The Property Management Show

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

3 Steps to Profitability with Kathleen Richards On The Property Management Show this week, Kathleen Richards is joining us to talk about profitability. She’s been on the podcast several times, and we’re asking her a pretty simple question: how can property management companies set themselves up to make good money? Kathleen Richards: An Intro Kathleen has been a member of NARPM since 2005 and she’s the former broker/owner of a Santa Cruz property management company. She earned her CRMC designation from NARPM and owns PM Made Easy, a company providing operational documents and forms to professional property managers. In 2015, she became a certified business coach and founded The Property Management Coach. Since beginning the company, she’s coached over 450 property managers and business owners on how to be more efficient and how to be profitable. Out of that business, Kathleen developed a niche that has drawn people to her who want to start a property management company. Some of them are real estate professionals who want to expand into property management. Other clients recently bought a franchise but don’t have the necessary industry experience. Earning Consistent Property Management Profits The focus of Kathleen’s work is to make sure your property management company runs smoothly. That’s the value that leads to consistent profits year-round. There’s a lot that demands your attention when you start a business. According to Kathleen, two things are needed: Time management Having efficient systems in place The quickest way to set up a business is to create a plug and play model. So much of what property managers do on a daily basis is repetitive. People usually don’t make progress with their business because they’re just reacting to things all the time and putting out fires. There’s no room to be proactive in how the put their systems in place. Automation helps. You can create templates and not type the same letter 20 times. This impacts your profitability. Maybe you’ve been thinking about raising your property management fees or updating your property management agreement but you haven’t actually done it yet. If you don’t have the time to focus on that, it means your systems and your time management aren’t working for you. That leads to less money. Being too busy actually hurts your profitability. For example, if you’re spending a lot of money on marketing but you don’t have the time to return phone calls from new potential clients, you’re throwing away that marketing investment. It doesn’t work. Systems Start BEFORE Day One Maybe you’re just starting a business and you don’t have any clients yet. You still need those systems in place. In fact, this is the perfect time to create them. Get together a plan for onboarding new tenants. Create an application. Set up a rent collection process. This isn’t necessarily the sexy stuff, but it’s foundational and necessary. You have to be prepared to operate your business before you open your doors. There’s nothing worse than working hard and not earning money. The right systems and careful time management prevent you from spinning your wheels. Set Yourself Up for Profitability Think about your pricing – always. Trying to do property management cheaply in order to attract more doors is a mistake. You don’t have to charge the least and you don’t have to manage every property that comes to you. Set yourself up to be profitable. Price your services in a way that reflects your value, and monetize what you do. Here’s an example of how bad pricing can prevent profitability. Kathleen worked with a client who had a flat rate for everything. When they actually did the math, they discovered that she was only earning four percent of the rent per door. That’s outrageous. A lot of owners worry about losing clients if they raise their rates. Set your prices correctly from the start so the expectations are out there. Communicate what you do by charging the right prices for each thing you do. Don’t offer to do “everything” for a certain percentage. Monetize each service you provide. You have to be clear about explaining your value. For some people, only the price tag will tell them how important the work is that you do. This is how you run a profitable property management business. Carve Out Your Local Niche With her coaching clients, especially those just starting a business, Kathleen recommends avoiding a broad approach. Be specific about the neighborhoods you’re serving, and then expand into other areas when the time is right. Pick the neighborhoods or the parts of town you’re willing to work in. This will be easier to manage, especially if you’re starting out in a dense area. Be intentional about the properties you choose to manage as well. If you have an in-house maintenance team, you might want to focus on managing homes that will need a lot of rehab because that’s going to increase your revenue stream. If you don’t have an in-house maintenance team, swap out those older h

Catching Up with NARPM Women’s Council for Property Managers Christina Wade and Kesha Jenkins of the Women’s Council for Property Managers join The Property Management Show to talk about the progress that’s been made since the last time we talked about the launch of this initiative. We’re revisiting the mission of the council and talking about some of the things that have come out of it. There’s a lot of insight and many success stories that have really empowered women in the property management industry. Women’s Council for Property Managers The Women’s Council for Property Managers is a NARPM group that was founded with the goal of equipping women to grow professionally and personally. The council enhances professional development and networking opportunities for women in property management so they can step into leadership roles that they may desire to fill but don’t feel prepared for. This is for any woman with any role in any property management company. All that’s needed is a desire to grow and expand in any way. It’s a challenge to step out of their comfort zones to access the tools that are needed to succeed. Success Stories and Successful Events Kesha’s first event happened to be a fair housing event, which was extremely informative and shared lots of knowledge. The event itself went off without a hitch and she was surprised that after 22 years in the property management business, she still managed to learn a lot during that event. This is why the Women’s Council for Property Managers is holding these meetings. Even though everyone in the room has been in the business for some time, there’s so much yet to be learned and discovered. By learning together, the women in the council are supporting their own careers and they’re supporting one another. After joining, Kesha quickly felt empowered to step out of her comfort zone and lead the Sacramento NARPM chapter. During another event, a property manager was really struggling because she could not find the answers she needed to a particular challenge within her own company. No one was willing to help her, but the women at this even surrounded her with support and encouragement. They provided referrals to specific people who could help her and get her the answers she needed. This was transformative: understanding that even when it seems no one is willing to help, there’s a support network willing to provide direction. Everything that had been envisioned for this council is actually happening, and Kesha and Christine say it’s been uplifting to witness. The purpose and the mission of the group is actually coming to fruition at these events. Taking Risks to Yield Results Anytime you start something new – whether it’s a company or a podcast or a group, you don’t know how it’s going to turn out. Maybe no one will show up. Maybe no one will get involved. Maybe it will be a complete flop. That’s a risk in trying something – but for the Women’s Council, it’s exactly what women in the industry have needed. Any backlash against the group has been due to people not understanding the mission. It’s not intended to put any one group ahead of another. It’s supporting people who want to step into leadership positions within their industry and their community. Community is at the core of this movement. Like-minded people are getting together to share knowledge and tools and they’re lifting each other up. Property Management Communities are Out There Something that may not be obvious to all property managers is this: There’s always a community that’s willing to help. If you approach one community and it’s not a good fit, keep looking. Many smaller groups and communities can be found within the industry. You’ll find the right fit. Generally, people in property management are accommodating, and once you find your tribe, you will notice a big difference in what you’re able to do as a group. This is especially true within an organization like NARPM, which fosters a true feeling of camaraderie among professional property managers. Christine and Kesha recommend looking for local groups and online groups. Facebook groups can be great, as long as you’re cautious. There’s a lot of hate and negativity on social media, but you can quickly find the same handful of people who are genuinely helpful and always positive. They’ll be willing to help, and instead of being combative, they’ll want to assist you in finding solutions. Don’t be afraid to reach out to people personally. Christine notes that Brad Larson was extremely helpful in getting the Women’s Council started because she got in touch with him to talk about it. If someone doesn’t respond, don’t take it personally. It doesn’t mean anything except that you aren’t meant to connect. Keep looking and keep trying. As you take steps forward, the right people will show up to help you meet your goals. Start with your local associations if you’re not already a part of them. And, if you don’t see a group out there, why no

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

Do Guarantees Work? Chuck Hattemer of Poplar Homes is on The Property Management Show today, talking about the property management guarantees his company implemented more than six years ago, and how they’ve helped him build a better property management business. The Idea behind Making Guarantees a Marketing Strategy Chuck and his business partner have been running Poplar Homes since 2014. When they started the company, they quickly noticed how much anxiety there was around income stability for real estate investors. A lot of the landlords they were marketing to relied on timely rent payments to pay their mortgage, insurance, and maintenance. They heard horror stories around evictions. There was a situation in which Chuck and his partner had to help a new owner with an eviction. The tenant had managed to completely steal someone’s identity and moved into a home with an $8,000 per month rent payment. After the eviction process had begun, they went into the home to make sure the tenant had moved out. Ever since that experience, Poplar Homes has gone above and beyond what is necessary to make sure properties are secure and owners feel safe with their investments. The owners involved in that eviction became immediate advocates for their property managers, and it demonstrated to Chuck that if property managers can take care of the root of that uncertainty that so many owners and investors feel, it could become part of their process. That was the beginning of the guarantee program: income stability and evictions. It’s a perfect example of turning a common pain point into a unique sales proposition. Rent Guarantee and Eviction Guarantee: How They Work Chuck’s company implemented these guarantees before they were common: Rent is guaranteed to arrive to the landlord by the third business day of every month. Evictions, if necessary, are covered for up to $15,000 of legal fees. To implement these guarantees, risk assessment is necessary. But the results have been pretty clear. Most customers surveyed name these guarantees as the reason they chose to work with Poplar Homes. While a lot of companies throw guarantees around when they’re marketing their services, for Chuck it works because this service aligns with their brand. Their mission is to be a partner with the property owner throughout their real estate journey. All the other services you provide have to be solid before you can start making guarantees. Check out the Poplar Homes website, and you’ll see that their guarantees are front and center. The storyline throughout the website content is that their services are guaranteed. This messaging mentality is also part of who they are, and why they’re so successful with this unique point of service. Chuck says it’s about reaching their audience. The majority of single-family rentals are managed independently. By having guarantees, they’ve been able to reach into that audience of DIY owners and show them a new style of property management that they can trust. They’re guaranteeing the residents they place, which helps them address some of the negative emotions that a lot of landlords still hold when it comes to property management. Implementing Technology to Support Property Management Guarantees A lot of property management companies have begun guaranteeing rent no matter what. That’s dangerous and difficult to sustain. Chuck does not guarantee rent during vacancy periods, for example. There’s too much risk there. Instead, their rent guarantee is pretty specific to what owners really want: timely payments. It’s hard to imagine how they can promise that rent will be deposited by the third business day of the month. What about grace periods and processing times? They’ve built the technology to support that guarantee. The payment processing hurdle is easily managed because rent is due on the first of the month, and late fees are charged if it comes in after that. They’ve we’ve built the tech payment processing and grace periods on rents. We work with 12 month leases built a payment system that’s directly integrated with their bank. Renters can set up automatic payments, recurring payments, and even split payments if there’s a roommate situation. On-time and online rental payments are incentivized. When tenants pay online, they earn other benefits. With 80 percent of their residents setting up recurring payments in their system, rent is almost always paid on time. After the money is collected, the payment system is on top of what the bank uses, allowing for same-day ACH payments. The money moves faster and takes one day instead of three to seven days, which is typical with most property management software. Another process that supports the rent payment guarantee is tenant screening. They automatically screen incoming residents on credit and financial criteria. The system weights all of that, and there’s a lot less risk in these guarantees. If you’re a property manager using third party software, you can still offer a rent

Misconceptions about Property Management Leasing Automation We’re talking about leasing automation today on The Property Management Show, and our specific discussion centers around what it is and what it isn’t. We’re also talking about how it can help property managers save time and improve their reputation. Our guest is Abi Wasserman, sales manager at ShowMojo. What is Leasing Automation? Simply put, leasing automation is the removal of any manual effort from the leasing process. With automation, you’re reducing the cost of manual effort that you put into the entire leasing process. From the moment the listing goes on the market to the way the application process begins can be completely automated for property managers. It includes syndicating the listing, screening a potential resident before they even visit the property, and coordinating showings. That’s the scope of leasing automation. One of the main misconceptions about leasing automation is that it simply means lockboxes or self-showing technology. Those things can be one component to leasing automation, but there’s more to it. Automation contains a lot of the self-showing process. It covers the way prospective tenants see a property. You can also still automate your leasing process without using lockboxes or self-showing technology. For example, for an occupied property a lockbox isn’t going to work. You can’t have prospective tenants showing up to take a tour of a home where your tenant still lives. Not owners want self-showing technology available, either. Showing technology might be part of what you do, but it’s not the entire automation process. What Leasing Automation is NOT There are some property management companies that have taken steps to implement workflow automation. A lot of sales people use canned responses to emails. That makes your process similar, but it doesn’t mean you’re automating that process. If you’re still picking up the phone to schedule and reschedule appointments or manually checking your calendar for times that are available to you or your phone is still ringing with inquiries – you’re not using an automated leasing process. If renters cannot self-screen before scheduling a showing, that’s not leasing automation. To be fully automated, you need to incorporate an entire process instead of taking one or two steps towards it. From the moment a property is available all the way up to a prospective tenant filling out an application, you can automate the process without any of your own labor. Once the screening starts and the move-in checklist comes out, you’ll need a high-touch plan to work with your tenants. The tech moves aside to the high-touch property management. Automation Does Not Mean Artificial Intelligence Maybe you’re worried that automated pre-leasing means people will try to call about a listing and get caught in an automated phone tree that takes forever to navigate and still ends up at someone’s voicemail. That’s a misconception. It’s also a misconception that robots will take over all of the pre-leasing work if you automate. According to Abi, you have to set up your process for best practices. Some property management companies want prospective tenants to be able to schedule their own showing online, without talking to anyone. Others prefer to have interested tenants talk to a live person. The automated process does not take out the human. It’s instead a prospect-driven leasing process that allows the renters to be in the driver’s seat. There’s an immediacy to it that prospective tenants want. A lot of times, tenants aren’t looking at listings during business hours. They’re scrolling through sites at 8pm or 11pm. When tenants schedule a showing or express an interest in replying, automated systems will still send a personal reply. It won’t be from ShowMojo if you’re a property manager using that software. It will be from a human inviting that tenant to schedule a showing. Most tenants prefer to schedule online. They’re more likely to use an automated form than they are to call the management company and spend 10 or 15 minutes trying to find a good time to see a property. They’d rather answer the five questions on a pre-screening questionnaire and move on. Automation Saves Property Managers Time For ShowMojo customers, the average amount of time saved is about four hours per day. That’s how long it takes to answer calls, coordinate showings, respond to voicemails, answer emails, and then reschedule showings. A lot of time can be wasted showing up at a property and having the tenant not be there. The automated process includes a rigorous confirmation procedure. Those tenants are more likely to show up and there are steps to manage cancellations or notify property managers if a tenant is running late. Less time is wasted. Instead of an inbox with dozens of emails that say showing requested, property managers using automation will have dozens of emails saying showing confirmed. They don’t have to do anything

The podcasts we publish on The Property Management Show usually inspire us to talk about the topics that we cover, long after the guests have left us. On today’s show, we’re sharing some of what we captured when Marie and Brittany were discussing the most common blind spots that property managers miss when it comes to marketing their business and their services. Two stand out: Positioning and Data. Most Common Property Management Marketing Blind Spot: Positioning Positioning can be a big blind spot for business owners and property managers. Here’s a question that we often pose to owners of property management companies: “What makes you different from your competition?” There are three common answers that we hear a lot: I am an investor myself. We care for your property like our own. We deliver peace of mind. These are great reasons for an owner to work with you. But these are not competitive advantages. They’re more like value propositions. They’re selling points, but they don’t necessarily set you apart from other companies. It’s important to communicate that you invest in your own rental homes and provide peace of mind and treat clients’ homes the same way you treat your own. But, you also need a differentiator, and these qualities are not that. You might be surprised at how many of your competitors claim those same three sales points. If you’re trying to position yourself as being better than your property management competition, you need something else. What does it feel like to work with you? What do you want your owners to feel like when they know you’re taking care of the leasing, management, and maintenance of their investments? Think about the experience of buying a used car. No one likes to do it because you know an over-aggressive sales person will approach you almost immediately, try to upsell you, and then keep you there for 12 hours while the financing is figured out. People hate that. So, you can position yourself as a used car company that offers 0 percent financing (which all of them do), or you can do what CarMax does, and solve the pain of used car buying. They know the process isn’t the best, so they allow you to do everything online and then arrive to pick up your car curbside without ever talking to a sales person. That’s a differentiator. Used car companies aren’t going to double their sales by offering 0 percent APR. But they might by positioning themselves based on their truly unique qualities. Property managers aren’t going to double their doors by offering peace of mind. These are the little things that make a big difference. Think outside the box when it comes to your market and what you can offer. Two things will help with this blind spot: Observe your competition. What are they doing and what aren’t they doing? Know your perfect client. Elevate Your Positioning Beyond Table Stakes This is hard. It takes thinking and creativity and brainstorming. We’re in a time of property managers offering guarantees. We did a whole podcast on that recently that will publish soon. When no one was offering guarantees – that was a competitive advantage. But, now that most management companies offer the same guarantees – it’s become table stakes. In other words, it’s so common now that many property managers feel they have to offer guarantees, just to be on level playing field with their competition. Sometimes it can seem like you’re running out of ways to make yourself stand out. What’s interesting is that reputation has a huge impact on whether or not those table stake offerings matter. If you’re a company that has a great reputation, it won’t matter as much if you don’t offer guarantees like other management companies do. People are going to want to work with you because of your reputation. But if you’re suffering from poor reputation management, offering guarantees and following through with them may play a bigger role in lifting your reputation and thus, your ability to grow. (Learn more about reputation management). These shiny new sales pitches – like guarantees – can help you gain some visibility. But, sooner or later you need something else. We recommend looking inward. It can be harmful for your business if you’re always chasing the next shiny object and the next big thing. You can overextend your team or put your business model at risk. Don’t lose sight of who you are. Guarantees are accessories for your business. But if you don’t know who you are and you bounce back and forth between what you offer, it’s hard for customers to get to know you. When you keep changing your offerings and they have no connection to each other, and they’re not tied to those core values, then it sounds like a gimmick. Beating the Positioning Blind Spot When you’re positioning your company, you have to ask yourself some key questions: Who are we and why are we here? Is this who we want to be? What do we already have in place? What do we need to stand out? If you

Brittany and Marie joined Ethan Lieber on the Latchel podcast to discuss marketing gaps and how property managers can compete in an industry that’s only growing more crowded and more competitive. Ethan wanted to know how a property management company can position itself and build relationships to add the marketing fuel that’s needed to grow. Here’s what they had to say. Fourandhalf as Property Management Experts Fourandhalf is a marketing agency that creates and implements owner lead generating plans for property management companies. The main goal is to help property management companies grow through owner acquisition. They partner with their clients to get found online by property owners, which requires marketing strategies that target their ideal owners. Some of the marketing campaigns Fourandhalf manages include blogs and content creation, websites, SEO ads, and reputation management. Most Fourandhalf clients already have the foundation of their business set up. A good marketing campaign will work best when the operational side of your property management business is ready to go and ready to grow. Marketing and leads need infrastructure to be effective. Even the best marketing plans won’t work if no one is there to answer the phone and engage with leads. Over the last five years, a lot of people have wanted to get into the property management space to build a monthly recurring revenue model. Fourandhalf can work with people who are starting from scratch, but it’s a challenge because marketing takes time. Sometimes, newcomers to the industry believe that property management is just managing homes, but there’s a lot more involved, and that’s why Fourandhalf has also served as a connection hub for people in the industry. If you’re not ready for marketing, this company will put you in touch with the people who can help you build your foundation and prepare for the marketing component. Acquiring a New Client: Close the Holes in Your Funnel Most property management companies can think about their marketing and sales process as a funnel. At the end of the funnel is the client. The top part gathers everything that’s needed for marketing. You’re bringing people into the funnel, and you want to make sure there’s not a hole in that funnel. You want to make sure the funnel goes somewhere. That’s how you get marketing to work. When people come to Fourandhalf, they’re usually doing some sort of marketing already, even if they don’t realize it’s marketing. Most business owners reach out for help when they realize they aren’t sure of what they’re doing, or they don’t have the time to do it right. The first step of the onboarding process with Fourandhalf is to look for problems in the process that a property management company already has. It might be an unstructured sales process or a simple training issue with their Business Development Manager. Trends and Mechanics in Property Management Ethan sees management companies with a demand and appetite for growth. Increasing doors and revenues is a huge topic in the property management industry. Has this led to an investment in property management marketing? Yes, and for a couple of reasons: The real estate market is crazy right now. The higher demand for marketing is partially driven by the fact that house prices are high. With such a hot real estate market, rental property owners are starting to cash out on their investments. While word of mouth and referrals once made up for any natural attrition with a property management company, marketing is necessary now because that attrition is growing. It’s a little bit of panic for some companies. Competition is growing. More and more property management companies are arriving in markets every day. Companies have to offer competing prices and services, so that requires a marketing strategy that gets existing and new businesses in front of people. You cannot control that your clients are selling their home. But, if you’re a property manager who also offers brokerage services, you want to make sure your clients know you can help them sell. That’s part of marketing. The worst case scenario is finding out you’re losing a client after the house is already sold. It’s easy to forget that providing a service is holistic. It starts with marketing and runs through the entire property management lifecycle. It’s all interconnected. You aren’t going to provide every service for every client by default. You have to let them know what you’re capable of providing, and you have to market yourself all the time. When property managers think of owner marketing, they often think about marketing as something that happens before the contract is signed. But, you can’t stop thinking about the owners you already work with. You continue winning their business throughout the contract period. You can make sure they’re happy with you and you can upsell other services, especially if you have a brokerage. Act as a consultant, not just a property manager. Educat

