtors should always invest in real estate. It gives you a good option because if something happens, you can always sell that real estate. Use those properties you own for retirement or for worst case scenarios or a rainy day. They encourage their team to invest in real estate. Several of their staff continue to buy properties. Some will buy and hold and others will buy and flip. MaryAnn uses the analogy of “Are You a Rancher or a Farmer?” Farmers will buy the properties and keep them working. Ranchers will buy the properties, improve them, and then sell for a profit.

Is now the time to grow your property management business, given the warning signs that maybe the market will shift?

For Hoffman Realty, Andrew says the expectation is that they may lose some real estate business during this potential recession, but they’ll grow the property management side of the company by another 25 percent in 2023. That’s just being on cruise control for MaryAnn, who is happy with where the business is right now.

They have a business plan and a marketing plan, which they review regularly. MaryAnn is an excellent sales person who manages to bring in new business easily, so they’re not planning to change anything too drastically. Their plan is to continue allowing the real estate business and the property management business to work together and keep them successful.

The expert entrepreneurial advice from Andrew and MaryAnn is this:

Don’t worry too much.
Have a plan.
Invest in real estate.

There’s a lot of bad news that comes with a real estate recession. One of the good things is that there will be deals coming up. All of that expensive real estate will soon become less expensive. If you can put some money aside, you’ll get a deal when the bargains show up.

If you have any questions about our chat with MaryAnn and Andrew of Hoffman Realty, please contact us at Fourandhalf via the form below.

First Name(Required)Last Name(Required)Email(Required)Phone(Required)Company NameJob TitleComments or QuestionsHiddenDate MM slash DD slash YYYY CommentsThis field is for validation purposes and should be left unchanged. ABOUT MARIE LIAMZON-TEPMAN: As the Director of Marketing for Fourandhalf Marketing Agency, Marie considers herself as a problem solver and storyteller at her core. She’s passionate about giving people the knowledge they need to succeed. She has been in property management marketing since early 2015, and has authored many blogs about the subject. She also hosts the longest running property management podcast called “The Property Management Show” where she and Brittany Stephens have fun examining all the nooks and crannies of running a successful property management business. When she’s out of the podcast spotlight, she works with the wonderful Fourandhalf team helping property managers grow their business and juggles that with being a new mom.The post Entrepreneurial Lessons from the ’08 Recession with MaryAnn Hoffman & Andrew Dougill appeared first on Fourandhalf Marketing Agency for Property Managers.

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Kathleen Richards recently interviewed Marie for her PM Tribe coaching group. They talked about the importance of marketing for property management companies, when it makes sense to seek professional help, and the current trends in the property management industry.

There was lots of good information during that interview, and we want to share it with property managers today on The Property Management Show.

Kathleen Richards and FourandhalfKathleen began working with Fourandhalf in the early days, when the company was the first and only marketing agency that focused specifically on property managers. She began with creating video blogs, which was a new idea. Even the idea of property management marketing was new.

According to Kathleen, the content marketing help she received from Fourandhalf over six years helped her grow her business. Not only did she grow her business, she established herself as an expert in the property management industry. Kathleen had been teaching at the local college and doing workshops on property management, so the video marketing added to her credibility.

In her coaching group, Kathleen introduced Marie and Fourandhalf as a great team to work with. They took her local business, a “little company in Santa Cruz” to the next level and helped her attract new clients.

The Purpose of a Marketing Strategy The first question to tackle is a pretty simple one: What is the purpose of marketing?

And, why should property managers invest in marketing strategies for their local businesses?

General Purpose of MarketingThe general purpose of marketing is to inform, educate, and convince people about a product, service, or idea. Even nonprofit organizations can use marketing to convince people to join their causes. Politicians use marketing to get people behind them. Local businesses want to share who they are and what they do.

Marketing Property Management Services For a property management company, the purpose of a marketing strategy is to attract prospective renters who may want to rent your properties. Or, to attract self-managing owners who may need a professional property manager. You invest in marketing strategies to attract investors, to retain current resident and owner clients, and to educate potential clients on the value of professional property management.

Education is marketing at its core. You’re explaining why a professional property manager is better for property owners than managing a property on their own. You want to share benefits and highlight the problems you help property owners solve.

How Can a Property Management Company Benefit from a Marketing Plan?Let’s say you need to go somewhere you’ve never been, and instead of using a GPS or glancing at a map, you get in your car and start driving.

You might get there eventually, if you stop and ask for directions or try several different routes. But, you will get lost, and you will waste a lot of time and money.

In this metaphor, a formal marketing plan serves as your GPS or your map. It shows you the most efficient way to get to your destination. It doesn’t mean you’ll never get there without it. It’s just a smarter way to do things.

Competing with Other Property Managers and Local BusinessesThe theme for Kathleen’s PM Tribe this month is competition. Competition can be a good thing, keeping you sharp and focused and relevant.

How does a sound marketing strategy help you not only find new clients, but also compete in the marketplace?

Sometimes, it feels like you’re doing the same things as other property managers. Marketing is the best way to differentiate yourself. It starts with identifying your ideal client and understanding how to talk to those ideal new clients. You have the opportunity to position yourself as a no-brainer choice.

Too many property management companies don’t spend time thinking about their ideal client. Or, they’re not working to decide which market segment they’re best designed to serve. The market thinks property management is a commodity, but it’s not. Every company is a bit different.

The ideal client is important as you put together marketing strategies to attract prospective customers.

Then, you have to think about what makes you unique in attracting those new ideal clients. A marketing strategy will help you communicate your message. It’s a trap to accept all the new clients who come your way. Not everyone will be a good fit. There’s more churn and turnover and conflict when you open your doors to everyone. Be clear about your ideal clients. Where do they want and need specific services? What kind of properties do they rent out? You’re more successful when you’re more focused.

Property Management Marketing Sets You ApartIt can seem like a challenge to set yourself apart from your competition in a local area. How can a company set itself apart from all the others in Santa Cruz?

Marie says with authenticity.

As a professional property manager, you find yourself roped into the lives of your owners and renters. Whether you like it or not, this is the nature of the industry. If you’re authentic and human, you’re establishing yourself and your property management business as something that’s different from others.

Technology is fantastic, but property management is still a relationship business. Use technology to increase efficiency. Don’t utilize it to the point that you’ve removed authenticity from your brand. It doesn’t work. Relationships are between people, not interfaces.

Kathleen likes to say technology is there to support you, not replace you.

Digital Marketing Industry Trends Artificial Intelligence (A.I.) is perhaps the biggest trend in digital marketing right now. Everyone is talking about the influence of A.I. There’s been a panic about A.I. taking all the creative jobs. Schools are worried ChatGPT is facilitating plagiarism. Tools are coming out that promise to do everything a marketer can do. A.I. is an effective method for generating immediate content, but there’s actually nothing to worry about.

This is not the value that digital marketing agencies and creative content creators provide.

The trend is to use A.I., and that’s a good idea. But, if you believe that marketing is just about putting text in a document and publishing it online, you don’t understand the true value of a marketing strategy.

A.I. makes things more efficient, but there is so much money coming into the creation of content online, it’s clear that content marketing plans still work. Why would they invest so much money if content was not still king?

When Kathleen first started working with Fourandhalf, very few property management companies were making videos. Now, everyone is doing it. Anyone can put words on the internet. If you’re not already creating content, you’re behind. If you’re still running print ads only, you’re behind.

The trend for using relevant content to generate leads is taking off. But – you need well written copy. You need content marketing within a full property management marketing strategy.

Like competition, A.I. does not make marketing property management services irrelevant. It does make your marketing team focus on sharing the value that you bring.

Kathleen could have made her own videos 10 years ago. It might have even helped her save money. But, she wanted them to look good. She wanted them the right size and length, and she wanted them ready to share on social media channels and social media pages and other websites.

A.I. provides the same benefit in that it frees up your time. Instead of writing a listing, you can focus on a higher level of customer service.

Online Reputation in the Property Management IndustryIf you don’t have the budget for a formal marketing strategy, where should you start?

Keeping a close eye on your online reputation can be done without a budget. Stay on top of this, because you don’t want to ignore it long enough to suddenly discover you’re in a hole that you need to dig yourself out of.

If you want to attract new clients but you can’t afford paid marketing, focus on attracting prospective owners with a stellar reputation. People use online reviews and star ratings to make purchasing decisions. They do this even for a simple purchase on Amazon, so when it comes to a major investment like choosing a property management partner, of course they’ll pay attention to online reputation.

Not focusing on reputation does a disservice to your property management company.

People have a love/hate relationship with Yelp.

But, if you try to step back a bit, you’ll see how it can benefit you and your marketing strategies. In the corporate world, marketing departments spend thousands of dollars a year on focus groups. With online reviews, you have ready-made focus groups. Read company information, absorb positive reviews, and don’t be afraid to look at negative reviews. They can be a goldmine.

Kathleen remembered an incident where tenants left a bad review about her company because they didn’t get their security deposit back. After some research, she realized the tenant who posted was never a tenant of hers. So, she responded with this information and then shared information on how her company handles deposit returns. It was an opportunity for her to showcase how she did business differently.

No paid marketing required. You don’t even need a content marketing plan when you’re focused on reputation.

Be open to those negative reviews, especially if they’re true and indicate a change you need to make to your business. Always ask your clients for reviews. You can share those reviews on social media accounts and on your own web pages.

Kathleen would sometimes ask her friends to test her company. Like mystery shoppers, they would call and be pleasant and then they would call and be awful. This told her how her staff would react to different types of potential new clients.

Marie spearheaded a property management marketing industry survey a few years ago, and one interesting thing out of that is this statistic:

Property management business owners who prioritized reputation as one of their top three business priorities were 16 percent more likely to have their property owner clients stay longer.

When you care about reputation and invest in it, there’s a better chance you’ll retain your owner clients and your tenants.

Higher retention rates depend on:

How you’re treating people.
Whether metrics are in place to evaluate your staff.
Policies and procedures that are consistently followed

When you’re intentional and you prioritize your online reputation and your service to owners and tenants, of course you’ll retain them.

This is a cost effective way to ensure you’re providing the best services to your clients.

Investing in Marketing EffortsMarie has seen property management companies attract new clients and knock their business growth out of the park and others who fizzled out very fast. What’s the difference, Kathleen asked.

The most successful management companies view marketing not just as an expense, but as an investment. They look at marketing as something that you sow and then later reap.

A marketing strategy takes time. You may wait six months or even over a year to see real results. The companies that grow frustrated when they don’t have 100 new doors in a month are the ones who move on and don’t find themselves able to grow with any success. They tend to want unrealistic things given their budget.

Successful companies also understand the importance of identifying an ideal client within larger customer markets.

Long term thinking drives success more than simply thinking about this month versus last month. There is no instant gratification when it comes to content marketing plans or generating leads. No business will shift overnight. It’s a process, and you need to work through that process.

It’s easy to misunderstand the purpose of marketing efforts.

Marketing is educating your clients. You might spend a year talking to prospective clients before you finally close the deal and take on their rental property.

When is it Time for Professional Property Management Marketing?Every company moves and grows differently, but by the time you’re at 100 or 150 doors, you know you’re suddenly running a different business than you once were.

You might feel like you’re outgrowing things operationally, or maybe your property management website isn’t as impressive as other websites and you want to use it to attract new leads in a more aggressive way. Maybe you’re not getting the reviews you want or you have your eye on certain goals and you’re not quite getting there.

This is a good time to work with a marketing agency. You can expect a property management marketing strategy to get you where you want to go, especially when it comes to attracting new clients.

Once you’re making a profit, you can begin to think bigger. Invest in your property management website. Start hiring staff. Make investments in your business. You’re ready to position yourself as an expert in the property management industry. You’re thinking about paid ads and digital marketing and reaching a target audience.

It’s time to put together a marketing plan.

After years of building your business, you begin to see where your strengths are and how your way of doing business will work for an ideal client. Instead of attracting all the business, start attracting that specific business with good marketing strategies.

There’s understanding property management and there’s understanding how to put a business together. After that, you can think about property management marketing and communicating with new clients.

Figure out your market, and figure out your ideal client fits your company. Then, you’re not throwing money at a marketing plan that isn’t getting results.

Marie’s final words on effective strategies for property management marketing are simple: Rome was not built in a day.

If you’re trying to build a solid, sustainable property management business, please understand that you need to be patient. Resist the urge to cut too many corners.

Thanks to Kathleen for having Marie talk to her PM Tribe. If you have any questions about property management marketing strategies and attracting more clients, please contact us at Fourandhalf.

First Name(Required)Last Name(Required)Email(Required)Phone(Required)Company NameJob TitleComments or QuestionsHiddenDate MM slash DD slash YYYY NameThis field is for validation purposes and should be left unchanged. ABOUT MARIE LIAMZON-TEPMAN: As the Director of Marketing for Fourandhalf Marketing Agency, Marie considers herself as a problem solver and storyteller at her core. She’s passionate about giving people the knowledge they need to succeed. She has been in property management marketing since early 2015, and has authored many blogs about the subject. She also hosts the longest running property management podcast called “The Property Management Show” where she and Brittany Stephens have fun examining all the nooks and crannies of running a successful property management business. When she’s out of the podcast spotlight, she works with the wonderful Fourandhalf team helping property managers grow their business and juggles that with being a new mom.The post How to Market a Property Management Company with Marie Tepman appeared first on Fourandhalf Marketing Agency for Property Managers.

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Scott Brady from Progressive Property Management, a successful property management company in southern California, is back on The Property Management Show, talking to us about an updated Blue Ocean Strategy that a property management company can use for the current market.

You might remember that he joined us in 2015, when he introduced the Blue Ocean Strategy and how it pertains to property managers. It’s the theory that property managers don’t actually have to compete with each other; their own property management company can access a local market that’s wide open because of the overwhelming number of self-managing investment property owners (SMIPOs).

Not much has changed, he tells us today, except instead of targeting only the SMIPOs, there are three pools of potential business that can help you grow your property management business.

A Refresher on Scott BradyScott’s journey to property management began in 2015. He was a top Realtor in the city of Placentia, California, which had a population of about 50,000 people. He ran for city council and won. He served as mayor for a term.

When the recession hit the real estate industry in 2007, like many real estate investors and professionals, he was caught flat-footed. He had been busy buying and selling real estate and building a real estate brokerage. He left the city council in 2008, and spent a couple of years regrouping. He knew that recessions happen every seven to 10 years, and he wanted to be prepared for the next one.

So, he decided to start a property management company.

He wanted to build right away, so in 2012, he launched Progressive Property Management.

Scott started with zero doors and now he and his team manage 1,200 doors.

Association management was added to his company during COVID. There was a good month where every property manager was sure all their tenants would stop paying rent. So, association management seemed like the logical next step to diversify a property management business that may have suffered during the pandemic. He began taking on association clients in 2020, and now serves 85 associations and 5,000 owners.

The lesson he learned is this: You have to think ahead. Get prepared before the other shoe drops.

One of Scott’s favorite quotes is from Jeff Bezos. When he was running Amazon, Bezos said that during quarterly earnings calls, analysts would get excited about a particularly good quarter. They’d try to figure out what they did so differently that quarter. But, if they had a good quarter, it was likely because of something they had done three or four years ago. Nothing happens overnight.

What you’re doing today will benefit you in two or three years, not two or three days.

Residential Property Managers and New BusinessIn 2015, Scott told us that 75 percent of rental property owners in the country were self-managing investors. Given everything that’s happened since then, what do you think that percentage is now, in 2023?

Scott believes it’s about the same.

Real estate investors self-manage their own investment properties because they think they have the time.

Property managers need to tell these self-managing property owners that they’re costing themselves money. Because if you can describe a person’s pain points better than they can, you’re going to earn their business.

By managing on their own, they’re not getting quality renters. They’re not getting lease renewals and high rent payments. They’re not being proactive with maintenance, and they’re not protecting their asset with specific programs. They’re not conducting property inspections or charging tenants appropriate fees.

As an industry, we have to tell them that they actually don’t have the time and the skill to provide their own management services, but more importantly, they’re costing themselves money.

As a property manager, if you’re charging around $150 a month, after they deduct that cost on their taxes, they’re paying you $100 a month, net. So, for $1,200 a year in management fees, they can make a lot more on their investment. An ongoing management fee costs less than vacancy. Lease renewal fees cost less than turnover.

This is the time to for a growing property management company to bring in more business. You might have been successful adding 20 doors a month in the last few years, but you’d also be losing 20 doors a month because everyone was selling. No one is selling now. So when you gain those 20 doors a month, it’s a net gain.

This is a good time to be in the property management business.

3 Blue Ocean Strategies for Property Management Companies TodayA Blue Ocean Strategy keeps the waters blue with opportunity instead of red with competition. We discussed this idea in depth with Scott in 2015, and you might want to refer to our 2015 podcast for background on this strategy. The idea is: other property managers are not your competition. Those self-managing landlords are your competition.

Scott says most property management companies can target three groups for the current Blue Ocean Strategy.

Real estate agent. Real estate sales are down 45 percent in southern California. That’s a big hit in real estate income for agents. They love the business and the lifestyle, but how can they do that with the market what it is? Progressive Property Management offers them a business model where they can work as independent contractors and manage residential properties and associations. Scott’s company will provide a way for them to earn $2,000 or $3,000, or $4,000 a month. They even provide the properties to manage. It’s a business structure that works for Progressive and the agents.
Residential real estate management. Whether it’s a new property owner or new clients who have been managing their own properties for years, the self-managed rental properties are still a big market for property managers. In 2015, these property owners didn’t feel like they had a lot of margin. They might have been renting out a property for $2,000 a month, and their mortgage was $1,800. Now, that property is renting for $3,000 a month, and if they managed to refinance when rates were low, their mortgage could be down to $1,600 a month. It’s a bigger margin, and they can afford property management fees. Also, that asset in 2015 was maybe worth $500,000. Now, it’s worth $800,000. It’s more valuable, and instead of selling it, they’ll hold onto it while they have a three percent interest rate on their mortgage. They’ll let you rent that house out for them.
Associations are potential clients. Association management is another blue ocean of opportunity. In California, the minimum salary for exempt employee is now around $75,000. The large management companies do not want to manage small associations with 20 to 100 property owners. It’s not feasible for them, but it’s perfect for a company like Scott’s because his real estate agents are independent contractors. They are not paid a salary. They get a commission. So he can take an association community and charge $1,200 a month and pay the managing agent $600 a month.

Many property management companies will choose one of these oceans of potential new business. Progressive Property Management is focusing on all three.

Marketing for New Business and Prospective ClientsScott says he is actively going after new business with direct mail, online leads, and networking. He’s willing to try a lot of different things, and then throw real money at whatever seems to be working.

And, remember: the things working now can be attributed to things that were put into place long ago. You cannot try something for a month and expect miracles.

Scott sends 5,000 to 10,000 pieces of direct mail every month. When an investor in Colorado gets that mail, and they have a tenant in Anaheim leaving, they know Scott’s company, and they’ll call. Those new property owners and potential clients have arrived at their pain point. In the property management industry, there are big pain points that ultimately bring in business:

A tenant is leaving and the rental property will be vacant.
A tenant needs to be evicted.
A property needs rehabs.

You want to be in front of that client when the pain point hits and they realize they need a professional property management company.

With associations, you’re marketing your management services to the HOA board. When the board hires a management company, they hear all kinds of promises. But once the hire happens, phone calls drop off and the services don’t match what was promised.

If you can deliver and perform as promised, you’ll keep your association business.

Residential Property Management vs. Association Management There are different ways to manage your rental property business and your association business.

With residential management, you can get lucky. Your tenants generally behave. There are no plumbing issues. You might talk to your owner once a year. Scott says that his 35 branch managers sometimes report months that the phone doesn’t ring at all for the 30+ properties they’re managing. There are no issues.

With association management, that’s not going to happen. You can expect to work every month. The HOA board will need constant communication and problem solving.

More than with residential management, HOA boards will know when you are overpromising and under-delivering. Your systems fall apart. There are no quiet months, but you can make good money doing the things that no one else wants to do.

Generally, property owners are happy with their residential management company. As an industry, property managers do a good job taking care of clients. Maybe three percent are unhappy.

But, Appfolio did a study of HOA boards, and 45 percent of those boards are unhappy with the management company they’re using. Five percent are actively looking for a new property manager. There are 2,500 associations in Scott’s market. Those statistics tell him that 150 HOA boards are looking for new management.

