I have had the unique opportunity as an owner of a property management company to lead the company’s new business division. That means I am on the front lines, talking every day with property owners and investors about our services. Early on, in the first 10 years of our company's existence, I wore the new business development hat along with about 20 other hats. In 2013, I replaced myself with another team member while I worked on other areas of the business. Now, in 2018, I am back in front of the company, looking for new owners to grow as investor’s as well as our business. I think I have the unique ability to explain the customer’s experience with new owners because I know every area of the business – our strengths and weaknesses. Investors looking at our company will never get sold because I have the ability to show them what the relationship will look like without adding fluff. My ability to clearly articulate our operation allows me to explain to potential new business why we may not be a good fit. Over the years, I have found that we are not a perfect fit for all owners looking to hire a property manager and below are some of the reasons why:
Shopping Price – Property management services are not a commodity, so we are not a good fit for an investor who is just shopping price. Our service and relationship are so much deeper than the monthly management fee and renewal rate. I am confident that lower management fee companies will cost most investors far more in the long run. That cost will be made up of real expenses - paper expense, vacancy expense, and personal capital. Now, because the investor decided to hire a cheap company, the investor’s time is consumed with micro-managing these expenses.
Handle Their Own Maintenance - I meet a lot of owners that want to handle their own maintenance to save a couple of dollars, when, in the end, it most often puts the customer’s experience at risk. As an owner, I would rather have my property manager handle the maintenance issue quickly to make my tenant happy vs saving a few bucks.
Don’t Want Pets - we come across owners that don't want pets, and I can totally understand where they are coming from. They may have had or heard about a bad experience with pets from a friend or online and simply don't want to subject themselves to that pain. Typically, our first goal is to educate an owner on how over 53% of the rental community has a pet. That means if we market your property for rent as “NO PETS,” we eliminate over half of the potential renter pool in a snap. We would also eliminate another high percentage of potential tenants by accounting for the people that may want to move into your place for a few years but want to keep the option open to get a pet. At the end of the day, saying no to pets may result in turning away close to 70% of people that may have an interest in having a pet.
As a company, we will never turn away an owner that doesn't want to have a pet, but we will explain to them that it takes twice as long to find a renter. That means it can take up to 45 days to get a lease signed. Sometimes the additional vacancy time would have been equal or more then the calculated risk of accepting a pet. We also offer the suggestion – for the owner’s piece of mind - to advertise how we will accept pets but ask for a large extra deposit to offset any risk. We like to discourage the “NO PETS” rule in marketing. It can always be a decision made on a case by case scenario down the road when an applicant presents themselves.
Wants to Manage Us - we have had owners (notice past tense) that want to hire us and then micromanage us. Every day there are emails questioning “why” on everything. One time we had an owner reach out to the tenant with no just reason. I always thought it was silly to pay us a fee and then spend more time micromanaging - a waste of their personal capital. Our operation is designed to be hands-off for an investor. We have multiple communication trigger points agreed to on the front end that will alert an investor when they need to step in to make a decision. I believe that an owner who wants to be hands-on should maybe manage the property themselves. That way they can save the money along with the energy they may use to manage the manager.
Maintaining Acceptable Conditions - this year alone I have advised 3 different owners on how we may not be a good fit for them, based on what they found to be acceptable for upkeep. These owners all could fall under the generalization of “slumlord.” We are not in the business of being a slumlord. When an investor does not keep their property up to a certain standard, there is higher risk of liability for all parties involved. It can lead to safety issues, unwanted attention from the city or municipality, reputation blunders, and most importantly, it will lead to crappy tenants. Crappy tenants and crappy properties go hand-in-hand. Overall, crappy tenants offer an entire new set of pitfalls. At the end of the day, we think there is a fine line to walk between quality property and not spending too much. When a landlord doesn't want to take care of basic services and upkeep, then it strongly suggested that we will not be a good fit.
Our company is for not all investors. We like to foresee that from the beginning, that way the owner and GC don’t have to go down a path that will ultimately end in both parting ways. Being able to work with the right mix of investors also protects our other investors we already manage. We have to look out for their best interest first and foremost.