Summary: The Property Management Show is back this week to continue our conversation with Ray Hespen of Property Meld. In the last episode, we talked about property management maintenance trends and increasing costs. Today, we’re mostly talking about how property managers can position themselves to have effective conversations with owners about maintenance. Key Takeaways: Talk to owners openly about the fact that maintenance costs are rising. Explain that it’s happening everywhere – not just to them. Communicate. Educate. Don’t leave them to draw their own conclusions. It’s costly to lose owners, and to keep them your message needs to be that you can help deliver better ROI, even with the property management fee. Owner engagement has to move beyond a simple monthly accounting statement. It needs to be a live updated and ongoing conversation. You can prioritize keeping costs down for owners while still making money on maintenance. Property Management Messaging We learned last week that a 10 percent increase in costs is likely to drive an owner away from property management in an effort to lower costs by doing it on their own. Like all of us, most owners don’t like to admit when they’re wrong. So, even if they begin managing on their own and realize they can’t keep costs down, they’re unlikely to return to their property managers. The property management industry needs to pivot when it comes to messaging. Stop talking about obvious benefits to property management – like peace of mind. Instead, the constant message needs to be that you can deliver better ROI by managing lower maintenance costs. Talk to owners openly about the fact that maintenance costs are rising. Explain that it’s happening everywhere – not just to them. Talk about the things you can do that they can’t: Increased buying power Access to vendors they can’t access on their own Long term relationships with vendors and contractors and suppliers. Internal maintenance teams You have to share the right message and you have to make sure your owners believe what you’re telling them. This is all about perception. Your owners need to believe that even though prices are higher, you’re still doing it for less than they could do it. Communicate. Educate. Don’t leave them to draw their own conclusions. Stepping Up Your Owner Engagement It’s costly to lose owners, and to keep them your message needs to be that you can help deliver better ROI, even with the property management fee. The only reason anyone wants to manage their own property is because they believe they can do it cheaper than a property manager. Your job is to change this perception. It has to be the conversation you have with existing owners and new owners. Selling new owners on peace of mind isn’t wrong. It’s true that you deliver peace of mind and protect their investments. But, you have to tell them what else you do. ROI is what matters, and right now you’re losing clients and not getting new clients because of maintenance costs. You have to address that. There’s a huge landlord market in the U.S. Check out these statistics from Ray: 8 million rental homes are professionally managed in the U.S. 23 million rental homes are self-managed by landlords. Retaining clients and acquiring new clients line up together behind messaging. If the industry can show landlords that property managers maintain homes at a cost that’s better than what they’re doing, there won’t be a self-managing landlord left in the U.S. Messaging includes knowing your audience and their hot button issues. Throughout 2020, property managers had an opportunity to market themselves as experts in the complex legal situation that the pandemic brought about. Landlords didn’t know if they could collect rent or send a notice, and property managers were relied upon to take care of that for their owners. Now, we’re coming out of that. Courts are opening and evictions are happening. Rent is more consistent. Maintenance costs are now front and center. It’s a new fear that property managers have to be prepared to talk about. How Property Managers Can Position Themselves Hopefully, you caught the podcast with the Real Estate Gladiators. Tracy Minick and Katherine Swanberg talked about how they constantly communicated with their owners everything that they were doing for them, even during an eviction moratorium and a difficult period in rent collection. Talk to your owners about what you’re doing to save them money – even while costs are going up. Ray has some additional recommendations on how property management companies need to position themselves right now. Here are his tactical suggestions: Explain what’s happening – maintenance costs are rising, and here’s why. Provide education. Talk about what you’re doing about it. Solicit preventative programs. Make this an active conversation at least once a month. The owner engagement has to move beyond a simple accounting statement every month. It needs

Summary: It’s been a year since we had Ray Hespen, co-founder and CEO of PropertyMeld on The Property Management Show podcast to talk about COVID-19 and its impact on property management maintenance. The last time he was with us, we discussed ghost maintenance – the idea that all these tenants were at home with the pandemic and no one wanted maintenance technicians or vendors in their property. So the theory was that a backlog of unfulfilled maintenance would develop in the early days of the pandemic. We have him back today to find out if that happened. Key Takeaways: As predicted, maintenance requests in 2020 dropped off in March and April, and then saw a huge uptick beginning in June. Maintenance requests in 2021 have stabilized, although Ray has seen a rise in maintenance cost and a rise in the number of requests, which he believes is a result of more folks working remotely from home. The rise in maintenance costs is due, in part, to the disruption of the supply chain and the fact that vendors and technicians want to be paid more. Ghost Maintenance and Rental Properties As expected, there was a huge drop off in service requests in the beginning of the pandemic. Then, as vendors and maintenance companies began putting safety protocols in place, the repairs requests began to pick up again. The 2020 year was not business as usual in property management. Ray was on the show last year because he saw a significant reduction in the volume of maintenance requests. Requests began to drop off in March and then in April they were at a complete standstill. In May, people began to feel better about reporting those critical repairs and allowing maintenance teams into their homes. By June, there had been a large backlog created, but there was an increase in work that was being completed. Through the rest of the year, service professionals were working through that backlog. An equilibrium was reached around October, and more maintenance issues were being generated. The power of data allowed Ray and his team to make these assumptions, which turned out to be completely accurate. Property Managers and COVID Maintenance Safety protocols for vendors and technicians were a big part of managing maintenance needs during the worst of the pandemic. Property managers were also proactive about soliciting their tenants for any known maintenance needs. The concept was that even if the tenants didn’t want someone in the property to fix the problem, property managers still wanted to know there was a problem. The goal was to help tenants feel comfortable submitting the requests. This was helpful in managing the backlog because once things opened up again, they could prioritize the work needed. Soliciting maintenance request requires a balance. Property managers don’t want to generate extra costs or invite unnecessary maintenance work for their owners. However, maintaining the property is important, so focusing on those preventative issues and making sure small problems can’t become large problems is important. Property managers understood this. Replacing a leaking toilet can cost thousands of dollars while fixing a gasket is relatively cheap. Property managers serve their owners by paying attention to those things that protect them against larger costs. Shifting from 2020 Maintenance Trends to 2021 Things are stabilizing in 2021 with maintenance requests. Vaccinations are available and infection rates are not as high. Tenants are generally more open to having people in their homes. The changes that were made in 2020 are still in place. Vendors are mindful of safety protocols and property managers are still soliciting if they’re worried a tenant isn’t reporting necessary maintenance. Comfort levels have changed, and residents are communicating with their property managers and their maintenance providers about scheduling. It’s systematic and these things will likely stay in place even post-pandemic. Remote Work and Rental Property Maintenance The data shows a couple of interesting points. First, there is a slight uptick in maintenance and service requests overall. These increased maintenance requests are consistent with a culture that’s increasingly working remotely. Residents are in their homes more, so there are going to be more toilet flushes and door handles turned. Statistics show a six percent year over year increase, which is statistically significant. Second, the invoice costing is up. Rising costs are a big issue for property managers and their clients. Invoices for maintenance are around 18 percent higher. This is statistically significant and it’s also something property managers need to pay attention to. Why? Because an owner will leave a property management company if there’s a perception that maintenance costs are too high. Any property manager will understand that. Studies show that if annual maintenance costs exceed 10 percent of the rent roll, the likelihood of customer churn goes up significantly. Invoices that hav

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 can compete. Key Takeaways: Venture Capital companies are interested in the business opportunities available in the property management industry, but the industry is difficult to dominate because of its fragmentation. Local property management companies have a competitive advantage over VC-backed companies because of the trust they hold with their community. Ethan believes that only three out of ten self-managing landlords are ever going to become your customer. Understanding this concept can help you narrow your focus when it comes to going after leads. Why Is Property Management Attractive to Venture Capital Companies? At PM Grow 2021, Ethan delivered a fireside chat on the topic of competing with these VC companies. Before we can get into strategies for competing, a lot of property managers may be wondering why. Why do these VC companies want to be in property management at all? The obvious answer is this: money. There’s a lot of money in property management. It’s a huge business opportunity. Traditional management services generate hundreds of billions of dollars. When you add in the ancillary services companies can provide, we’re looking at trillions of dollars. Typically, local businesses have captured most of the market share. Look at a national scale, and you’ll see where the venture-backed companies began in property management. They funded industry-specific endeavors like Appfolio and Yardley and Buildium and similar platforms. The entrepreneurs that backed those initiatives now want some of the market share that property management companies themselves have been earning. Here’s an interesting statistic: the top 15 management companies only own 7 percent of multi-family properties in the U.S. No other industry behaves like this. When you take a look at retail, huge companies like Walmart and Amazon can come in and eat everything up. It’s easy. But, property management is one of the remaining industries where it’s hard for VC companies to dominate. That’s because the business is so fragmented. Winner-Take-All Thinking Isn’t Part of Property Management Generally, venture-backed companies have been drawn to industries with a winner-takes-all playing field. If you figure out what an industry needs, you can dominate the market. Microsoft figured that out early on and the government had to force them to break up and allow competitors. A lot of VC companies have the goal of getting so big you’re a monopoly. But you don’t want to look like a monopoly because you don’t want to attract the government’s attention. With property management, it’s hard to see a situation where someone is a monopoly and a winner that takes all. Zillow is never going to become a monopoly where there’s no room for anyone else, for example. Property management is one of the few industries that this will not happen. The VC companies want in because the industry is so big. They don’t need to take it all. They know that just a fraction of the market will make them a lot of money. So, they want to eat up a lot of the market share, but local property management companies have a lot of competitive advantages. You’re probably not even competing for the same type of business as these VC companies. Property Management and Industry Disruption Another thing that VC companies look for is this – how ripe is an industry for disruption? Property management is very much a legacy industry. Historically, it’s been very inefficient. There’s a low use of technology and automation and AI. So it creates a space for companies to come in and leverage their technology and software platforms. Meaningfully higher margins are earned. When you’re competitive, your business is more sustainable and fast growing, even if your acquisition cost is higher than your competitors. You may spend more money to get your next customer, but that customer is also going to be far more profitable. That creates a new playing field in property management. If your margin is 30 or 40 percent while everyone else is at 6 percent because you can acquire customers at five times the cost they do, you’re going to grow faster. Does it work for VC companies? The challenge in property management is that acquisition costs are much higher for national companies. When you want to scale quickly, you have to be willing to pay that higher acquisition cost. If you’re spending $4,000 to acquire one landlord, you need to be sure about your ROI. The payback period will be more than a year. This means client retention is more important than ever. Losing money in the first year is a given, but if you hold that client for six years or more, you’re going to see

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 PM Grow 2021, head over to 2021.pmgrowsummit.com) Today, he’s talking about the practices, mindsets, and habits that property managers should have to ensure their business is profitable. Key Takeaways: Property management profitability is a mindset and a practice, you can cultivate as a property manager Profitability practice starts with knowing your Financial Freedom Finish Line Stick to your practice, trust in the strategy you’ve laid out to get to your goal, and live within your means as your wealth grows over time Steve’s profitability practice is to limit owner decision-making in order to provide better service to his tenants Property Management Profitability as a Practice Property management profitability is more of a practice than an end result. It’s similar to nutrition in that it has to be part of your day-to-day lifestyle and mindset. We asked Steve to speak about what profitability as a practice means for the property management industry. It starts with a personal financial goal. Ask yourself where you want to be in five years, 10 years, or 20 years. At what point do you want to cross what Steve calls the Financial Freedom Finish Line? The Financial Freedom Finish Line is the point at which you have enough assets and money and rental income to quit working forever and not run out of money. It’s the point where your wealth produces the income you need to live. Everyone should start with that. You’re starting with the end in mind, and that’s often a big jump for people. But, if you’re 25 years old and you know you want to retire at the age of 55, with a net worth of $3 million in today’s dollars, you’ll have to do some math. Compute out into time with inflation what that number needs to be when you’re 55 (or whatever age you pick). Work backwards to figure out how much you have today and how much you have to add each year so that when you do reach the finish line, you’ve done what you set out to do on your financial journey. That’s where you start. For Steve, the practice of building wealth is just doing some numbers. It doesn’t have to be complicated. In fact, he first wrote those numbers out for himself on the back of a napkin. This strategy has informed his property management business. It’s why he never wanted to be a 2,000-door company or a 1,000-door company or even a 500-door company. At 100 doors, he got what he needed to be on that path he had set for himself. If you’re feeling a financial bottleneck that’s preventing your company from becoming profitable, check out our episode with Daniel Craig about Bottlenecks to Property Management Profitability. Establishing an Ideology of Profitability Steve remembers listening to a finance guy on AM radio every Saturday when he was younger and driving around, and he absorbed a lot of what the expert said. Steve doesn’t remember who it was, but there was one thing in particular that stuck out. The finance expert said never borrow money to purchase a depreciating asset. That idea essentially means: it’s a bad idea to borrow money for things like furniture and cars. If you can help it, those things should be paid for in cash. It’s okay to borrow money for things that increase in value, however, namely real estate. Steve moved forward with this philosophy and never bought a car that wasn’t at least 10 years old and affordable with a cash payment. If you adopt a belief or a principle that informs how you’re going to handle your money, and then you start doing it without breaking your own rules, you’re going to create an ideology for yourself that helps you achieve your property management profitability goals. A big mistake Steve sees a lot in real estate is people increasing their lifestyle as they increase their income. He never did that. His happiness came from seeing the progress of the wealth he was building over time. You have to be patient because the growth is slow. Steven never questioned that he could be prosperous and happy. Financial independence simply required a roadmap and a commitment to the property management profitability practice he had laid out for himself. You can compare this to eating right. There’s no magic bullet or big secret. You know what you have to do to be healthy. The problem is in the execution. The Gap Between the Practice and the Action When it comes to making your property management business profitable, sometimes you have to reconcile what you know you should do (the practice) with what you’re actually doing (the action). That can be a struggle. We know what’s good for us, but it’s easy to sabotage ourselves by acting differently. How can property managers work through that? Stev

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 over the last year of this pandemic and how to navigate around ever-moving targets, laws, and expectations. Key Takeaways: Due to Federal and local eviction moratoriums put in place by the pandemic, large parts of property manager’s lease agreements are unenforceable. This has dramatically changed property manager’s job descriptions. Property managers like the Real Estate Gladiators are communicating with owners and tenants more, assisting tenants with unemployment & helping tenants seek financial support so that they can afford to pay rent. Property managers are more valuable to owners than ever. It’s vital that property managers communicate the way that their job has changed to their owners, and demonstrate the amount of work they’re doing to keep their owners compliant. Property Management During Moratorium Madness The Real Estate Gladiators team has been fighting even harder for their owner clients than they ever did before. We asked Tracy and Katherine to talk about how they’re using this experience to showcase their true value as professional property managers, even though their hands are in many cases tied because of laws and moratoriums. COVID Legislation and Eviction Moratoriums Current legislation is under consideration to extend the eviction moratorium and to implement other laws that will impact both tenants and owners. While Tracy and Katherine primarily manage homes in Snohomish County, Kings County, and Pierce County in Washington State, they’ve learned that anything done in Seattle usually spreads throughout the state. Often, it motivates other states across the country to enact similar laws. The legislative session in Washington State will include a tremendous number of bills that will impact business owners and property managers and landlords in many different ways. We could see some huge changes coming. It’s been almost a year since we began living with COVID. Moratoriums enforced on property managers and owners have required a pivot in the way everything is handled, from late fees to notices to evictions. Most of us likely believed that this was simply a response to a temporary situation. Now, it’s looking like the laws and restrictions put in place could become an additional two-year plan. You should check out our episode about cashflow during the COVID-19 pandemic if that’s another layer that you’re dealing with right now. Looking at the Washington State Eviction Moratorium Like many places in the country, Washington State has had an eviction moratorium for a full year. There’s a national moratorium and then there are local extensions of that moratorium. This provides another blanket of restrictions and rules that hold back the eviction process. In Washington, there are laws in place that impact Real Estate Gladiator’s ability to: Collect past due rent Terminate tenancies Increase rent Charge late rent fees Charge penalties or NSF fees Essentially, large parts of their lease agreements are no longer enforceable. Even asking tenants to pay rent or providing an invoice for the rent that’s due is not allowed. Property managers and owners in and around Seattle and throughout the state of Washington have been encouraged to ask tenants to pay what they can when they can. Payment plans are also encouraged. This has dramatically changed the job of a property manager. Before last year, owners would hire a property manager to enforce a contract. Now, owners are relying on property managers to increase the level of communication and negotiation with tenants to an all-time high. Property managers are communicating with tenants 10 times more than they were a year ago. They’re also communicating with owners more frequently. To be a successful property manager, you have to understand the situation that each tenant is in and how they’re impacted by COVID hardships. Tracy and Katherine have been providing resources to tenants to help them access any support that’s available to them. This is a different job description than it once was. Coordinating COVID Resources for Tenants and Owners Real Estate Gladiators were always providing resources to their tenants. Now, however, those resources include help in applying for unemployment. They’re educating residents on where to go for help and how to initiate an unemployment claim. In Washington State, you do not have to prove a COVID hardship in order to be protected from eviction. Tenants are simply not required to pay rent right now. That doesn’t mean they won’t be accountable for it at some point. Communication with tenants has been about support. Tracy and Katherine are w

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 Takeaways: A Realtor referral program is a tool or system that a property management company uses to collect leads based on referrals from Realtors. Realtor referral programs can be a great source of generating leads. To make yours successful, you need to be willing to put time into maintaining and managing your program, and your relationships with Realtors. Realtor referral programs are the most successful when supported by a holistic property management marketing strategy. Basics of a Realtor Referral Program Everyone has a different idea about what a Realtor referral program is and how it should work. At its most basic, the program is a tool or a system that a property management company sets up to help them with the marketing of their leads. There are typically multiple components involved: A website or a web page that explains the program. This site should include information about the referral bonus paid to eligible Realtors who refer clients to the property manager and a list of benefits that the Realtor will enjoy by working with the property manager. An automated marketing system where social media outreach is done or a Business Development Manager calls Realtors on a consistent basis. Online form asking for referrals These are the typical components, but that’s not everything your referral program should include. Creating the Realtor referral program is your first step. Then, you have to make it work for you. That requires marketing and managing your program. There are multiple levels to its success, and it requires ongoing attention. Check out our step by step guide to creating your own referral program makers Successful Programs vs. Those That Fail Why do some Realtor referral programs work and others do not? Vitaliy says it really comes down to effort. As with any program, you have to put in a lot of work to get the results you want. With referral programs, it’s easy to get discouraged if you don’t see immediate results. But, you have to realize that building successful referral relationships takes time. Programs fail because property managers don’t make the effort. They don’t spend time networking with real estate agents and marketing their services and value. If a lot of traction isn’t made right away, it’s easy to lose interest in the program and begin focusing on other things. This is a mistake. Referral programs aren’t easy. Earning those referrals requires time and effort, and it’s not going to happen right away. Everyone knows that property managers are busy. There’s a lot of talk about property managers working in their business instead of on their business. A referral program sounds like a great idea but it starts with a website and relationships and marketing. Before too long, something else will grab your attention and you’ll go back to getting lost in the day-to-day business needs. If you want your program to work, you have to focus on implementing that program and jumping on Zoom calls and meetings with Realtors. You need to share your expertise and your knowledge while promoting your services. That’s what will bring you the success you’re hoping for with a referral program. In the property management industry, no two days are ever the same. Things are always coming up. Property managers in Texas, for example, never imagined they’d have to deal with frozen pipes in their properties and mass power outages. You need a plan to push through the daily work and the craziness you encounter from tenants and owners to make time for your referral program. Research and Statistics: How are Realtor Referrals Used? A lot of research has been done on referral programs and one particular study looked at over 600 professionals across North America. Here are some of the interesting things that were found: 84 percent of decision makers start with a referral. 82 percent of respondents said referrals are their biggest leads. Those are big numbers. The best leads come from referrals because they convert at a higher rate. It’s cost effective, too. You’ll close deals faster which means you can spend your marketing dollars elsewhere. Another important statistic: Only 30 percent of companies have a formalized referral program. When you call a lead that you got off a Google Ads campaign, the conversation is going to be more challenging than the lead you call from a referral. We know referrals are an excellent source of marketing leads. So, why do only 30 percent of companies have a formal program? Out of the 30 percent of companies that use referral programs, 86 percent of those companies have grown in last two years. We know they work. How Can You Make Your Realtor Refe