Managing Happiness as a Property Management CompanyScott identifies two things that aren’t being done well in the residential property management industry:

Tenants are treated as a necessary evil, and not as residents. If your tenant is leaving next year, why not help them rent somewhere else? You want your tenant programs to make their rental experience better, not simply generate extra income. Show residents more love. Scott likes sending his residents a Christmas gift every year. It shows they value their occupancy.
Owners only hear from their property managers when there’s bad news; a plumbing leak or a tenant not paying rent. Transform the owner experience by sharing good news once in a while.

Tighter relationships with property owners and tenants are a good way to build a better business.

Progressive Property Management’s company tagline is: WE MANAGE HAPPINESS.

Scott admits that they manage crazy, too. But, his goal is to make both owners and tenants happy. To do that, the complaint calls and the maintenance requests are handled quickly. They choose vendors who are considerate and kind. They negotiate the best deal and secure the best tenant.

Guarantees are offered on investment properties, too. If a pet damages a property, the company will pay for it.

Here’s why it matters: as a property manager, you’re not competing with other property management companies. Instead, you’re competing with that 70 percent of the population that is self-managing. That’s about 200,000 doors needing management in Scott’s marketplace. So, he’s not competing. He wants to share success and business with other property management companies.

Association management is different. No one is sharing. That’s a zero sum game, and if you gain a client, it usually means you’ve taken that client from someone else. Almost no associations self-manage anymore.

The balance of residential and association management is nice.

Today’s Property Management MarketWe may be on the cusp of a new recession, and a lot of large property management firms are circulating and looking for consolidation and acquisition opportunities. Is that creating anxiety in the property management market?

Scott reminds us that five years ago, everyone feared property management entrepreneurs at Mynd were going to come in and more or less manage properties for free. Everyone in the industry thought they’d undercut the market and drive smaller management companies out of business.

That didn’t work.

Those companies could not grow organically because property management is still a belly to belly business. You’re managing an asset that’s important for someone. Scott says he has never had a potential client call looking for the biggest management company possible. They care about property management services, value, and competitive pricing.

There is a lot of money out there in the large and growing property management firms. PURE Property Management raised 80 million, and Home River wants to acquire as many small companies as they can. These giants don’t want to destroy small companies, they want to acquire them or consolidate resources and expertise in the local market.

Some companies have to sell. Some companies want to. The best decision is up to you.

Over the last five years, the industry has learned how to cut costs while managing properties. A lot of businesses are using virtual assistants and part time employees. Technology is used more and property management software programs have been embraced. There are additional programs in the industry that add revenue.

Margins have moved from what was 0 to 5 percent seven years ago to potentially 25 and 30 percent for some management companies today. That’s a testament to the property management industry and how we’ve been managing properties more efficiently, Scott says. And, we still have a way to go.

The recession will create more doors to be managed in the next three to five years. There are short term rentals opening new opportunities in the industry. There’s commercial property needing to be managed. A lot is happening.

As organized real estate finds itself in trouble these coming years, big brokerages will find themselves losing money and talent. It creates an opportunity for property management companies. Rental properties are the place to be, and it wasn’t always that way.

How will you take advantage of that?

Property Management Services and GoalsScott is excited for this year and next. He sees a lot of growing property management companies, and he has set some growth goals of his own.

For example, he’s put a lot of money back into the business. They’re looking at business structure and new areas and they’re investing in digital marketing. He’s experimenting with lead generation, direct mail, business website improvements, and paying for referrals.

Bono, from U2 talks about the band trying to make an album in 30 days. It actually took 90 days. People asked if it’s because they struggled to create songs, but the problem was the opposite. They came up with 30 additional songs while they were in the studio!

You cannot stop digging for gold until all the gold is discovered.

Put your money and resources towards growth right now because the next five years could be the best five years in the history of property management. You can be proud of owning a successful property management business.

If you have any questions about our recent or past conversations with Scott Brady of Progressive Property Management, or you’d like to talk about your own property management business, please contact us at Fourandhalf.

First Name(Required)Last Name(Required)Email(Required)Phone(Required)Company NameJob TitleComments or QuestionsHiddenDate MM slash DD slash YYYY PhoneThis field is for validation purposes and should be left unchanged. Contrary to popular belief, Brittany and Marie are actually NOT the same person – despite having a shared bio. Together, they host Fourandhalf’s podcast called “The Property Management Show” where they have fun examining all the nooks and crannies of running a successful property management business in this day and age. When they’re out of the podcast spotlight, their day jobs involve working with the wonderful Fourandhalf team helping property managers grow their business. Brittany and Marie have three shared passions: marketing, helping people win, and most importantly – Harry Potter.The post 3 Blue Ocean Strategies for Growing Property Management Companies with Scott Brady appeared first on Fourandhalf Marketing Agency for Property Managers.

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The current economic climate is a double-edged sword for property management companies. On the one hand, we are seeing increasingly high demand for rental property as people look to downsize and move away from homeownership. On the other hand, with reduced job security and income levels, tenants may find themselves unable to pay rent or in search of lower cost housing options. This means that property managers must be prepared to weather any economic storms on the horizon – but how? Kim Meredith-Hampton & Scott Hampton have some ideas about how best to recession-proof your property management business.

Lessons Learned from Past RecessionsKim and Scott are no strangers to economic downturn. Their company survived the Great Recession of 2007 to 2009. Before the recession hit, Hampton & Hampton had a large portfolio of rental properties, mostly brand new homes, managed on behalf of various investors. These investors were able to obtain financing from banks with little difficulty. So they were able tobuy homes they couldn’t afford.

The company did not realize the risk of this until tenants began calling with foreclosure notices on their rental properties. Kim and Scott soon discovered that many of their clients had not made mortgage payments for months and were only collecting rent. The banks were approving everybody for everything, and they had unknowingly taken on clients who were in over their heads.

As a result, the company had to adapt quickly. They implemented new procedures, such as checking if owners were in foreclosure before taking on their properties and creating a foreclosure disclosure for tenants. This disclosure would inform the renter that the owner of the house they are renting is in danger of being foreclosed on by a bank. This helps people know if their home could be taken away from them and lets them plan ahead for this possibility.

Eventually, the company was hired to handle foreclosed properties for banks. They would offer tenants cash to vacate the property. This was a win-win for everyone involved – the tenants received a payout to help them move out, and the banks were able to avoid costly and time-consuming eviction proceedings.

Strategies for a Recession-Proof Property Management BusinessThere’s more than one way to create a recession-proof business. As a matter of fact, it’s a good idea to implement multiple different strategies to keep yourself from getting stuck if one proves ineffective. Let’s look at a few of the ways you can make your property management company more recession-resistant.

Diversify Your Portfolio of PropertiesDiversifying your portfolio means investing in different types of properties, such as residential, commercial, and industrial. If you have all your properties invested in one sector, an economic recession that impacts that sector could have a significant impact on your overall income. However, if you have properties in different sectors, the impact of the recession is spread out, reducing the overall risk. Different types of properties may also appeal to different markets, allowing you to access a wider range of tenants or buyers.

Cut Costs Without Sacrificing QualityAs a property manager, you’re always looking for ways to reduce costs without sacrificing the quality of your properties. In today’s economic climate, it’s more important than ever to find ways to save money while still providing a high level of service to your tenants. Here are some strategies that you can use to achieve this:

Energy EfficiencyBy investing in energy-efficient appliances, lighting, and HVAC systems, you can reduce your energy consumption and save on utility bills. This will also improve the comfort and convenience of your residents, which leads to higher tenant satisfaction.

Preventative MaintenanceRegular maintenance is essential to keeping your properties in good condition. However, by focusing on preventative maintenance, you can catch issues before they become costly repairs. For example, scheduling regular inspections of your properties to identify small issues before they turn into major problems that require expensive repairs.

Use TechnologyKim and Scott are always ready to try new things. When hedge funds started getting into real estate, the property management industry began to ramp up quickly. At the time, there wasn’t a lot of great technology available. By being flexible, they were able to discover new systems and improve the efficiency of their team. Ultimately, this is what enabled Kim and Scott to step out of the nitty-gritty, day-to-day operations and work on growing the business.

Technology can be a cost-effective way to improve efficiency and reduce costs. For example, using property management software for leasing, accounting, maintenance, etc, can help you streamline your operations and reduce administrative costs. Smart technology, such as smart thermostats and lighting, can also help you save on energy costs.

Focus on Tenant RetentionVacancies can be costly, so it’s essential to focus on tenant retention. By providing excellent customer service and responding promptly to tenant requests and complaints, you can increase satisfaction and reduce turnover. This can help you save on marketing and advertising to attract new renters.

Be Proactive in Communication with Owners and TenantsEffective communication is an essential component of successful property management. Being proactive in your communication with both property owners and renters can help you build strong relationships, boost retention, and even save money.

During economic downturns, tenants may face financial difficulties that can lead to missed rental payments or even eviction. By proactively communicating with them, you can address potential issues before they become major problems.

Invest in Marketing and NetworkingIn a recession, it can be tempting to cut back on marketing and networking efforts in order to save money. However, investing in these areas is essential for the continued success of any business during an economic downturn. Marketing allows you to reach new customers and maintain relationships with existing ones, while networking gives you access to valuable resources that may help your business during a difficult time. By investing in both marketing and networking before and during a recession, you can ensure long-term financial stability.

Best Practices for Managing Cash Flow During a RecessionIt’s undeniable that a recession can leave businesses across many industries feeling uncertain and overwhelmed when it comes to setting realistic budgets and financial goals. With economic sectors across the board being impacted, property managers need to take stock of their current resources and use strategic planning to best position their organization for ongoing success throughout this period.

Maintain Cash Reserves and Contingency PlansHaving cash reserves can provide a safety net during times of financial uncertainty, allowing a business to continue operating even if revenue decreases significantly. This can help to cover fixed expenses such as rent, salaries, and utilities, ensuring that the business can stay afloat and avoid defaulting on payments. Combined with a good contingency plan detailing potential risks and specific actions to be taken in response, you should be able to weather a recession.

Cash reserves can also provide a business with opportunities to invest in growth during a recession. With many competitors struggling to survive, a business with cash reserves can take advantage of lower prices to acquire new assets or expand its operations, positioning itself for long-term success once the market returns to normal.

Track and Analyze Financial Data RegularlyDon’t get caught unprepared when recession strikes. Keep a close eye on your company’s financial performance. Try to identify potential problems or areas of concern before they become significant issues. Good accounting systems will also help you track spending and ensure that you are operating under budget.

Seek Out Financing OptionsDuring a recession, it may be more challenging to obtain traditional financing options such as bank loans. However, there are other financing options available that can help you navigate a tough economy. The following are some common financing options that property managers may consider:

Small Business Administration (SBA) loans: The SBA offers several loan programs designed to help small businesses, including property management companies. These loans typically have lower interest rates and longer repayment terms than traditional bank loans.
Bridge loans: Bridge loans are short-term loans designed to provide immediate funding to cover expenses during a transition period. These loans can be used to cover the gap between the end of a current loan or other financing and the start of a new financing option.
Private lenders: Private lenders may offer alternative financing options to property managers who do not qualify for traditional bank loans. These lenders may be more flexible in terms of credit requirements and collateral, but typically charge higher interest rates.
Line of credit: A line of credit is a flexible financing option that provides access to funds as needed. This can be useful, as it allows you to draw on funds as needed to cover expenses.
Factoring: Factoring is a financing option where a property manager sells their accounts receivable to a factoring company at a discount in exchange for immediate funding. This can be a useful option for property managers facing a cash flow crunch during a recession.

Exploring New Avenues For Real Estate Investment Opportunities After experiencing the ’09 recession, Kim and Scott learned the importance of staying ahead so that they don’t get caught off guard like they did with the unexpected foreclosures we went over earlier. Over time, they have diversified the types of properties that they manage so that they are not putting all their eggs in one basket.

Introducing Multi-Purpose Spaces As A Cost-Effective SolutionNow Kim and Scott are working on transitioning from a traditional office to a multi-use space. Essentially, this is a way to reduce overhead expenses by renting out part of the office as a co-working space. As investors themselves, Kim and Scott own the building, which makes this kind of solution possible. It provides a safety net because, if need be, the space could fit up to 4 separate offices, allowing them to earn rent should one of their other income streams dry up.

Looking Forward – What’s Next On The Horizon?Kim and Scott have a lot of things in the works despite a shaky economy. They see themselves as always being a step ahead and they are always looking for the newest idea or innovation. Kim refers to them as “trendsetters” and “guinea pigs” – always willing to be the first to try out the latest tech. We’re excited to see what they have in store.

If you’re a property management company looking to grow your business, we encourage you to get in touch with the Fourandhalf team by filling out the form below.

First Name(Required)Last Name(Required)Email(Required)Phone(Required)Company NameJob TitleComments or QuestionsHiddenDate MM slash DD slash YYYY CommentsThis field is for validation purposes and should be left unchanged. ABOUT MARIE LIAMZON-TEPMAN: As the Director of Marketing for Fourandhalf Marketing Agency, Marie considers herself as a problem solver and storyteller at her core. She’s passionate about giving people the knowledge they need to succeed. She has been in property management marketing since early 2015, and has authored many blogs about the subject. She also hosts the longest running property management podcast called “The Property Management Show” where she and Brittany Stephens have fun examining all the nooks and crannies of running a successful property management business. When she’s out of the podcast spotlight, she works with the wonderful Fourandhalf team helping property managers grow their business and juggles that with being a new mom.The post Weathering the Storm: How to Recession-Proof A Property Management Business w/ Kim & Scott Hampton appeared first on Fourandhalf Marketing Agency for Property Managers.

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Greg Crabtree, CPA is back on The Property Management Show to talk about marketing spends and the return on investment (ROI) that property management companies should expect to see on marketing budgets.

If you’re not already familiar with Greg, he’s an accomplished entrepreneur, financial expert, and the author of Simple Numbers, a book that every business owner should have read by now.

When we first had Greg on The Property Management Show, it was at the beginning of the COVID-19 pandemic, and we were talking about managing cash flow for small businesses. He said that although company owners pick marketing as the first thing to cut back on, he didn’t necessarily agree. You can watch/read our previous interview: Managing Hits to Your Property Management Cashflow.

We asked him back on the podcast to talk about why that behavior exists in business, and why he thinks it’s a big costly mistake.

First, let’s talk about the effect of economic trends on marketing spend.

Marketing Spend and Economic TrendsMarketing spending is traditionally seen as a canary in the coal mine for economic slowdowns. The spend may not be cut to zero, but companies don’t want to spend extra money on marketing when they feel like there’s not a customer willing to respond to those marketing efforts. When marketing budgets are cut, it’s an indicator that the economy is softening.

While researching for his next book, Simple Numbers 2.0, Greg created a model that aggregated clients’ data as if it was one big conglomerate. This was across a blend of industries and across geographies. This model focused just on U.S. economic statistics and captured data from 100 companies.

The marketing spend of that model dropped about 60 percent right at the beginning of COVID.

Remember that a lot of businesses closed during the early days of the pandemic. You’re not going to market a business that no longer exists.

On the other side of that trend, some companies saw a huge influx of business because they served the needs of customers during an unprecedented pandemic. Business was coming in faster and faster.

They didn’t need to invest in marketing, either; they had more business than they could respond to.

It took over 12 months for the rate of marketing spending to get back to the pre-COVID level.

Fast forward to today. There have been a lot of wild shifts. Companies have done a lot of different things, but even many of those that suffered are now getting back to the feeling that things are working. The biggest issue for those companies, right now, is labor.

Labor Supply’s Effect on Small Business’ Bottom LineThe biggest issue businesses are facing is the labor issue – they are finding it difficult to find people to do the job at the same price.

It’s not a question about generating new sales. It’s a question of not having the people they need to deliver on the product or service they’re selling. This is a population problem.

This is a problem that had already been set in motion years before now; COVID did not cause it.

In the U.S., we don’t have enough people to do the labor. In 2001, we were at about a 2.4% replacement birth rate. Today, the U.S. is at about a 1.6%. A stable society is a 2.1%. And, we are not willing to fill that birth gap with immigrants at the moment. This is a serious problem globally, and quite a few countries are in what we call an inverted pyramid when it comes to population.

We don’t have enough people.

Marketing Spend is Going Up Despite the Economy TankingThe economy is slowing, but marketing spends have not dropped. Marketing spends are continuing to increase in the current economy. Here’s why Greg things that is:

Your highest production and earnings capacity is the last 10 years that you work.

In 2019 and 2020, a vast majority of the baby boomer generation in this country decided to retire.

And, there aren’t any replacement workers to fill the gap. Those baby boomers retired with more money than previous generations. They also retired with a pretty developed habit of consumption that is breaking the pattern of previous retiree generations that as you get older, you spend less. This generation likes to spend money. That’s creating a demand that doesn’t necessarily get met. There’s an economy of people who are consuming, but not producing.

Businesses have to increase their marketing because new business is not going to show up through an expanding economy. You’ve got to take that business away from someone else, which is why you’ll see more aggressive and more expensive marketing that helps you differentiate what you do against what your competition is doing.

Not only do you have to market better, you have to perform better, too.

How Economic Factors and Marketing Spends Impact Property ManagementWhen COVID first arrived, a lot of property management marketing was suspended. We were at a standstill, waiting to see what would happen.

In the world of property management, Greg sees some distinct cross-currents.

When it comes to residential real estate markets, there are two things for property managers to understand:

You need to keep marketing so you can attract new properties to manage. There’s a good chance you’re losing existing customers through acquisition. Good customers have sold or are selling.
Rents are at historic levels. Multifamily properties are a great place to deploy a large amount of money because occupancy rates are also high. This could potentially lead to some sort of national rent control, if not legislatively than definitely through bureaucracy.

Property tax increases are another problem for investors in rental real estate.

You may be earning high rents, but you also have a huge property tax bill.

For commercial rental properties, there are different challenges, specifically when we talk about retail spaces. Office spaces, too. We have seen a bit of a return to the office, but not to the point that it was pre-COVID. These commercial properties usually don’t have long-term mortgages, either, so when it’s time to reset their mortgage, expenses will skyrocket.

Rethinking Property Management Marketing SpendIt’s not so much about how much you spend, but understanding what’s effective when it comes to marketing.

Greg tells his property management clients to spend every amount they can on marketing, as long as it’s effective.

It’s more about your return on investment. Are you getting back what you’re investing into marketing your property management business?

Greg calls it launch capital in Simple Numbers 2.0; the idea that for marketing in general to be effective, you want to recover the cost and improve profitability by 50 percent of what you spent.

His example is this: maybe you could have made $100,000 in profit this year. But, you chose to spend $50,000 on a new marketing campaign in an effort to win new business. Your real profit for the year is $100,000, and your launch capital span was $50,000. You need to make sure your new profit covers the $50,000 spend as well as $25,000 more.

In essence, you’ll want to earn back $125,000 of profit. That’s the way Greg looks at it.

But does that mean you can immediately expect that kind of ROI a couple of months into your marketing campaign? Definitely not, according to Greg. He is a believer in a more patient kind of marketing, which we’ll revisit later.

Greg Says Spending on Marketing is Like Playing BlackjackGreg likes to use a blackjack analogy when explaining marketing spend. If you’re playing a blackjack hand and you’re betting $25 on this hand and you win, then you know you’ll get some extra money.

You have a choice on whether you want to keep feeding the hand or not. You assess the odds, and as you keep climbing and having success, you keep feeding the hand.

But if you’re not seeing success, then you aren’t going to keep throwing more money at it when there really isn’t an opportunity for you to win.

Understand the Hand You’ve Been DealtMarketing does not always have a formula. But there are patterns of things that work.

We’re in an interesting time, and you need to ask two questions of the marketplace:

Is the market allowing you to be profitable at the moment?
Is the market allowing you to grow at the moment?

If you’re a real estate brokerage selling single-family homes, the market is not allowing you to be profitable right now in 2023.

You can throw in all the marketing dollars you want to try and create a profit, but the market won’t allow it. So, you may want to save that marketing spend and wait. Mortgage lenders are in the same boat.

On the flip side, property managers are well-positioned.

More people are renting because fewer people are buying. People will always need a place to live. So right now, it seems that the property management industry has been dealt a good hand.

Property Management Marketing is about Timing and Providing ValueConsumers get annoyed when they’re over-messaged. Property owners react the same way.

A surge and pause approach to marketing can ensure you’re getting yourself out there without driving away potential customers. Marketing can sometimes come off as desperate, where you’re doing more damage than good.

Good marketing is staying in touch with people who have been identified as a good potential target. You’re not wearing them out; you’re reminding them that you’re there and you’re ready to step in when they have a problem that they need solved. Marketing has to be patient.

Don’t Turn Off Marketing Just Because Times Are GoodProperty managers cannot afford to stop marketing just because they’re profitable and growing. You need to pay attention to the market and you need to have the solutions that owners and investors don’t even realize they need yet.

