The Property Management Show

Google Ads can be a powerful growth engine for residential property management marketing. But for many business owners, it’s also a source of frustration. Misconceptions, unrealistic expectations, and the complexity of campaign management often leave property managers saying, “Google Ads just doesn’t work for me.” On The Property Management Show podcast, Google Ads expert Maddie Lushington shared candid insights from her five years of running Google Ads campaigns for property managers across North America. Her stories reveal why some campaigns fail, what realistic success looks like, and how property managers can avoid common pitfalls when marketing to property owners. Why Property Managers Struggle with Google Ads Many property managers walk into Google Ads expecting instant results: a certain number of leads, a specific cost per door, or guaranteed outcomes based on what a peer mentioned at a conference. Maddie has seen this play out countless times. I also recalled overhearing property managers comparing results over lunch at an industry event. One person bragged about generating dozens of leads in Florida, while another lamented that ads never worked for them in a smaller market. On the surface, these conversations sound like benchmarks. In reality, they’re stories shaped by geography, competition, and budget. Comparing success in Florida to a rural town in Arkansas is like comparing apples to oranges. The market dictates what’s possible. This misconception — that performance can be copy-pasted from one market to another — is one of the biggest reasons property managers feel let down by ads. What Defines Success in Google Ads Campaigns for Property Managers Beyond Cost Per Lead Leads and cost per lead remain the metrics everyone talks about, but Maddie encouraged property managers to widen their definition of success. Impressions and clicks reveal whether your brand is showing up consistently. More importantly, looking closely at the type of clicks matters just as much as the number. Owner Leads vs. Tenant Clicks This is where nuance comes in. Owners and tenants often use almost identical search terms. That means even the most carefully crafted campaigns will capture some tenant clicks. Maddie was quick to point out that this isn’t a failure — it’s simply the nature of how search works. Her team’s role is to constantly refine campaigns to keep the balance tilted toward owner leads. She stressed the importance of daily click volume as a leading indicator. If a campaign generates five to ten clicks a day, we know we’re creating enough opportunities for owner leads to come through. Not every click will be perfect, but the math starts working in your favor. Can You Trust AI Tools for Google Ads in Property Management? Automation and AI sound appealing. Google has rolled out tools that promise to “optimize” campaigns with little human input. But Maddie and I both warned against over-reliance on AI in property management marketing, and here’s why: The Nuance Problem You Can’t Ignore I put it plainly during the interview: “Google has now shifted from purely keywords to intent.” That sounds great until you remember that intent is slippery. Intent is a very nuanced thing, which robots find it hard to master. In property management, that nuance cuts deep. Owners and tenants search with similar phrases. Maddie sees this daily: “Tenants and owners actually search very similarly…[and] the AI isn’t nuanced enough to… know the difference… between the owner that we want and the tenant that we don’t.” Google’s shift from keywords to intent has been one of the biggest changes in recent years. If you want a deeper dive into how Google’s constant updates affect property management marketing, check out our blog on what property managers need to know about Google’s latest updates. When AI Goes Wrong in Google Ads Maddie shared a story that perfectly illustrates why human oversight matters. During a routine review of a campaign, she noticed something bizarre: Google’s AI tools had injected Latin placeholder text — lorem ipsum — into live ad copy. In another case, the AI mistakenly expanded a campaign targeting vacation property management into keywords for vacation activities. This meant ads meant to capture property owners would start showing up for people searching “things to do on a trip.” Without human intervention, those wasted clicks could have drained hundreds of dollars from a campaign. The lesson? Automation can support you, but it cannot replace human strategy — especially in an industry as nuanced as property management marketing. Google Ads Budget for Property Managers: A Reality Check Perhaps the most sobering part of Maddie’s interview was her explanation of budget math. Many property managers believe that $500 a month should guarantee a couple of new doors. The truth is far less straightforward. Breaking Down the Numbers A $500 monthly budget equals roughly $16.50 per day. With an average cost per click of $5.50, that leaves room for just three clicks a day. If those clicks come early in the morning, the campaign stops showing for the rest of the day. That means potential owner leads searching later in the afternoon never even see your ad. Competitive Keywords Cost More In some markets, clicks for high-intent keywords like “property management company near me” can cost $20–$30 each. Removing them might