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 the times and attract more property owner clients. Key Takeaways: Internet marketing has exploded in the last nine years for the property management industry. Google Ads, websites and content marketing are crucial for owner marketing these days. Changes in consumer behavior are affecting owner marketing strategies. There are more things vying for our attention these days – your job is to capture owner’s attention, and provide value to them once you have it. Catch our full Property Management Marketing series: Property Management Marketing | Part 1 | The Rise of Zumper & Facebook Marketplace Property Management Marketing | Part 2 | Building Waitlists & Pre-Marketing Remembering Property Management Owner Marketing in 2012 John started in internet marketing about nine years ago, when it wasn’t really a thing. There were websites and homepages, but they were little more than a placeholder or calling card. Think of a glorified Yellow Pages ad for a company, with the addition of a few pages. Most property managers were getting their websites from their software companies. It was still more common to spend marketing dollars on print ads in the Yellow Pages or on billboards or bus seats. Maybe a property manager would purchase a radio ad or a television ad if there was money and ability. The internet was not the primary marketing platform for property managers when John got started and Fourandhalf was arriving. He remembers his first NARPM National meeting, which was in Washington, D.C. in 2012, and he had to explain to people that you can get business from the internet. Some people understood this but a lot had not thought about it. Leading an Industry Towards Different Thinking The world at large began to change and a huge part of life moved online. YouTube was around and that’s where people went to watch videos. Netflix had just started streaming but it wasn’t very popular yet. More information could be found online and eventually, there was no reason to explain to property managers that it was a good idea to advertise on the internet. The number of ways to advertise had grown more sophisticated. When Fourandhalf started, content marketing and video blogs were very new. The best ways to market your property management services to owners were through content marketing, social media marketing, and reputation management. These were the products Fourandhalf focused on and they looked nothing like they look today. With reputation management for example, John was simply teaching people how to respond to reviews. There were no automated systems in place and Yelp was far more popular than Google. In some markets, Yelp wasn’t even used yet. Now, things have evolved and Google stars are far more important than Yelp reviews. As marketing moved online, banner ads were available but it didn’t take long for marketers to realize that no one was clicking on banner ads. Pop up ads weren’t working either. It was time to learn how to leverage the data that could be gathered by a person’s online presence. Valuable Owner Marketing Tools Today AdWords AdWords started slowly and before everyone started using it, you could launch an AdWords campaign for cheap. Now, we’re at the point where so many people are using it that it’s actually an auction site. The price keeps going up and that’s not going to stop. Early in the AdWords days, a Bay Area property management company could spend $2 per click. Now, it’s about $65 per click in the same market. There was also a huge gap in knowledge about how to use AdWords. We encountered a lot of property managers who hired a generic AdWords company that didn’t understand the difference between owner clicks and tenant clicks. Our industry has gotten smarter and property managers are careful not to waste money. We’ve learned how to track return on the marketing dollars that are spent. AdWords can still work today, but plan to spend some money. There aren’t any magic bullets when it comes to owner marketing for property managers. In the past, implementing a marketing strategy would put you ahead of your competitors. Now, everyone is using those strategies so not implementing them will put you well behind other management companies in your market. Websites Websites are more important than they were even a few years ago. This has become the base of internet marketing. Your website is a lead source, not just a place to post information about who you are. Everyone is researching everything online. Before a new owner gets in touch with you, that lead is going to be pretty well-educated thanks to what they’ve found online. Consumers hardly have to in

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 you’re already doing both property management and HOA management or you’re thinking about expanding into one or the other, today’s episode is for you. Introducing Ken and Allison – The Faces of HOA and Property Management Banking Ken Carteron has been an HOA banking professional since 1992, and he’s been in the general banking industry since 1980. His 40th anniversary in the field has come and gone, and one association manager he works with once said that Ken has forgotten more about HOA banking than anyone else will learn in their lifetime. It’s what he does and he’s good at it. His clients would agree. Allison DiSarro has been with us on The Property Management Show before (check out Property Management Banking & Trust Accounts). She’s an expert in property management banking and introduced to us the concept of analysis credits for property managers before Seacoast joined Enterprise Bank and Trust. Allison says she was skeptical of the merger at first, but now she’s excited about the growth of opportunity available for the property managers she works with. The Merger: Seacoast Commerce Bank Joins Enterprise Bank and Trust If you’re not already aware of the merger between Seacoast Commerce Bank and Enterprise Bank and Trust, we want to talk about what that will mean for customers of the bank. Prior to the change, Seacoast had been successful in becoming the face of property management banking. Growth was never a problem, but there were some things missing. The benefits were the analysis credit program, the high rates, and the compliance. Those were always the driving factors. What was missing, however, was a solid product provider. The online capabilities and flexibility of the bank was hampered by the system they were using, and investing in a new software system wasn’t possible. Customers of Seacoast needed the tools and support to do online banking more effectively. Relationship managers were advocating for that, and the system that Enterprise Bank and Trust uses is exactly the one they wanted. What Seacoast Clients Can Expect with the Merger Property managers who have been working with Seacoast will notice a positive impact. The system is sophisticated and easy to use. On February 12, everything will convert to the online banking system used by Enterprise. Beyond the new technology, everything property managers loved about their relationship with Seacoast is the same. The merger has felt less like being absorbed into another company and more like a collaborative move forward. Most importantly, the specialty deposit team is getting what has been needed. Ken has been in banking for a long time, and this is hardly his first merger. He says he’s been through some terrible ones, and is impressed that this has been handled so well. Enterprise has been good about coming to Seacoast for guidance in moving forward. That doesn’t usually happen. Another major benefit to the merger is the flexibility that comes with having onsite programmers. They can build integrations into existing software programs and expand the product that’s already provided. There’s also a larger lending product for HOAs. The lending limits with Enterprise Bank and Trust are a lot different than they were before Seacoast merged. Ken can now present a package on behalf of an HOA client who needs a $10 million loan and expect it to be accepted. That allows him to provide more value to his clients. One thing they both mourn is the loss of the Seacoast Commerce name. It was a security blanket that’s hard to let go of, even if it’s a normal process. But this is a new bank with a new executive team and new owners. There’s been a merger into a bigger bank and it’s creating new opportunities for property manager and HOA clients. How Has HOA Banking Changed? Long ago, an HOA would have a trust account. That’s not the case any longer, and in the reserve accounts that are used instead, Ken works with HOA management companies to set up insured money market accounts. Here’s why that matters: The FDIC covers $250,000 per Tax ID number. An HOA will have two accounts; an operating account and a reserve account. To keep that money safe, those accounts should not go over the $250,000 limit. But they can and they do because operating funds go up and down throughout the month. It’s Ken’s job to find a place for the rest of the funds – those that exceed the $250,000 limit. Many HOAs will have millions of dollars, and that money needs to be scattered into different accounts so they can maintain FDIC protection. The ICS program helps them. It allows Ken to place all excess funds into one set of accounts which are

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 it to your owners.property We asked Jordan to join us on The Property Management Show to talk about how Nacha affects property management companies and what you need to know. Key Takeaways: Nacha is the National Automated Clearinghouse Association, which oversees the ACH Network, the backbone for the electronic movement of money and data in the U.S. Property managers have responsibilities and can be held liable as third-party senders. Property managers can undergo Nacha Certification, which establishes them as a trustworthy company that has taken steps to ensure money is handled correctly. Understanding the National Automated Clearinghouse Association Nacha essentially manages the ACH network. The association makes the rules and educates all participants. When property managers collect rent from tenants and pay that rent to owners, it means they’re participating. There are responsibilities that come with that participation, and understanding the different roles will help keep everyone happy. Nacha has direct members, which are banks and other financial institutions. There are also third-party senders, and those are payment providers. Most property managers fall into this classification. Nacha has rules in place that benefit everyone who participates. They help banks work with third-party senders. They maintain the high level of trust that’s necessary when payments are made and received electronically. The money has to continue flowing properly. All of the direct members and third party senders on the ACH network are subject to the large rulebook that Nacha keeps to detail and interpret all the rules. They can break down what each rule means and how they are defined. Property Management Companies as Third-Party Senders Property managers wear many hats. Being a payment provider or a third-party sender in the ACH network is only one of your roles. You probably don’t give it a lot of thought. But, you need the protections that are in place when your tenant originates a payment and that money comes to you and then you pay your owners using your own financial institution. You expect things to go smoothly – but will they always? Many property management companies handle their rent collections and disbursements through their property management software. This doesn’t release you from the responsibilities of a third-party sender, however. You’re still the one collecting account numbers and routing numbers and banking information. If you’re collecting rent and paying owners without involving your own bank, the property management software would qualify as the third-party sender. But most property management companies do have money moving in and out of their accounts. The flow of payments is your responsibility. What Can Happen During the Payment Flow? Something that has happened more than once is a property management company going bankrupt. If tenants pay rent before the property management declares bankruptcy but those rents aren’t paid to the owners because of the bankruptcy, there’s going to be a wild disconnect. The funds will be held in different ways depending on the bankruptcy laws in your state. The ACH rules are in place to protect the incomplete transaction. There will be a lot of owners who are upset and a lot of tenants who are insisting they did pay their rent, and the commotion will be messy. Consumers – or tenants and owners – are not going to know the ACH process. There are protections in place for them, but it’s going to be complicated. Fraud is another issue that can cause problems for property managers as third-party senders. If you’re not following good quality control and you don’t have strict processes in place, it’s easy to be a victim of fraud. Someone could call you claiming to be one of your owners. He could say he’d like to change his bank account information so that all future payments are routed into the new account. Are you going to take his word for it and make the change over the phone, or do you have controls in place where you’ll call him back at the number you have on file to verify the request? As a property manager, you can think you’re providing great customer service while at the same time handing over rents to a fraudster. You need risk management and checks and balances. Property managers can think of Nacha standards the same way they think of NARPM standards. Nacha has a certification program, which can be beneficial to property management companies. Nacha Certified The Nacha Certified program lays out compliance expectations for third-party senders such as property managers. The program was designed to try and hel

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 new concept in the property management and real estate industries, it has come to mean different things to different people. We’re looking at how it impacts the industry and what it might mean for you in limiting vacancy rates and marketing your rental homes more efficiently. Key Takeaways: Pre-marketing is the process of marketing a rental home and generating interest before it is officially available for showings. Property managers should take advantage of software that allows them to build waitlists with interested tenants Pre-marketing & building waitlists can save property managers time and money, but only if you have the proper internal processes in place to support your pre-marketing system. Catch our full Property Management Marketing series: Property Management Marketing | Part 1 | The Rise of Zumper & Facebook Marketplace Property Management Marketing | Part 3 | How Owner Marketing Has Changed Pre-Marketing in Property Management: The Baseline Jeremy does not show any homes while tenants are still living there. This was something he did before embracing the pre-marketing platform he currently uses, but now all showings commence after a property is turned and made ready. The right systems must be in place for effective pre-marketing. Technology plays a big role. What pre-marketing means to Jeremy is giving the property the best chance to be leased quickly as soon as showings can occur. Rently is a valuable tool in this process. Like other showing services and lockbox resources, it provides a waitlist that helps with pre-marketing. Previously, if a home was coming onto the rental market sometime in the future, you could simply say “Coming Soon.” A lot of property managers found that difficult to manage, however. People would call about availability and information. That’s hard to administer and scale. Keeping track of all the follow up can be overwhelming. With Rently, Jeremy and his team put homes in waitlist mode. This is the pre-marketing and pre-leasing sweet spot. People can register for the waitlist and they’re immediately informed when it’s live and ready to be seen. Staying on top of expectations is a big part of this. If you say your property will be available on October 15, people on that waitlist will expect it to be ready for viewings on October 15. Otherwise, you can create a lot of frustration. The software allows property managers and marketing professionals to see who is on the waitlist. They know how many people are interested and they know when those prospective tenants joined the waitlist. The data is valuable in setting a final rental price, collecting applications, and scheduling showings. What Does the Waitlist Show Renters? On the waitlist, prospective renters have access to the same pictures and descriptions that they’d see on any normal listing. With brand new properties that have never been leased and are occupied by an inherited tenant, Jeremy’s team will have to get whatever pictures they can, at least of the property’s exterior. If the home has been marketed in the past, those older photos will be used so people can get a general sense of what it looks like inside. When the listing goes live, there’s an accurate portrayal of the home. New photos can be taken with any updates that have been made during the turnover. As most property managers know, turnovers can take two days or two months, depending on the work that’s done. Sometimes, the floors have to be replaced and the walls re-painted. Other times, it’s a simple cleaning and lock change. Internal Property Management Processes Required for Pre-Marketing It’s not just having access to great technology – it’s how you use it. Internally, you need processes in place to ensure the availability date is accurate. Technology is often slow moving in property management, and a lot of different people are trying a lot of different things. Some of the new technology is exciting and some of it is cumbersome. Rently and products like it are some of the biggest game changers the industry has seen in years, Jeremy believes. The Challenges Pre-Marketing Can Solve Before adopting this strategy of pre-marketing, sales managers at Jeremy’s company were responsible for visiting rental homes as soon as a tenant gave notice that they were leaving. They’d take a look around and determine whether the property could be shown in its current condition. Showing occupied homes was difficult due to all the scheduling that had to be done around the existing tenant. Today, it would be impossible with COVID. Even before the pandemic, it was a frustrating process for future tenants, current tenants, and property manager

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 shifted. Key Takeaways: Market consolidation of rental advertising platforms has driven big changes in the industry. You need both Zumper/Facebook Marketplace and Zillow to reach the largest pool of tenants. Use these two KPI’s to make rental advertising spending decisions: the number of leads you’re getting from each source and which of those leads get signed. Property managers should leverage automation and technology wherever possible. Catch our full Property Management Marketing series: Property Management Marketing | Part 2 | Building Waitlists & Pre-Marketing Property Management Marketing | Part 3 | How Owner Marketing Has Changed Craigslist is Out and Market Consolidations are In Generally, there’s been a transition away from Craigslist. Back in the day, anyone who ever advertised a home for rent in any market had probably used Craigslist. It was free and easy. When Zillow came along, it was a better alternative, especially once they acquired HotPads and Trulia. New features were available for marketing your properties, and individual landlords joined property managers in spending more time advertising their homes on those platforms. The latest Craigslist killer is Facebook Marketplace, which has partnered with Zumper and Apartment List. The rental feeds on those sites have been directly integrated onto Facebook Marketplace, which is a huge disrupter in the industry. Market consolidation has driven a lot of changes. Rent Path is a key player. They own Rentals.com and RentalHouses.com. Recently, they were acquired by CoStar, a huge company that’s further bulking up to compete with Zillow and Zumper. These are the players who will shape the rental advertising industry over the next few years. Some of these consolidations are financially motivated. CoStar has a lot of money and a large collection of commercial data assets. Taking over a company like Rent Path which was struggling to maintain their competitive edge makes sense. For more on the state of the rental property market, check out our conversation with Dave Spooner. Platform Usability: The Costs to Market Rental Properties What does this mean for usability? Through market aggregation there are fewer players, which means less competition. Zillow’s inclusion model said that if you were renting out a single-family home or a condo or any residential rental property with no more than 50 units, you didn’t have to pay to advertise on their platform. That was a Utopian time, and it no longer exists. Zillow realized that to compete with these new consolidations, they’d have to start charging. Each player is looking for dominance and exclusivity. Everyone wants to be the Amazon of rental advertising, and with Facebook getting involved, it’s going to be easy for them to emerge as a major force. They’re a tech company and they already have a lot of eyeballs coming to their site. Another benefit to the Zumper/Facebook Marketplace partnership is credibility. Facebook Marketplace might seem like a dubious place where people go to sell their Harry Potter DVDs. It’s not that. There’s now a serious interface for rental properties, and it’s generating a lot of leads and a lot of leases. There’s a big difference between individually contributed content and the feed that’s integrated from professional rental advertising domains. Facebook, as we know now, has a lot of scammers. Not every account on Facebook is real. But, the filter comes with the Zumper partnership. Everything that’s contributed has already been verified. You’re getting polished, professional rental listings. Which Platform Provides More Rental Leads? Tenant Turner has collected some data on the volume of rental leads coming in from both Zumper and Zillow. This is the million dollar question for landlords and property managers who are wondering where to advertise their rental properties, especially now that Zillow is charging for the privilege. Zillow was on top for a long time and would account for 75 percent of leads through Tenant Turner. Remember that when we talk about Zillow, we’re including Trulia and HotPads and all the smaller sites that are syndicated. This Zillow platform represented three out of four tenant leads in Tenant Turner. This has steadily declined, and the number of leads increasing through Zumper is directly related to the partnership with Facebook Marketplace. Zumper has been around for a long time. They’re established, but they never had the market share they needed and wanted until they got together with Facebook. Now, Zumper is neck and neck with Zillow in terms of leads. That happened over two years. Zumper

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 Grow Summit 2021, which will take place January 20th – 22nd. They talk about this year’s concept and theme for the Summit, the decision to go virtual for 2021, and why this virtual conference is unlike any other you’ve attended. Lean forward, listen in, and get excited — we can’t wait to unveil what we’ve been planning. What’s PM Grow Summit? PM Grow Summit is a property management conference designed from the beginning to focus on how property managers can run their business more effectively. NARPM is a great resource for getting the nuts and bolts of property management, but if you want to get exposed to the latest innovations and ideas on running and growing a business, you want to be at PM Grow. PM Grow brings in the best ideas for business growth from outside property management, and then teaches business owners, marketers and sales teams how to leverage those ideas within the industry. In the first year of PM Grow, using video content in your marketing was a new and novel idea, so that became the focus of the conference that year. In later years, PM Grow tackled company structure and the importance of hiring a BDM for your business. PM Grow also helped put EOS into the mainstream within the property management industry. For 2021, PM Grow’s theme is: Removing Barriers to Growth. There’s been feedback from previous years that some property managers have trouble implementing all the ideas that they get from PM Grow. Learning the latest trends in the industry won’t help your business grow if you can’t implement them. Between this feedback and the obvious barriers to growth being presented from COVID-19 this year, “removing barriers to growth” felt like an extremely relevant and timely topic. You may be wondering what some of these barriers are that will be covered at the conference? Here are our main Keynote Speakers: Keynote Speaker – Greg Crabtree: Will speak about financial barriers to growth, with a Q&A to follow. Keynote Speaker – Libby Gill: Will speak about how to overcome mindset as a barrier to growth and how you can lead people through change, challenge and chaos. Keynote Speaker – Chuck Blakeman: Will speak about how to get off the treadmill and how to overcome time as a barrier to business growth and making money. There will also be a variety of workshops you can attend to get more individualized attention and answers to your questions. Visit the website for more information. To Go Virtual or Not to Go Virtual? John says there isn’t a 100% satisfying replacement for in-person conferences. The energy, the hugs, the atmosphere: those things will never be replaced in a virtual platform. But John still felt that PM Grow had value to offer property managers, especially in a world dramatically altered by COVID-19. The best way to overcome the hurdles that property managers are facing right now is for the industry to come together and share ideas with each other. So, PM Grow was definitely happening. But with COVID cases rising and laws prohibiting large gatherings, an in-person conference was impossible. A survey sent out to property managers had mixed reactions — the overwhelming majority wanted PM Grow to happen, but many were concerned about the health risks of an in-person event. Frequently Asked Questions About the Virtual PM Grow Summit All these factors meant that PM Grow had to go virtual. But there were several concerns about putting on a virtual conference. We’ll tackle them one by one. Do I have to be on a screen for three full days? Nope, you won’t be forced to be in front of a screen for three full days. The conference will have a mixture of on-demand content and live events, so that you have flexibility to juggle both the conference content and your day to day responsibilities. We did this because we understand that screen fatigue is very real. You are free to log in to the virtual world outside conference hours to catch up on on-demand content you missed during the day. The recorded content will also be available to all attendees after the conference. We want you to be able to maximize your time during conference hours engaging with other people, attending live sessions, and connecting with fellow property managers as well as vendors. Is this amounting to a glorified Zoom meeting? Definitely not! When you log on to the online platform, you will create a personal avatar that you’ll control, and who will serve as your “virtual representative” as you walk the 3D world of the conference. You will see and be able to interact with other attendees’ avatars — shake hands, talk to people as you approach them, play games, ri