Those property taxes, for example, are going to be higher because property values are higher. Are you proactive in letting your clients know how this will impact their portfolios? Don’t wait for them to ask, be their source of information.

When you’re spending on property management marketing, you want the fastest ROI. But, that’s not always the best marketing. Take content marketing. You create content that provides value to potential customers, and you’re not pushy. It’s not a sales pitch, it’s providing information that could help your potential customer run their business better.

Some business owners will get impatient with that. But, marketing is an investment.

Offer something of value, and make sure that what you’re offering is something that the marketplace wants.

Your job, when marketing, is to address the pain of the customer. You’re offering a solution. You’re not just trying to beat another company on price.

What Is and Isn’t Marketing Spend?When you’re thinking about how much to spend on property management marketing, you’re assessing your return on investment. How does that look in your books?

Marketing spends will include any marketing professionals you have on staff, as well as agency work that’s done for you, billboard space you might buy, sponsorships, and online ads.

Greg also asks his clients to think about separating the marketing spend from the sales activities.

Sales and marketing go hand in hand a lot of the time, but if you have a business development manager (BDM) on staff who sort of does marketing, are you paying that person from your marketing budget or your sales budget? It’s tempting to bundle sales and marketing together, but that’s not a good practice.

Think about it. One hundred percent of the time, marketing precedes sales. There’s rarely a sale that happens without some kind of marketing. If you’re really effective at marketing, the sales process is pretty smooth.

Greg says that if you’ve used your marketing efforts to communicate the values and benefits your property management company provides, your sales will close easily.

Computing Marketing Spend EffectivenessNo matter the size of your business, understanding the effectiveness of your marketing efforts is critical for success. Calculating marketing effectiveness helps you identify what strategies are working and which ones are not so you can optimize your efforts and make informed decisions. By doing so, you can improve targeting, reach more customers, increase conversions, and maximize the return on investment (ROI) of your campaigns.

Is Customer Lifetime Value a Factor?How does Customer Lifetime Value factor into figuring out how good of a return you got out of your marketing spend? Well, it’s a bit complicated.

Although Greg believes in the value of Customer Lifetime (aka how long your customers stay with you), he doesn’t believe in how Customer Lifetime Value is typically used. You see, a commonly accepted way to compute this metric looks something like this:

Customer Lifetime Value = (Average Contract Value) x (Average Length of Customer Relationship)

Since it’s based on averages, it bundles all customers together into a simple statistic. It also implies that all customers are created equal. However, if you’ve been in business long enough, you know that this doesn’t reflect reality. Not all customers are created equal.

Customer Lifetime Value Is Too Static a MetricGreg believes that each customer’s value ebbs and flows over time. So when it comes to gauging marketing effectiveness, he believes that a simplified thing such as Customer Lifetime Value is not the most ideal metric.

This is because customer behavior is unpredictable, and thus the true value of a given customer can change over time. For example, a customer may be great when they first join but become less reliable later on; or a customer may start off as a poor customer but become increasingly valuable as time goes by.

Because of this, Greg believes that businesses should consider other metrics to measure marketing effectiveness.

Contribution Margin to Marketing Spend RatioGreg Crabtree’s preferred way to measure property management marketing effectiveness is by looking at a specific margin to spend ratio: computing your Contribution Margin (otherwise known as Gross Profit after taking into account fees and labor) and dividing it by the total marketing spend over the last 12 months.

Formula: 12-month Gross Profit / 12-month Marketing Spend

Get that ratio for the last 12 months, and compare it with previous periods to identify the overall trend. Is the trend going up or down? To him, looking at the trend line is a reasonably effective way of saying, am I getting more signal output for the dollar spent?

He goes on to say that even if the trend line is not going up, but the volume of business is increasing, then that can still mean that your marketing strategy is working. However, if both volume and signal rate are going down, then it’s time to go back to the drawing board in terms of marketing strategy.

At the end of the day, Greg says it’s not the dollar amount that matters – it’s the signal-output rate that counts. By paying attention to this ratio and tracking it over time, businesses will be able to assess their marketing strategies and see whether they are effective or not.

Focus on Overall Profitability of Your Property Management BusinessMarketing an unprofitable property management business is not a smart thing to do, yet a lot of business owners make the mistake of investing in owner marketing even before they’ve established profitability for the core business.

You have to ask yourself some difficult questions, and if you find yourself “putting lipstick on a pig”, then you have some foundational work to focus on.

A very important overarching metric Greg likes to look at is this: you need a $2 profit for every dollar of labor that you spend, regardless of what that labor does for you. If you can do that for your property management business, you’re in a good position.

Profitability Per CustomerUnderstanding your profitability per customer by year or by quarter is also important, Greg says. But keep in mind that customer lifetime value is not a constant yield. The profitability of a single customer is never going to be constant.

Expecting to make the same amount of money on a customer every single year is somewhat irresponsible. You might have to fire a long-term customer. If that customer is not profitable any longer, you have to let them go.

Pricing and Customer ChurnAnother factor that affects profitability for a property management company is pricing. What should you charge new customers versus what you currently charge your existing customers? As an example, cable companies will often dangle lower prices in front of new customers, and then they’ll raise the rates six months later.

Do increasing prices contribute to customer churn?

Maybe. But, that in itself does not keep a property management company from growing. You set a price, and that’s what your customers have to pay.

A lot of property management companies worry about adding on fees. Whether they’re fees for owners or tenants, there’s the fear that customers may leave. But if serving those customers at a lower price is not profitable enough for you, then it is actually worse for your business if they stay. So look at the overall profitability of the company, and don’t be blinded by misguided metrics such as door count or unit count.

In conclusion, a property management company’s marketing budget should not be determined simply as a percent of expected revenue. As a CPA, Greg Crabtree’s advice to property managers is to spend every marketing dollar that works. He also emphasizes the importance of treating marketing as an investment – there are risks involved, but if you deploy the right strategy and you are patient, then you will win at the end.

To learn more about Greg Crabtree and his book, Simple Numbers 2.0, you can visit: https://www.simplenumberscri.com/books

If you’re looking to get more property owner leads to grow your business, or you’re interested in boosting your property management company’s presence online, contact the Fourandhalf Marketing team via the form below.

First Name(Required)Last Name(Required)Email(Required)Phone(Required)Company NameJob TitleComments or QuestionsHiddenDate MM slash DD slash YYYY EmailThis field is for validation purposes and should be left unchanged. ABOUT MARIE LIAMZON-TEPMAN: As the Director of Marketing for Fourandhalf Marketing Agency, Marie considers herself as a problem solver and storyteller at her core. She’s passionate about giving people the knowledge they need to succeed. She has been in property management marketing since early 2015, and has authored many blogs about the subject. She also hosts the longest running property management podcast called “The Property Management Show” where she and Brittany Stephens have fun examining all the nooks and crannies of running a successful property management business. When she’s out of the podcast spotlight, she works with the wonderful Fourandhalf team helping property managers grow their business and juggles that with being a new mom.The post How to Set a Property Management Marketing Budget According to Greg Crabtree, CPA appeared first on Fourandhalf Marketing Agency for Property Managers.

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Dave Gorham is back as our guest on The Property Management Show. He is a co-founder of Realty Solutions in New Jersey, and we’re diving into his philosophy around customers for life, and how it’s important to align a business with the idea that you’re going to serve your customers in some capacity for as long as you can.

Dialing into Customer Lifetime as a Business ModelCustomer lifetime is an important part of Dave’s business. And, it was never intentional.

This focus grew out of the discussion he began having with clients about their financial assets and their exit strategies. It became part of the same conversation. As the company began to grow, Dave was acting as the Business Development Manager (BDM), and he would talk to potential clients about exit strategies. He’d be curious about why they were buying a particular property and what they planned to do with it. Dave found himself wanting to know what the client would do with a property if it became unprofitable and a financial advisor recommended letting it go.

This naturally helped him to create customers for life. He found it was necessary to figure out how to serve a client as a property manager for the lifetime of the relationship.

Curiosity really drove these conversations.

It was Dave, building relationships and being really curious about why his clients wanted a particular property and what they planned to do. If the property didn’t make money, was that his concern as a property manager? Or, did it depend on the owner’s strategy? They might have an equity position where they don’t need the cash flow now, but they know the zip code they’re buying in will lead them to a profitable sale in five years.

For other investors, there has to be cash flow. They invest in properties that will never provide the equity that others are looking for.

Scope of Services and Customer LifetimeA lot of those conversations resulted in owners not necessarily having the answers to those questions.

For Dave, this became an opportunity to build relationships and plan for a lifetime customer. He and his partner built Realty Solutions on just one property. Many of the owners who struggled to answer Dave’s questions about why they were investing or what their exit strategies were could relate to that. They were starting with one property, too.

Initially, these questions were curiosities. Now, Dave sees these questions as part of the conversation. If a potential customer cannot answer the questions, Realty Solutions can provide advice and guidance. If they can answer the questions, they’re getting a glimpse of how Dave’s company can help them succeed. They’re saying:

“This is what the journey can look like.”

This is part of helping new customers and even existing customers understand the scope of services that Realty Solutions can provide.

You don’t want a client looking for services elsewhere when you can provide those services yourself.

When you have the conversations up front, you’re better positioned to provide all the required services, and for life.

Knowing how to talk about what makes you unique is a huge selling point. What is the heart of what you do?

Customer Lifetime from a Sales StandpointThis can be part of your sales process. You’re trying to educate someone on how to think about what would make a good investment. Why one asset instead of another? You cannot just buy a property and wait to make money.

Dave acknowledges that this lengthens the closing cycle. There might be a client eager to sign up for property management services, and Dave sees the value in slowing down and gathering all the information. What if this goes the wrong way and the client decides not to hire them for property management?

Dave says there needs to be a distinction in the company that establishes at what point services start. Before they start, he is willing to give away everything. All the advice. All the information. All the education.

Why?

Because it makes them a better customer for life.

They’re an investor. We’re investors. This makes those clients colleagues.

Realty Solutions wants to put together programs and solutions. They want to build a network. If they give away all the information they have and then a client’s exit strategy changes or they decide to manage the property on their own because they’re more educated, Dave thinks it’s great. They haven’t hurt themselves.

Self-managers are not competition. They’re future clients.

As an investor, you know how overwhelming it is to lease and manage properties. They’ll be looking for help eventually.

Maximizing Customer LifetimeOnce a customer hires you to manage their properties, how can you maximize their lifetime customer value?

The goal is to get your investors to continue growing their portfolios.

The pandemic was a huge detriment to economies. But, Dave says it allowed them to get clear on who they are. They decided that improvements could be made to how they interface and communicate with clients. They also decided they wanted to elevate the subject matter that they were discussing.

At Realty Solutions, there was a rule five years ago that property managers had to talk to five clients a month. They were stressed and busy and had stuff to do every day. They were never thrilled with jumping on a call with an owner and not knowing what the owner wanted to talk about.

Some new efficiencies have been developed. There’s a lead property manager who has one job: to talk to clients. There’s time for critical thinking and a real conversation. The operational efficiencies and structures are in place to allow that property manager to talk to owners like they’re true clients. They talk about what they want to do with particular properties or new properties.

These systems are used for constant conversation.

There’s also been a new development where they’re selling one client’s property to another client. Realty Solutions promotes itself as a brokerage. In the last few years, they have not needed to go on the MLS because they have owners who want to buy the properties being sold by other owners.

That’s a win/win. It’s a double win-win for Realty Solutions, because they’re still managing a property that they already know and serve.

One of the major pitfalls in client retention is the lack of focus on keeping those clients. Property managers put a lot of time and effort into how to get a client. They work hard in getting that contract signed. Then, it’s easy to forget about them. But you have to change the context of the conversation. That’s where you’ll maximize customer lifetime value.

Repurposing Content to Demonstrate ValueOn the business development level, a lot of content is shared to bring in new clients. If someone is searching the web for rent collection information, the BDM at Realty Solutions will share a video or a blog on that subject.

Now, property managers are re-using that content to remind clients that they’ve had for years that they’re doing more than fixing toilets in the middle of the night on a Saturday. They don’t just knock on the door and ask for rent. They’re a valuable partner in the investment process. Any property manager who is not constantly talking to customers about the value they provide is doing themselves a huge disservice.

Another example of describing value is the owner benefit package that Realty Solutions recently introduced. A lot of owners opted out but then didn’t realize that they were getting something really valuable. There was a need to reconnect and re-offer the services. This helped the BDMs at Realty Solution to tweak their message on how to sell it. Talking to existing owners helped.

You cannot assume the message you’re intending is the message that’s landing. Have the conversations that will tell you what owners are hearing.

These conversations also help with conflict resolution.

Most conflicts come from miscommunicating or misinformation.

Investing in excellent software and professional video conferencing can help you leverage the ability to communicate. If there’s a conflict with a client, Realty Solutions will get in the room and have a video conference with the client. It’s like everyone is in the room together. You can look at people eyeball to eyeball. This, Dave says, levels up the relationship. It’s harder to be mad or misunderstood.

There’s also some new email etiquette that triggers in-person conversations. If an email goes out for the third time, the property manager knows that it’s time to stop and make a phone call. Something is being miscommunicated if three emails are required to sort it out.

Tracking Improvements and Customer LifetimeAccording to Dave, the customer lifetime value at Realty Solutions pre-COVID was eight years. A lot of things happened post-COVID and the market is now insane. There was a fear that a lot of clients would sell. Which was true. Except that in order to sell, a buyer is required.

It’s easy to panic about losing a client to a sold investment property. Now, it’s a celebration for Realty Solutions. They’re already talking about exit strategies. Their team can help. They can even keep it in their portfolio by selling the home to another investor.

Dave believes this will improve their customer lifetime value. In a few years, he believes it will be much longer than an average of eight years.

Sometimes, it’s not necessarily customer lifetime value you’re looking at, but property lifetime value. Dave remembers an owner who was in trouble. The owner sold Realty Solutions his entire portfolio, including one property in particular that the team didn’t want. So, they sold the property to an outside buyer.

That buyer then needed property management. After that year of owning the home, he hated the property too, and wanted it sold.

Realty Solutions put it on the market, and one of their clients bought it.

They were left managing a property they never wanted to own.

But, it’s an example of getting a lot of years off a single property.

Customer Lifetime and Business DecisionsFocusing on customer lifetime value will influence the business decisions you make.

For example, it will change how much you spend on marketing versus another acquisition.

Understanding customer lifetime value also impacts the way Realty Solutions approaches shedding clients that are not really working for them. Their clients need to fit their business model and participate in the whole picture. Dave is willing to take risks, but he’ll also make a quick judgment and pull back if he sees money being lost.

Spending on advertising, for example, increased over the last two years. Many companies pulled back on their advertising budgets. Realty Solutions did not. They saw where their revenue was declining, and they took measures to stop it. That included more robust advertising.

Now that they’re in a stronger place, it makes sense to pull back on advertising and sink more money into digital marketing.

Remember that marketing is not just advertising. When you’re thinking about property management marketing, your strategy is not to market in just one way. There’s a whole mix of things you can do. Some of them are foundational and some are advertising. You can shift the dollars in your marketing budget from one thing to another.

This is an important nuance.

A poorly run business does not help your clients. If you’d like to talk more about what you heard Dave discuss with us, please contact us at Fourandhalf. We’d be happy to talk about your lifetime customer value.

First Name(Required)Last Name(Required)Email(Required)Phone(Required)Company NameJob TitleComments or QuestionsHiddenDate MM slash DD slash YYYY CommentsThis field is for validation purposes and should be left unchanged. Contrary to popular belief, Brittany and Marie are actually NOT the same person – despite having a shared bio. Together, they host Fourandhalf’s podcast called “The Property Management Show” where they have fun examining all the nooks and crannies of running a successful property management business in this day and age. When they’re out of the podcast spotlight, their day jobs involve working with the wonderful Fourandhalf team helping property managers grow their business. Brittany and Marie have three shared passions: marketing, helping people win, and most importantly – Harry Potter.The post Creating Customers for Life appeared first on Fourandhalf Marketing Agency for Property Managers.

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On The Property Management Show today, we’re speaking with Andrew Smallwood, who is the Chief Customer Officer (CCO) at Second Nature and the host of the Triple Win podcast.

We’re diving into the difference between lifetime value and transactional value and how understanding that difference will help you have a successful property management business.

Building Customer Lifetime Value versus Transactional ValueThe conventional thinking around winning is that you have to get the biggest part of the pie. You have to focus on maximizing profits. Andrew is asking us to think about winning in new ways.

Here’s the technical definition of customer lifetime value:

Customer lifetime value is how much revenue you get from a customer over the lifetime of that relationship.

From a revenue perspective, that’s an appropriate way to define lifetime value. It’s a fine metric.

What gets overlooked is that revenue cannot be the only way you look at things. When Andrew thinks about lifetime customer value, he’s not only thinking about how he’s monetizing the relationship. Here’s what he’s thinking about:

What difference do we make for the customer?
What value are we bringing the customer?
How do we expand the difference we’re making and the value we’re delivering?

Increasing the value proposition and creating new value for customers will impact your lifetime customer value. If you make a bigger difference, you reap the rewards. If you start and end with how to monetize your relationship, this might lead to sub-optimal thinking and behavior; and, ultimately counterproductive results.

Lifetime Value: Keeping Customers and Residents and TalentProperty management thrives on recurring revenue. Churn is an acknowledged problem in our industry. We’re excited to see the new benchmark study but from the early results, we know it’s typical for a management company to lose 20 percent or 25 percent of its units. In the hot sales market we had through the pandemic, losing 30 percent or more would not be unheard of.

When customers are leaving at that rate, it becomes difficult to grow a business.

A lot of property managers experience getting stuck. Once you reach 150, 300, 500, or 700 doors, growth comes more slowly. Until you solve for the churn problem and you manage to be more effective with acquisitions, looking at lifetime value is your best way to sustainably grow a business.

Andrew says the question that needs to be asked is: How do we grow a relationship and bring so much value that people have such a great experience they would never leave?

At Second Nature, his team asks how to create a resident experience so good that residents don’t want to leave. They want to create an investor experience so good that investors don’t want to sell properties, they want to buy more. They want to create a team experience so good that the talent within the company wants to stay in the industry.

That drives the Triple Win philosophy.

Creating Retention Experiences While Making MoneyWe want to create experiences so good that people don’t want to leave.

But, we’re all in the business of making money.

Andrew says this takes some nuance and thinking.

Who gets to define what a good experience is?

Ultimately, it’s the customer. Are these experiences that people pay for? Are they experiences that people stay for? Are they experiences they’ll want to tell their friends about?

If the experience isn’t doing one of those three things, is it really relevant?

How can you create a generous market value that grows the value of a customer? This is what you really need to be asking. Often, we think about the economic relationship and the pie. The longer the relationship goes on, the more you can expect the economic pie to grow, but it’s growing at the same scale.

When customers are looking for more value over time, they’ll need a bigger slice of that pie.

For property managers, this means more management for less money. You need to create new value and different values that are not necessarily commoditized. If we grow a bigger pie, everyone will get more from it.

It takes a willingness of the person creating the value to share the value.

This can be challenging for people.

You made something happen, so you should recoup all the spoils of those efforts, right? That’s fair-minded. But ultimately, if you’re trying to build relationships for the long term, you have to be willing to share value and be generous with others. This extends your relationship over time.

Sales and Customer ConnectionsAndrew has been in sales for a large part of his career.

He understands the hyper-focus on closing deals and increasing commission checks.

But, he does not think about sales in a conventional way. Second Nature attracts a different customer to the company because of that.

Here’s what he believes about sales.

Sales should be about how you help people make good decisions. What difference are you making as a salesperson?

It’s not about commission. Everyone has been on the opposite side of someone who works on commission.

What you need to think about, when you’re selling, is how to solve your customer’s problem and whether you can solve it at all. If something your potential customer needs isn’t a solution you have, make a connection and direct them to someone else who can help.

Be clear on your strengths and first make sure that the customer has a problem you can solve.

A lot of decisions lead to success. At Second Nature, Andrew shows potential customers how they can help people make better decisions. They have ridden the rollercoaster hundreds of times, and they have learned some important things.

This is an approach people appreciate more. You can hit your personal income goals, but what you really want to do is help other people reach their goals. As a salesperson, you need to identify the people to whom your skills and products can bring value. Identify them quickly and then support them.

It behooves you to only sell people what they need. But, the sales culture is strong. Think about all those LinkedIn messages you probably get. They’re total strangers sending impersonal messages inviting you to schedule a meeting to talk about lead generation.

That’s throwing a dart and hoping it lands.

This might work for some people. It has not worked for Andrew, and it’s not what he encourages others to do.