save money, but it also risks cutting off the very leads property managers want most. The art lies in balancing expensive keywords with more affordable ones while keeping the campaign productive. Why Long-Term Thinking Matters in Property Management Marketing Another trap Maddie sees is obsessing over monthly lead numbers. Property management, like many industries, is seasonal. Summer brings a surge of activity as leases turn over, while the holidays often slow things down. One “bad month” doesn’t mean a campaign is failing. Maddie encourages clients to focus on year-to-date averages. If the cost per lead stays close to the $300 benchmark across the year, a quiet December doesn’t negate a strong July. It’s about the bigger picture. Consistency over time, not perfection every month, is the goal. Why Reputation Shapes Google Ads Performance Even the best-crafted ad doesn’t operate in isolation. Maddie described the buyer’s journey for a typical property owner: they click an ad, skim the landing page, and then — almost always — Google the company name. At that point, reviews and online reputation heavily influence the decision. Sometimes, it’s not just about the reviews you currently have. It’s also about proactively making sure tenant frustrations don’t spill over into your online reputation. Maddie wrote a full blog on how property managers can prevent negative tenant reviews that’s worth a read if you’re looking to strengthen your reputation before investing more in ads. Owners are likely to reverse their decision to call a company after spotting a low star rating or too many negative reviews. This is why she emphasizes pairing Google Ads with reputation management and lead nurturing campaigns. Ads are often the first handshake, but trust is built through reviews, follow-ups, and consistent visibility. Your reputation is part of the larger customer journey, influencing whether property owners move forward with you or not. We break this down in detail in our blog on online reputation and the customer journey for property management companies. The Future of Google Ads in Property Management Looking ahead, Maddie believes the biggest challenge will be rising costs. As more companies enter the market, competition drives up the cost per click. For residential property managers, this means budgets need to stretch further, and campaigns must be managed with even more precision. Still, she’s optimistic: “If you have the right strategy in place, you have the right audience, you have an appropriate budget, you’re A/B testing regularly, you’re doing maintenance, Google Ads is so effective.” Should You DIY Google Ads or Hire an Expert? Running ads in-house may seem like a way to save money, but Maddie’s stories show the risks: wasted spend, missed opportunities, and costly AI mishaps. Another challenge Maddie and I discussed was targeting investor landlords. On paper, “investor” sounds like a great keyword, but in practice, it’s loaded with spam. Search terms around “real estate investors” often pull in schemes, courses, or people looking to flip houses rather than serious rental property owners. A lot of keywords related to investments are associated with scams and spam. That makes it tough to use investor-related keywords without wasting budget, which is why campaigns need constant refinement to filter out irrelevant clicks. For property managers serious about getting more owner leads, working with a marketing partner who understands the property management industry provides not just technical expertise but also peace of mind. FAQs About Google Ads for Property Managers How much should property managers spend on Google Ads? It’s entirely location-dependent and we recommend doing keyword research to see what the average cost per click is in your area. Make sure that your budget is high enough to generate 5–10 clicks per day. Smaller budgets can work in rare, low-competition markets, but they often run out early in the day. Do Google Ads really work for property management companies? Yes — when set up correctly. Google Ads helps property managers appear when rental property owners and investors are actively searching for help. Success depends on targeting, budget, landing pages, and follow-up. How do I avoid getting tenant clicks on my property management ads? You can’t avoid them entirely because tenants and owners search with similar terms. The solution is using negative keywords, refining campaigns regularly, and creating owner-focused landing pages to improve lead quality. Should I manage Google Ads myself or hire an agency? While DIY is possible, most property managers lose money through wasted clicks and missed targeting. Partnering with a marketing agency that specializes in property management marketing ensures your ads are optimized for getting more owner leads. About Fourandhalf Fourandhalf Marketing Agency helps property managers like you get more owner leads through marketing — whether you need help with your website, SEO, online reputation, paid advertising, email marketing, social media, or video and blog content. Basically, everything you need to attract and convert more owners, all in one place. <&console.warn&n&t> InstagramThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post Google Ads for Property Managers: Expert Insights from Maddie Lushington appeared first on Fourandhalf Marketing Agency for Property Managers.