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 Chrissy Wade (Wellspring Property Management) to join us and talk about why this group is so necessary and what it aims to achieve. Key Takeaways: The Women’s Leadership Council is a group that was formed with the intention of providing women in property management with more confidence and strong public speaking skills Kellie & Chrissy are hoping to eventually host quarterly events and make this organization a new committee at NARPM. This is a new group that is in the process of growing and evolving. The founders’ goal is to make this group as inclusive as possible. Their first event is “Elevate your Game & Take the Fear Out of Public Speaking” on November 12, 2020 at 11:00 a.m. PST and 2:00 pm. EST Meeting a Need in Property Management Leadership Women often don’t feel represented at industry events, and that’s not unique to the property management industry. When Chrissy began talking to other women about this, the response was incredible. She received a lot of feedback and private messages from women who wanted to do more and expressed a desire to be speakers at different events and conferences. One of the problems that Chrissy ran into was that many of these women who wanted to speak, didn’t have a huge portfolio of past speaking engagements or leadership roles. So the first step seemed to be to prepare women for those public speaking engagements. Chrissy felt strongly about not putting an inexperienced woman on a major stage if she’s never had that experience. So, Chrissy and Kellie began talking and recognized the interest in and importance of building confidence and developing public speaking skills for women in the property management industry. A lack of experience in public speaking is a huge barrier to leadership positions for women. The group’s first event is aimed at removing a lot of the fear and uncertainty about speaking in public and sharing your voice. Encouraging Women to Speak Up The first event is called Elevate your Game & Take the Fear Out of Public Speaking. The keynote speaker is Dr. Michelle Mazur, who runs Communication Rebel and has made a business out of developing speakers. She’s going to talk about removing a lot of the barriers that women feel, which will empower them to have their voices heard, whether that’s in the boardroom, in small group meetings, or in large conferences. Participants will come away with tools to fortify their ability to speak up. Our society has set up and reinforced expectations of women that make it difficult for them to feel safe and confident speaking their mind. There will be practical tips on preparing to speak and accessing the confidence needed to move forward professionally and personally. Historically, women haven’t been encouraged to speak up. Women have been raised for generations to be supportive and nurturing — and quiet. Women need the tools to trust themselves and navigate an industry that historically has favored men’s voices over women’s. A lot of women in leadership know that one of the first steps in taking the initiative in the business world is accessing confidence in their own thoughts and ideas. Communication is where everything starts. Events like this will give women with diverse backgrounds extra tools and resources to lead them towards communication, leadership, and success. Empowering Everyone to Do New Things This event encourages participation from all genders. The panel will include men and women speakers and there is a broad spectrum of topics. The main goal of the event is to empower people to do something that they felt like they couldn’t do before. The current working name is the Women’s Leadership Council, but this group isn’t only for women. The council was formed with the idea that every voice matters. It’s open to all genders. The idea is that everyone can learn from one another and elevate the property management industry and each other. Anyone who wants to be a better business person is invited to participate. Want some advice for feeling confident with being on camera in your video blogs? Check out our marketing manager Marie’s 5 tips for being on camera. NARPM and The Women’s Leadership Council The Executive Committee and Board of NARPM had been thinking about building roles for more women and putting together a group that focuses on women’s challenges and concerns when Chrissy approached the organization with this idea. In December, this concept will go to the Board of Directors and be proposed as a new committee at NARPM. For the last few years, NARPM has been doing leadership training in local chapters. It’s a tw

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 delinquent rent payments during the pandemic isn’t as high as expected. Occupancy is down in most major cities. Worst case scenario is a spike in COVID-19 cases and another shut down of the economy coupled with no relief package from the government. Best case scenario is existing trends continue and digital property management tech integration accelerates. There are fewer barriers to setting up an online rent payment system & now is the time for property managers to implement it. The Rental Property Market: Rent Payments and COVID-19 To gain insight on the current rental property market, we invited Dave Spooner to join us on the show. Dave is with Innago, a property management software company that helps with the automation of functions like communication and rental payments so property managers can focus on the more complex parts of their business. Despite what nearly everyone in the property management field predicted, the data coming from Innago and other sources show that nationwide, the number of delinquent rent payments isn’t as high as expected. For the most part, rent is getting paid, and it’s getting paid on time. People are suffering economically from the pandemic and the shutdowns, so what’s happening to allow for this? Two things, according to Dave: owner concessions and government help. Why The Rent Delinquency Rate Isn’t As High As Expected Owner Concessions: First, landlords and property managers have chosen to make a lot of concessions. It has become important to collect whatever rent they can. There’s an eviction moratorium in place nationwide through the CDC, which views evictions as a public health crisis. Landlords know they don’t have a lot of recourse, so they’re collecting whatever they can and working with tenants to avoid larger problems. Some owners have reduced the total rent that tenants are paying or spreading out the missed payments over the next several months or offering credits. Landlords and property managers are working together with tenants to get some rent coming in. Net rent may be down, which means the total amount that’s collected is likely lower than it was last year. But, it’s not as bad as everyone feared. The delinquencies are not up in any meaningful way. The market has adapted rapidly to this. Property managers have largely initiated the concessions that are necessary to keep rent coming in. Good managers have been able to successfully navigate their owners through these unchartered waters. If you caught our podcast with Anna Myers on using data to navigate delinquency and economic uncertainty, her tips are an excellent resource. Government Help: Second, government aid has contributed to helping people pay their rent. Payments are still coming in because those programs have worked. Most renters received a $1,200 stimulus. Those who lost their jobs were eligible for unemployment and received a bonus. Those programs did assist with living costs and rent payments. Those landlords who took action to try and offset the economic challenges of their tenants and had renters receiving those supports are in good shape. Geographic Nuances with COVID and Rent Payments Real estate is a local business and each market is unique. Some areas in the rental property market are more impacted by COVID-19 than others. Large cities have traditionally been magnets for people seeking employment, but cities were the hardest hit. Their COVID numbers have been much higher than other markets. Occupancy is down about five percent, which is significant in a market like San Jose, San Francisco, Boston or New York. Why spend money on an expensive apartment in the city if there’s no demand to go into the city-based office? The shift to working from home has driven renters to seek less expensive housing outside of larger cities. Younger people who don’t have partners or children may be moving in with parents or friends, which is also contributing to a lower occupancy rate. Renters may break leases or not renew their leases during the pandemic. From an occupancy standpoint, the larger and more expensive markets are seeing decreases. Renters are finding other places to live for six to 12 months. For a thorough look at property management market trends, check out our conversation with Jeff Hacker. Tenant Retention While Occupancy Falls Ongoing concessions are necessary to avoid vacancies in the rental property market right now. Not a lot of renters are trying to move into a new place during the pandemic. Of the folks that are moving, very few of them want to attend multiple showings or hire movers to come into their homes. There’s a trend towards avoi

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 renters and landlords and property managers. There are three main types of AI – Narrow, General and Super, and we are still developing General AI. AI can be used by property managers to answer common questions from renters, automatically send emails, save money on utility bills, process maintenance requests and more. There are two ways that AI can learn: Supervised and Self-Learning. Property managers are encouraged to use Supervised AI, in which their AI system has been trained by a company like LetHub. Implementing AI doesn’t have to remove the “human touch” from property management – it is meant to streamline operations and save time on monotonous tasks. If you’re a property manager interested in integrating AI, do your research to know what kind of AI you are signing up for and how much it will actually save you time. Transcript: Marie Liamzon-Tepman (00:00): Welcome to The Property Management Show brought to you by Fourandhalf Marketing Agency for Property Managers. Brittany Stephens (00:05): Today’s topic is artificial intelligence and how to properly use it in the world of property management. Our guest is going to go over some key concepts of AI so that property managers can make better technology decisions for their business. Marie Liamzon-Tepman (00:21): That guest is none other than Faizan Khan, who is the CEO and founder of LetHub, an AI platform for property management companies. Happy listening! Meet Your Artificial Intelligence Guide, Faizan Ali Khan Marie Liamzon-Tepman (00:38): Faizan, thank you so much for joining us on the podcast today. Since it’s your first time ever on the show, can you please let our audience know who you are and what’s your relationship to the property management industry? Faizan Khan (00:53): Yeah, thanks for giving me the time and the opportunity to share what we’re doing. So I’m the founder at LetHub. Lethub is an AI communications platform for rental property managers that automates the communication between renters and landlords and property managers. So nobody has to pick up the phone and, you know, pre-qualify people and book tours. So that’s all handled by River, which is our AI. And it’s in a constant learning phase where it improves with time, just like humans. What is Artificial Intelligence? Brittany Stephens (01:27): Awesome. So to start off, could you define AI, define Artificial Intelligence for us common folk? Faizan Khan (01:42): Sure. So I think to put it in a nutshell, because it’s a very complex field and I guess the media portrays it in a very different way, anything that automates any kind of task that humans perform in a faster way or better way, that can be considered artificial intelligence. Brittany Stephens (02:14): So if we’re talking about different stages of AI, what are some of those? Faizan Khan (02:20): So again, it’s very complex. There are seven different different stages of AI, but to put it in simple terms, we can classify it in three stages. So there’s Narrow AI and then there’s General AI, and then there’s Super Intelligent. Narrow AI is something that has very limited sort of memory and that can outperform humans in some robotic tasks. And then General AI, I would say is just your general intelligence which is not really good these days. We’re not there yet. It’s something that understands a lot of the things that we do in everyday life. So a domain-specific AI would only understand a few things that they’re really good with. General AI just understands everything because it learns really fast. And then the last one is Super Intelligence AI, that’s the AI that produces other AI’s. The bot that can make other bots. Marie Liamzon-Tepman (03:39): That’s gonna take over the world. Yeah. Faizan Khan (03:42): If you’ve seen the Avenger movies, that’s what we’re talking about. How Can Artificial Intelligence Be Used In The Property Management Industry? Marie Liamzon-Tepman (03:47): And so given that General AI is where we are right now, and even then we haven’t even mastered it, right? What kinds of applications of artificial intelligence can we see in the property management industry? Faizan Khan (04:01): Yeah, no, that’s a good question. Any task that you can automate, that can definitely be done by AI because if you can train a machine to do a certain job, then you can implement AI in that piece. So an example is, if you don’t really want to communicate with renters and there’s a pa

What Property Management Business Plan is Best? Property management business plans and systems are more important than ever, whether you’re trying to grow your company or simply manage the new normal of this pandemic. But which one is best for your business? On today’s Property Management Show podcast, we’re talking to Deb Newell and Andy Moore about their expertise in both property management and coaching/consulting. We’re discussing property management business plans and systems and how to choose a path to better operations within your own company. Introducing Deb and Andy Deb Newell owns a property management company and has also grown her own consulting business. Real-Time Consulting Services is based in St. Paul, Minnesota. She helps her property management clients focus on three core principles established for businesses: People, Process, and Technology. The mission of Deb’s company is to help businesses see the deficits they have and to find ways to fix some of the gaps and miscommunications. Basically, she dives in as a company’s temporary COO to look at the operations and make them more efficient. She works with companies that are just starting out and have been in business for many years. Andy Moore owns Gulf Coast Property Management in Sarasota, Florida. As a property management business owner, he realized where the operational challenges were coming from in his own company and in the industry, so he became involved in business consulting. Now he works part time with property management companies to reorganize and focus. Often, Andy has seen professionals in the property management world start off as technicians. Maybe they were property managers or real estate agents or maybe they worked in maintenance, and then they came into the management or ownership of a company without any real idea for how to run the business. In these scenarios, business plans and systems can give people a better idea of how to properly run a business and guide them through key concepts like hiring, firing, and managing. It helps entrepreneurs set expectations and deliver a quality service. Note: Andy Moore is no longer an EOS Implementer® as of July 6, 2020. For information about the Entrepreneurial Operating System (EOS) or to find an official EOS Implementer®, please visit www.eosworldwide.com. Six Sigma and Other Management Frameworks Deb’s approach in consulting is taking elements from various management frameworks like Six Sigma to help her clients. Her focus is on the lean management side and the idea of eliminating the defects within a business. Her process is to go through the core principles and evaluate the business in such a way that the company can focus on the customer. By understanding how everything really works, looking at processes and how they flow, concentrating on the value of the business, and removing any blocks or defects, the company is brought to a better result. An important part of the work is also getting buy-in from the team throughout the process. Every effort has to be systematic where a roadmap is presented. You might think one employee is an issue to your company’s success, but you have to dig deeper. Maybe that employee is struggling because of a lack of training or the absence of clear expectations. There’s always a root cause, and to execute any plan in the right manner, those root causes have to be identified and solved efficiently. Different Management Systems Fit Different Companies Deb likes to use her company as a sandbox for her clients; owning her own property management business allows her to test things out. But, it’s important to remember that there’s no one right way to implement a management system. There’s no wrong way to do things. Everyone runs their business differently. There are many variables, from size to region to property type. You cannot completely copy one successful model that you see elsewhere. It might not work for you. Andy says he runs into the same challenge. He has to make an effort not to impose his management style and the way he is structured on the others that he coaches. Every business is nuanced, and the dynamics from company to company always change. He has learned to put up guardrails to guide other property management entrepreneurs rather than simply telling a them how he himself would solve a problem in his own business. There is always a temptation to copy what successful property management companies do. But, if you’re in a different market and you don’t understand why the company you want to copy is doing what they’re doing, you may be missing some key insights. There’s always a new shiny concept or idea that promises to change everything. There are visionaries in the field, but not everyone is going to be able to implement those visions. Find the change agent in your company to drive what you want. If there’s not a person ready to do that, think about how to develop someone who can lead the path towards the larger goals. How to Choos

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, we’re diving into how their relationship was built and how they manage to sustain it so that each of them can attract more business. Introducing Paul and Terri Paul (BRE# 01179722) heads the Paul Boudier Team at Keller Williams Realty in Placer County. He’s lived in California for more than 50 years, and he’s been a Realtor for 25 of those years. He feels passionate about his opportunity to help thousands of families in the tri-county area find a home or an investment property that works for them. Terri Alcala (DRE# 01168555) is a property manager who owns Action Properties in Roseville. She’s been managing properties for 30 years, and Action has been in business for 20 years. Terri’s mother gets the credit for introducing the two. She was a real estate agent working with Paul in 1994, and she immediately grew to appreciate Paul’s work ethic and the way he presented himself. Since Action Properties is one of the few management companies in the market that doesn’t also do real estate sales, the partnership has been invaluable. Paul and Terri agree that their relationship works because they make each other look good to their clients. That’s the foundation of a strong referral relationship program. Referral Relationships in Property Management Use Your Network Terri and Paul were introduced to one another, and you also have a network of people who can introduce you to partners that may help you build a stronger property management business. Look for people you can work with and build relationships with. It’s difficult to call a random Realtor or property manager who you don’t know, so focus on the relationships that are already in place and see what else they can do for you. With a relationship like the one Terri and Paul have, they refer new business to each other first. But they have other referral sources, too. Terri specializes in specific parts of Sacramento, for example, so when Paul has a client who is in an outlying area, he relies on other relationships in those regions. Building additional relationships is its own form of lead generation. Trust Drives Business Neither Terri nor Paul rely on formal contracts when it comes to working with each other or with any other professionals in real estate and property management. They trust the people they partner with – which may seem old school, but is vital in their industries. Terri says she still trusts that people will do what they say. There’s an understanding, and the people she works with are committed to that. For Paul, communication works hand in hand with trust. He uses client experience to know that each party is holding up their own end of the bargain. When his clients are happy with the services Terri is providing, he knows the relationship is working. Every agent and property manager handles their referral relationships differently. A lot of property managers also sell real estate, and, in that case, it’s important to track who is referring business to you. You’ll want to take care of the management of that property and then offer the business back to the referring agent when the client wants to buy or sell. This is all based on trust. Property managers and real estate agents who are focused on good customer service will end up winning business and building both trust and relationships. Seeking Out the Experts Instead of sheltering in and keeping all the business you possibly can to yourself, rely on the expertise of others in your network. The relationships you build will bring in better business. Terri shares an example of 1031 exchanges. As a property manager, she knows enough about 1031 exchanges to be able to have a conversation with a client. But, when a client wants to sell a property and perform a 1031 exchange, she calls Paul. She knows he is an expert in this area and can help her client get a better result. This is about educating your clients and making connections. Terri probably could have fumbled her way through a 1031 exchange, but why do that? Connecting her clients with Paul makes her look good. It demonstrates her commitment to service and to people. At Fourandhalf, we’re always struggling against the idea that people are afraid to share information for free. They don’t want to educate people because they’re afraid those people won’t need them. That’s not true at all. You’re building trust, and you’re building a relationship when you educate and share information and make referrals. Even if the person you’re helping doesn’t use you in that moment, they will likely come back to you in the future because they’ll remember how helpful and resourceful you were. Challenges

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 attorney and founder of Accessible.org. He’s here to talk with us about what accessibility really means for your website and how you can avoid getting a demand letter from an attorney who claims you’re violating the law. Introduction to Kris Rivenburgh Kris is an attorney who became interested in website accessibility when he noticed people were being sued. It’s a brand new area for many lawyers, and as he began researching what these lawsuits were about, he developed a specialty in a subject that many lawyers and other professionals hadn’t encountered before. Everything written on the subject was vague and ambiguous. None of the information he could find was helpful to people targeted by a lawsuit. He continued his research and began writing about it. Now, he’s a resource for people who need help distilling the legal and technical jargon that keeps them from really understanding website accessibility. Website Accessibility: An Explanation You want to make sure that everyone visiting your property management website gets the information they need. That’s website accessibility in its most basic form; you’re making your website flexible enough that everyone can access and engage with the content. You run into accessibility issues when the code and the structure is inflexible. Potential Accessibility Issues on Your Website There are several things happening on your website that you may not even think could be potential issues for people with disabilities. Kris provided a couple of examples: Images. You need alternative text to describe any meaningful images on your website because someone using a screen reader won’t know what the images are. Form fields. These need to be labeled correctly or not everyone will understand what information the fields are requesting. Fair Housing Act and Americans with Disabilities Act: Places of Access There’s a reason that the surge in lawsuits is especially targeted to the property management and real estate industries. Fair housing laws have to be followed. While the ADA was a civil rights law that was written before websites were even a part of doing business, the law addresses all physical places of access. Websites aren’t physical, but they are high traffic places. Title III in the ADA is where this issue lands when we talk about website accessibility. Places of public accommodation, according to the law, have typically included hotels, restaurants, gyms, and schools. Websites are different, and the courts have come to see that websites are an integral part of daily life. Some judges see them as a nexus with a physical place and others believe that websites stand alone as a place of public accommodation. Technically, the ADA does not talk about websites but you don’t want to argue that technicality in court. If you’ve received a demand letter, you’ve already lost your lawsuit. The Fair Housing Act requires that everything is accessible, including advertisements. That’s how it applies to your property management or real estate website. Everyone needs access to the properties being advertised on your site. Lawsuits are Driven by Serial Litigants and Plaintiff Attorneys Something to consider is that 98 percent of these lawsuits are being driven by serial litigants in law firms that are looking for opportunities. There isn’t always a plaintiff who genuinely wants to file a lawsuit because your site and your content could not be accessed. It’s often because there’s an attorney who is testing your website and making claims over and over again when they find sites they believe are non-compliant. This has nothing to do with actual accessibility or someone being prohibited from reaching content. There are a lot of great advocates for people who have disabilities. They’re doing good, legitimate work trying to help more people access more information online. Those advocates are not likely to serve you with a lawsuit. Instead, you’re hearing from a lawyer who is making a money grab. They know that it costs money for a company to defend against a lawsuit. So, they’ll send a demand letter pointing to a particular part of your lawsuit that they can prove is inaccessible. You’ll be offered a settlement that’s less than the cost of your defense. Businesses settle to save time and money. The plaintiff attorneys have nothing to lose. If you receive a demand letter, you’ll lose a few thousand dollars in attorney fees and settlements. Avoiding Lawsuits: Is ADA Compliance Really What this Is? There’s a lot of confusion over who is regulating what and how to follow the law. Many people are calling website accessibility ‘ADA compliance’, but that’s not entirely what