Nurture the Relationships You Already HaveThink about getting the first date. Easy enough. But, moving into a long-term commitment takes effort. It’s the same with your customers. Closing the deal is a good first start, but then the relationship keeps changing. How do you determine what needs to be done with each customer?

Andrew says there’s no one right answer, but he does have an answer that may help.

Do you do something small for all customers, or do you do something big for just a few customers? Or, is it a matter of prioritizing your customers? Where do you focus and invest?

This, too, has to be values-driven. And, your business model may inform your decisions.

Andrew wants a great relationship with everyone who wants a great relationship. Not everyone wants the same relationship, however. Many customers are happy to work with and talk to you, but they’re in the relationship to get a specific business outcome. Others will form a legitimate, deep friendship with you.

Practice radical generosity. That’s Andrew’s advice. Be willing to make the first move, and see who is responsive to that first move. Decide how to create more and more value in the relationship, and look for reciprocity.

You don’t want any of your customers to feel left out. But, if you can establish what kind of relationship your customers want to have with you, it’s easy to get a sense of how you’ll need to nurture that relationship and provide ongoing value.

There’s a risk to doing nothing for anyone because you don’t want to offend someone. In that scenario, everyone gets left out.

Creating Customer Relationships that LastAndrew talks with thousands of property management company owners. We asked him what the secret seems to be…how do property management companies create good, lasting relationships with owners, investors, and residents?

Here are the insights Andrew shared:

The more tightly you identify your ideal customer, the more success you’ll have with that customer relationship. It’s less about demographics and more about problems. What are the problems that your ideal customers need you to solve? And, how can you solve them passionately? Focus your relationship building there. Create value for specific customer profiles, and you’ll develop great relationships. You’ll add value to those relationships. Instead of casting a broad net to bring in any fish out there, be specific about the fish you want to catch.
Focus on culture and hiring. Andrew loves asking, during employee interviews, for a story about when a potential hire made someone’s day. He’s heard incredible stories about what people have been willing to do, and when he hears about someone willing to invest in Moment Making, he knows it’s a good fit. Hire people who can build good relationships.
Avoid competitive negotiation. Andrew learned this from FBI Negotiator Chris Voss. Negotiation must be about trust-based influence. It has to be collaborative and empathetic. Tech in the property management industry is exciting, but it doesn’t solve for empathy. Think about how you’re handling interpersonal interactions, especially with difficult people. The team environment matters. If someone is incentivized on how many customer tickets they’ve processed per day, they’ll be as short with a customer as possible. What you need instead is a team member who can create the right experience and produce a good feeling.

Are you thinking that this all makes sense for a large company with a lot of resources, but not for a smaller property management company who feels the need to cast a wide net and bring in as many fish as possible?

Andrew says this takes us back to where we started the podcast today.

It’s not a question of a company’s budget and revenue. For example, a handwritten note costs nothing. A recorded video costs nothing.

At Second Nature, the goal is to be Relentlessly Resourceful. The CEO and VPs share hotel rooms when they travel, for example. The money they save on extra rooms can be invested into their customers. This is a decision they’re willing to make because it matches their values.

Radical generosity for customers is a value. They are not asking what’s the least they can do for their customer so they get the highest return. Instead, they’re asking what’s the most they can do for their customer to build this relationship.

That’s a key thought that we started with. The least we can do versus the most we can do. Many of the best relationship-building things do not cost money, or they cost very little money.

How are you making people feel? What can you do to show your care, passion, interest, and curiosity?

Continue to make an impact and stay close to your customer. Think about how to align your resources so you can bring the most of that to your customers. Do the best work of your life and build the best relationships.

That’s what Andrew and the team want to accomplish at Second Nature, and you can do it too, with a small budget or a large budget.

There’s a lot of good information here. If you have any questions about this show, please contact us at Fourandhalf. And, if you haven’t checked out Andrew’s podcast yet, you should. Look for Triple Win on your podcast provider of choice.

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Andrea Hardaway from First Property Management is blazing a path of success as she has published her book, Property Management Freedom, and recently gave an inspiring talk on the topic of market consolidation at PM Grow Summit 2022.

Despite hefty acquisition offers by larger management companies coming in their direction, Andrea and company remain determined to move forward with independent operations – something we wanted to explore more about!

Let’s take a deeper look at what makes them so successful.

Property Management Offers versus Property Management ConversationsAndrea and her two partners started First Property Management seven years ago in a Panera Bread. With no prior experience in property management, but a passionate drive to succeed, they steadily built up their portfolio – now managing nearly 1,000 doors! Team members are loyal and talented and they have an ever-growing list of clients and residents who trust them to keep things running smoothly.

With such a successful business, the leadership at First Property Management could probably make a lot of money by accepting one of the many offers they have to sell the business. So, why do they keep turning them down?

Andrea is clear that she’s not turning down conversations. It’s smart to have conversations because there’s always something to learn.

But, selling her property management company is not something she and her partners are ready to do.

There’s a lot that’s happened in the last few years, and a lot that’s still to come.

Here’s why Andrea and her partners aren’t ready to sell:

They have a great business environment which allows them to be free from the day-to-day operations of the business.
The portfolio at First Property Management is growing. They’re managing almost a thousand doors and preparing to expand from Chattanooga throughout Tennessee and into Alabama and Georgia.
A lot of business operations are being streamlined and automated.

There’s more going on that can’t be shared yet. All of those things are increasing the value of their company. They’re also increasing and the value of what they bring to the property management industry.

Andrea and her partners want to see where those things go.

Beyond Customer Retention to Brand AmbassadorsPart of a company’s success is retaining clients and employees. It’s one thing to retain someone by keeping them from leaving. It’s another thing entirely to make them a brand ambassador.

That means something to Andrea’s company.

First Property Management has achieved incredible success without relying on traditional marketing and advertising. Instead, their growth relies entirely on organic relationships.

When your growth and your success is based on relationships, you need a lot of trust, and that trust has to be protected. Their clients refer other clients to them. Several owners on the west coast talk to their colleagues and when those colleagues are ready to invest in Andrea’s market, a referral is made. By building strong bonds with both customers and employees, FPM has managed seven years worth of sustained development – proving how important it is to invest energy into creating meaningful connections when striving for success!

Here’s how Andrea and her team turn owners, residents, and employees into brand ambassadors.

Keeping Property Owners and Investor Clients HappyThe client base is grown from relationships.

Andrea and her partners Brian and Randy also invest in properties themselves. This means they’re not a fee-heavy property management company. They have fees, of course. How else would they stay in business? However, there are certain things they’ll never charge their clients for.

One example is maintenance. A lot of property management companies use maintenance as a profit center. Andrea says she understands this; it’s a great way to make money and sustain a business.

At First Property Management, however, there is never an upcharge for maintenance. The vendor’s invoice is passed on directly to the owners so they can see that they’re paying exactly what the vendor charged.

Their clients trust them and value their commitment to transparency. They’ve built a reputation for effectively managing properties and helping owners and investors build wealth and grow toward greater financial success. As a result, not only do clients stick with them, they’ll even refer others to First Property Management.

Residents, not TenantsAt First Property Management, they understand that a home is more than just four walls and a roof – it’s an essential part of living. That’s why Andrea and the rest refer to their tenants not as renters but rather residents.

This messaging is important in communicating with residents. When a property manager sees a house as a home, there’s a different sort of relationship in place. When property managers understand that a home is just one part of a broader life, the relationship deepens. Property managers at First Property Management believe in moving work orders along and meeting the needs of residents because a home is a foundational part of a person’s life.

When FPM first launched their resident benefit package, there were some mixed reactions from tenants. However, when it was presented as a way to improve their day-to-day living in their home, the majority of them embraced it.

Keeping a Property Management Team Happy and IntactAndrea wants her employees to be so happy about arriving to work that they skip to the front door, but she understands the work isn’t always easy.

Property management is a difficult industry to be in. It’s not super complicated, necessarily, but there’s so much involved in it, and that action never stops. Andrea wants to create an atmosphere where team members are joyful.

To this end, Andrea works closely with the Director of Operations, who oversees the day-to-day business. She is realistic with her expectations. She tells her team when she’s unhappy about something, but she also tells them when she’s excited about something.

There are a few things Andrea believes help her retain her best team members.

First, she offers one on one meetings with each employee. This is their time to talk about whatever they want – things they are happy with, things that they think could be done better, whatever. Any conversation topic stays between her and them unless it’s critical and needs to be shared. In that case, Andrea checks with the employee and makes sure that they are comfortable.

Next, she conducts an internal survey every six months. This allows her to get a pulse about whether people support and rally behind the business or whether they’re detracting from it. Specific questions are asked about the company itself and its performance. She wants her team to know that she’s listening to concerns.

Finally, she has team-building days that take place in the field. Not every person who works in property management gets out there. They work in offices or from homes and they don’t always see the properties that are being managed. She does team building events where the office closes and everyone participates in some group activity. Recently, it was a three-hour cooking class one morning. After class and lunch, they went on a van tour of the homes that they manage. They went inside to tour the homes that are vacant or being turned over.

The point of this? So her employees could see these places not just as an address but as a physical space that someone will call home.

If you’re not already doing something like this, you might want to consider it.

Investing in the CommunityPart of Andrea’s strategic plan is community engagement, but it’s about more than growing her business. Andrea and her partners truly care about the impact that they can make on their community.

Here are some of the things Andrea is working on individually and with her business.

Real Estate Development and Affordable Housing NonprofitsAndrea has joined nonprofit boards related to real estate and development and affordable housing. Chattanooga Neighborhood Enterprise and the Community Foundation of Chattanooga are two such organizations. She’s also on the board of the Chattanooga Design Studio, which focuses on urban design and development.

Eviction Protection InitiativeAndrea is on an advisory committee for Eviction Protection Initiative (EPI). This is a surprise to a lot of people since property managers do most of the evicting. But, she takes no joy in evicting people. Inspired by Dan Heath’s book Upstream, she believes that it is better to get to the root of problems early rather than just solve symptoms one-by-one. She understands there are correlations between factors like late payments and utility shut-offs which can lead to eviction down the road; so with EPI, they’re looking upstream – finding indicators before negative outcomes occur and guiding those affected onto more secure paths towards stability.

Collaborating with Affordable Housing DevelopersBy partnering with private developers, First Property Management is working to address a difficult problem – making affordable housing available in Chattanooga. But it doesn’t stop there – they’re also encouraging their own residents to consider homeownership by providing a robust set of benefits and assistance.

The company is passionate about this, and Andrea wants to see owners and brokers encouraging meaningful action in their local communities too. Why just make real estate deals? Why not make deals that make a difference?

Not only does community involvement benefit those being served, but it also impacts retention. The more they are in the community, the more exposure their company gets.

This community investment shows up in clients and team members, too.

During COVID, many people began having financial issues. They were losing jobs and not getting paid. There was an eviction moratorium and people were getting behind in rent. One of Andrea’s clients paid the rent for some of his residents. He took money out of his pocket and put it towards the rent he would have collected so the property managers and his own company got paid, even if it meant a loss in profit for himself.

He did that because of the way he views people. We are all connected in some way, and that matters to Andrea. These are the clients she and her partners want to attract. If they’re not that type of client now, she hopes they grow into that.

There is an opportunity to do very well financially while doing a whole lot of good in the community. They don’t have to be separate. You can be motivated by money and committed to the community.

Andrea also suspects that one of her employees paid someone’s rent when they fell behind. She’s not supposed to know that (and would never require an employee to do it), but she thinks it’s a beautiful display of care and optimism.

But do not mistake that optimism for naiveté. This is simply the culture Andrea feels responsible for creating.

How to be Profitable in Residential Property ManagementAre you wondering how Andrea remains profitable with all of this in place?

She affirms that profitability is important. It allows her company to stay in business and create new opportunities.

Profitability starts with company structure. She and her partners are living the lives that business owners should live. They don’t have to put in 40 hours at the office. They can leave and come back knowing that everything is running smoothly and they won’t miss a beat.

They have a great team and they have KPIs to manage the business. Along with profitability, they look at client retention each month and make adjustments as needed.

There’s a financial reserve in place, too. The company has a capital reserve in place in case the business gets in trouble. Her team gets paid. The partners get paid. Taxes are paid. There’s an operating margin and a budget that they work to. She recommends reading Profit First by Mike Michalowicz, which gave them the framework for their cash management solutions.

First Property Management is always working towards remaining profitable. You don’t have to choose between making money and doing good. But, as a property management business owner, you also need to recognize when it is time to step back and take of yourself so that you don’t burn out. If you and your team are not burned out, then you can be better advocates for your business, your clients, and your community as a whole.

Andrea literally wrote the book on this – Property Management Freedom: Grow Your Property Management Company without Burning Yourself Out.

If you have any questions about this podcast, contact us at Fourandhalf.

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We’re back on The Property Management Show with Kathleen Richards. In Part I, she shared her story about buying and selling a property management business, and how she introduced herself to her new employees and clients.

We ended the chat talking about toxic owners and how to deal with them while acquiring a business.

Property Management and Customer ServiceGiving bad owners permission to leave is helpful when you acquire a new business. And, if you don’t call people out on their bad behavior, you’re telling them you are okay with it.

Don’t do that.

Make sure you can distinguish the bad owners from those who simply need a new strategy.

In her first six months of taking over the business, Kathleen had to fire a couple of owners that were not working out. Overall, she was committed to being proactive with people and letting them know that she was there to help.

One owner had extremely high expectations. Kathleen is fine with high expectations, but what she didn’t like was his habit of bringing up every mistake that had ever been made with his properties. These are problems that pre-dated Kathleen, but he hammered away at them anyway.

Kathleen told him that she represented a fresh start. She suggested that they tour all of his properties together. They did that, and then they sat down over lunch and discussed what he wanted to do with each property. It was a meeting of the minds.

It delivered a great outcome. Everything was reviewed together and they agreed on a course of action. Moving forward, he agreed to let Kathleen do her work without bringing up past mistakes where everything went wrong.

It was about discussing what could be done together, and the relationship improved dramatically from there. This owner became a favorite client and a dear friend.

Setting expectations is an important part of the acquisition process. Tell the owners who you are and what they’re getting with you. They need to know how you operate.

Communicating with Your Employees While Acquiring a Property Management BusinessBe positive when meeting with employees. Invest in the time it will take to sit down and talk to them. You don’t want to give superficial assurances that everything will be okay. This is new for you, and you’re excited. But, the employees you’re meeting with are likely scared.

Connect with employees by asking a lot of questions.

Listen to what they’re saying.

Get them to understand that you need each other.

Seek their advice.

Ask for ideas.

Find out what their career plans are. There may be room for pay increases. Discuss a performance plan. Show them that you’re looking to work with people who are excited to be contributing to the company. When you come into a new team from a place of compassion, you’ll earn their trust.

Employees leaving is not usually the problem.

The problem is that they’re stuck in how they’ve always done things. “That’s not how we do it” is commonly heard, and there’s often resistance to some of the change that’s coming.

Getting employee buy-in will matter. Performance growth plans will matter.

Find out how to work with your employees. With remote working, you might find out that someone is starting to care for a parent. Why not see if they can work from home for some hours? If you’re willing to work with your people, you’ll see they are bringing a lot to the table.

What can you bring to that table?

Have a meeting of the minds.

When you’re talking to your employees as a new owner, ask more. Tell less.

You also want to make space for emotions. It’s okay to be sad when the company is sold. Be compassionate and acknowledge their grief.

Retaining and Restructuring TenantsHow can you retain good tenants and set boundaries with problem tenants?

Problematic tenants need to be dealt with head-on. Enforce your rental agreement and remind your tenants about what the rental agreement says. You cannot just evict nasty tenants anymore in California. You need just cause.

People skills are necessary when dealing with tenants. Here’s an example Kathleen provided:

A tenant was late with rent every month. She would come in and pay $200 and then $400 the next week. Obviously, the prior owner had allowed this. Kathleen met with her at her home and realized she was living in a three-bedroom home all by herself. It turned out this was the home in which the tenant raised her children. Kathleen suggested finding her a one-bedroom with lower rent. It was less of a financial burden.

She could have said no to partial payments, and she would have been within her rights. Instead, she began asking questions and finding out a better way.

Owners, tenants, and vendors typically want to do the right thing. But maybe the owners you’re working with have had multiple property management companies, and they’re scarred by previous experiences. When you let people know how you can have a successful relationship, they’ll rise to the occasion and be willing to participate.

Another example Kathleen shared is from 2009 when she had a tenant who was downsized from a job in Silicon Valley. Instead of evicting him because he could not pay rent, they put together a plan. He moved out as soon as it was possible, and a new tenant moved in.

There is always a solution as long as you can have a conversation and problem-solve.

Talking and communicating is where it starts.

When you communicate with residents, they feel like you’re there to help them. Remember that you hold a lot of power over your tenants. You are connected to the roof that’s over their head. Try to come to them from a perspective of wanting to help.

Solve problems together, Kathleen advises. This is what has worked for her.

Another example:

A tenant was a nurse working nights and sleeping during the day. He kept calling because other tenants were noisy and he could hear the kids playing all day while he was trying to sleep. They weren’t doing anything that isn’t normal, so Kathleen had to suggest that living in a fourplex might not be the best idea while working nights. She helped him find a unit with a bit more quiet.

Kathleen is simple and straightforward. Honesty and integrity are her two main business values, and she tells all prospective owners that. If they want to get $6,000 a month in rent from a studio apartment, she’s not going to lead them to believe that she can deliver that.

Building up trust is important as a new business owner. You have to elevate your communication.

Scaling the Service Model for Larger Property Management CompaniesThe examples Kathleen has provided are perfect for a small business when it’s possible to reach out to individuals. What if you’re buying a giant business and you can’t really just pick up the phone and have those conversations directly?

If you’re buying 1,000 doors or 2,000 doors, that’s not your role. You shouldn’t be calling every owner.

Understand your position in the company. In a large business, you have departments and teams and an organizational chart (pleasehave an organizational chart).

Basically, you have a more defined structure to your business. The owner communication will be up to your property managers, who you need to trust to speak to their owners the same way you would.

You’ll need to empower your team.

Kathleen doesn’t hire anyone without knowing how they handle conflict and challenges.

In a larger company, make your property managers the experts. Defer to them when it comes to doing what they do best. This empowers them when they need to handle things.

Put together a monthly training session with your staff about expectations and customer service once you’ve been in an ownership position for a while. Find out how they do things. Train them to become leaders.

Very successful companies like Coldwell Banker and Starbucks and In-and-Out Burger all have specific training programs in place for employees. Once you grow from a small business, you have to scale the training and the mentoring. Universities can exist within companies.

Don’t show up as a know-it-all when you’re a new owner. Get down on the ground floor and always be in a place where you’re assessing how you can improve. Make your staff your leaders.

What about the future of property management acquisitions?

Many venture capital companies are buying everything up. But, there’s still a place for smaller companies. In the marketplace, there are always going to be owners who want to work with smaller property management companies. They appreciate the unique service.

Your business model is not going to go away.

If you have any questions about how to acquire a property management company with ease, get in touch with us at Fourandhalf and we’ll talk further about this podcast and how we can support you.

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The prospect of acquiring a property management business is very exciting.

The hard part comes when the deal is done. How can you handle the baggage that comes with a book of business? How do you protect yourself from the potential loss of owners and employees?

Our guest on today’s podcast has personal experience with this. We are welcoming Kathleen Richards, also known as The Property Management Coach. She’s also the brain behind PM Made Easy.

There’s so much to talk about with Kathleen that this is a two-part podcast. Let’s jump into the first discussion.

Acquiring a Property Management Company: How Kathleen Did ItIf you’re not aware, before she became The Property Management Coach, Kathleen was a successful property management business owner. She did not start from scratch. In fact, she acquired Portola Property Management before it was even called that. The company she bought was an established business with a decent door count.

Owners did not know that Kathleen had acquired the company right away; she was introduced as a new property manager. It was rolled out as the former owner being semi-retired and pursuing other things.

Kathleen took a few immediate steps:

She sent out an email introducing herself. She explained she was excited to be part of the team and shared her background and experience.
She invited any owners to call her directly with questions.
She began calling owners and personally introducing herself to them.

This portfolio had a lot of clients who had been with the company for 30 years. They were older and the internet in 2005 was not what it is today. These personal phone calls were necessary (We didn’t even have smartphones then).

At the beginning of her ownership, Kathleen did not make any changes to the way the business was run. Continuity was important.

Acquisitions and EmployeesThe person Kathleen bought the business from did not tell his employees there would be a new owner. The secretive nature of the transition made things difficult. She was introduced to the staff as the new owner, and there was some stress.

Kathleen reassured them quickly. In the first week, she let the part-time leasing agent go because that employee had been lying to owners.

The company was structured as a real estate office with a property management division. There were four property managers, each with their own portfolio of business. Most of them were Realtors. One person was a full-time property manager. There was also a full-time assistant who was very valuable to Kathleen as she took over. They discussed her career goals, found money for a pay increase, and Kathleen supported this employee in getting her license and moving forward with the work she wanted to do within the company. This employee knew the owners. She knew how things worked. It was important to keep her on board.

Before buying the business, due diligence was essential. An outside CPA was brought in to look at the books. Kathleen looked at the properties on paper and drove by the homes.

It’s a different situation when you only have a couple of employees. But, even if there are 20 employees, you have to approach the business you are buying with excitement. Take time to talk to each individual employee. Reassure them as a group that you’re going to look to them because they’re the experts.

Cultural fit is critical. If you’re buying the business as your starting point, you have more space to keep things as they are. If you’re buying the business and incorporating that business into your own existing business, you have to make sure there’s a culture fit. If your existing business works in a way that’s 180 degrees different from the new business, you can expect some friction.

When Kathleen ultimately sold her company, she was told the new owner didn’t need a bookkeeper. It was painful for Kathleen to let her own bookkeeper go, but she wanted to be the one to do it so she could offer severance and support.

Employees will want to know where they stand.

Before You Acquire a Property Management Company: What to Look AtKathleen consults with property managers preparing to buy a business. Here’s what she tells them to find out first:

Look for pending lawsuits.
Look for recent lawsuits.
Review all the books. If you’re not an accountant, pay someone to audit them. You don’t want to bring on a business that’s going to cause financial problems for you as a new owner.
Check the actual files. Are these quality accounts?

Kathleen worked for a property management company for a little while to ensure she liked the business, and she was surprised when the broker bought a whole book of business that turned out to be junk. They were crappy properties with owners who didn’t care. The new owner had to close out every door.

This portfolio was bought from a friend. Deals are often done between property managers, but remember – this is still a business. If you’re buying from a friend or colleague, do your due diligence anyway.

If the company runs well and produces cash and the employees are running it so that you don’t have to be hands-on, you’re in a good position. Compare this to a company that needs a lot. Maybe it’s a sole proprietor who doesn’t want to upgrade their software. Kathleen coached a client who inherited 200 doors when her father passed away. Everything was on paper. It was an old-school ledger and not even an Excel document had been used.

Know what you’re getting.

Find out if the owner is willing to stay on in some capacity. Is there a clawback clause? If you buy a property management business with 100 doors but by the end of the year, owners leave and you’re left with a business that has 90 or 75 doors, you’ll want to get some of that money back.
Look at the systems a company has in place. What kind of software do they use? This is going to matter if you’re integrating theirs into yours. It gets tricky if you’re meshing two businesses together.

Minimize Losing Owners During an AcquisitionReach out to owners right away.

You should not be a surprise to them.

You can be proactive. Email the owner-clients and introduce yourself as the new business owner. Or, don’t introduce yourself as the owner. Call yourself the vice president or the property manager. It’s up to you.

Don’t make dramatic changes to the business because it scares people.

When you start doing things that will help – you minimize owner churn.

Improve communication. Owners will like that.

Share ideas for increasing revenue. Owners will love that.

When owners see early improvement with you, they’ll be less likely to leave.

Here’s something that may feel counter-intuitive: invite some of your owners to leave.

Kathleen knew early on that there were simply some owners that she wasn’t going to get along with. They were rude, verbally abusive, or simply difficult. So, she went straight to them and told them that she was the new property manager, and it was okay if they decided to take their property back and either manage it themselves or look for a new property management partner.

She simply asked for 60 days of notice so she could provide a smooth closeout.

Kathleen knew that these problem owners would only find some simple or stupid reason to blow up at her and fire her. She wanted to avoid that, so she gave them the opportunity to leave. She said it was okay. Many of them took her up on that and were relieved they could leave without conflict.

Does it mean losing business? Yes. But, you’re exiting the relationship on a positive note rather than a contentious one.

You won’t say this to everyone. Only the owners that you know won’t work out. It’s okay to close them out.

That’s what we have for Part I of this podcast with Kathleen Richards. Contact us with any questions. And make sure you join us for Part II.

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Retaining Employees and Clients in a Way that’s Purposeful and Profitable:A Chat with Jan Leasure from Monterey Bay Property ManagementWouldn’t it be nice if you had a team who was in it for the long haul?

How do you define the long haul in property management? Is it 10 years or maybe 20 years?

What about 30 years? Is it possible?

It is. We’re talking to Jan Leasure, the owner of Monterey Bay Property Management. Her company has a great track record for employee retention, and they also do well with client retention and profitability.

Employee Retention – Why Do They Refuse to Leave?Jan has employees who have been with her for decades. Thirty years, even.

What’s the secret?

There are a couple of things that impact this type of retention rate:

Choosing the right person the first time. When you hire right at the beginning of your work relationship, you can count on longevity. This does not necessarily happen on sites like Indeed and ZipRecruiter. You’ll find great people there, but Jan has noticed that she has better luck hiring people that she knows in other ways. She looks for qualities and personality traits that she believes will match her company culture.

Jan has turned a golf pro into a property manager. She’s also hired a former nail salon owner, a former restaurateur, and a former physical therapist. This doesn’t always make sense, but their professional backgrounds aren’t as important as their fit with the company. It’s been highly successful. Choosing the right person at the beginning is a good way to start.

Another tip to success is creating the right job for the right person. Over the years, Jan has created positions whether there’s an opening or not. It’s expensive to do that, but it means that when growth came quickly, there was a deep pool of talent to choose from in the company already.

Jan has never had a job opening at Monterey Bay Property Management.

She invests in her team before she has the work, creating opportunities and trusting that the work will show up eventually.

Identifying the Right Employee and PositionFor Jan, there is always wisdom in starting new people at the front desk.

Everyone coming into the company starts there. It works well because they are on the firing line from the very beginning. They’re taught to answer the phone, find out what the person needs, and then ask that caller to hold while the right answer is sought. That shows a new employee how the wheels of the company will turn.

People learn by doing. You can give them a procedure manual or a checklist, but just by listening to the questions and finding the answers, a lot is learned. That’s training.

When Jan meets someone out in the world, what is it about that person that makes her want to hire them?

She hired the woman she saw in the restaurant time and time again because of the person’s sparkling personality. She was always on an even keel no matter what was happening. The temperament was always the same. That’s the attitude that’s so desperately needed in property management. We have to be unflappable. Customer service skills are much the same.

How do you approach someone not even looking to work for a property management company?

One day when Jan was being waited on by this woman, she engaged her in a conversation about how long she had worked there. Jan asked if she had ever thought about doing anything else. She pitched property management and they kept talking about it.

The interview process is different from any other typical job interview. Jan wants to know how they will fit into the company culture. They discuss problem-solving skills and talk about challenges. Once that step is complete, you hire them and you get them to a place where they feel like they can see themselves working there for 20 or 30 years.

Retaining the Employees You’ve HiredOnce you have the right employees in place, you need to lead them to the decision that they want to stay with you for the long term. This is done by understanding what each individual needs.

Before she became a real estate broker and a property manager, Jan was a teacher. One of the skills teachers have is the ability to evaluate each student based on their individual skills and abilities. From there, they can meet their individual needs.

She transferred those skills to her work in property management, and it helps her retain employees.

After someone has been in place for a while, they talk about what they like and what they don’t like. Adjustments are made.

Jan can clearly remember a specific situation where she thought an employee would make a great reservation agent for her vacation rental operation. But, she had no interest or intention to do that. The employee is still with the company, however, as a bookkeeper.

Some people are fine without a periodic check-in and other employees need that ongoing conversation. Instead of having one process for everyone, Jan nurtures and coaches her team individually, depending on their unique needs.

Compensation and Employee RetentionWhen you’re willing to restructure things to meet the needs of your employees, you’re more likely to retain them. People have children while here. They may need to work from home. They may want to bring the baby into the office.

The ProfitCoach team believed Jan over-compensated her employees when it came to salary and money. She agrees that her salaries are probably some of the highest in the country for what they do. She doesn’t mind. She sees it as trading longevity for compensation. It’s a math problem, and she’s willing to work out the math.

Monterey Bay Property Management is very profitable. The balancing act is necessary; if she’s spending on employees, she cannot spend in other places.

What surprised Jan was that when she asked employees what they valued most, she learned that flexibility is more important than money. They want to be able to work from home or from the office. They want to choose their own hours.

Jan rarely says no to any requests for time off. In fact, she wishes her employees would take more time off.

This is good business. When you give people a little bit, they give back a lot. It builds tremendous loyalty.

Employee retention translates into owner retention. The company does not typically leave because they’re dissatisfied or looking for a better deal. When they leave, it’s because they’re selling the property or moving into it themselves.

Outrageous Customer ServiceT. Scott Gross wrote a series of books years ago surrounding the idea of providing positively outrageous service. The idea is that you go the extra mile, do the unexpected, and provide great service as a result.

Here’s an example from Jan:

One year, on Thanksgiving, a tenant’s oven was not working. The tenant was trying to prepare Thanksgiving dinner. Jan was able to send a repair man out to look at the oven, but the part could not be ordered until the following Monday.

That wasn’t going to work for the tenant.

Rather than apologize and do nothing more, Jan had a solution.

She took the tenant’s turkey to her house and cooked the bird for that tenant.

People don’t forget that. It’s an example of positively outrageous customer service, and that story is still being told today by the tenant and anyone else who was involved.

Answering the phone doesn’t seem like it should be outrageous – but in this day and age, it is.

Find your own way of providing positively outrageous customer service. You’ll notice a change in your retention.

Jan also writes a newsletter every month for her owners. It goes out with their statement. The newsletter isn’t fancy; it’s not in a prescribed template. It’s simply information on what’s going on in the market and what she expects to happen. She’s an investor too, so it’s written from that standpoint.

Employees and ProfitabilityHere’s an example of outrageous customer service for her employees: Jan has helped some of her employees establish their own property management businesses.

You might think that in their small market, this cannibalizes her own profit.

Yes, and no.

She did cannibalize her own portfolio to help her employees get started. She leased them some of her accounts, which meant a small fee was still coming in on those properties.

Monterey Bay is a small area, but there’s enough business out there for everyone. Jan wants to help train the next generation of property management leaders. She’s launching them into the market and into their own businesses.

It’s another strategy that supports retention. Employees see Jan supporting their teammates. They know she’ll be there for them when they need help. Employee loyalty is something every business should aspire to.

It’s a question of how fulfilled you want to be.

Jan says she’s fulfilled by this way of doing business. Some people grow for growth’s sake. They want to see how big their business can get. That doesn’t have to be you. Jan wants to grow so she can help others do great things.

There’s not just one way to do things.

Jan acknowledges that her way is not for everyone. She has enough and she’s living the quality of life she wants while facilitating success for others.

If you’d like to talk about managing employee and owner retention or if you have thoughts on today’s podcast, please contact us at Fourandhalf.

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Managing Properties in One of the Country’s Toughest PlacesWhat does it take to get an amazing reputation, not just on Google, but also on Yelp? Our guests on the podcast today are from R.E.M. Residential. It’s one of the highest-rated residential property management companies in all of New York. They have not had a negative review, not even on Yelp, since 2017.

How can they manage in one of the toughest markets in the world while keeping people happy without people-pleasing?

We’re about to find out.

Introducing R.E.M. ResidentialR.E.M. was started in 2000 by Rick Elezi. Rick came from an extensive real estate background. He started out as a porter, and he also worked as a doorman and handyman. Shpresa Elezi met him because her dad was a resident manager next door to the buildings where Rick met. They began doing property management in 1995, and five years later, R.E.M. was born.

Rashaad Middleton is the company’s director of management. He started with R.E.M. about 14 years ago as a broker. Ten years ago, he became the director of management. He’s been a landlord for two years, so he understands both sides of the rental relationship. He’s proud of the retention rate of the company, both with clients and employees. Fourteen years in, he’s happy.

Lara Lapysh has been with R.E.M. for seven years. She started as a broker and has been growing the condo department. She specializes in condos and co-ops. R.E.M., she says, is a family. The industry has a large turnover rate, and she enjoys being an old-timer in the company she’s committed to.

How To Maintain Zero Negative Reviews in a Thankless IndustryWe know the property management industry can be thankless.

The concept of property management is simple but keeping up with the concept is hard. It’s really just about meeting needs and exceeding expectations.

We all have basic needs wherever we happen to live. We want to know that things will work. Doorknobs turn and there aren’t any leaks. When you go to the bathroom, you want to know that the bathroom is going to work the way a bathroom should work.

When clients or tenants approach the team at R.E.M. Residential, the goal is to give them what they want. It’s not just fixing what needs to be fixed. The team helps them solve problems. They’re bringing a better experience to the people they work with.

Property managers cannot control everything. Some situations have no resolution and no one is perfect. But, when the focus is on relationships and innovation, exceptional customer service can be achieved.

One of the main complaints people have is that they cannot get to a live person when they’re making a phone call. When property managers and their teams are willing to talk to people, those clients and tenants will feel updated. They’ll feel taken care of. Sometimes, that’s more important than an instant resolution to a problem. People appreciate a personal touch.

Spresha says she has had disagreements with people, and those people recommended the company to other people anyway. The disagreement is not the problem. As long as you’re communicating and sharing your expertise, even your adversaries will relate to you.

Layers of answering machines and automation do not resolve anything.

There’s a lot of disagreement in property management. It’s part of the job. The team at R.E.M. Residential is dealing with sophisticated, educated, and successful people. They might tell their property managers what they want, and those property managers will respectfully disagree. This is the job.

What makes the relationship work anyway? Communication. Common ground can be found. A perfect record of reviews is more about relationships than resolving management issues.

Keeping Relationships Happy When People Are Not HappyYou cannot make everyone happy all the time.

The key to keeping the relationship happy is getting back to people. Right away. Don’t promise you’ll call back in an hour and then wait two days to call. Even if it’s bad news, communicate immediately. Be respectful. Use soft words. Treat tenants and owners and building board members like humans. Guide people in another direction if they can’t get what they want.

Property managers can establish better relationships with tenants by explaining that they need to implement what their owners require. You’re the liaison between landlords and renters. You have to get to know the people you work with and show them that you’re sticking around when it comes to service. For example, Rashaad has rented apartments in many of the buildings managed by R.E.M. People know him. He showed a lot of his fellow tenants an apartment. They remember he was easy to work with, and they remember when he got them a deal. When those tenants find out he’s also working with the management company, they know that he understands their needs.

Your contract with your tenant does not end when the lease is signed.

The job of a property manager is to advocate for everyone; owners and tenants. A little bit of effort makes a big difference to your tenants. A human element is necessary, even when important things are automated for efficiency and accuracy.

When you work towards tenant retention, remember that you have tenants who love to communicate online and via text but you also have more traditional tenants who want to pick up the phone and have a personal conversation. Be prepared to use the apps but also have the conversations.

Reach everyone.

Automation and Personal Relationships: A Both/And SituationThere’s a place for automation. A need for it.

Specific things can be automated when the human element is not taken away. Tenants can pay rent online and schedule maintenance through an online app, or they can call their property manager and talk about a problem that’s happening in their apartment.

Be flexible. Make sure both options are there and make sure your tenants know that both options are there.

The team at R.E.M. Residential provides their personal phone numbers to owners and tenants. No one has abused that privilege yet.

There’s absolutely a need to automate. You cannot manage properties in 2022 and 2023 without automating. Stay ahead of the tech curve and invest in what you need to run your business better.

Ultimately, however, you have to remember that a property manager’s job is to be a human and to talk to humans. No app will resolve a conflict between seven people in a room.

Balancing the workload at R.E.M. is largely about instinct and knowing how each team member works best. Brittany calls it “a vibe.” No one is overloaded. Personalities are matched to properties and clients. Property managers are asked if they have time to take on another building or another client. They’re not assigned new work without consent.

No one needs to have their time wasted or compromised.

It’s easy not to respond to people who are calling for help or to complain. Most of your clients understand that a large part of your day is putting out fires. You’re a property manager. If you tell them that you’re prioritizing what you need to do, and you’ll get back to them about their situation as soon as possible, they’ll be okay with it. They’ll know they’re going to get what they need.

People want to be heard. They don’t want to feel like they’re sending something into the black hole and they don’t want to give up on ever hearing back from their property manager.

A cheerful response is essential, too. Spresha says she hires receptionists based on how they sound when they answer the phone. Communication goes a very different way if there’s a bad attitude or a voice that sounds rushed and disinterested answering the phone.

Retaining Property Management Clients with ServiceR.E.M. has never lost a client, except for a couple during COVID who could not travel the way they intended and thus decided they did not need a property manager.

Their retention rate when the building isn’t sold is near perfect. A customer may sell the building and that typically means they’ll lose the client, but when a building is in the position it needs to be in that it can be sold, they know they’ve done something good while managing it.

R.E.M. Residential does not want to be the biggest property management company in New York. They want to be the best.

Retention at the employee level is also near-perfect. It’s a family. They’ve been a family for a long time, and sometimes they argue and sometimes they come together. The team socializes outside of work. They have wonderful personal and professional relationships.

Without trying to team-build, they manage to do a lot of team-building.

Rick makes most of the decisions, but when suggestions come up, they’re heard. Sometimes, he has to be worked on and sometimes he listens to their opinions right away.

If someone makes a mistake, there’s an immediate meeting. The management team at R.E.M. Residential knows that everyone they’ve hired is good at what they do. But, mistakes get made. The purpose of talking about the mistake is to make sure it doesn’t happen again. Mistakes are not a problem, but repetitive mistakes are a failure.

There’s also a collaborative vibe to the team. They cover for each other and they contribute to problem-solving and workload issues. This isn’t just to help their co-workers. It’s also to protect their brand. If one person drops a ball, the entire brand suffers. This understanding brings the team together.

Be Obsessed with ReviewsRick admits to being obsessed with reviews. That shift has made the whole team pay more attention. Everyone is checking in on their reputation online.

Everyone monitors reviews at R.E.M. Residential. They also ask for those reviews naturally. And, they suggest that the positive review is not for the company, but the specific person who helped them. Usually, it’s the building super.

If a tenant calls in and says they are moving out after five years, they’ll be asked if they were unhappy. Usually, the answer is no. They simply need a bigger space or a smaller space or they’re interested in living in a new neighborhood. So, the team asks that tenant to go online and leave a five-star review for the building super.

Anyone who calls is asked to provide a five-star review for their super or any team member that contributed to a good experience. This request is always made verbally, on the phone. If one of the property managers sees someone in person, they’ll also ask for a five-star review that way.

Seize the opportunity. Have a conversation about the experience, and then ask for the review. This establishes a commitment.

Secrets to Success: A ReviewNo negative Yelp reviews. Now you see how it’s possible.

The secret to the success R.E.M. Residential has achieved is:

Having actual people pick up the phone.
Encouraging property managers to do what they’re supposed to do with support.
Communicating even if there are disagreements.
Asking for five-star reviews for specific people, like a building super.
Hiring people who fit your team immediately.

There’s no formula. Everyone on the podcast admits that. The business works because the people in the business hold the same values and they work well together. Their strategy is to treat people well and go off all the best gut instincts.

Creating a culture of accountability and collaboration translates to better client experience, which contributes to client and employee retention. If you’d like to talk more about this podcast, please contact us at Fourandhalf.

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Note: The names in the video are swapped. The first guest shown is Tommy Chambers and the second is Chris Harold.

We welcome you back to the Property Management Show with your hosts, Marie Tepman and Brittany Stephens.

In Part 1 of our conversation with Chris and Tommy of Chambers Theory, we talked about how they used data and innovation to expand their customer lifetime value amidst area-specific market forces that tend to shorten it.

Here, in Part 2, we’ll cover how they balance profits, people, and the customer experience.

Retaining Property Management EmployeesA happy property management team will almost always lead to a happy set of property management clients.

How is employee retention encouraged at Chambers Theory?

In a number of ways.

First, there’s a new role: Director of People and Culture. That role really sprung from fast growth. In four years, they grew to 30 employees and while every employee is moving in a different direction, helping the company succeed is the end goal.
There’s also a focus on work/life balance. The team is friends outside of work. Many of them have been together for 15 years. When you’re working with fellow humans and not just working in a company, it’s easier to focus on what you do together.
Committing to a capacity-to-care ratio.
8Profit sharing so that a portion of the company’s profits are dispersed among the entire team. Everyone benefits from company growth.