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 Property Management Show, we’ve invited Todd Cohen to tell us what this means and how you can use this knowledge to change the way your team thinks about sales. Introducing Todd Cohen Todd Cohen is a keynote speaker and a workshop leader who is passionate beyond words about showing people how every one of us are in sales every day. He works hard to dispel the negative stereotypes that are often attached to the idea of sales. Those stereotypes hold us back professionally and personally. Since leaving his last corporate job 12 years ago, spreading the word about sales has been Todd’s mission. Before COVID, he was doing 90 appearances a year, and he’s still delivering online speeches and workshops about his thesis that everyone, no matter who they are and what they do, is in sales. Your Sales Process Starts Before You Say a Word In traditional sales training, there is a nuts and bolts methodology that says the first sales call is the most important moment in the process. It leads to getting the contract signed and the product delivered. That’s a very 1990s way to think about sales. Really, property management sales, and all sales, begin before you even say a word. We are all consumers. We all make decisions the minute we see something or somebody. When you encounter a human, you immediately form an opinion. Either you will feel good and you will feel like you’re in the right place, or something about the situation or the person will tell you that this isn’t the right place for you. It depends on how the person doing the selling shows up. This is what most people miss, and it’s to the detriment of organizations. Today, people have shorter attention spans and they’re making decisions quickly. Humans are disconnected from each other and busy with their phones and computers and moving on to the next thing. There’s a narrow window to start the sales process. Missing that window makes everything harder. The moment you show up to a person is where the sales process starts. It’s the most important moment. Readers form opinions. Podcast listeners make decisions. There’s an inherent bias that comes with your buying decisions, and that has to inform how you show up and how your team approaches every interaction with current and potential customers. The reality is that people make a buying decision initially and in a split second. If you’ve read the Malcolm Gladwell book, “Blink,” you know that there’s a moment when the buyer unconsciously realizes that they need to buy something. Everyone sells in all interactions. Sales People: Born or Bred? Trained or Talented? Are property management sales people are born or bred? Do they fall into those roles naturally or is it a product of their experience and mentors? Todd says yes and yes. More important is the question of how we define sales people. Some people chose a profession in sales. And then there’s the rest of us. Everyone has to sell themselves and make a decision about how to show up. We try to sell ourselves so people will build relationships with us. We try to influence others. Every human being does that. Choosing sales as a profession is a little different, and it’s not for everyone. People have a sense of not wanting to be in sales because they fear rejection or they have a hard time asking for things. There’s no such thing as rejection. It’s a myth. Rejection is personal, and in sales it doesn’t happen that often. Proposing to a spouse is one of the hardest sales calls in the world. So is convincing your toddler to eat peas or asking someone to move their car because you’re blocked in. All of those situations involve sales. The stereotype of selling is negative, and self-identifying sales people deal with it every day. Words to Never Say: “I’m Just The…” “I’m just the ____” are the three most damaging words to an organization or a career. Don’t say this to a tenant or a client or an employer. Explaining why you can’t help or be responsive because you’re just the receptionist or just the assistant is going to shut down the sales process very quickly. It sends two negative messages: The person asking for help should go elsewhere. The person responding doesn’t value themselves. People would rather do anything than understand they’re selling. Everything is sales, and everything influences how people think. Decide how you want to show up. Property Management Sales Process The Business Development Manager at your property management company is the initial point of contact and the professional who first speaks to a property owner about why they should hire your company to manage an investm

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 to talk about the tools he uses to make this work for him and his company. Introducing Bob Abbott and Alarca Realty Alarca Realty handles properties in the Charlotte, North Carolina market. They’ve been in business since 2005, and Bob got started in real estate because he wanted to flip houses. Then, he moved into property management and was comfortably building that business when the last economic storm arrived. He and his company have been focused on property management since 2010. Transition from Brick and Mortar Office to Virtual Property Management Team Turning your property management company into a remote business doesn’t happen overnight. Baby steps are best. Bob started by talking to people at conferences. He planned and mapped this out three years before taking any concrete steps. Then, he turned some of his invoicing over to a company that provided virtual assistants. It was working well, so he hired another company called Virtually Incredible to help with processing applications. As this continued to work, he began to hire virtual assistants on his own, without the help of a third-party company. Remote assistants and virtual team members began doing marketing and now they also talk to clients and tenants. Cost was a factor in this decision; remote labor is cheaper. But for Bob, even more important was keeping his core team happy. His local employees were feeling overwhelmed, and as he slowly began to take things off their plates and advertise for the jobs they didn’t want to do, everybody began doing better work. It was a win for the company, the current team members, and the new remote workers. This began in 2014, when Alarca Realty had three full-time employees and about 140 doors under management. So: how remote can you take your property management business? For Bob, anyone who needs to set foot on the property obviously has to be a local employee. Everything else is done remotely. Bob has a separate maintenance company and the maintenance crews handling repairs and turnovers need to be in the local area. Keeping the Company at a Comfortable Size With his virtual property management team making growth easy, the company grew to managing 250 properties. Then, there was an epiphany about work/life balance, and Alarca Realty slowly began to shed the clients who weren’t fun to work with. Bob focused on keeping the happy clients and culling those who were never happy or who were difficult for the team to manage. If you’re like most property managers, you probably remember the early days of signing every owner who wanted to hire you. It doesn’t have to be that way. Alarca Realty is in a place where it’s okay to be selective, and they’re managing about 150 doors. The upside for Bob, he says, is that he can spend his summers with his family while working two to four hours a day. Working with clients who align with the company’s vision has made a big difference, just as remote workers have. Any owner who didn’t want to perform necessary maintenance on their property was cut. Any owner who was abrasive and rude to Alarca’s team members was also cut. There was a bit of a financial hit initially, but the company is more productive now, and happier. Checklists and Workflows and Process: More Important than Ever It’s easy to think you’ve thought out an entire process before you implement it. The basics can easily get lost when you’re planning to move your entire team remote. For example, new remote workers had to be trained on logging into PropertyWare. The training has to be specific, and Bob put together checklists and made videos. He also used a tool called Screen CastOMatic, where he could film himself doing something. He’d share that link with his virtual assistants so they could see exactly how things were done. It’s an ongoing process because software changes and so do technologies. As you grow, more people are using your checklists, and you have to begin relying on those team members to update the checklists. They don’t always do that. Bob’s solution is pretty brilliant. In his market, the slowest months of the year are November and December. So, every Wednesday in November and December, the company closes for process improvement days. No one answers the phone or handles regular business. Instead, they focus on tightening up checklists and improving workflows and procedures. It takes this part of the process out of the day-to-day work for Bob’s virtual property management company. It’s not an interruption. Accountability: Helping Team Members Own the Process All accountability starts at the top. If you are being asked questions, you have to answer them. But, that only trains your emp

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 at Grocapitus Investment to talk to us today about how you can work with your property owners and your residents during a crisis like COVID. While this isn’t a housing crisis, it is a public health crisis, and it’s affecting almost everyone nationwide. Anna is in a unique position to tell us how she’s using data to plan for economic shifts and new housing trends. Introducing Anna Myers and Grocapitus Grocapitus is a syndication company based in the San Francisco area. The company has acquired 13 properties across the United States in the last 18 months, which includes 1,800 units. These are mostly multifamily residential units, and they are now getting into self-storage properties. Anna and the company invests alongside their investors. Her team finds the deals, sources the deals, and lines them up for purchase. Then, the properties are co-purchased through a syndication, and Grocapitus manages the project. This makes Anna the asset manager who works closely with property managers at each building to execute the business plan associated with that deal. These investment properties are spread throughout the United States, which means they’re working with property managers in different states and cities. Anna isn’t a property manager herself, but as the asset manager of these buildings, she’s been able to experience a lot of different property management styles. It’s given her a unique insight into how the industry works and what’s required to succeed, and it’s why we turned to her for advice on guiding rental property owners and investors through delinquency and economic uncertainty. Asset Management vs. Property Management As an asset manager, Anna is concerned with her investors and the residents living inside her units. The property managers she works with are her boots on the ground. They facilitate all engagement and communication with residents, and they make sure local laws and regulations are followed. Those property managers are showing the apartments and executing the business plan that’s in place. The business plan is what dictates the action of each property manager. Maybe there’s a plan in place for a building constructed in 1985. It may need some renovations and updates and the business plan will reflect those intentions and project the money that’s spent and the returns that are earned. These things can’t happen from Anna’s office in California; she counts on her property managers to execute the plan. Using Data for Property Management Decisions Grocapitus is very data-oriented. Their background is in technology and they apply data science to real estate. You can’t manage what you can’t measure, and the company uses specific spreadsheets called Trackers. The property managers working with them fill those Trackers out every week so that asset managers can stay on top of the data. The Trackers expose trends and inform decisions. It’s an easy and all-inclusive way of looking across the portfolio to recognize trends and see where things are going right and wrong. Two Trackers in particular are essential to how property managers and asset managers work together: Monday Morning Report. This is a specific sheet that’s related to occupancy and rental collections. It tracks economic data and leads that are coming in that influence occupancy. They track notices to vacate and tenants who are moving. They project their exposure four weeks down the line. The report reflects collections and delinquencies, bad debt, and eviction numbers. It’s a Tracker that the team is watching all the time. Capex Tracker. The Capex Tracker follows the renovations that are ongoing at their value added properties. There is data that reflects classic turns (basic turnovers that often include cleaning the carpet and touching up the paint) all the way to premium turns (improvements that push the property to the top of the market). This report also tracks every turn in between the classic and the premium. Premium renovations can only be done if rent is going to be pushed up by $250 or more. These reports show whether the budget in the business plan was accurate. They can check the rent bumps against the expenditures and have discussions about where they are spending too much and where they might want to invest more. Data is numbers and numbers tell the truth. Guiding Owners Through Rent Delinquency It’s early in May, and as a property manager during COVID-19, you may not have collected as much rent as you normally do. Anna’s data shows that rent collection depends on property class and communication. In the early days of the pandemic, Anna asked her property managers for a list of thei

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 is contained and we are all moving on. Property Management Maintenance During and After a Crisis: Introducing Ray Hespen and Property Meld Property Meld is focused on property management maintenance. The company provides a platform to automate a lot of steps that help property managers follow-up with maintenance work, verify what’s been done, and communicate with residents, owners, and vendors. Ray and his team work with management companies to improve quality, create efficiency, and keep costs down. Since the entire industry is in a weird situation right now, he’s the obvious expert to talk about what this means for maintaining rental properties. He’s also going to shed some light on what property managers can expect maintenance to look like after this crisis passes. Rental Property Maintenance and COVID-19: The Big Picture Property Meld has analyzed data to look for changes in behavior. They’ve found a few key things: Renters are concerned about submitting repair issues and having people come into their homes. Not all landlords and management companies want to send techs out to complete repair issues. There have been some big shifts in behavior. The drop-off has actually been about 25 percent fewer maintenance requests than the normal curve this time of year. That’s pretty significant. An Absence of Repair Requests Leads to Ghost Issues This is the “COVID effect” on maintenance. When renters don’t submit the requests for repairs that are needed, ghost service issues are created. These are things that exist, but as a property manager, you don’t know about them. People are at home more, so a higher number of repair requests would normally be expected. But, the 25 percent drop tells us that a lot of repairs are needed but not noted. Some property management companies have told tenants that if the repair is not an emergency, they shouldn’t submit it. That’s one way to do it. But, as more information has come out, the better recommendation may be to encourage your tenants to submit the repair request, and then prioritize what really needs to be done. That will reduce the number of ghost service issues that are floating around out there. If you don’t have tenants submitting their necessary repairs, you’re not going to be able to prepare for what you need to fix. After the crisis subsides, there’s going to be a huge influx of maintenance work that needs to be done. It will likely be overwhelming for property managers and their maintenance teams. So, you need to have a sense of what kind of work you’ll be looking at. Property management companies are generally taking the requests that they currently have and prioritizing those that absolutely need to be done. The completion rate is 56 percent lower than the normal completion rate. This tells you that only half the work is getting done. With these two contributing elements and a backlog that’s growing every day, there’s going to be some deferred maintenance. The work that’s needed will pile up. Assuming that the social distancing requirements ease up a bit in May, there’s still going to be a large backlog that takes you right into summer, which is the busiest time of the year for most property managers and their maintenance teams. Renters aren’t submitting but they will at some point. Their property issues are not going to fix themselves. When people are comfortable submitting maintenance requests again, things may get a bit chaotic. Examples of Cautious Renters There may be a tenant who has a broken refrigerator. That’s an emergency since no one is going out to eat. The tenant needs a working fridge, and vendors who are sent into that home will need to be careful and sanitize everything. It’s about balancing the need of the tenant with the safety of the tenant and the repair worker. Marie shared two examples of work that she has recently needed done in her rental property. First, there was a window that started leaking during heavy rain. She did everything she could to minimize the damage by using towels and keeping the area dry. She let her management company know that the window was leaking, but she also instructed them not to make the repair if they didn’t have to, because she didn’t want anyone in her home. This is pretty typical of how most tenants are feeling right now. Marie’s second repair need involved a garbage disposal. She tried her best to fix it and troubleshoot it herself. When she couldn’t, she submitted the request and removed the disposal herself, leaving it outside her door for the repair person to fix. Then, she re-installed it herself. That’s probably over-cautious, and Marie says she knew

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 difference between various types of leads. He’s going to give us standard definitions for things like market-qualified leads, sales-qualified leads, and prospects. Then, he’s going to explain how to set up a basic sales process. This information will provide you with an industry standard for determining your cost per acquisition, which will ultimately help you close more doors. Introduction to Jeremy Pound Jeremy founded RentScale with Jordan Muela of LeadSimple. The goal of RentScale is to bring a professional level of sales and sales management to the residential property management industry. Property managers are operationally-minded. You would probably agree that most companies have their customer services dialed in and their maintenance policies and accounting practices where they need to be. But, a lot of management companies are winging it when it comes to growth. RentScale aims to bring professionalism to the sales side the same way Fourandhalf brings a higher standard to property management marketing. What is a Lead? Property management owner leads can be great, and they can also be a source of friction. Not everyone even knows what a lead is. Part of professionalizing and operationalizing any process includes creating labels and boundaries. You need a framework for communicating about things. Leads can sometimes feel like magic. But magic isn’t an operation. It’s not a process. Instead of trusting some magical sales process, you need labels and buckets and guidelines. At its most basic definition, a lead is simply contact information. If you have a name and a phone number, or an email address, or a LinkedIn profile, you have a lead. Even just a name is a lead. You have discovered someone who may have an interest in what you do. That’s a lead. What are Property Management Owner Leads? Now that we know how simple it is to identify and define a lead, let’s talk about what property management owner leads look like. A lead might be someone who fills out a form on your website. It might be an owner who has a question. It could be a landlord who wants to know how much you charge. It might be a referral. These are inbound leads and it’s what most property management companies wait for. All those listings that are managed by owners are also leads. If someone is renting out a property in a building where you’re already managing three units, you have a lead. Prioritizing Hot and Cold Leads: Developing a Pipeline “Pipeline is life.” Remember that. If you don’t have a pipeline, you don’t have the opportunity to sell. You want to talk to people who will potentially do business with you. So, in your sales pipeline, you want to move your leads into the prospect category. Prospect is another vocabulary term. A prospect is a lead who is in your sales pipeline. Your lead is the name or the contact information. That lead becomes a prospect if you call them and talk to them and find out two things: Are they qualified to do business with me? Would they be interested in doing business with me? How you qualify a lead depends on your business model. You probably want them to have the financial stamina that’s required to own investment properties. You want them to have maintenance reserves and maybe you want them to be hands-off and not calling you every day. If the lead is qualified and interested, they convert to a prospect. Prospects deserve more of your time and energy. Everyone has to be on the same page with how you define a lead and a prospect. Then, you have to understand the difference between a marketing-qualified lead and a sales-qualified lead. Marketing-Qualified Lead vs. Sales-Qualified Lead LeadSimple really revolutionized the idea of automation for property managers, and if you use another CRM system, you probably have similar capabilities in that you can use drip campaigns to follow up and do content marketing. When someone comes to your website and reads your blog about Three Questions to Ask a Property Manager, they might provide an email address to get another piece of content that addresses the same topic. So, you know they are interested in that information. You know it’s a landlord or a potential landlord or someone to whom you can market your services. That’s a marketing-qualified lead. A sales-qualified lead is a bit different. It’s someone who fills out a form or reaches out to you and asks to be contacted. That’s a lead who is raising his or her hand and asking to be called on. Their intent is to be contacted. A marketing-qualified lead is not interested in being sold to yet. They’ve indicated interest, but they’ve not asked to be

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 exactly what you need. Greg Crabtree is with us today, and he’s the author behind the book: Simple Numbers, Straight Talk, Big Profit. We’re discussing how to manage cash flow and ease the stress that your business may be feeling. Introduction to Greg Crabtree Greg has owned a CPA firm for 33 years, and in January he merged with one of the Top 20 Accounting Firms, Carr, Riggs & Ingram (CRI). This has perhaps turned out to be one of the timeliest mergers in history because he now has access to 2,000 professionals who can help businesses with consulting and expertise in times of crisis like we’re experiencing now. The consulting Greg provides is based on the Simple Numbers book. There’s a COVID19 task force set up to help you, so if you need additional resources, be sure to check out cricpa.com and look for the resource link. You’ll find additional information that applies to your property management company that includes: Loans available to companies like yours Business interruption insurance and whether it applies Employment benefits and extended sick leave requirements The Simple Numbers book helps entrepreneurs understand their financials in a clear way. It also provides guiding principles. Companies that have followed the guidance provided in this book are not in a state of panic right now. They were prepared for the crisis and they’ve avoided a lot of the pitfalls that other companies are experiencing right now. This is why Greg is on the show today. He has a lot of experience working with accounting in property management firms, and he’s going to help with your cash flow. How to Manage Your Property Management Cashflow During COVID19: 1. Payroll Protection Plan: Apply Now At the top of the list of things you have to do right now is to prepare to apply for the Payroll Protection Plan (PPP). Every property management company that has employees and 1099 contractors can benefit from this loan. The information on applying for this loan has been changing day to day, and finally we have a base for how to do it. You’ll need to use calendar year 2019 wages when you apply for this loan. Now that we know this, you can start preparing what you’ll need to access PPP funds. This is not hard to do: Look at your 2019 wages paid that do not exceed $100,000 for your highest paid people. Add those wages and divide the number by 12. Multiply that number by 2.5. There’s the amount you’ll be working with for your PPP application. Here’s an example: If you paid $600,000 in qualified wages in calendar year 2019, that divides into $50,000 per month. Multiply that by 2.5 and you get $125,000. You need to be in line today with a lender to apply for a loan to cover that $125,000. If you visit SBA.gov, you’ll find application forms that you can download. That’s not the application itself; you’ll get that from your lender, but it’s the information that you need to start gathering. Funding is expected to come through at the end of April or the first week of May. The eight weeks after you get funded is your evaluation period, in which you determine how you’ll spend the money. This loan is potentially forgivable. This is important because we will never see another forgivable loan in our lifetime from the SBA. It’s huge, and you need to apply for this money. Even if you’re not experiencing a loss right now, all you have to do is certify that there’s enough economic uncertainty in the next three or four months that you need the money. We can’t think of a single business that won’t be able to certify that. Spend the money on paper. Show the plan for how you’ll use it to meet payroll, pay rent and utilities, and make the interest payments on any business debt. You want to maximize the forgiveness potential on this loan. Most of you have a payroll that you know you have to meet, and those numbers will be easy to factor into your calculations. But don’t forget the maintenance guys and that one contractor who does the landscaping or the cleaning. Those 1099 employees count in your wage base. The individual bookkeeper you might hire that you pay on a 1099 has to be counted. If these are individuals and not companies, you can count them. The government has recognized the necessity of gig economy workers, and they know that your contractors need to be paid. 2. Conduct a Sensitivity Analysis The next step to managing your property management cashflow during COVID19? Prepare to do a sensitivity analysis. If you aren’t familiar with this term, you’re basically studying how much uncertainty your business can handle. For property managers, this means how much can rents go down without your management