There’s a timeline for reviews with the team where each employee gets to discuss their own plans for career advancement. Tommy and Chris have also borrowed a measure from Navy SEAL Team 6, which is focused on two things: performance and trust. You want high performers who you can really trust. And sometimes, if a particular team member isn’t performing well, they’re worth keeping close because you know you can trust them and their peers can trust them.

Capacity-to-Care RatioThe capacity-to-care ratio began as a look at how many properties per person made sense to keep the team functioning as well as they wanted. Companies that have problems with quality seem to have a higher property per team member ratio. A 100:1 ratio makes it hard for those team members to care about the 100 properties they have to manage.

It doesn’t matter how good you are, if you’re too burdened, you’re losing your capacity to care.

To increase that capacity to care, the ratio has to be lower, and/or more infrastructure is needed to support the team.

Each team member at Chambers Theory is specialized in what they do. And, more experienced hires have more capacity. So, increasing capacity has become a key metric.

Right now, the company is at 24 properties per staff member. They’re investing heavily in the staff ratio, but expect to grow to 30 properties per staff member before too long. They’re skeptical of going any higher than 35 to 1. Even if the team seems capable, they’ll want to hire enough people that the ratio stays closer to 30 properties per staff member.

How to Stay Profitable While Focused on Capacity-to-CareHow do you balance taking care of your team with making money?

Profitability is more likely – even if it’s tighter – when you have better quality of service and higher average rents and lower vacancy rates.

Hire so that you’re prepared for growth and not waiting for it.

And, remember that employee retention increases profitability over time.

Your employees, when they have the capacity to care, will continue to improve their service and be more efficient. You’re not spending money on hiring and training new team members when you have great retention.

Referrals as a Source of GrowthWhen new business is continually coming in the door and current clients are easily retained, there’s little to worry about in terms of profitability. Chambers Theory has a stream of referral business that comes in because most of their clients are Foreign Service and military clients. They have a presence in the community and throughout the Washington, D.C. area.

They like to say that all of their clients become friends and all of their friends become clients. Developing relationships is a huge part of their business model and their plans for growth. They know their capacity to care is higher and that turns into a powerful referral machine. Clients are served well, so it’s easy for them to earn new business based on their reputation.

After four years in the property management business, they have around 700 single-family homes they’re managing in northern Virginia. There’s also a small portfolio of properties in Oregon that make up about 80 doors.

They see the sales market softening eventually and a lot of accidental landlords looking for help when they cannot sell their homes.

Protecting Reputation and Asking for ReviewsIt’s amazing what happens when you ask for a review.

Their team has focused on building relationships, so quickly solving problems when someone is unhappy is almost intuitive. On the other side, when they have done a good job, they’re quick to ask their clients to please put a positive review out there.

People love helping other people. Customer service culture is not just about what you do for your clients. It’s giving them an opportunity to do something for you. They want to help, and you have to accept their willingness to help by sharing a good review.

Reviews are about emotional intelligence and paying attention to communication. Can you pick up on cues of dissatisfaction? Do you know when a client is satisfied?

When you lead with gratitude, you get a good response.

Emotional intelligence prioritizes personal emails over automated emails, for example. Instead of sending an automated email to ask for a review, a dedicated team member writes a personal message that’s gratitude-based.

Growth isn’t without pain, and sometimes you have to decide what you want to sacrifice. Tommy and Chris weren’t willing to sacrifice their services in order to make more money.

Are they profitable? Yes.

Could they be more profitable? Also, yes.

Yet, they were not willing to stretch their team members too thin in order to be more profitable.

As they continue to grow, they’re also looking at automation.

Some things are automated, but never the actual relationships they have with their clients. They could have an automated repairs department, and they could send out an automated email asking for a review every time a problem is solved.

But, they don’t.

There’s only so much that can be automated before that personal relationship and level of service is lost.

There’s a team at Chambers Theory that’s only responsible for calls. They’re trained to use their emotional intelligence to respond to calls and get back to people quickly. Even if the solution is not immediately available, their clients know they’re being heard.

This is Trust Equity.

Imagine you’re going on a long trip and you start with a full gas tank. Every mile of the trip, you’re depleting what’s in your tank. Think about that tank as your relationship with your clients. How far will you go with clients if you don’t fill up the tank?

Automation versus Personal TouchEveryone has shifted to automation. And while the team at Chambers Theory invests heavily in technology, it’s not used for communication or personal relationships. It’s leveraged within the team so that people can provide personal service.

Three areas of automation are working well for them right now.

Inspeqt. This is a tool that allows property managers to go into any house and scan bar codes on appliances and systems. It provides an inclusive look at everything in the house, which allows for recommendations on repairs, replacements, and upgrades. If a water filter is broken, the Inspeqt app identifies the exact filter that’s needed and even facilitates a purchase on Amazon that gets it there the next day. This saves so much time. Instead of calling a contractor and waiting days for a new water filter to be installed, the problem is handled on the day it’s reported. This is extra value to owners and tenants.
Minut. A Minut device is especially useful for vacant home and second home property management, which is the majority of their portfolio in Oregon. A device similar to a smoke detector is installed and it measures humidity levels, heat, and noise levels. If something is wrong, there’s an immediate notification. If it’s the middle of winter, for example, and the temperature has dropped to 60 degrees and continues to get lower, they know the pipes are in danger and it can be addressed.
Collecting data and creating apps. Chambers Theory has a Director of Operations who is a wizard at collecting data and building apps for the team to use. Metrics and performance data can be accessed immediately and everything can be automated that isn’t external facing communication. Repetitive, internal tasks are easily automated and simplified.

A lot of companies talk about their mission and their vision. They have powerful slogans.

It’s one thing to tell people what you believe in, but the real proof is when you show them.

Chambers Theory has managed to do that, and we’re so glad that Tommy and Chris joined us to talk about what they believe in and how it has helped them grow a successful property management company.

If you’re enjoying The Property Management Show, please leave us a rating or review on your listening app of choice. And, contact us at Fourandhalf if you have any questions about this conversation.

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The Property Management Show is back with Marie Tepman and Brittany Stephens from Fourandhalf, and today we’re talking about customer lifetime value.

When we think about customer lifetime value, the biggest variable that comes to mind is the length of time a customer stays with your company.

But what happens when your service area is full of military or intelligence personnel, who only need your services while they are deployed overseas?

Our guests today are Tommy Chambers and Chris Harold from Chambers Theory, and not only have they discovered how to protect their customer lifetime – they also found a way to expand it through innovation.

Customer Lifetime Reflects Customer Satisfaction This season of the podcast is all about companies that are doing so well their customers don’t want to leave.

Chambers Theory tracks a lot of data to review and improve their performance, and according to that data, they’re a company that’s doing very well. We asked Tommy and Chris to talk about some of their most impressive statistics.

Two of the statistics they are always tracking are days on market and average rents. This property management company has lower days on market and higher average rent than any of their competitors. With a slogan that says “Real Estate with Intelligence,” Chambers Theory has managed to embody what they say about themselves. They collect data on their own performance and that of their competitors, and then they use it to their advantage.

Days on Market
Average Rents

Sometimes, the results of their data seem intuitive. A property in one area is going to rent faster than a property in another area simply because it’s a more desirable neighborhood.

But it helps to know those numbers.

At Chambers Theory, they look at the historic data and they use their experience to make intelligent decisions and improve the metrics that they invest so much time into collecting.

Here’s what they’ve found:

Chambers Theory has rents that are an average of 27 percent higher than their competitors. The average rent in the northern Virginia market is close to $3,500 a month.
The average days on market is 12. This is notable because their competitors have an average days on market of 30.

The data they collect is used to make intelligent decisions and to improve the work they do for their clients

Which helps with their client retention rate.

The simple act of measuring is what’s important. It’s important to the company and their clients. Measuring allows you to see how you can get better and then track your improvement over time. New solutions and innovations show up and the entire team works together to improve.

But, you can only improve by tracking your progress and monitoring the numbers you care most about.

Client Retention Rate At Chambers Theory, the client retention rate is over 95 or 96 percent.

Tommy and Chris are quick to say that a lot of that has to do with the team and how well they are able to service their clients.

They also have a stellar reputation in the industry.

Reputation, systems, and a well-focused team are the reasons that they retain so many clients.

Two specific things have pushed this client retention rate even higher:

A team member was recently promoted to Director of People and Culture. All staff achievements are communicated to clients, and Chambers Theory has become a fantastic place to work in an industry that has a reputation for quick burnout. There’s a lot of value invested in the community of the team. Tommy likes to say that by “serving each other, we become free.” The team has that mindset every day, and that mentality allows them to maintain high retention rates with both clients and employees.
A unique value proposition to their clients also keeps retention rates high. A large percentage of the clients they serve are military and Foreign Service workers. So, when they go overseas it’s usually for three or four years and then they come back to the area and move back into their homes. So, they close out their property management contract when they come back to Virginia, and then they re-hire their property managers when they’re reassigned again a year or two later. They’re now offering a different model of property management to those clients where they assist in the management of the home even while the homeowners are living in it. They’ll take care of bill paying and maintenance coordination and scheduling even while the property is being occupied by the owners instead of tenants.

Tommy and Chris also point out that they let go of clients who are not willing to be responsible for their properties. They want their tenants to have a good experience too, so if owners are not willing to invest in the property and take care of their home, they are willing to take on that attrition.

Keeping Property Management Clients Close The innovative program they’ve designed for homeowners who come and go every few years is called the Home Escrow Account.

Their clients keep them as a property management partner even while they’re living in the home themselves. There’s a different fee structure; there’s no percentage of the rent collected. But, it provides a continuity of service to the property and to the owner.

This service has led to an increase in accounts not being closed when a homeowner returns from overseas.

If you’re a property management company that’s serving a large military community, this is the type of program that can drive your client retention numbers much higher. There’s a lot of overhead when you have to close and re-open an account. Why not see if there’s a way to do it better?

This program has also had an impact on the referral network at Chambers Theory. The extra level of care that’s provided makes a big difference. It’s a higher emotional need. When you know a client is coming back to live in their own home, you’re treating them and their experience differently than you would an investor who would never live in one of their properties.

This can do a lot for lifetime customer value. Imagine if you did not have to lose those owners who come back from an overseas deployment.

Client Retention and Employee Retention An important point that sometimes gets lost is that employee retention is directly related to client retention.

Taking good care of a property management team is more likely to lead to higher satisfaction with your property management clients. It delivers consistent service and a direct connection between your clients and your employees.

In Part 2 of this conversation, we’re going to talk more about the importance of employee retention and how it serves client retention.

No one likes a cliffhanger, but we definitely want you to tune in next time so you can enjoy Part 2 of our conversation. In that episode, we’ll also touch on how they balance profits, people, and the customer experience.

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Customer Lifetime Insights and Marketing Let me ask you a question.

When was the last time you made a big purchase?

Imagine you realize that you need a new car. What would you do next? If you’re like most people, you would probably head over to Google or your preferred search engine.

What would you type in that search bar? What results would you get back?

Most of us would get some ads on top and then some search results with star ratings. You’ll probably see some articles with titles like “The 10 Best Cars of the Year.” And, by the way, if you actually read those articles…none of them will actually agree on what the 10 best are. That’s because everyone defines “the best” as something different.

All these results you see are intentionally driven marketing pieces created by people who want to lead you to their sales funnel.

You might click on articles. You might check out some head-to-head comparisons. After a while, you’ll realize that you’ve collected enough information and that you’re more knowledgeable than you were when you started.

You’re actually ready to buy. But, why? What’s actually going on here?

And, most importantly, what does this have to do with property management?

Everything.

And that’s what we’re talking about today, on The Property Management Show.

Buying Decisions and Property Management Content What happens as we move through our buyer’s journey on the internet?

We spend hours and sometimes days doing research and reading articles and consuming data and content. This is all done to make us feel better about the big decision we’re about to make. All the pieces of content we consume during the journey shape our expectations and nudge us closer to making that decision.

All of us are like this, especially when we’re making big decisions such as hiring a property manager.

So if your customer’s buying decisions and expectations are influenced by the content they’re seeing during the exploration phase, then it’s in your best interests as a property management business to have your educational content out there for prospects to consume before they even give you a call.

This makes sense, yet we encounter a lot of property management business owners who don’t believe in content marketing or don’t think it’s worth the hassle or the investment.

The content you create is here to fill information gaps. It also helps when prospects are trying to make a buying decision or looking for a solution to a problem they’re experiencing.

Content creates a relationship between the prospect and the business, and it helps the prospect make a decision.

You can’t expect leads to pour in the moment you publish a piece of content online. The effects are more delayed, and sometimes it can take a year or more for your content to generate a huge increase in business.

But, here’s what’s interesting: Research has shown there’s a positive correlation between content and customer lifetime.

Customer Lifetime Averages Fourandhalf actually did an industry study on property management marketing last year, and we found some interesting things about customer lifetime.

Before we nerd out on all the data pieces of this study, let’s do a quick poll:

How many of you listening right now know how long your owners stay with your company?
If you have a number in mind, how confident are you of that number?

If you couldn’t come up with the number or you hesitated a bit, you’re not alone.

In the Midwest, 10 percent of property management business owners had no idea how long their owners stayed.
In the South, 5 percent had no idea about their average customer lifetimes.
In the Northeast and West, there were even fewer people tracking, and that was interesting to us.

For those who did track or at least try to guess how long their customers were with them, here are the numbers we gathered:

Property management companies from the West and Midwest keep their owner clients for 1 to 6 years longer than their peers in the Northeast, on average.
The most common customer lifetime length in the West and Midwest was 4 to 7 years.
In the Northeast, it was 1 to 3 years.

In the South, the length of customer lifetimes was evenly distributed between 1 and 3 years, 4 and 7 years, and even 10 to 15 years.

Understanding Customer Lifetime Value Knowing how long your owners stay with your company is key to understanding customer lifetime value.

There’s a lot of discussion in the industry right now about customer retention and the importance of providing the best client experience.

That’s great in concept, but what are you implementing to improve client experience and customer value, especially if you have limited resources? How do you, as a business owner, prioritize efforts and resources related to retention and client experience versus the other needs of your company?

This is where customer lifetime value comes in.

If you only look at the annual contract value when you’re making these decisions, you’ll see that clients staying for one year are just as valuable to your business as those who stay 10 years. Owners who stay for a year versus 10 years are fundamentally different, of course.

Understanding customer lifetime value and the factors affecting it will allow you to make smarter business decisions.

Marketing Decisions and Customer Lifetime Value (CLV) You might be wondering: What business decisions require you to take customer lifetime value (CLV) into consideration?

If you guessed marketing, you’re spot on.

Marketing is not the only business practice that’s influenced by customer lifetime value, but it’s what we’re exploring on the podcast today.

Some key marketing questions centered around CLV are:

How much should you spend on owner marketing?
What channels should you use?
What is a good ROI for your marketing dollars?
How much should you spend on retention campaigns?
Who do you target during those retention campaigns?

Making marketing decisions with CLV in mind prevents you from accidentally ignoring aspects of your marketing that impact your bottom line.

Think about that earlier story about buying a car.

It’s clear that people move through the marketing funnel in a non-linear way. During the exploratory phase, the minds of owner leads are still open to suggestion. No strong opinion has been formed yet. Once they do focus on the opinion, they’ve formed, it stays with them even after they become your client.

Closing the sale is the start of the relationship. It’s important to remember that.

Looking at the Data around Marketing and CLV

What do we know about marketing and CLV based on our research?

YouTube Videos

According to our research, property management companies who use YouTube videos for marketing are 12 percent more likely to retain their clients for 8 years or more.

This sounds random, but it makes sense. YouTube is the second-largest search engine in the world, only behind Google. People search for consumer content on YouTube, and they expect to find videos and education.

What does this have to do with customer lifetime value?

It goes back to the content that’s consumed as prospects are in their exploratory process. The more informed an owner is before making a decision, the more they’ll have realistic expectations of what property management is and what it isn’t. They’ll understand the true value of professional property management, and they’ll stay with you for longer.

Brand Recognition

The more you show up when prospects search for answers online, the more familiar they are with your brand. Then, they’ll trust you more. This happens before they reach out to you, so when they do reach out, you have a lot less convincing and selling to do. There’s less friction than what you might encounter with someone who is learning about you for the first time.

Trust and Reviews

In the context of business. Trust is synonymous with stars. Who doesn’t love stars? In preschool, your teachers handed out gold stars as a reward. It was the thing to have.

Now, we’re still vying for those gold stars.

Our research found that property management companies prioritizing online reviews are 16 percent more likely to beat the industry average when it comes to CLV. You might be wondering if the higher star ratings simply attract higher-quality owners. That would explain the correlation between online reviews and customer lifetime, right?

Actually, taking control of reputation doesn’t mean filtering out negative reviews. It includes a whole system that requires thought and intention. It requires property management companies to identify their touch points and follow-ups, and conduct a full analysis of feedback and reviews.

The most important thing you can do with those online reviews is to help your organization improve.

The key here is that when property managers who prioritize online reviews routinely ask for feedback from their clients, those business owners actually listen. If the feedback is less than ideal, they do something about it.

The goal is to foster trust and then live up to that trust.

Automation

Automation, which is a fan favorite when it comes to business priorities, boosts customer lifetime value by just 5 percent.

Remember, prioritizing your online reputation increases CLV by 16 percent. This finding is interesting and tells us that you shouldn’t automate just for the sake of automating. You need a clear strategy and a clear understanding of your current process and systems. Just doing automation in a vacuum is an expensive way to make mistakes faster.

Marketing Spends and CLV This might surprise you.

It turns out that dollars spent on marketing by themselves do not correlate with higher customer lifetime.

This confused us because it seems so simple: the more money you have, the more you can do to impact customer lifetime and attract better leads.

So, what does this mean for property management?

This finding suggests that where and how you spend your marketing dollars is more important than how much you spend on owner marketing.

As for customer lifetime value, that should serve as the North Star, which can guide you in the right direction.

Spending money on acquiring customers is good, but don’t ignore your existing customers. It’s more expensive to acquire new owners than it is to keep existing owners.

Don’t be blinded by lead volume when you’re thinking about marketing. Remember that not all leads are created equal. If you intend for your business to thrive and survive in the long term, be prepared to do what you can to hold onto your clients for longer.

That’s what we have for today on The Property Management Show. In our next few episodes, we’ll look at real examples of how focusing on customer lifetime value, owner retention, and even employee retention can impact your property management business.

If you have any questions about owner marketing, please contact us at Fourandhalf.

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Customer Analytics with Aurelie Lemmens Today’s guest on The Property Management Show is Aurelie Lemmens, an Associate Professor of Marketing at the Rotterdam School of Management, Erasmus University in The Netherlands, and Academic Director of the Expert Practice on Customer Analytics at the Erasmus Center for Data Analytics.

Dr. Lemmens is an expert on the topic of customer churn and has written peer-reviewed papers on the topic.

Defining Customer Analytics What does customer analytics mean, specifically to a property management company?

Here’s the general definition of customer analytics:

The idea is to leverage as much data as you can gather about your customer. You’ll want a good collection of data at the point of customer acquisition and even before that – when they’re visiting your website. You want data about the customer when they’re signing a management contract or filing a complaint. You want to collect data on that customer when they’re saying something positive or negative about you and when they’re canceling their contract.

Leveraging all that data with sophisticated analytics can help you decide what the best action might be for your customers at each of those points in time that we mentioned. You want to find the optimal action to reduce churn and increase profitability.

Mentioning data and analytics can sound pretty technical. But, these churn analytics can help you better understand why your customers are leaving and whether it’s worth your time and resources to try to keep them.

Studying Customer Analytics and Churn Two main points are important to remember from the study conducted by Dr. Lemmens and her colleagues.

First is the notion of incremental lift. What will be the impact of your marketing intervention on the customer? What will happen with the customer that would not have happened if you did not perform a certain action?

This sounds easy, but it’s actually pretty complicated because it’s hard to observe what’s happening based on what you didn’t do. How can you see the impact of choosing to take one action and not another?

Second is the notion that all customers are different from each other. You have to recognize and understand all the different types of customers you are working with. Only then can you design an action that speaks directly to Customer A and not Customer B, who will have their own actions designed based on who they are and how they behave.

How should you choose which customers to work towards retaining? That’s another takeaway from this study.

Those Likely to Churn, Those Likely to Stay, and All the Others When companies think about preventing churn, they tend to focus on identifying the people most likely to leave.

That’s the first step. Then, they’ll figure out what they should do to keep them from leaving.

But, if they’ve already made up their minds on some level to leave, can you really manage to keep them? Is it worth your time and resources?

This is a natural reaction. It’s tempting to try and prevent people from leaving when we’ve identified that they’re likely to leave. But, this strategy could have you retaining customers that are hard to retain or maybe not worth retaining.