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 lines of business, revenue, and most importantly – service. Introducing Carlos Veliz of Vision Property Management Carlos has a pretty great story. Vision Property Management went live in November of 2017. They now manage 700 units and they’re currently negotiating for an additional 150 units. Most of their accounts are local; they serve properties that are within 20 to 25 miles of Oakland. Most three-year-old management companies would build their business organically or by buying up companies and portfolios. Carlos followed a bit of a different path. He comes from a property management background, but had been doing construction. Carlos was renovating an apartment complex in early 2016, and one of his construction clients had purchased a portfolio of 25 units around Oakland. This client was having a terrible time finding a good Oakland property management company. His complaints were: They didn’t know what they were doing. They didn’t provide any reports or updates. They spent money without trying to save it. Property management had been something Carlos had wanted to get back to; he had been thinking about opening his own property management company at some point. So, he asked this client for three months to prepare and get licensed and up to speed. Then, he would be ready to manage those units for him. The client agreed immediately. How to Expand Your Property Management Services With The Triangle Effect: Building Better Businesses “The Triangle” is what Carlos calls his business model; from his property management company, he developed a construction company and a maintenance company. His goal has been to find recurring income streams so he could make all of his companies stable. When Vision was started, they were using maintenance vendors just like everyone else. It was really difficult to find a good, reliable maintenance vendor. Results were inconsistent; sometimes, the quality was there, and sometimes it wasn’t. The vendors he used could not be counted on to fix their errors. If something went wrong, getting them back was almost impossible. They had already moved onto a new job and a new client. In order to control the level of maintenance service he was delivering to his clients, Carlos realized he had to open his own company. So, he did that – and now all the work orders for Vision Property Management are done within 72 hours, and they’re handled professionally and responsively. It has increased accountability and it has fostered trust. In property management, 90 percent of the complaints you get are maintenance-related. If you can control and limit those complaints, it’s easy to run a great business. Speaking of complaints, you may have seen our blog on incentivizing online reviews – which will frequently revolve around maintenance issues. If not, check it out! The construction company, of course, already existed, and it fit seamlessly into the other two businesses. They’re being invited to do turnovers and remodels and major repairs. Carlos encourages his property management clients to gather other bids, but he has a relationship with his clients that makes it instinctual for them to choose his company. They’re more comfortable because they know him, they know his company, and they know his work ethic. So the Triangle, or the Trifecta, for Carlos and Vision’s success is maintenance, construction, and property management. Triangle Benefits: Accountability and Service We have talked to other people in the property management industry who say it’s a conflict of interest to blend all these services. But, there is a simple benefit. At the end of the day, the accountability lies with one entity. A lot of the bad reviews around property management start with maintenance. So, if you have the bandwidth and capacity to own the maintenance piece, why leave that opportunity hanging? You can control the experience for renters and owners. Everyone is familiar with the tenants who don’t want to wait for anything. They want their repairs now, and instead of calling a vendor and going back and forth, Carlos and his team can send their own maintenance crew immediately. This is especially effective during emergencies. It also helps for any owners who are paying too much for good maintenance. Emergency or after-hours work can cost three times the normal amount. You’re paying much more for the same work, and having a dedicated maintenance team attached to your property manager can solve that. Carlos is committed to charging market rates for hourly labor and materials. Then, there’s a 10 percent mark-up for hourly rates, which he is transparent about with his cli

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 your property management business, and we’re joined by Dave Gorham, who makes this a living and breathing part of the way he does business at Realty Solutions. How to Implement Standardized Systems in Property Management: Job Descriptions and Organizational Flow In Part 1, we discussed the importance of standardizing your processes and what kind of obstacles and benefits you can expect when you use them in your property management company. Now, let’s take a look at the process behind standardized processes: how do you implement standardized systems? Realty Solutions is a New Jersey-based property management company that is successful now because they embraced a sense of organization. Dave was an early adopter of job descriptions and putting together an organizational flow. You have your own assumption or expectation about what each person on your team does. It’s important that those team members have the same expectations and assumptions. Unless you have something written down, you cannot talk about why you may be out of sync. Don’t keep your job description in your head. Write it down. If you’re the president of the management company, you have some expectations about what your bookkeeper should do. But, your bookkeeper might have different ideas about what her job is and what your job is. That’s why you have to write down every job description. It allows everyone to know your true responsibilities and the responsibilities of others. Titles and jobs have different meanings from industry to industry and even from company to company. At Fourandhalf, our job description for an account manager is very different from what an account manager does at a bank or a cable company. Each business defines it for themselves. If you don’t have each role defined, everyone will have different expectations. So your first step in getting an organizational flow in place and systems standardized is to define every role in your property management company. Contracts and Agreements Lead to Accountability If you don’t spell out what you’re doing, it’s easy to get out of scope. Identify your roles and relationships. You can customize things as needed, but make sure it’s written down for everyone to see and understand. You wouldn’t take on a property management client without a contract. Make sure your employees have a job description – or a contract – as well. That’s a precursor to a compensation package, and from there you can move to KPIs and improvement plans. Agreements need to be in place as well. They can be put into place by two people. Those agreements have to be described in writing. They also have to have consequences which are good or bad, and there has to be a way to clean up the agreement if it stops working. Things do not happen magically. You need a collective mindset that agrees to this, and it has to come from a leader within the company who sets up guard rails or boundaries and then allows every employee to use their creative and critical thinking to follow the processes and commit to the agreements. Developing an Organizational Flow (Chart) How should you implement standardized systems like organizational charts or flows? At Realty Solutions, Dave developed an organizational chart for the company, but he doesn’t want you to embrace all the negative connotations that come with the term ‘organizational chart.’ Don’t see it as a superiority scale or a picture of who is most important in the organization. It’s better to make it an organizational flow rather than an organizational chart. This is important in getting rid of the idea that if someone’s name is above you, it’s in a superior or authoritative aspect. What the organizational flow should show is where you go for support or questions. The person in the box above you knows what you do and how you function. You’re the one keeping yourself accountable – not the person in the next box up. This turns into a decision-making and operating structure. You may remember the Fourandhalf blogs Michael Lushington did a couple of months ago on work flow. This is similar. Before Michael came to Fourandhalf, everyone had an idea about who did what, and how they should respond if something went wrong. But, nothing had been written down. Nothing was on paper. There wasn’t any standardization. We were successful, but as we grew and added new people to the team, things were bound to break. Those ideas in our heads had to be put into a work flow. Workflows Are Not One-Size Fits All Dave is not a micro-manager at Realty Solutions. His job is to create policies and procedures based on what works well. That’s an ongoing conversa

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 because he’s a systems and standardization success story. Introducing Dave Gorham of Realty Solutions Dave Gorham is the broker-of-record and owner of Realty Solutions, a New Jersey-based real estate management company. Realty Solutions is more than a property management company; they look at the full lifecycle of an investor and an investment property. In addition to managing properties, the company does community association management and operates a law firm. They’ve been in business for more than 20 years. With over 30 years of real estate experience himself, Dave can also approach his work from a place of personal experience because he’s an investor, too. He’s also a Mind-Set Coach for Frame of Mind Coaching, and loves building leaders. Defining a Standardized System in Property Management: What it Is and What it Isn’t Anything that makes what you do repeatable and easy to track is a standardized system. It could be a calendar. It could be a history of events. It could be a list you keep with a paper and a pen. The idea is to track what you do and measure results. It’s that simple. When you really start to build your standardized systems, you’ll start thinking about property management software and accounting software. A standardized system is not a rigid set of rules. It’s a consistent plan to leave people more space and energy to be creative and work their own way. This is an important distinction. The systems provide enough guidance so that when things happen, there are warning signs to show you what might be coming or what area of your business might be affected. The successful standardized system will have rigid processes but will give the user freedom to do their job better. In a property management company, your standardized systems might cover how internal communication is tracked or what happens when someone signs up for your services or where you start when one of your clients wants to sell a property. PM Grow Summit Sponsorship How to Manage the Fear of Standardized Systems People get nervous about standardized systems because people fear they won’t be nimble enough in their job. It creates fear in an organization sometimes, especially when people believe that they should do things according to their own best judgment. You have to demonstrate the benefits of a standardized system against the risks of doing everything on a case by cases basis. Fears are usually dissipated as soon as people start using the system. With the right standardized and consistent process in place, you don’t have to figure out what you’re going to do next. You know what the next step is, and you’re prepared to take it. But now you can use your critical thinking and your creativity to do a better job with those steps. A property manager can do a better job working with a vendor who has been a challenge when she is working within a standardized system. Everything is tracked, so that property manager is not only working better – her work can be repeated and measured because she’s documented what she’s done. Sometimes You Need a Better System Everyone uses some sort of system. The question you need to ask is – how do you know if your system isn’t working? Consider your sales process. You may have a process and you know how to go through the motions. But, is it repeatable? Can anyone follow that process and have the same successful results? If it’s not scalable and another team member cannot follow the system, then you need a better system. As you grow your property management company, you’re going to continue hiring people and bringing on new team members. If the standardized systems you’re using don’t make sense to new people or can’t be used by someone else, they’re not working for you. Why You Need a System: An Example (or Two) Dave is working with a business owner who is re-starting his brokerage company. It’s a small business and the owner has always had a lot of freedom with how it’s run. The business is five years old, but it’s also brand new, as if he’s starting over. Why? It’s a new business now because he decided he wanted to grow and move the business forward. So, he needed what he didn’t have yesterday, which was a set of systems that include software. Now, he can track what he’s doing and see where his greatest successes and challenges are. He has a small team that’s going to grow as he scales. A second example is a new client Dave just began working with, who he has known for years. Five years ago, this client was self-managing 20 rental properties. That required systems, and the owner had some in place that worked for his 20-unit business. Then, he found himself managing 50 homes and then

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 & Property Management to help us understand what’s happening in California with rent control, and what other markets and states are thinking as we implement new standards here. Keith is heavily involved in the National Association of Residential Property Managers (NARPM) and extremely active in property management legislation. When it comes to managing homes in California, Keith gets around. So, his insights are worth listening to. Keith Becker: A Brief Bio We’d be very surprised if you don’t know Keith already, but in case you don’t, here are a few things you should know about him: Keith has been managing residential rental homes for 25 years. DeDe’s Rentals in Santa Rosa has been around for nearly 50 years. Keith has been the president of the California state chapter of NARPM. He’s been NARPM’s regional vice president for Hawaii and California. Presently, Keith is on the NARPM board for the North Bay area and he’s also on the board of the California Apartment Association. Keith still loves when he does, and when he’s not running DeDe’s, he spends his free time focused on property management. He loves this industry, and he follows everything that happens in it. A Summary of AB 1482 and Getting Good Advice AB 1482 is also known as the California Tenant Protection Act. If you own a property management company – even outside of California – you need to know what this law is and why it’s considered the minimum standard right now. This is rent control. There are two things to think about right away: We are discussing some heavily legal information today. Like most of you paying attention to this podcast, Keith is a property manager not an attorney. A lot of information surrounding this topic has legal implications, especially when you execute the laws. If you have a legal question, talk to an attorney who specializes in landlord-tenant law. It’s complicated, and we expect it will only get more complicated. Politics has shaped much of what’s going on in California and with rent control. We aren’t going to get into politics. We’re talking today about process. This has already happened. While there’s always a threat that Costa Hawkins, one of the primary rental housing laws in California, will be overturned in the future, we’re not dealing with that today. We’re dealing with the current law and what it means for you, the properties you manage, and the tenants you work with. PM Grow Summit Sponsorship Baseline Rent Control: California State Law and Local Laws This statewide rent control law is the baseline for any rent control ordinances throughout California. What you need to know when we’re balancing the state law against rent control laws in cities throughout California is that whichever law is more onerous to the owner and more favorable to the tenants will always apply. Some cities already have rent control laws in place that are more arduous than AB 1482. Their stricter laws apply. For example, let’s look at Richmond. In Richmond, landlords cannot raise the rent on their tenants any more than the Consumer Price Index, or CPI. The new law, AB 1482, says you cannot raise the rent more than five percent plus the CPI. This does not mean that Richmond owners can now raise the rent five percent plus CPI. The Richmond law is more onerous for landlords, so that law applies. But – the rent control law in Richmond only applies to properties that were built before 1995. With AB 1482, the only properties that are exempt are those have been built in the last 15 years. So, you may have a property that was exempt from the Richmond local law but is now pulled in through this statewide law. It’s very much a situation of “if this, then that.” You must know AB 1482 but you also need to know your local laws. If you have a portfolio of 100 properties, you’ll need to look at each property individually and determine how the law applies. Exemptions to AB 1482 There are a few automatic exemptions to AB 1482: Commercial properties Tourist or hotel accommodations Hospitals Religious facilities Extended care or residential care facilities Dorms owned and operated by colleges or schools Deed restricted low or moderate income and affordable housing Housing already subject to stricter rent control laws. These properties are automatically, by statute, excluded from AB 1482. If any of your properties fall under those categories, set them aside. But, these are probably not what you manage. Next in the exclusion algorithm is the age of your property. The law is written with an expiration date of 2030, so it’s only going to last 10 years. There were some concerns that no one would build in Cal

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 feeling priced out of the market in California’s Bay Area, and that’s only one of the property management market trends we’re going to talk about on today’s show. Jeff Hacker and Property Management Market Trends He’s Noticed Bayside Property Management has been in the Bay Area for more than 30 years, and Jeff has been at the helm for the last 15 years. He works with a lot of small investors who are feeling priced out of the local market, so he’s been helping them invest in other markets. Consulting with local investors who don’t have the budget to invest in San Francisco and the surrounding markets has given him some keen insight into what’s going on in the property management industry all over the country. Defining the Three Market Tiers Jeff’s work is taking him through three different levels of property management markets, which we’re identifying as primary markets, secondary markets, and tertiary markets. How are those defined? Primary markets are also called ‘gateway markets’, and after those, we have secondary and tertiary markets to buy property. Most people define these markets on population numbers, but that isn’t always the best way to do it. Usually, a primary market has at least five or six million people and then secondary markets have between a million and five million residents, and tertiary markets have fewer than one million people living there. But from an investment point of view, there are more important factors than population numbers. Jeff suggests that you look at other things. Investors may care less about population and more about: Job growth Economic strength Whether there’s a university or professional sports teams Airports Access to shopping, restaurants, and culture You’ll want to know what kinds of real estate transactions happened over last 10 or 12 years. Research the volume, sales numbers, and what’s going on with the cap rate. All of this plays into how you define each market and decide whether it’s a viable place to invest. Bakersfield, California is a good example. If you’re looking simply at population, it might not seem like a great place to invest. But, the indicators listed above will show you that even though it’s a small market, Bakersfield is a good spot right now for real estate. Reno is another good example. Tesla is there now and a lot of people are moving out of California and into Nevada areas like Reno, Henderson, and even parts of Las Vegas to enjoy better tax rates. PM Grow Summit Sponsorship Property Management Market Trends: Shifting Demographics The biggest change has been in population demographics. Fifteen years ago, the number of college-educated renters was small. They tended to buy homes. But, when the recession hit in 2008 to 2010, there was a real shift in home ownership. People became disillusioned with owning property, and there was suddenly a fast growing segment of renters who had college educations. They are largely still in the market, and they tend to prefer urban and suburban environments, where they can find single-family homes in quiet and safe family neighborhoods. Single-family homes made up about 30 percent of the market 10 or 15 years ago, and now they make up 35 percent of the market, and that number is rising. Other demographics have changed. The Gen-Z renters we’re working with were born in 1997, or they’re a bit younger. The millennial age group covers people born from 1980 to 1997, and Gen-X tenants were born from 1965 to 1980. Finally, we have a large population of Baby Boomer tenants. They were once homeowners, but now they’re renters. They are downsizing and giving up their homes to move into urban areas with walkable neighborhoods. These renters are looking for amenities and access to healthcare and shopping and theaters. Boomers no longer want the hassle of homeownership. They are simplifying their lives and if they’re not in urban areas, they want suburban areas and planned communities. Retirement communities are growing in popularity. Younger generations are tech-friendly and they want everything to be electronic, automated, and online. The Gen-Z and Millennial tenants you rent to will expect WiFi in their homes, and they’ll want to sign everything electronically and communicate with texts. They are hoping to build credit and establish themselves in a rental property. They’re also more laid back and casual. New Challenges in the Property Management Industry The challenges are significant. Jeff identifies the three biggest challenges for property management companies as: Tenant retention Portfolio loss Affordability Tenant Retention Tenant retention is significa

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. We asked Kathleen Richards of PM Made Easy and The Property Management Coach to talk through this topic with us. If you haven’t thought about risk management before, this information is for you. If risk management has been in your back burner for a while, this information is also for you. Introducing Kathleen Richards Most of you probably know Kathleen, but we asked her for an update on what she’s doing now. Kathleen sold her property management company in 2017, and before doing that she became a certified business coach. She launched Property Management Coach and then bought LandlordSource, which has recently been re-branded and newly launched at PM Made Easy. She helps property management business owners figure out what they need, and one of the things they always need is risk management. What Does Risk Management Mean for Property Managers? Risk management means covering all your bases. The property management industry is very litigious. So, you need to manage the risk that’s present in the properties you’re managing, and you also need to manage your own risk as a business owner. As a property manager, you have risks associated with accounting, hiring employees, and how you do business. Mitigating as much risk as possible is crucial to the success of your property management business. Common Property Management Risks 1. Regulatory Compliance Would you believe that some property managers start a business in states where licensure is required, without being licensed? Often, they don’t even know that they need the license. So, your first risk could be this simple. Do you need to be licensed as a property manager in the state you’re in? Find out, and if necessary, get licensed. Moreover, make sure you read up on the laws and regulations related to property management in your area. Each state can have different rules, and these regional or state specific rules are subject to change by the regulatory bodies. So make sure you are always up to date with new laws and any changes. 2. Risks associated with owners, tenants, and vendors You have to screen owners as carefully as you screen tenants. Working with bad owners is a huge risk. You don’t want to work with owners who don’t care about their own risk, because that only increases your risk. Perhaps a new owner who wants to work with your company has a vendor who they’ve been working with for years. But, the vendor isn’t licensed or insured. You shouldn’t use that vendor, no matter how confident your new owner is in the work. It introduces too much risk. Kathleen was once an expert witness in a court case where a tenant asked an owner if the tenant’s friend could trim some trees on the property. The owner agreed and the tenant’s friend fell off the ladder, shattering a hip. That friend had no insurance and sued the owner. The property owner absolutely should have known better than to let that tenant’s friend climb on a ladder while at the property. This was a huge and unnecessary risk that cost the owner a lot more than it would have cost him to hire a professional company. Another example from Kathleen’s personal experience involves marijuana. It’s legal in California but it’s not legal federally. So, when she discovered a tenant was growing marijuana, she discussed the risks involved with the property owner. The property owner didn’t really care, but Kathleen didn’t want to take on the risk of what could happen with drugs – even legal drugs – growing in the back of the property. The tenant had kids living in the property as well, and Kathleen could not live with herself if anything happened to those kids because of the drugs being grown in the property. So, she ended her contract with that owner and invited him to manage the property himself. There are a lot of risks associated with your owners and your tenants and your vendors. You have to think about the potential consequences and weigh the risk. 3. Fair Housing Risks In property management, the risk of violating fair housing laws is always present. Your employees need to understand every detail of the fair housing laws. Make sure they read policies and sign off that they’re understood. Send employees to trainings. Give them reading material. Continually train them on fair housing. From service animals to discrimination, fair housing can be scary. There’s so much that can happen. Here’s an example. A property management company didn’t have a receptionist; property managers were responsible for answering the phones. A prospect called to ask about the various properties that were available for rent, and the property manager who happened to pick up the phone spent a lot of time discussing the available homes. The pho