There are also your customers on the other end of the spectrum. They are happy, and there is a low probability that they’ll leave. You don’t need to do much to keep them happy. They’re already there.

Those customers in the middle are where you should focus. There’s no reason to believe they’re planning to leave but there’s also no reason to believe that they’ll be with you for the long term. You’re not really sure where they are in terms of staying with you. Maybe they’ll consider leaving, but there’s more of a chance you can keep them.

Those are the customers who you want to reach with interventions. Predict what their level of responsiveness will be to those interventions.

Basically, you’re studying the customers who are on the fence.

Some Customers are Sleeping Dogs Research has shown that you have a negative impact on half of your customer base if you target them. Half of your customers want to be left alone. They don’t need intervention from you, and if you bother them with constant emails or offers – you’re just going to lose them.

Some of those customers might also have forgotten that they’re unhappy, but when you intervene, you remind them of that unhappiness. They’re sleeping dogs, and if you keep contacting them or you keep trying to ensure you’re holding onto their business, they’re going to resent it.

To reduce churn and increase profitability, you need to figure out which customers are worthy of your intervention without a high risk of waking up those sleeping dogs.

How can you do that?

First, you need to define what KPI you want to look at. Maybe sending your customers a $5.00 gift won’t make a difference now, but it will contribute to a long-term relationship. Decide what you want to measure.
Once you know the KPI, the easiest thing to do is to have a documented trail of your effort. So, you’ll put half of your randomly chosen customers into Group A, and you’ll give them something specific. Maybe it’s a thank-you email with a $5.00 gift card. With the other group of randomly chosen customers, you’ll do nothing.
Once you get the data that tells you what kind of impact that had on whether they renew a contract with you or increase what they spend with you, you’ll be able to make some connections and see how that action impacts your customer lifetime value.
Compare Group A to Group B.

This kind of test allows you to see, on average, if sending the thank-you email with a gift was a good action to take. Which customers reacted? Which did not?

Analyze Who is Responding to Interventions With this type of test, you can analyze who is responding to interventions and how it impacts customer lifetime value.

The beauty of this testing is that you get an estimate of how much profit you can generate once you roll out the campaign on all your clients. Figure out how much money you want to spend retaining all of your clients or most of your clients or some of your clients. The A/B test can be done on a small scale, and it doesn’t cost a lot to find out what works best.

Find out what your customers are reacting to in a positive way.

Maybe you’re a property management company owner and you’re about to offer renewals to all of your owners. You can decide if you want to send an email asking for renewal commitments, send no correspondence at all, or send an email with a gift, asking them to consider renewing for another year. The way your clients respond will tell you which method might work best for your company.

Remember what was mentioned earlier: all customers are different. You might be able to create categories of customers based on their similar responses to a test like this.

As a property manager, you have different customer groups already. There are investors who come to your company and don’t want to have a lot of involvement with how their properties are run. This is a Business-to-Business relationship that you’re managing. But, accidental landlords who have a single home to rent might need a different type of strategy. They don’t think of themselves as business owners and they may need more nurturing in their Business-to-Client relationship.

Each of those customer groups will also have their own reasons for churn.

Communication Fatigue and Communication Quality Communication fatigue is real, and maybe your clients are tired of hearing from you.

Dr. Lemmens says this is possible, and it depends on the quality of communication. She gave an example of a charity she worked with, where donors were able to decide which project to give money to. By doing that, they had a sense of agency when they donated money. They could decide how their own funds were being used, so the communication was relevant to them because it involved projects they cared enough about to fund.

For property managers, you need to think about the quality of your communication as well. Those annoying emails are bad. Meaningful emails are good. When you have quality communication, it will help you retain clients, not hurt you.

You can no longer rely on automated notifications and consider that to count as quality communication. You have to engage with your clients and be willing to experiment with communication in order to find out what works and who likes what type of outreach.

Customer Lifetime Value and Analytics Churn impacts customer lifetime value, and you have to remember that customer lifetime value is a forward-looking metric. It estimates future revenues. Two things make up that lifetime value:

The revenue a customer brings in.
The amount of time a customer stays with you.

You don’t know how much a customer will spend with you in the future. And, you don’t know how long they will stay. It’s only what you perceive.

Lower churn increases customer lifetime value, but lowering the churn KPI is only a small part of the story. What’s important is this: how much money is there going to be left on the table after you try to keep that customer? What do you have to spend to keep them for long enough to make the spend worth it?

In a more realistic sense, the past is predictable. You know what they have spent. You can use that information and take action based on what has already happened. It will help you decide how much a customer is worth in the future and it will cut down your churn.

Know your numbers, and don’t be afraid to dive into the data and analytics behind your customers.

There is a lot more we could talk about on this topic, and if you have any questions about our conversation with Aurelie Lemmens, please contact us at Fourandhalf.

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Welcome back to The Property Management Show. If you joined us on Part 1 of this podcast with Ray Hespen, you learned about why it’s important for property management business owners to pay attention to churn. You need to do more than pay attention – you need to measure it.

We’re back to talk about how you can prevent owners from leaving in the first place.

Measuring Owner Churn If you’re not measuring your churn, you don’t know how big of a problem it is.

Owners have different goals. Whatever your business goal is, owner churn should be a KPI. It impacts your growth and profit. We cannot think of a single property management strategy that would not need a metric measuring churn.

So, who should measure it?

That depends on how your property management company is structured. Ray says that whoever is responsible for owner engagement after the sale should ultimately track owner churn.

All Churn is Not Created Equal You need an ideal customer profile. This is something that gets talked about a lot. Who is your perfect client?

Churn from anyone who does not fit that profile is likely okay. Churn from perfect clients is not okay.

It’s important to keep track of who you’re losing and who you’re keeping. You need a scorecard to show you whether you’re losing those perfect clients or others that you took on knowing they weren’t a perfect client. Then, you’ll need to decide how much you’re willing to invest to recover the clients you lose. It may be worth it to recover the perfect clients.

Resident Satisfaction and Owner Churn In Part 1 of the podcast, we talked about two things that impacted owner churn:

Maintenance visits to the property (more visits = better retention)
Staying below the 12 percent maintenance costs threshold

The third thing is resident satisfaction. There’s a direct correlation between lease renewals and owner renewals.

This makes sense and it matches the maintenance indicator. Residents who are not satisfied with maintenance will not stay in a property. When lease churn is higher, owners will reconsider their property management relationship.

Sometimes, property managers worry about providing great service to residents because they don’t want owners to believe that it’s at their expense. That’s crazy. Owners should want you to treat their residents well.

When you retain tenants, owners save money. When a resident leaves a property, here are some of the things that happen:

The property manager has to do an inspection.
The property manager has to organize repairs and replacements.
The property manager has to find a new tenant quickly to avoid a long vacancy.

And all those costs are passed to the owner.

Retaining a resident for five years requires resident satisfaction. It’s worth it to you as a property manager because it helps you keep your owners.

Keeping Churn Low: A Dashboard If you want to keep your property management company’s churn low, you know you have to measure it first. Then, you have to think about these three specifics. There is probably a way in your accounting software to capture this data.

Which owners are at risk of being above that 12 percent maintenance cost vs. rental income threshold? Know who they are. Give them the white glove treatment and take good care of them.
Focus on resident satisfaction. Look at the things you can control and correct any issues quickly. The average rental unit has an average of four service issues a year. Be attentive.
Measure the percentage of owners who opt into preventative maintenance services. Drive that number higher because we know that the more maintenance visits you make, the more likely you are to retain clients.

These are the metrics you need when you’re fighting against churn.

Get the numbers and then make a plan. Tell your property managers that you want the number of owners enrolled in preventative maintenance services to be 30 percent higher by the end of the year (this is an example). You’ll find it addresses all three of the points that we made about why property owners leave their management company.

You get only one shot at an investor. We can’t invent new investors for you to chase down. Make it count and keep them as long as you can. If you can implement programs that reflect what we know, you can see some changes in your owner churn numbers.

When Should Churn Make You Feel Okay? If you lose an owner and you know that you did everything you could to keep them, let that owner go in peace. When you can look at their account and see:

High resident satisfaction.
Lots of maintenance oversight.
They’re well below the 12 percent threshold.

You know there’s nothing you could have done to keep them. Their departure was totally outside of your control. It has nothing to do with what you’re doing for them.

Zero churn is not realistic.

Not everything is in your control. You cannot save every single owner, so focus on the factors that you can control with the owners who can be kept.

Consider this scenario: an owner dies and the trust decides to auction off the property. That’s going to be some churn and there’s no sense in trying to fight against it. You won’t convince the family’s trust to stay with you. You’ll waste your time and resources. Set goals and targets that are reasonable.

According to Ray, PropertyMeld keeps about 90 percent of their clients, while the industry standard in software is to try and hit 80 percent. Saving everyone is not a good use of resources. Be strategic.

Property managers need to establish a healthy amount of churn.

What Else Does the Data Say?

Other interesting data points have Ray and PropertyMeld digging a little deeper into some areas of property management and owner churn:

Sticker shock with internal maintenance teams. When an in-house maintenance team costs more than what an outside vendor would cost, there’s a higher risk of churn. If your internal maintenance team is performing for less, you have an advantage. Are you driving down the costs for your clients or not? This is something to look at.
Repair estimates. Really high estimates upset owners. Even if the work isn’t performed – getting that estimate puts them off. When you hand your owner a very high estimate for work they may have requested, it’s going to start chipping away at their confidence in what you can deliver, and eventually, they’ll leave.
Invoice costs are rising. We talked about ghost repairs early in 2020. Since then, HVAC invoices are up 118 percent. Plumbing invoices are up 60 percent. That’s just over two years.

This could be a battleground in the future. Owners seem to be stomaching the costs right now, but there’s no telling where the next year or two will take us, and this is a crazy real estate market.

Property Management Company To-Do List You have some new knowledge and insight into your churn numbers and what may be driving them. So, what are your next steps for your company?

We have them for you:

Find your churn number, know that it can be better, and move it.
Start tracking what you need to know. Pull it out of your accounting software. Whatever the number happens to be, make a decision to hold onto 10 percent more owners.
Go big with preventative maintenance.
Watch for your clients who are closing in on that 12 percent number.
Focus on tenant retention.

Don’t do one. Do all of them.

PropertyMeld is presently beta testing a PropertyCare Plus plan which builds a catalogue of services for owners. They can choose what they want, whether it’s annual HVAC clean up, gutter cleaning, semi-annual inspections, etc.

Preventative maintenance, we know now, is critical. It’s also a logistical nightmare for property managers. Ray and his team are taking a stab at making it easier.

These insights can help you hold onto more owners. If you’d like to talk about them or anything related to your property management marketing plan, please contact us at Fourandhalf.

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On The Property Management Show today, we’re talking with Ray Hespen, who has been here before to talk about maintenance, data, his company PropertyMeld, and the dangers of ghost maintenance requests. Today, we asked him to discuss what some of his recent data has been telling him about customer churn in the property management […]

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Daniel Craig on Why Customer Churn is a Silent Killer Daniel Craig from ProfitCoach is joining us on The Property Management Show today to discuss the problem of churn and the value of retention. Walk down memory lane with us for a bit, and you’ll remember that Daniel’s first benchmarking study led to the NARPM […]

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Meet Ray Hespen! He is the CEO and Co-founder of Property Meld. You might recognize him if you attended PM Grow Summit 2022, where he spoke about maintenance as an owner retention tool. He’ll be on the podcast talking about Owner Churn.

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Meet Aurelie Lemmens! She is the Academic Director of the Expert Practice on Customer Analytics at the Erasmus Center for Data Analytics in The Netherlands. She’ll be on the podcast talking about Customer Churn. Check out the video for a sneak peek of our interview with her.

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We’re thrilled to announce a new season of The Property Management Show Podcast. Watch the trailer to see what this season will be about!

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3 Steps to Profitability with Kathleen Richards On The Property Management Show this week, Kathleen Richards is joining us to talk about profitability. She’s been on the podcast several times, and we’re asking her a pretty simple question: how can property management companies set themselves up to make good money? Kathleen Richards: An Intro […]

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Catching Up with NARPM Women’s Council for Property Managers Christina Wade and Kesha Jenkins of the Women’s Council for Property Managers join The Property Management Show to talk about the progress that’s been made since the last time we talked about the launch of this initiative. We’re revisiting the mission of the council and […]

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This week on the Property Management Show Podcast, Marie and Brittany are joined by Michael Lushington, CEO of Fourandhalf, and Ethan Lieber, CEO of Latchel, to discuss PM Grow Summit 2022. Fourandhalf and Latchel are co-presenting the upcoming conference, which focuses on the future of property management. How is the future of property management […]

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Do Guarantees Work? Chuck Hattemer of Poplar Homes is on The Property Management Show today, talking about the property management guarantees his company implemented more than six years ago, and how they’ve helped him build a better property management business. The Idea behind Making Guarantees a Marketing Strategy Chuck and his business partner have been […]

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Misconceptions about Property Management Leasing Automation We’re talking about leasing automation today on The Property Management Show, and our specific discussion centers around what it is and what it isn’t. We’re also talking about how it can help property managers save time and improve their reputation. Our guest is Abi Wasserman, sales manager at ShowMojo. […]

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The podcasts we publish on The Property Management Show usually inspire us to talk about the topics that we cover, long after the guests have left us. On today’s show, we’re sharing some of what we captured when Marie and Brittany were discussing the most common blind spots that property managers miss when it […]

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Brittany and Marie joined Ethan Lieber on the Latchel podcast to discuss marketing gaps and how property managers can compete in an industry that’s only growing more crowded and more competitive. Ethan wanted to know how a property management company can position itself and build relationships to add the marketing fuel that’s needed to grow. […]

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Summary: The Property Management Show is back this week to continue our conversation with Ray Hespen of Property Meld. In the last episode, we talked about property management maintenance trends and increasing costs. Today, we’re mostly talking about how property managers can position themselves to have effective conversations with owners about maintenance. Key Takeaways: […]

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Summary: It’s been a year since we had Ray Hespen, co-founder and CEO of PropertyMeld on The Property Management Show podcast to talk about COVID-19 and its impact on property management maintenance. The last time he was with us, we discussed ghost maintenance – the idea that all these tenants were at home with […]

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Summary: Ethan Lieber from Latchel is our guest on The Property Management Show, and in this podcast we’ll talk about these behemoth venture-backed companies that seem to be entering the property management space in record numbers right now. We want to know why they’re here, what motivates them, and how smaller property management companies […]

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Summary: You may recognize today’s guest on The Property Management Show podcast. Steve Crossland is joining us, and he gave a speech at PM Grow Summit 2021 about the ABCs of property selection and portfolio selection. (by the way – if you’d like to watch that talk, and the rest of the recorded content from […]

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Summary: During this time of moratorium madness, it’s becoming more and more difficult to enforce leases and do your job as a property manager. Our guests, Tracy Minick and Katherine Swanberg from Real Estate Gladiators know your pain. In this episode of The Property Management Show, we’ll discuss the way property management’s role has changed […]

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Summary: We’re talking about Realtor referral programs on The Property Management Show today, specifically, why they fail and what is required to make them successful. Vitaliy Merkulov from Renter, Inc. has joined us to share what he’s learned about referral programs and how to ensure property managers are making the most of these tools. Key […]

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Summary: In Part 1 and Part 2 of our Property Management Marketing series, we discussed various aspects of property management tenant marketing. Today, we’ve invited our own John Bykowski, CEO at Fourandhalf to discuss some of the big changes he’s seen in owner marketing. We’re talking about how property management companies can keep up with […]

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Summary: On today’s episode of The Property Management Show, we’ve asked the experts in property management and HOA banking to join us. Allison DiSarro and Ken Carteron from Enterprise Bank and Trust, formerly Seacoast Commerce Bank, are on the podcast to talk about the differences in banking for property managers and banking for HOAs. Whether […]

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Summary: Jordan Bennett is from the National Automated Clearinghouse Association, which is most easily identifiable to us as ACH. We’re talking about the role of the association and why it’s necessary to follow the carefully curated best practices that they’ve put together. Property management companies are often third-party senders, since you collect rent and pay […]

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Summary: Jeremy Tallman is the President and Managing Broker for T&H Realty Services in Indianapolis. He is talking with us on The Property Management Show today about pre-marketing and the success he’s had in building waitlists for properties that are soon to be available in his portfolio of rental homes. While this isn’t a […]

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Summary: Advertising your vacant rental units online has changed, and that’s due to some acquisitions and partnerships that we’re discussing today with James Barrett, CEO and Director of Business Development at Tenant Turner. On this episode of The Property Management Show, we’re taking a look at property management marketing and how the online marketplace has […]

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Today’s guest speaks Danish, is an adventurous wine-drinker, and has 29 years of experience within the tradeshow industry. He also happens to be the CEO of Fourandhalf and PM Grow Summit. That’s right, it’s our very own John Bykowski! John joins Marie and Brittany today on the Property Management Show podcast to discuss PM […]

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Summary: Over the last few months, there’s been a new development at the National Association of Residential Property Managers (NARPM). The Women’s Leadership Council has been formed, and it’s growing. This group is still new and a work in progress, but their first event is coming up, and we asked Kellie Tollifson (NARPM President) and […]

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Summary: Dave Spooner from Innago joins The Property Management Show to talk about rent payments, whether delinquencies are as bad as we expected them to be in a time of COVID, and what the pandemic has meant for the rental property market and accelerating the embrace of property management technology. Key Takeaways: The number of […]

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Summary: In this week’s episode of “The Property Management Show,” Marie and Brittany sit down with Faizan Ali Khan, the CEO and Founder of LetHub, to learn more about what artificial intelligence (AI) really is, and what property managers should know about its applications in their industry. Key Takeaways: Artificial Intelligence can automate communication between […]

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How do you build successful referral relationships in property management? Your property management company depends on relationships, and on today’s episode of The Property Management Show, we’ve asked Paul Boudier and Terri Alcala to join us. They have a unique professional relationship in place, and they’ve been referring business to each other for years. Today, […]

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If you saw our recent blog post and video on ADA compliance myths, you know that ‘website accessibility’ is a big buzzword these days. But, what is it and how you can you prevent one of those lawsuits aimed at your property management company, accusing your website of not being accessible? Kris Rivenburgh is an […]

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What if we told you that the property management sales process starts long before you make a pitch? And what if we told you that you’re already selling even before you realize that you’re doing it? This revelation is why we’ve titled today’s episode “How We Sell…” instead of “How To Sell…”. Today on The […]

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Bob Abbott from Alarca Realty in North Carolina used to be a work-from-home skeptic. Now, he’s an advocate, and we asked him to join The Property Management Show to talk about how to establish a virtual property management team and what you can do to keep your team members productive and accountable. We asked him […]

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As a property manager, you are likely communicating with owners and real estate investors more than usual, and your clients are probably more than a little nervous during this time of economic uncertainty. How should you guide owners through rent delinquency? To answer this question, we’ve asked Anna Myers, the Vice President and Asset Manager […]

The post Using Data to Guide Property Owners Through Delinquency & Economic Uncertainty appeared first on Fourandhalf Marketing Agency for Property Managers.

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On this week’s episode of The Property Management Show, we have invited the co-founder and CEO of Property Meld to talk to us about the subject everyone’s talking about – COVID-19. Ray Hespen is specifically discussing what’s happening with property management maintenance right now and what we can expect and prepare for once this pandemic […]

The post Handling Property Management Maintenance During and After a Crisis appeared first on Fourandhalf Marketing Agency for Property Managers.

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What’s your definition of “good” property management owner leads? How do you determine which leads are “bad” ones? And if everyone has a slightly different definitions, then are we just comparing apples to oranges? Jeremy Pound is the CEO and founder of RentScale. He’s joining us on The Property Management Show to talk about the […]

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Feeling anxious about how to manage your property management cashflow during COVID19? We got you. Hopefully you’re safe and at home during these crazy times. If you own a property management company and you’re worried about your cash flow and your business operations during this unprecedented pandemic, this episode of The Property Management Show is […]

The post Managing Hits to Your Property Management Cashflow During the COVID-19 Pandemic appeared first on Fourandhalf Marketing Agency for Property Managers.