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 podcast where we interview Allison DiSarro and Ken Carteron about the merger as well as Property Management vs. HOA Banking: https://fourandhalf.com/hoa-vs-property-management-banking/ Allison DiSarro from Enterprise Bank & Trust (formerly Seacoast Commerce Bank) joins us today on The Property Management Show to discuss property management banking and trust accounts. Maybe you think you’re fine when it comes to this topic: you’ve done a great job of separating all the funds that need to be separate, and you understand the importance of trust accounts. The problem, however, is not necessarily in what you don’t know. The problem could be in what your banker doesn’t know. Allison worries that your trust account might just be a business account that the bank calls a trust account. If it worries Allison, it should worry you, too. Introduction to Property Management Banking and Allison DiSarro from Enterprise Bank & Trust Allison started out with Seacoast Commerce Bank over 10 years ago. She worked for a branch in Massachusetts and she noticed a lot of property management accounts coming into the bank where she began as a business development officer. This led to a focus and an expertise on serving property management companies and their unique banking needs. All banks look for what’s called a “sticky deposit”. This is money that’s deposited and sticks around. The rents that property managers deposit aren’t sticky; the money moves right back out of the account so owners can be paid. Trust accounts, however, are sticky. The bank holds security deposits and reserve funds. Since property management business was already at Seacoast Commerce Bank and the company’s CEO was dedicated to hiring industry experts for their business banking division, Allison quickly developed an expertise of her own. She has spent years diving deep into trust accounts to find out what makes them special and how to keep them compliant. The question she asked herself was: who are we afraid of? Most property managers are afraid of the Department of Real Estate. If you own a property management company, your main concern is likely that you’d pass an audit if the DRE showed up at the doors of your business. Allison met with auditors and attorneys and became acquainted with FDIC rules and regulations to figure out how to build a division within Seacoast related to property management. She would later on bring this same knowledge and expertise as the head of the property management banking division within Enterprise Bank & Trust (formerly Seacoast Commerce Bank). Now, she’s here to tell us that the DRE audit isn’t necessarily the biggest threat. Trust Account Terminology: What are We Really Talking About? A trust account holds other peoples’ money. The money is held there until a trigger of some kind releases it. When people hear the term trust account, they probably think about family trusts. You might set one up at the bank for your own family. It puts money away for other people, who are your beneficiaries. When we think about property management trust accounts, the beneficiaries are the property manager’s customers who are actually entitled to the money being held there. As the owner of a property management company, you can walk into any bank and open up an account. You have to take some steps to make sure you’re having the right account opened. Your business operating account is easy enough. But, for a trust account, you want a bank that understands the property management industry and the needs of businesses within that industry. The most common mistake in the industry is that bankers aren’t aware of the legal and regulatory complexities involved in a property management trust account. They’re actually opening up a general business account and they’re calling it a trust account. That might be the account’s nickname the same way another business account would have an “operating expenses” nickname or “payroll account” nickname. So, you’re walking away from the bank thinking you opened a property management trust account, but you really only have a business account that’s called a trust account. There’s no protection, and that’s dangerous. PM Grow Summit Sponsorship What to Ask your Business Banker Most bankers aren’t trained on how to open a trust account that’s specific to property management companies. It’s not part of the traditional banker training. Find out if you have a trust account or if what you think is a trust account is actually just a business account. Put these questions and requests in writing. Email your banker with your account number and the name

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 so he could raise his kids and be with his family. His wife’s family had owned a property management company since 1946, and he began learning everything he could about the real estate and property management industry. Eric knows that getting your real estate license doesn’t mean you know anything really important about real estate. Terms like ‘escrow’ sound scary, even to professional agents, and there are lots of acronyms. When he closed on his first home, he was a licensed agent but still felt outside of the loop. The entire process made him nervous, and that allowed him to think about how his clients and his owners felt during this process. He sees his mission as demystifying things for his clients. Currently, he’s managing around 300 properties and his company does between 15 and 20 million in sales. Why do we have Eric here today as a guest on The Property Management Show? Because we’re talking about 1031 Exchanges, and that’s one of those terms that might need to be demystified. It’s a term that gets thrown around a lot. Everyone is aware that it exists, but not everyone is clear on what it is. Defining a 1031 Exchange The tax code scares people right away. But, a 1031 Exchange is not as complicated as people think. It’s simply a way to defer taxes. This exchange is a way to move gains that you’ve earned on one property into a new property that you’d like to purchase. Here’s an example. Let’s say you bought a home years ago for $100,000, and you just sold it for $200,000. That’s a gain of $100,000, and it’s taxable. But, if you take that $100,000 and put it into another property, you can defer those taxes. You need to buy a like property, but that isn’t as restrictive as you might think. It simply means you have to buy another income-producing property. So, you can sell a condo and buy a fourplex. For a while, everyone wanted to own a winery. It’s possible to sell a rental property to buy a vineyard. One thing you need to know is that you never actually see that gain from the property you sold. The money immediately goes into an exchange holding company, and you’ll pay some fees. So, it moves from one escrow account to another. Many investors find this is a great way to do business, especially when you don’t overcomplicate it. Some investors, for example, want to take their $100,000 gain and only roll $70,000 into the next property while keeping $30,000. It’s possible to do that, but you’ll have to pay your tax on that $30,000. The 1031 Exchange isn’t mystical, but if you don’t know the rules, it’s easy to get into trouble. There are some timelines that are important: 1. From the time you close on escrow with the house you’re selling, you have 45 days to designate up to three different properties for your next purchase. You don’t have to close on those; you simply have to demonstrate that you’re moving towards a purchase. 2. You have 180 days after your first sale to close escrow on your purchase. So that’s six months. After that, you cannot leave the money there indefinitely. If it looks like you’re not going to close within those 180 days, get your tax expert involved. When you finally liquidate and get out of the income producing property business, you’ll have to pay those taxes. But, the 1031 Exchange is a great way to stay in the business even when you’re ready to sell an investment. It’s hard to escape taxes forever, but you can minimize what you pay. This is similar to what happens when someone inherits a property. If your parents bought a fourplex in 1962 for $40,000, and you inherit it when they die while it’s worth $1 million, that will seem like a big tax bill. But, you get a step-up adjustment, which means your tax clock starts ticking at $1 million. If you sell that property in two years for $1.2 million, you don’t have to pay a tax on the gain from the original $40,000 value. You pay on the $200,000 gain your property has earned. This doesn’t always make sense. If you’re selling a property and you only make a few thousand dollars, the capital gains tax will be equal to or even less than the fees you’ll need to pay to the exchange company. It might not be worth it, but at least run the numbers to find out. PM Grow Summit Sponsorship Buying and Holding Real Estate Investments Investors always grumble about how rich they’d be if they had just purchased a lot of Apple stock back in the day. Here’s something most people don’t realize: that house you inherited from grandma is actually your Apple stock. If you hold onto it, you stand to make a lot of money. Real estate is one of those things that provides some great returns if you buy and hold.

On The Property Management Show today, we’re talking to John Bykowski, CEO at Fourandhalf as well as Matt Simons, general manager of Abodea. Our topic is maintenance for property management companies. How can maintenance be a bottleneck to profitability, and what can property management company owners do to mitigate that risk? By the way — have you caught our other episodes on Bottlenecks to Property Management Profitability? If not, be sure to check out our episodes on: Focusing on the Wrong Activities, Poor Accounting and Leaky Sales Funnels. Alright, let’s dive in! Introducing Matt and Abodea Matt is responsible for building the customer service component of what Abodea does, and if you’re not familiar with Abodea, you might have known them as SuperTenders, which was founded as NightTenders. They were the first company in their space to provide after-hours maintenance support to property managers. Now, the company coordinates maintenance support for property management companies at all hours of the day and night. If the power goes out or the bathroom is flooding or it’s 105 degrees and the air conditioning doesn’t work, you can use Abodea to respond to the tenant, diagnose the problem, and take the appropriate action. The company was created by a property management veteran who recognized that maintenance is a major pain point for property management companies. John and Matt met at a sales conference in Nashville recently and got to talking about how maintenance can really be a bottleneck for property management companies that are trying to grow. How Maintenance in Property Management Can Hold Your Company Back A company’s scale of operations can create a bottleneck when it comes to maintenance and profitability. Abodea discovered that customers who were smaller or start-up companies were dedicating a lot of time and resources to maintenance, and not getting anything back. Maintenance is unpredictable. It’s not like collecting rent or paying owners. You can go months without any maintenance needs or have three properties need something major in one month. So, it’s hard to allocate resources to efficiently manage the repair issues and dispatch vendors. Maintenance is a delicate part of your property management business. Each maintenance call is different in its importance and urgency. A repair that’s handled the wrong way can cause long-term, sustained damage to your owner’s property. It can deplete the quality of life for your tenant. So when it’s 3:00 in the morning and you have to make a quick decision, your judgment can be difficult to trust, no matter how long you’ve been in the business. This can create customer churn. There’s also the matter of finding and retaining good vendors. You have to build a vendor list that includes professionals you can trust. It’s a good idea to have three or four vendors you can call in each specialty so you have the confidence that you’ll be able to get someone on the phone immediately when necessary. Building and maintaining a vendor list takes a lot of time and resources. Doing maintenance correctly can be an overwhelming cost, even for large property management companies. PM Grow Summit Sponsorship Building Maintenance in Property Management as a Revenue Stream On the flip side, there are revenue streams associated with rental property maintenance. That revenue can offset the cost of maintenance, and sometimes significantly. So, the entire maintenance experience for property managers is on a spectrum. It can be a big cost center or just a big cost. And, if you’re not appropriately scaled or you haven’t allocated your maintenance resources correctly, you can lose customers and create damage to properties. Usually, maintenance is separate from general property managers. A lot of companies have upcharges that are included in maintenance invoices. That’s because maintenance is unexpected and unpredictable. Each maintenance issue is a single event, so you’re being compensated for the time it takes to diagnose the problem and dispatch the appropriate professionals. If that cost isn’t property communicated to property owners, there will be issues. The upcharge has to be aligned with the market and easy to explain. Property managers face bottlenecks here if they can’t communicate the value of proper maintenance response to their customers. Moving from Big Cost to Cost Center with Maintenance: Know Your Numbers Know your numbers and your ratios if you want to move from losing money on maintenance to turning it into a profit center. Understand the costs you incur on maintenance, separate from the costs you incur on the business overall. Calculate your revenues too. These need to be separate and the only way to avoid cost creep is by staying on top of what your maintenance services are costing you and what they’re earning you. It won’t take long to find inefficiencies. Matt recommends thinking in terms of 400 units to one maintenance coordinator. If you have one st

Does Your Property Management Company Have A Leaky Sales Funnel? This week’s episode of The Property Management Show continues our series on removing bottlenecks to encourage profitability in your property management company. We’re joined by two superstars from RentScale, Berit Elizabeth and Milissa Miller. No matter how outstanding your property management marketing is, if your sales process isn’t airtight, you will lose business. Milissa and Berit are going to tell us the damage to property management that a leaky sales funnel can do to your profitability, and they’re going to share a couple of secrets that can ensure you’re not losing opportunities. By the way – if you’ve missed our previous episodes on bottlenecks to property management profitability, including focusing on the wrong activities, and poor accounting, you can catch up by clicking on the links. Alright, let’s introduce these sales experts, and kick off our topic. Introducing Milissa and Berit Both Milissa and Berit are consultants with RentScale, where they work with property management companies across the country on improving sales processes. They are both passionate about optimizing the sales process. They have worked in sales and in training throughout many different industries, and they are happy to be working with property managers because of the unique business model that comes with recurring income streams. What is a Leaky Sales Funnel in Property Management? Even if you’re new to sales, you probably have some idea of what a sales funnel is. You’re putting all your leads and potential business into the top of the funnel, and on the bottom of the funnel, you’re producing customers. When lots of leads are dropping into the funnel but few customers are coming out, your conversion rate is smaller than you expected, and you need to know where those leads are dropping off. This is what Berit and Milissa refer to as a leaky sales funnel. You have leaks in the funnel where those leads are falling out. You need to identify them and fix them so you don’t lose that business. Visualize a bucket. It would be great if all your water stayed in the bucket. But, if there are holes in that bucket, you’re never going to keep all the water. That’s what a leaky sales funnel looks like. A leaky sales funnel can break the bottom line of a property management business. You’re probably paying for leads every month. If you’re putting a budget towards those leads, you want to know how much money you’re spending on leads compared to the money you’re earning on signed contracts. That means you have to look at the sales process itself. There are many stages to that process, and you need to evaluate each stage to find out where your sales funnel is leaking. Are You Closing Enough of Those Leads? Maybe you’re not even looking at your sales funnel because you’re closing a handful of great business every month, so you assume everything is working just fine. Why go looking for problems? But, you have to know your sales funnel so you can avoid lost opportunities. Look at the bigger picture of how many leads you have coming in versus what you are closing. Does it make sense? You need to make sure you’re maximizing the leads that are coming in. If you’re not looking at your sales funnel, you’re not going to know what to fix. Make your sales process visual. You want to take a look at the definitive steps you take, and you want to see how people move through the process. It won’t take long to identify where they’re dropping off. PM Grow Summit Sponsorship How to Fix a Property Management Leaky Sales Funnel: Identify Your Ideal Client You need to attract the leads you want. Maybe you want to focus on attracting investors who are hands-off, or your company specializes in accidental landlords who never planned to rent out a home. The way you approach those leads will be different. You have to speak the right language through your marketing, otherwise there will be tremendous leaks in that funnel. One of the biggest leaks is not knowing who your ideal client is. Imagine for a moment that you decide your property management company is only going to work with yellow houses that have two stories and one front door and three windows. You’d probably be more profitable than a company working with all sorts of houses. Why? Because in your marketing, you’d be putting out specific criteria for who you were willing to work with, and every owner of a yellow two-story house would likely get in touch with you. If you know exactly who you want to work with, you’ll have an easier time keeping leaks out of your sales funnel. When you’re clear on your ideal client, it’s not only easier to attract clients. It’s easier to keep them. You’re setting an expectation, and that will lower your churn. Everyone will be happier. Customers will get the services they want and property managers will be happy because they know exactly what they’re doing and why. Fixing this one leak solves

Welcome to The Property Management Show’s second episode in our multi-episode series entitled Bottlenecks to Property Management Profitability. Today, we’re talking about property management accounting. We’re joined by Daniel Craig from Profit Coach. He is sharing some juicy details on property management accounting and how it impacts profitability. There’s a lot that can go wrong for property management companies when it comes to accounting, and we’re talking about what you should be doing to get to profitability, and the tools you need to get there. Most of you probably know Daniel. But if you’re a new listener, let’s hear a bit about why his opinions on accounting matter so much. Property Management Accounting: Introducing Daniel Craig and Profit Coach Daniel came from a traditional accounting background. He has always done business with the intent of owning outcomes for the entrepreneurs he works with. Daniel understands that entrepreneurs are in business because they want to be free. They’re seeking freedom in finances, time, relationships, and purpose. Most entrepreneurs think of accounting as a simple way to file taxes and comply with the IRS. But, accounting is so much more than that, and Daniel’s passion is to show entrepreneurs how accounting can help you know if you’re achieving your goals. It can help you measure financial performance, get clear on where you want to take your business, and achieve your goals. Daniel and his company want to help you use your resources to achieve your purpose. He soon realized the property management industry is a great business to be in, and a lot of companies were doing great. But, he also noticed a trend where a lot of property management owners were working hard and not making a lot of money. His goal is to help the industry rise and break through to larger profits. Daniel worked with Lead Simple to do a financial benchmarking study for the property management industry, and NARPM noticed. They enlisted Daniel’s help to write national accounting standards for the property management industry. The Purpose of Property Management Accounting A lot of people find accounting to be less than exciting. As the owner of a property management company, you might think of it as dirty work that someone else in the company is responsible for doing. You just want to know your financial statements will keep you out of trouble and appease the IRS. But, the primary purpose of accounting is to measure financial performance. You’ve probably heard the phrase ‘what gets measured gets managed.’ Daniel believes that anything which gets measured, also gets improved. You’re in business to make a profit. Accounting measures that goal and gets you clear on your company’s financial performance. Bad accounting creates bottlenecks to profitability and prevents clarity. You need that clarity. Remember this: Clarity Drives Commitment and Commitment Drives Change. If you have goals but you’re not clear about where you are today, then you can’t possibly know what it will take for you to achieve those goals. You cannot allow yourself or your company to stay in a financial fog. It leads to uncertainty and keeps you noncommittal. If accurate accounting can deliver clarity, you will be able to make a commitment and reach the change that’s necessary for you to achieve the outcomes that you want. People think either they’re profitable or they’re not. But, it’s not black and white. There are degrees of profitability. If you’re not making money – that’s an obvious bottleneck. But, if you’re not making as much as you could be, that’s another bottleneck and you might not know how to solve it. PM Grow Summit Sponsorship Assessing Your Need for Accounting Clarity It’s possible your property management company isn’t making any money on management services but you don’t know it because your brokerage division or maintenance division is bringing in all the profits. You need to know the performance of each division. If you’re not making good money managing properties, why aren’t you? Assess where you are with your accounting by answering these three questions: What is your average profitability over the last 12 months? If you don’t know the answer, you have a bottleneck to profitability. Or, you’re not paying attention or calculating your metrics. This is a number you need to know. Having money in the bank doesn’t mean you’re profitable. Do you know the relative profitability of the various divisions in your company? You should. It’s important to separate the profits coming in from management, brokerage, maintenance, and any other ancillary businesses. You need to know what each division is doing and if you don’t, there are reporting issues causing bottlenecks. Do you regularly review your financial statements and gain insights that change how you do business? If you don’t change as a result of looking at your financials and the statements aren’t clear, you have an accounting problem. Tho

The latest series on The Property Management Show podcast is going to focus on the bottlenecks that keep property managers from becoming profitable, growing and increasing their productivity. To kick off this series, we have invited Kasey McDonald to talk to us about the activities a business owner needs to focus on to start or grow a property management business. Kasey is the director of the Property Management Training Academy, and she’s been in the real estate industry for 20 years, focused on property management. She began her own property management company where she organically grew the business to 227 doors in three years. Now, she’s doing what she really loves – focusing on the education and knowledge side of the industry. Her job is to help businesses be better businesses, especially if they don’t understand property management as well as they should. The discussion of the day? Removing the bottlenecks that inhibit your growth. Why Are There so Many Bottlenecks to Property Management Profitability? It’s easy to focus on the wrong activity for your market. It’s easy to misunderstand the activities that are involved in generating leads and building a sales pipeline. Before you can grow, you have to understand where you are and what’s happening in your market. There are probably 50 things you can do to grow your business in your particular market. To be effective, narrow that down to the five best things, and focus on those. It’s important to commit to a growth activity and to be consistent. A common bottleneck to property management profitability is giving something a try for a short period of time and then stopping if you don’t get immediate results. Some activities in prospecting and sales will take a lot longer. Be consistent for a long period of time. If it feels like something isn’t working, keep going. All of a sudden, the flood gates will open up and you’ll wonder why. The “why” is that you stuck with it, and you didn’t give up a month earlier. Focusing on the wrong things while you plan and build your business is common. If you know how to avoid this mistake, you’ll have a more productive time growing. Look at Your Foundation: What Works and What Doesn’t? Your foundation is your systems and your processes. Here are some good questions to ask about your foundation: What have you been doing to grow? What results have you had? What do you need to do to get the results you want? Maybe you’re making calls to prospects in your database, but you’re only making those calls once a week. To achieve what you want, you might need to increase the amount of time that you spend on that activity. You can’t do the calls once a week and then push the activity to the side when you decide it’s not working. Break it down and decide how frequently you should make these calls, how many calls you should make, and who those calls should reach. When you invest in the activity, you will get the results you want. Those results may not be immediate, however. Property management profitability takes time and consistency. In Kasey’s practice, she helps owners identify what’s not working. Usually, the problem is lack of effort. Formula for Growth: Consistency Be consistent with your time and your activities. Block out the time you need in your calendar to complete your tasks, and always leave room for growth activities. You don’t want to be multi-tasking while you try to grow. You don’t want your attention pulled towards several things at once. Any property manager who says “I’m too busy” to focus on growth is simply making bad choices about how their time is spent. You can find an hour in every day to work on generating leads. If you can’t, your day needs some restructuring. It’s easy to get distracted and stuck in the day-to-day, even when you begin bringing on team members. Delegating is hard. But, if you devote one hour every day consistently to a couple of growth activities, you’ll see the results coming in and you’ll understand the process. There is a lot of noise in your office, and if you start the day not knowing what needs to be done, you’ll be reacting all day long. So, understand your key tasks. Put everything that needs to be done into your calendar until it becomes a to-do list. Then, find the hour you can dedicate to growth activities. Property Management Profitability: Five Growth Activities Every Owner Can Try The growth activities that work best depend on your market and your goals. But, these five can help you with property management profitability, no matter who you are or where you operate. Organize your database of clientele. This should include past, present, and potential clients. Make phone calls and send emails. Keep your brand awareness in front of the people in this database. Kasey recommends a minimum of 10 calls per day. Distribute door hangers. The door hangers in your community can tell people who you are and what you do. Showcase recently rented homes in the neighborhood on your hanger,

Privacy is suddenly something everyone is talking about, and as a small or medium-sized property management company, you might not think you have to worry too much about it. After all, you’re not Facebook. You’re not Google. Why would privacy for property management companies be important for you? But, you do collect information from people, and those people deserve to know what you’re doing with that information. Our guests today are privacy policy experts from Termageddon. They’re here to give us some information on what you need to do in terms of addressing privacy concerns and data collection. Introducing Atty. Donata Kalnenaite and Hans Skillrud Atty. Donata Kalnenaite and Hans Skillrud can be trusted to talk about privacy policies on websites. As the company’s president, Donata is an attorney who practices privacy law and contract law. She’s a Certified Information Privacy Professional through the International Association of Privacy Professionals, and she wrote Termageddon’s policies to keep them up to date with the current and coming laws. Her job is to follow the different laws in each state and analyze what they’re proposing and what they’re passing. She’s also an expert in federal and international privacy laws. Hans is the Vice President and co-founder of Termageddon, and works in sales and marketing. With a background in software and website creation, he has a unique ability to translate some of the complex legal content that people need to know when they’re thinking about online privacy statements. Privacy for Property Management Companies: Why Should Property Managers Care About Privacy Laws? Privacy can be a confusing topic. It’s easy to see why large companies like Google and Apple and Facebook have to be careful about privacy, but why does it matter to a small or mid-sized property management company? Most privacy bills and laws don’t have a revenue cap, which means you’re bound to the same rules and laws as companies that earn hundreds of millions in revenue. It doesn’t matter how much information you collect on people or how many people are sharing their information. If you have a contact form on your website, you’re gathering personal data. That means these laws will apply to you. Think about your tenants. You know where they live. You know how much money they earn. You probably have their bank account information, and you know if they have a dog. This is sensitive information. So, you need to take privacy seriously. Additionally, property management is a service-based industry. People care about privacy. Your tenants care and your owners care, and that means you need to care. Personally identifiable information includes names, email addresses, and phone numbers. Laws protect people from taking that information from others without the proper disclosures. With all of the inquiries you’re getting from people all over the country and even all over the world, you need to disclose what kind of data you’re collecting and what you’re going to do with it. You want your website to be viewed by a lot of people. So, you need a strategy for staying up to date with website privacy laws. Privacy Policies and Different State Laws You might have been on a website where you notice there’s a different privacy policy stated for residents in different states. It’s hard to combine the privacy laws and requirements from different states into one blanket policy. Consumers from different states currently have different rights. There’s a lot of debate about how to word everything. Your privacy policy has to make sense and it has to include all the required disclosures, and that can take some time to put together. It takes time and training. A lot of people want to know when they need to begin including a privacy policy on their website. According to Hans and Donata, you need to have one as soon as your website has a contact form. When you’re inviting people to share their information, you need to disclose what you’re doing with it. Maybe you’re a property manager with contact forms on your website, but you never sell that information to third parties. You need to disclose that. You need to disclose whether or not you’re tracking people who land on your website. There are several disclosures that you may not realize you need to include on your property management website. Are you offering a free rental analysis on your website, and asking for names and emails? You need a disclosure for that, too. Privacy, Companies, and Consumers A number of bills have been proposed to allow individual consumers to sue companies for not disclosing what they are doing or not doing with data. These laws are not on the books yet, but they are under consideration in several states. People will likely be able to sue companies for violating their privacy rights. Currently, a consumer would need to go the state’s attorney general and file a complaint. The attorney general would then decide whether or not to pursue a case. The Federal T

Today we have a pretty cool guest on The Property Management Show Podcast. Shawn Johnson of Independence Capital Property Management is an investor and property manager, and he shares a lot of golden nuggets that will help property managers attract investors, and work better with investor clients. Our focus is on the relationship between investors and property managers, and how the two worlds come together. There are a lot of misconceptions that keep investors from working well with property managers, and there are also misconceptions that keep property managers from offering more value and expertise to their investor clients. We’re talking about solutions to all of that with Shawn. Introducing Shawn Johnson Shawn bought his first house in 2002 when he was 20 years old. The market was taking off, so he lived in the house as his primary residence for two years and then sold it, netting $65,000 in profit. That experience gave him the real estate investing bug. His goal was to have three income-producing properties by the time he was 27 years old. That didn’t happen. He bought a car wash instead. After that great first experience, he bought a property to flip. But he broke even and didn’t make any money on it. This was disappointing, but it didn’t stop him from becoming a smarter investor. He decided to forget flipping and invested in long-term rental homes instead. The entrepreneurial bug took over and Shawn decided to make things happen. He began acquiring more properties, and the first few rentals he managed himself. But, as soon as he brought staff onto his property management company, he was happy to hand over the management of those properties to the team of qualified property managers he had hired. Now, he has a portfolio of properties local to Farmington, New Mexico, and he also owns rental homes in Indianapolis. Those investments are also in the care of an experienced property manager. How Property Managers Can Attract Investors Property Management Investors: Being an Investor Makes you a Better Property Manager Being an investor yourself shapes the way you run your property management company. Investors want three things: The best tenant. The fastest tenant placement process. The highest rent. Knowing this on a personal level has helped Shawn serve his investor clients better. It informs the leasing process at his company, and it allows him to share a different perspective for how to maximize investor gains. If you’re a property manager who also invests in rental properties, you should position yourself as an investor-minded property management company. This is a shift that Shawn has made in his business over the last couple of years. When current clients are asking to leverage their existing property to buy more rentals, you’re providing more value and growing your business. You can help clients with self-directed IRAs if they want to convert their 401k plan to buy investment property. Make yourself available to investors as an investor. Growing Your Business with Current Clients Knowing your pool of existing clients can help property managers attract investors. When you decide to grow your business, you can go after new clients, but you can also see how you might be able to help your current clients. Shawn noticed that his current investors were telling him they’d been thinking about selling their properties. Instead of putting those properties out on the open market, Shawn considered two things – did he want to buy the property himself? And, did he have other investor clients who might be interested in the opportunity? When the property your investor is selling seems like a good fit for your own portfolio, you can probably work out favorable terms. If it’s not the right investment opportunity for you, set up a pocket listing program for your other clients. This is an excellent way to grow your business with your existing pool of clients. Sometimes, owners learn quickly that they don’t like being landlords. Shawn had a situation where he took over an owner’s property with a $30,000 down payment. That gave him two homes worth $350,000 that immediately cash flowed because the seller offered zero percent financing for two years. These opportunities are available to you. Know how to find them and be prepared to take them. Did you catch our blog on capturing more investor leads on your property management website? If not, that’s a great place to start building your investor clientele. Changing Your Mindset to Avoid Short-Term Thinking Real estate can sometimes be a short-sighted industry. It’s hard to look at the long term because this is a sales market, and every broker or Realtor is chasing that next commission. But, if you take the $10,000 commission you earn on the next property you sell and buy a rental property with it, you’ll eventually turn that money into $300,000. Not a lot of property managers and real estate agents are willing to think this way. But, Shawn says it’s the only way he thinks. T

Eric Wetherington from New Heights Property Management has more than 25 years of experience starting, acquiring, and managing dozens of companies. He is joining The Property Management Show today to discuss responsible property management growth. We talk about what that is, and how to maintain it when you’re growing a property management company. Introduction to Eric Wetherington Eric is the director and broker in charge of New Heights Property Management, which he started 10 and a half years ago in partnership with a large real estate firm in the Charleston area. The real estate agents realized they didn’t have a solution for the homeowners who couldn’t sell their houses during the last recession. So, he began the property management company and it quickly grew. In addition to starting and growing New Heights Property Management, Eric has helped to develop and grow other companies. He got into the real estate services industry 25 years ago, and he has helped to build business entities like joint ventures and title companies, giving him a lot of start-up experience. He likes to see growth happen and he’s learned to think on his feet. Defining Responsible Property Management Growth Responsible growth requires three things: An engaged team. Great services offered to clients. Profitability. This is what responsible growth looks like. If all of these things are happening in your company, then you’re growing. It starts with your great team, and that team has to provide valuable services that keep your customers happy. Profit is also important. If you think you have a business but it’s not making any money, then what you really have is a hobby. You might seem to be growing year over year, or month over month, but if no profit is increasing the bottom line, you don’t fit the definition of responsible growth. If your team members hate what they’re doing and they don’t enjoy coming to work every day, you’re not embracing responsible growth. Check out our episode on how to build a great property management team with Melissa Prandi for more information on this. Property management is a service industry, so if you’re not providing value to your clients and they aren’t happy or they’re in a hurry to leave you, then you’re not growing. Team, service, and profit. These are the things that define responsible property management growth. How to Balance and Master the Responsible Property Management Growth Elements Every entrepreneur makes mistakes, and one of the things Eric learned from his mistakes is that your business and your team will only grow to the level that you’re growing as a leader. You’re the cap of your business. So, whether you learn best by reading books or listening to podcasts or attending conferences – get comfortable with the three growth elements (team, service and profit), and learn how to balance them. Much of your understanding as a business leader will come to you through trial and error. You learn and grow by making mistakes. Don’t be afraid of that, and don’t be afraid to shift perspectives and make responsible growth a priority for your property management business. Leading a Team Towards Responsible Property Management Growth Every good leader knows that the team has to come first. You have to hire the right people and put them in the right seats on the bus. If you put your team first, your team will take care of your customers. When your customers are well cared for, you naturally become more profitable. Everyone is accountable for responsible growth, but the leader of the company is ultimately responsible for it. A good leader will ensure the team has bought into this growth plan. Standing up in front of the team to say “we’re going to double sales this year” is not a great way to lead. If you want to set that goal, you need to be prepared to have a plan that will support it. More importantly, you’ll need to show your team members where they fit into that goal and how it benefits them. Show your team what winning looks like and how it’s going to benefit them. When your team members are being asked to put in the time and energy that’s required to reach a certain goal, they want to know why the company is going in that direction. And, they want to know why it’s good for them individually. A good leader will cover all of that and be ready to personalize the goal for each team member’s level. Let them know how they’re impacted. That will build engagement. In the staff meeting Eric recently held, his Business Development Managers (BDMs) were sharing how easy it has become to sell their property management services. Most of the potential clients they’re calling on have already read the great reviews that the company has received online. Those prospective owners feel like they know the company already, so the BDMs don’t have to spend a lot of time making a hard sell. Those reviews are achieved by the team that’s delivering great service. You see how this is working? Everyone understands their role in

Direct mail marketing for property management is making a comeback, and we have asked Brian Pavek from SmartZip to join us on the podcast to discuss the role data plays in this space. Over the past several years, the team behind SmartZip developed a scoring metric for the real estate industry that’s able to predict which homeowners will sell their home in the next year. Recently, they’ve expanded their data aggregation and analytics to serve property management companies. This is why Fourandhalf works with them to provide a data-driven direct mail marketing solution to property management companies. But before we dive into direct mail, let’s first talk about the basics. What is Data-Driven Marketing? In a nutshell, data-driven marketing means working smarter, not harder. It involves using collected information about a group of people and strategically targeting those who are qualified to work with you. Here’s an example: If the total population in a town is 5,000, how do you know which of those people actually own rental properties that you could potentially manage? The answer is data. Would you rather market to the whole town, or only to those who own the types of properties your company can manage? Data-driven direct mail marketing for property management companies helps you reach the right prospects. If you’re looking at a target market with 5,000 homes, you can take one of two approaches: The first approach is when you have a smaller budget. So using data-driven direct mail marketing as an example, you’ll send out 500 pieces of mail to homes in that market. Those are blind samples. You don’t know which 500 households will receive your direct mail, but you know that’s the number you can afford to reach. The second approach is when you can afford to reach every one of the 5,000 homes. You send your direct mail marketing to every address. This is still pretty blind; out of those 5,000 homes perhaps only 1,800 of them are investor properties. Data will help you decide who gets your property management direct mail marketing. Would you rather send out 500 mailers blindly or send out 500 mailers to people who you know may need property management services? The data removes the blind targeting in direct mail. You need three things for an effective direct mail marketing campaign: The right message The right recipients The right timing The data is valuable and it provides a greater opportunity. Consistency and Commitment: Direct Mail for Property Management is Part of a Larger Strategy By now, you know that effective property management marketing requires a multi-channel strategy. Your direct mail marketing for your property management business should fit into the rest of your marketing, and you have to commit to tracking results for a few months. If you try it in one month, you could get great results. But, you might not. This doesn’t mean it’s working or not working. Sometimes, it’s just not the right time for people to receive your piece of mail. You can always be on-point with message, and the data will ensure you’re reaching the right people. Timing is always variable. That’s why a long-term commitment is needed. Most consumers require eight touches to respond tobranding. You need repetition in order to be successful. Why are Direct Mail Campaigns for Property Management Cool Again? For a long time, direct mail marketing for property management got lost in the shuffle because online advertising arrived and it had a tremendous impact. Online advertising is still important, but a lot of people are using ad blockers because they’re annoyed by the constant online ads they see. Almost everyone has that one email account they never check but use for spam emails from companies trying to sell them stuff. Direct mail either provides people with information or triggers a desire. In either case, the goal is to get in front of potential customers. Direct mail never stopped working, it just became really tedious. Now, companies like SmartZip are helping to make it cheaper and automated. It’s making a difference. Instead of four or five steps, there’s one step. You pretty much click a button and you’re sending a beautiful piece of direct mail to a targeted audience. Consumers aren’t going to respond to your direct mail unless you are making their lives easier or providing some type of advantage. The automation has made direct mail more affordable. You know you’re only sending mail to addresses that can receive it, and your targets are relevant. Working with a data analytics company will allow you to access data that has been gathered and digested. You’ll have access to street addresses as well as email addresses and phone numbers, providing a comprehensive platform from which to build your multi-channel marketing strategy. Data is what makes direct mail worthwhile. Don’t move forward with direct ma

Do you know any successful, married property managers? We do. Hoffman Realty is one of the most successful property management companies in the country, and as you’ll soon learn, the owners of that company have a marriage that most of us would envy. Why is everything working so well? We’re going to find out on today’s episode of The Property Management Show. Our guests are MaryAnn Hoffman and Andrew Dougill from Hoffman Realty, a Tampa property management and real estate company. MaryAnn founded the company in 1998, right after she graduated from the University of South Florida. There were a lot of investors who wanted her to manage their properties, so she started the company. Later, she met Andrew and got married. Now, these married property managers work together and they’re going to share some tips for success. If you’re a listener who is thinking about going into business with your partner or spouse, you’ll want to pay attention. The advice you hear will help you decide if it’s the right time. It will also help you plan for the potential rewards and challenges. How Did These Married Property Managers Get Started? MaryAnn was already in real estate when they got married, and Andrew was working for a large corporation as an engineer. He had a nice corner office downtown and even his own parking spot. Then, he got laid off in 2000, during the burst of the dot-com bubble. This was scary for MaryAnn who wondered if her business could support the both of them while he looked for a new job in his field. They created something good from a bad situation. MaryAnn needed a website and a lot of technical support. So, she suggested that Andrew work for her company while he looked for his next job. She was concerned that he was giving up some huge potential career opportunities, but after 20 years as an engineer, Andrew stopped looking for a new job and really became involved in Hoffman Realty. They realized they were having fun working together. So, they took the plunge and officially went into business together. Establishing a Routine and Setting Boundaries as Married Property Managers In his former job, Andrew did a lot of traveling and when he would return home, it was difficult for him and MaryAnn to fall back into the routine of being together. Now that they work together, there’s a lot more harmony around the house. The couple is really in sync and everything runs a lot smoother. There’s more of a connection within their professional and personal relationship. If MaryAnn is having a bad day, Andrew gets it. There’s a lot more intimacy when you know what each person is going through and what they’re dealing with on a daily basis. They help each other, and they rely on their own individual strengths to keep the company – and the relationship – on track. Setting boundaries is also important. Married property managers bringing in their spouse to work with them might be concerned that their partner will try to take over and change everything. That’s not what you want. Andrew and MaryAnn decided that they would separate which parts of the company they were each responsible for running. MaryAnn is the people person and makes routine decisions about the business. Andrew handles the technology and the high level decisions and everything related to their marketing systems and processes. In 20 years, these married property managers haven’t stumbled, and it’s largely because of those clear boundaries. MaryAnn says she admires Andrew’s ability to handle what he handles, and she loves managing her end of the business. She doesn’t flinch when angry owners yell, but she has no interest in figuring out why a computer isn’t working. Their strengths are much different, and they use those differences to make their company run better. An organizational chart is more important than ever when you’re married property managers, even if you’re the only two people in the company. Write your name in each box that represents your responsibilities, and make sure you’re not both in the same box. That’s where conflicts can arise. If you listened to our recent podcast with Melissa Prandi, you’ll remember what she said about putting together a great property management team. She said make sure you hire people with different strengths. At Hoffman Realty, Andrew and MaryAnn value the separate things that they each do best. When you decide to work with a spouse or a partner, make sure you can identify which jobs you are each responsible for, and then don’t creep over into each other’s areas. If you have the same strengths and weaknesses at your spouse, maybe you shouldn’t work together. Or, you should be prepared to hire people who can fill in those blanks. Do These Married Property Managers Ever Get Tired of Each Other? Working as married property managers doesn’t necessarily mean that you’re together 24 hours a day and seven days a week. While there may be challenges to sharing both a home and a business, you can make it work. MaryAnn and Andr

Michael Lushington, the COO of Fourandhalf, joins Brittany and Marie on this week’s episode of The Property Management Show podcast. The guest is Will Gunadi of nextCoder, and the subject is workflow automation for property management companies. You might have read or watched Michael’s blogs about workflow and how to use it as a business owner when you’re growing your property management company. If you haven’t seen them yet, be sure to check them out: Workflows Part 1: Get in Touch with Your Property Management Company Through Workflows Workflows Part 2: Elements of a Good Workflow for Property Managers Workflows Part 3: Implementing Property Management Workflows without Being a Micro Manager Will is an expert on workflow automation, and we asked him to explain in simple terms what it is, and how it works. Understanding Workflow Automation Workflows are a series of steps. Those steps are repeated again and again. That’s why this particular process is so relevant to property management. If you think about it, your whole property management operation is full of workflows. Things are repeated. For example, tenants are always moving out. Each time that happens, you have to repeat the same steps. So, it makes sense for property managers to put an effort into automating the workflow. It’s natural. You might have heard about business process management or even robotic process automation. Those are big terms, and they’re related, but workflow management is a discipline in itself. Workflow automation is a combination of business process management and robotic process automation. There are smaller programs that are written to contribute to the overall automation process. Will jokingly calls those programs “minions.” So, with a robotic process automation, the “minions” are executing and overseeing the workflow steps. The diagram is what ties business process management into the whole scheme. If you search online for business process management, you’ll see a workflow diagram. The diagram is a big part of automation. Workflows are not useful to you as a company owner if you cannot see them visually. So, combining business process management with robotic process automation is really what we’re talking about when we discuss workflows. Automation: What it Is and What it Isn’t There’s work that cannot be automated. Sometimes, people will have a vision of automating everything. They imagine they’ll just be able to press play and that’s it. But, this isn’t the real purpose or function of automation. Automation does not mean hitting play and sitting back. That might work when you’re listening to music, but when you’re managing 400 houses or even 1,000 houses; it’s not going to work. There are two types of automation: Automate the steps of your workflow where it makes sense. Automate the notifications and alerts. You can broadcast steps to people executing. Forget the idea that automation means computerized. That makes no sense. For property management companies, the workflow has some steps that have to be done by a real human. That’s how you think about automation – it’s still a human function. In property management, you can automate triggers to remind you to execute things. You can automate the steps of your workflow and the orchestration of the teams involved. Is Your Property Management Company Ready for Automation? If implemented correctly, automation will help a property management company scale up and grow. If you’re currently managing 100 or 200 properties, this is the time to start thinking about the workflow process. Start documenting what needs to happen. If you wait and start at 500 or 600 properties, you’ll find you’re too busy to put out fires and manage processes. So, start early. Workflow automation is applicable to any property management company as long as it’s understood and acknowledged that it doesn’t mean computers take over everything. The steps are still extremely human. Here’s an example: locks will always need to be changed on apartments or houses between tenants. No matter how good a computer program you have, it’s still going to be a person who goes to the property and changes the lock. It has to be documented. Automation can send you reminders and notifications when those locks need to be changed. But a human being has to go there and re-key the property. Building relationships with your owners and tenants is also something that cannot be automated. You can automate the way that relationship is orchestrated. You can make sure your owners get the right information at the right time. You can automate alerts and accounting statements. That’s the value of workflow automation for property management companies. Automation is not a Magic Bullet The technology behind automation is excellent, but there’s often a gap between what the company knows about how it works and the automation the company wants to put in place. You cannot decide to implement workflow automation if you don’t f