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Ever thought about what it would take to expand your property management services? Our guest on The Property Management Show today is from our own backyard. Based in Oakland, we’re talking to Carlos Veliz, the CEO of Vision Property Management. Carlos shares how to branch out from your traditional property management services to create new […]

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The last time we were together on The Property Management Show, you learned why having standardized systems and processes is so important to your property management company. This week, we’re digging a little deeper into that: we’re talking about how to implement standardized systems and what to do first. This can really be transformative for […]

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Our next big topic on The Property Management Show is the importance of standardized systems when you’re starting, growing, or even preparing an exit strategy for your property management company. This is such an essential topic that we’re breaking it into two parts. Today is Part I, and we’ve asked Dave Gorham to join us […]

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Looking for an summary of AB 1482? Look no further. If you’re managing properties in California, it’s hard to avoid discussing AB 1482. This new law has probably taken center stage as you help the landlords and investors you’re working with comply with it’s requirements. We asked Keith Becker (DRE License #01201067) of DeDe’s Rentals […]

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Our topic on The Property Management Show podcast today is something that’s really interesting, especially if you own a property management company. Today, we’re diving into property management market trends. The guest who’s joining us is Jeff Hacker, owner of Bayside Property Management. He’s finding that a lot of the investors he works with are […]

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Risk management isn’t a sexy topic, but it’s something that you need to think about as the owner of a property management company. Making mistakes while managing – or not managing – your risk will keep you up at night. It could also result in lawsuits, huge fines, and even the loss of your business. […]

The post Risk Management Mistakes That Keep Property Managers up at Night with Guest Kathleen Richards appeared first on Fourandhalf Marketing Agency for Property Managers.

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UPDATE: As of November 2020, Seacoast Commerce Bank has merged with Enterprise Bank & Trust. Allison DiSarro and her property management banking team from Seacoast remain intact and run the whole property management banking division within Enterprise Bank & Trust. If you would like to learn more about the merger, watch this recent episode of […]

The post Property Management Banking and Trust Accounts (Explained by a Banker) appeared first on Fourandhalf Marketing Agency for Property Managers.

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Today we’re joined by Eric P. Hoglund, Broker (DRE #01420325) with Estey Real Estate & Property Management. He explains the benefit of understanding 1031 exchanges for property management companies, even if your company doesn’t do real estate. After doing a lot of traveling with the Navy, Eric decided he wanted to be closer to home […]

The post How 1031 Exchanges Can Grow a Property Management Business (Even if You Don’t Do Real Estate Sales) appeared first on Fourandhalf Marketing Agency for Property Managers.

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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 — […]

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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 […]

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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 […]

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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 […]

The post Bottlenecks to Property Management Profitability: Focusing on the Wrong Activities appeared first on Fourandhalf Marketing Agency for Property Managers.

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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, […]

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.

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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 […]

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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 […]

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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 […]

The post Deep Dive into Data-Driven Direct Marketing for Property Management Companies appeared first on Fourandhalf Marketing Agency for Property Managers.

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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 […]

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.

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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 […]

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.

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Your team represents your property management business, and today we’re talking about the importance of building and keeping a great property management team with Melissa Prandi, of Prandi Property Management. Many of her employees have been with her for 10 years or longer, and she’s quick to tell us that having the best team she’s […]

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Chrysztyna Rowek is the owner of Lighthouse Cove Property Management in Washington State and an active member of NARPM. She has gone from cleaning houses to buying/acquiring property management companies, and she joined us on The Property Management Show to share her experiences and the lessons she has learned along the way. Background: Buying Lighthouse […]

The post Due Diligence When Acquiring Property Management Companies: Learning from Chrysztyna Rowek’s Mistakes appeared first on Fourandhalf Marketing Agency for Property Managers.

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As the owner of a property management company, have you thought of your own exit strategy yet? Whether you’ve already chosen your path, or you’re still unsure about the best option, it’s worth listening to how Stephanie Gordon did it. If you don’t know Stephanie Gordon yet, you should. She is the founder and CEO […]

The post Not Your Typical Exit Strategy: Stephanie Gordon Shares How She Sold Her Property Management Business appeared first on Fourandhalf Marketing Agency for Property Managers.

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If The Property Management Show looks and sounds a bit different this time around, it’s because the podcast has new hosts. Marie Liamzon is the Director of Product Development at Fourandhalf and Brittany Stephens is the Director of Client Success at Fourandhalf. They got together with Sandy Highland of Sacramento Delta Property Management just after […]

The post Staying Personal at Scale: Sandy Highland Talks About Service and Relationships at Nearly 2,000 Doors appeared first on Fourandhalf Marketing Agency for Property Managers.

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Small property management businesses have a lot of opportunities, even as they’re competing with larger companies. As a small business in the property management space, you have a lot of unique abilities, such as your talent for providing local service. The local knowledge you possess is irreplaceable, and it takes those big businesses some time […]

The post What Property Managers Can Learn About Automation from Propertyware’s Inaas Arabi appeared first on Fourandhalf Marketing Agency for Property Managers.

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Scott Fritz believes that if you are a property management business owner and you stay in that business, your company will be worth less than it would be if you train your company to work without you. He joins Alex on The Property Management Show this week to discuss the different between an entrepreneur and […]

The post The 40-Hour Work Year: Are You Working Too Much in Your Property Management Business? appeared first on Fourandhalf Marketing Agency for Property Managers.

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Futurescaping and tracking where the property management industry is going has been interesting over the last few years. A lot of things are coming to a head, and on The Property Management Show podcast, we think it’s important to invite guests who are running big businesses. When our small business partners engage with our big […]

The post Futurescaping the Property Management Industry with Chris Lister of Buildium appeared first on Fourandhalf Marketing Agency for Property Managers.

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How can you grow your property management business by opening new locations? A lot of listeners have called and written with this question, wanting to know how to be successful in a new market without having to acquire another property management company. Jason Rose was highly recommended when I asked for help with this topic. […]

The post Preparing Your Property Management Business for an Additional Location: How to Grow without Acquisitions appeared first on Fourandhalf Marketing Agency for Property Managers.

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Over the last eight years, we’ve helped more than 500 property management companies grow their business by helping them develop a sound and effective marketing strategy. We’ve also been busy growing Fourandhalf. Once we hit around $2 million in revenue, the systems we had in place ceased to meet the demands of our clients and […]

The post How EOS Can Fuel Growing Property Management Companies appeared first on Fourandhalf Marketing Agency for Property Managers.

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Scott Brady, owner of Progressive Property Management, had 52 doors in 2013. Now, his company manages about 1,052 doors, and he plans to grow to 3,100 units by 2020. We think he’ll do it. Today, he’s joining us on The Property Management Show podcast to talk about executing the kind of growth that most property […]

The post Taking Owners from Fear to Trust: Controlling the Whole Customer Experience appeared first on Fourandhalf Marketing Agency for Property Managers.

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On our first episode of the year, The Property Management Show wants to start by identifying what’s happening in the property management industry. This industry has accelerated at an extreme rate. We’ve talked about it multiple times, and new things continue to happen. For example, not only are private equity backers getting into the property […]

The post Property Management Acquisitions, Growth and Marketing: The Renters Warehouse Strategy appeared first on Fourandhalf Marketing Agency for Property Managers.

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We’ve made it to the end of 2018, and on this year’s final episode of The Property Management Show, we’re setting you up to take full advantage of the opportunities available in 2019. Think about the journey we’ve traveled over the last few years. In 2017, we focused property managers on the idea of sales […]

The post Turn Any Sale into Lifelong Loyalty in 100 Days appeared first on Fourandhalf Marketing Agency for Property Managers.

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Here at Fourandhalf, we love our sixth-floor office that looks out over Silicon Valley, and we find it helpful to have everyone in the same place. But, we often wonder whether it would be possible to build a property management business that is completely virtual. The Property Management Show received an email from a listener […]

The post How Remote Can You Go? Running a Virtual Property Management Business Without Sacrificing Service appeared first on Fourandhalf Marketing Agency for Property Managers.

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On The Property Management Show, we love helping people in the industry learn from the successes and failures of property management business owners. The feedback we’ve received on our How I Did It series has been phenomenal, so we’re bringing you another episode today. Our guests are Kristin and Shawn Johnson, and they run a […]

The post How I Did It: Kristin and Shawn Johnson Discuss the Successes and Failures of Independence Capital Property Management appeared first on Fourandhalf Marketing Agency for Property Managers.

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The Property Management Show is based in Silicon Valley, and the beauty of our location is that we get to meet entrepreneurs driving property management innovation. Today, our guest is Daniel Shaked, the founder of Home365. This is a company that sells maintenance end-to-end through technology, specifically using artificial intelligence (A.I.) and their own network […]

The post The Next Big Thing in Property Management Innovation: Talking Data and A.I. with Home365 appeared first on Fourandhalf Marketing Agency for Property Managers.

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How I Did It: Lisa Wise Discusses Property Management Growth Today on The Property Management Show, we’re talking to Lisa Wise, who runs a boutique property management company called Nest DC. She spoke at PM Grow Summit in 2017, and she’ll speak again in 2019, so if you’re curious about the conference or you haven’t […]

The post How I Did It: Lisa Wise Discusses the Growth and Expansion of Nest DC appeared first on Fourandhalf Marketing Agency for Property Managers.

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Mike Catalano and Steve Rozenberg joined Alex on The Property Management Show to talk about growth through acquisitions. Mike Catalano is one of the most experienced property management owners to talk about acquisitions, and Steve Rozenberg runs a tightly systemized company and is thinking about acquisitions as part of his growth strategy. Alex and Mike […]

The post All About Acquisitions: Michael Catalano and Steve Rozenberg Discuss Evaluation and Integration appeared first on Fourandhalf Marketing Agency for Property Managers.

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On this episode of The Property Management Show, we’re talking to a guest about fiscally responsible growth after he emailed Alex a response to the podcast about Mynd.co and Doug Brien, who received a lot of venture-backed funding to grow a property management business. Benton Cotter remarked that it was a great interview, but thought […]

The post What Does Fiscally Responsible Growth Look Like? Twelve Markets and 4,000 Properties in 2.5 Years – How Benton Cotter Did It appeared first on Fourandhalf Marketing Agency for Property Managers.

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Are you still passionate about property management? If you’re not, you may be driving away business. Today on The Property Management Show, we talk to Steve Welty, owner of the hugely successful Good Life Property Management. There’s a lot to discuss, from how to become competitive in a new market to the importance of reputation […]

The post Steve Welty Talks about How to Dominate the World (or your Property Management Market) appeared first on Fourandhalf Marketing Agency for Property Managers.

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On The Property Management Show, we’re starting a new series called How I Did It, which focuses on property management success stories. The goal is to empower property management business owners with success stories from those who have done it. We all have challenges when it comes to running our businesses, and in this series, my […]

The post How I Did It: Stephanie Gordon Shares the Challenges that Helped her Succeed appeared first on Fourandhalf Marketing Agency for Property Managers.

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Thank you for joining us for another episode of The Property Management Show. Today, we’re talking to Doug Brien, who is the co-founder and CEO of Mynd.co, a property management startup. Before we talk about his innovative new property management platform, there are a few other things you need to know about Doug. First, he’s […]

The post Doug’s Property Management Startup Raises $35.6 Million; Do You Mynd? appeared first on Fourandhalf Marketing Agency for Property Managers.

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Today on The Property Management Show, Robert Locke is joining us to talk about how to structure your business without growing pains. This probably sounds impossible, but Robert is going to help us elevate the conversation and explain some BIG IDEAS. Why We Should Learn from Robert Locke Robert started his property management company 35 years […]

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In this episode of The Property Management Show, we’re talking about top-line growth versus bottom line performance in your property management company. There’s a belief that’s accepted among business owners that you suffocate without profit. However, it’s also possible that you can suffocate without healthy top-line growth. Profit may be achievable, but top-line growth is possibly […]

The post Top-Line Growth and Profit in Your Property Management Business: How to Navigate the Black Holes appeared first on Fourandhalf Marketing Agency for Property Managers.

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This week on The Property Management Show podcast, we’re treated to an amazing entrepreneur who has been doing property management for 36 years. We’re talking to Melissa Prandi, the owner of Prandi Property Management, and we’re picking her brain for some wisdom on running a property management business successfully. Founding Story: Prandi Property Management in Marin County Melissa started as a receptionist in the company she now […]

The post Achieving Growth with Old-Fashioned Service: A Female Entrepreneurs Guide to Navigating the Property Management Industry appeared first on Fourandhalf Marketing Agency for Property Managers.

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Welcome to another episode of The Property Management Show. We’re glad you’re participating and providing us with feedback, because we see a need for quality information that will help you take a bite out of the huge opportunity that’s out there. As some of you know, 75 percent of the rental properties in the U.S. […]

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The Property Management Show’s audience has grown to about 8,000 downloads a month, with thousands of views on YouTube. So, the intricacies of property management and how to do it right are interesting topics for everyone, especially new entrepreneurs going into the business. The guest we have today has been described as a hardworking hustler. […]

The post How to Expand Into a New Market Without Acquisition appeared first on Fourandhalf Marketing Agency for Property Managers.

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Growth has been the topic of our last few podcasts, and today we have a guest who can help provide some mutual mentorship and coaching with Alex, our host. Growing is easy, but putting a framework around growth to have a successful, profitable business with happy people is challenging. It requires real leadership. Steve Rozenberg […]

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Elevate Operations, Systems, and Talent on both Pre and Post Sale Sides of the Business, or Become Irrelevant On November 9th, 2016, we gathered a group of industry leaders on this podcast live at the NARPM National Conference in Hawaii. Our aim was to decode the future industry trends and help property management entrepreneurs develop […]

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Over the last 48 episodes of The Property Management Show, at least 40 of them have covered sales and marketing. So, there’s a wealth of information for growing your property management business. If you missed those, go back in the archives and pull out a roadmap on structuring your sales team, organizing your marketing, and […]

The post Support My Growing Property Management Business: A Guide to Automation and Outsourcing appeared first on Fourandhalf Marketing Agency for Property Managers.

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Mike Kalis is the CEO and president of Marketplace Homes. He joined us on the Property Management Show podcast to talk about growth plans and discuss the challenges of acquiring property management companies. Marketplace Homes – 19 Markets and 3,100 Doors Marketplace Homes was born 11 years ago, in metro Detroit, during the collapse of […]

The post Acquiring Property Management Companies: Financing Deals, Finding Deals, and Integrating Processes appeared first on Fourandhalf Marketing Agency for Property Managers.

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The Property Management Show Case Study The latest event in the property management industry is quite significant. Castle Property Management, a VC-backed, technology-first start-up in Detroit is closing their doors. Let’s talk about what we can learn from the failure of this property management start-up as an industry and as entrepreneurs. Our guest on the […]

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A Chat with Aaron Robertson of Authority Property Management About a year before Alex Osenenko started Fourandhalf, he met Aaron Robertson, and they were both doing different things. Alex was working for Appfolio and Aaron was running a property management company with some business partners. Today, Alex is hosting The Property Management Show, continuing to […]

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The Property Management Show has been on the air for about two years, and each episode inspires a lot of feedback from listeners. There have been some questions along the way as well, so on this episode, host Alex Osenenko is answering some of the specific questions that listeners have submitted. Alex will use his […]

The post Avenues to Property Management Growth: Q & A with Alex Osenenko appeared first on Fourandhalf Marketing Agency for Property Managers.

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Hiring someone to help you with your property management business isn’t as simple as it sounds. If you’re a business owner and you know you need to hire someone because you cannot continue to wear 16 different hats while trying to run and grow your business, the biggest challenges are immediate: You don’t have the […]

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Here Are Your Keys to the Rent Estate Revolution. Kevin Ortner runs the largest property management company in the country. He has some things to say about where the industry is going and how property managers can move it in the right direction while growing their own businesses and increasing their own potential. On the […]

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Jock McNeill was a guest speaker at the 2017 PM Grow Summit, where he gave a thought-provoking talk about Growth Through Acquisitions. He’ll be back with Michael Catalano at the 2018 PM Grow Summit to discuss the 5 Principles of Success in Growing Through Acquisitions. While we were chatting about his presentation, he said in […]

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This episode is a little different because it was recorded via Facebook Live and was co-hosted by Jordan Muela from The Profitable Property Management Show. We asked six keynote speakers to give us a sneak peek of their talks for the PM Grow Summit, which will open its doors in January of 2018. In this […]

The post Who’s Who at the PM Grow Summit 2018 – A Facebook Live Podcast and Preview appeared first on Fourandhalf Marketing Agency for Property Managers.

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Technology is huge. With emails, Facebook, Skype, and other platforms, it’s easy to lose the art of face to face communication and interpersonal communication. People can hide behind digital technology. That means communication and relationships are more important than ever. If you can master how to communicate correctly and develop relationships, your destination is only […]

The post Property Management & Communication: Science-Backed Ways to Talk with Clients appeared first on Fourandhalf Marketing Agency for Property Managers.

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Establishing great relationships with the right owners will elevate your property management business to a more successful, more profitable level. Identifying and understanding who those owners are can help you be more selective in the business you bring in, and will give you an opportunity to control the customer journey and the professional relationship you […]

The post Property Management Client Roadmap: How to Choose the Right Owner with Marc Cunningham appeared first on Fourandhalf Marketing Agency for Property Managers.

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Growth Opportunities: The Iceberg Report Right now in the United States, there are about 22 million single family rental homes and multi-family rental properties that have up to four units. Out of these, 14.3 million, or 65 percent, are self-managed by the investor or landlord. This offers a vast opportunity to the 32,000 small or […]

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According to the Iceberg Report, right now in the United States, there are about 22 million single family rental homes and multi-family rental properties up to fourplexes. Out of these, 14.3 million, or 65 percent, are self-managed by the investor or landlord. This gives a vast opportunity to the 32,000 management companies competing for the business. By […]

The post The Framework of a High-Performance Property Management Team with Adam Hooley of Apmasphere appeared first on Fourandhalf Marketing Agency for Property Managers.

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Our guest today is Kasey McDonald, who trains Business Development Managers (BDMs) in Australia and here in the United States. She is a consultant for the BDM Academy, which helps property management companies grow and scale, paying special attention to sales. The topic we’re discussing today is how you can support your BDM so that you […]

The post How to Hire, Train & Succeed with Property Management BDM’s appeared first on Fourandhalf Marketing Agency for Property Managers.

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Two guests are needed today because our topic is complex: attracting and retaining top talent for your property management firm. The specific challenge is that, according to Forbes, 60 percent of everyone in commercial real estate services will be at retirement age in the next five years. Even if you are a single-family residential property […]

The post What if Property Management Companies Recruited Like Tech Startups? appeared first on Fourandhalf Marketing Agency for Property Managers.

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Our topic today is maximizing fees, otherwise known as value-added services. The main revenue source for most property management companies is their management fee, but there are many value-added services that can be incorporated to increase revenue. Our guest, Darren Hunter, specializes in this and is a household name in the Australian property management community. […]

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How do you restructure your property management company or property management department to satisfy a savvy client? Rhys Standley, Owner of Just Property Management in Australia, has a creative solution that has increased his company’s client satisfaction and employee satisfaction. We met Rhys at the recent LPMA event in Australia, where the best minds and […]

The post How to Restructure Your Property Management Department and Satisfy the Savvy Client with Rhys Standley appeared first on Fourandhalf Marketing Agency for Property Managers.

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The topic today is how to sell property management services by building a powerful local referral network. Our guest, Joe Stokley, can speak intelligently on this subject because he is a master networker. Joe runs Stokley Properties, a successful property management business in Walnut Creek, California. Joe and his wife began as real estate investors, […]

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The topic of preparing your property management company for a successful exit is a big one, and our guest today is one of the brightest minds in property management. Andrew (Andy) Propst has experience in taking his company, Park Place Property Management, from 200 properties to 4,000 properties in eight years and in just the […]

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Hosting events that educate real estate investors will increase your visibility in the local community, position you as an expert, offer major credibility, be a potential boon for referrals, as well as get you in front of an ideal customer. Needless to say, it is a great way to drive new business, and we have […]

The post How to Put Together Real Estate Investor Education Events with Douglas Skipworth of CrestCore Realty appeared first on Fourandhalf Marketing Agency for Property Managers.

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Today, we are talking about maintenance services and how you can turn it into a competitive advantage for your property management company. Here with us to answer our burning questions on the subject is an expert in this realm: Curt Fluegel, the CEO and founder of PM Toolbelt. About Curt Fluegel, the Founder of […]

The post Property Management Maintenance Company: Systemizing for a Competitive Advantage appeared first on Fourandhalf Marketing Agency for Property Managers.

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Today, we’re giving you the inside scoop as we listen in on one of our clients, Ryan Weir, with Walker Weir Property Management in Auckland, New Zealand. We’re going to dissect one of his sales calls, received from his Google Ads campaign – an owner lead, interested in property management. We’ll listen to Ryan navigate […]

The post The Anatomy of a Successful Property Management Sales Call appeared first on Fourandhalf Marketing Agency for Property Managers.

The Property Management Show: Recent Episodes

The Property Management Show