Most property-management owners focus on adding new doors, or, they’re just concerned with reputation management and they don’t feel like they need to grow their business. But, they ignore the cause of lost revenue and lower customer lifetime values: annual churn that quietly erodes 20–25 % of portfolios. You probably don’t realize just how big your churn rate is. Welcome to Part 2 of our conversation with Todd Ortscheid, CEO of Revolution Rental Management. In this part of our series, we are talking about real world churn rates for property managers, how boosting your Customer Lifetime Value (CLV) can elevate your property management company and give you the budget necessary to effectively market your services, and some of the most threatening legislation and regulation around fee-maxing. How Much Are You Really Losing? Getting Honest About Churn Any industry report you read will show you that property managers can expect to lose doors every month and every year. Even if you’re doing a perfect job, your owners are going to sell their properties. They’re going to die. They might change their minds. Todd says that when asked to estimate churn, many managers guess that their churn rate is around five percent. But really, most property managers are losing 20–25 % of their doors every year. The latest NARPM® benchmarking guide says the average churn is at 20%, and Todd says that property management companies that can bring that loss down to around 10% can feel really good about what they’re achieving. Some property managers might think that they’re not losing money on churn because they’ve helped one of their owners sell a property. That’s great. There are commission earnings to be made. But, they’ve lost the recurring revenue. Never underestimate what you’re losing to churn, and even though it’s surprisingly difficult, try to bring that churn rate a bit lower. When sales are intense, churn rates will jump. Be prepared. Increasing Customer Lifetime Value When you have responsible ancillary fees in place, you’re earning extra cash to invest into better services. Better services reduce your churn and increase your customer lifetime value. Where should those extra earnings be spent? We discussed this a bit in part one of our conversation: Marketing. Each new door now yields twice the ROI, making pay-per-click (PPC) or content marketing an easy investment. Better services. Upgrade what you can provide. This might be a 24/7 maintenance line, leasing automation, and a resident-benefit package (RBP). These things are increasingly expected by tenants. Fee-Maxing Myths and The Triple-Win Model Fee-maxing means charging more money from tenants. Won’t that lead to tenant churn? If you’re taking more money from residents, the property manager and the owner have better returns, but won’t residents leave, thus increasing an owner’s vacancy rate? That’s a fear not a fact. Properly structured fees don’t drive tenants away. Most ancillary charges are behavior-based or have opt-in requirements. Late fees and bounced check fees and credit-contingency fees are behavior-based. Only the tenant can prevent those fees. Pet fees are completely optional. No one will charge a tenant a pet fee if they’re not moving in with a pet. Todd has a client in Washington State who is the only property manager in his market to allow pets everywhere. He rents every listing faster while collecting a pet fee for the owner. The result is a much lower vacancy rate, happier owners, and grateful residents who couldn’t find pet-friendly homes elsewhere. Tenants who have lower credit might not like that they have to pay a bit more in rent every month, but they’ll be grateful that they can rent a place, even with that low credit score. Those residents are grateful that someone is willing to work with them. Second Nature is the company that manages Resident Benefits Packages. They have a model that they call Triple Win. The owner wins. The tenant wins. The property manager wins. That’s what happens with these ancillary fees, whether we’re talking about renters insurance that’s offered to tenants at a cheaper rate than they’d find on their own or a rising credit score that’s occurring because their on-time rental payments are being reported to the credit bureau. It’s a better deal for residents. Those tenants aren’t going to leave. They’re getting benefits. Fee-Maxing and Regulatory Reactions Fee-maxing quickly got the attention of regulators and legislators, and they began to see it the same way they might see Ticketmaster charging “junk fees.” But it’s not the same. The airline industry has done a good job of convincing the government that their ancillary fees are necessary in keeping ticket costs down. The property management industry needs to make the same case. Our industry has advanced. We want to fund technology and new benefits for tenants, and if we cannot provide that through ancillary fees, we’ll have to increase rent and property management fees. When those fees go up, rent has to go up. Everyone suffers. It no longer becomes a situational cost. It’s not affecting only tenants with pets or only tenants who need credit help. It’s affecting everyone. Many areas of the country are facing legislative hurdles when it comes to ancillary fees and property management. Part of this is due to the perception that landlords are rich corporations. In Atlanta, for example, a lot of institutional investors and corporations have moved into the market. So, many people have the misguided idea that landlords are big rich billionaire fat cats. But those institutional investors are about one percent of the rental owner market. Everything else is owned by small investors. The average landlord is a blue collar person and all their wealth is in the rental property. People don’t know that. States like New York are especially hostile to ancillary fees, which surprises no one. West coast states like California, Oregon, and Washington, are also tightening rules on fee-maxing and capping pet fees or Resident Benefit Package fees. In Colorado, pet fees are now limited to $35 per pet. Another state that has shifted to be less landlord-friendly is Nevada. What are some smart work-arounds that can keep a property owner and manager profitable in some of these states? Here are some of Todd’s suggestions: Rent-inclusive RBP pricing. Bundle the benefit cost inside your advertised rent. For example, if your normal rent in Oregon is $2,000, you can advertise your property at $2,050, and provide the Resident Benefits Package. Then, earmark the first $50 as the management fee. Provide tiered service packages. Offer “Platinum” plans that bake in formerly capped fees. Support data-driven advocacy. Show lawmakers how fee caps backfire on residents. This is a lesson that rent control already should have proved. It’s important to be creative and work within what you can charge. Over time, too much regulation will negatively impact residents and there will be backlash. Be ready to explain why the fee is in place. If it’s just a money grab, you’ll have a tough time defending it. But, if you’re putting a fee in place to change behavior or provide something of value, there’s an argument that can be reasonably made in support of that fee. The best business model will depend on your property management company. Maybe an all-inclusive plan works best for your customers. There are zero additional fees, but they’re paying you more every month for everything, whether they use all the services that the fee covers or not. Tiered pricing is another option. It’s like buying a basic economy airline ticket and then adding the things that you want, like meals or seat selections. There’s nothing wrong with any of the models. As the owner of a property management company, you need to figure out what will get you to the revenue that allows you to provide the kind of service you want to provide while still making money for yourself. In Part Three, we’ll pivot from policy to practice. We’ll talk about education versus marketing, how to create video that converts, and how to use AI to be an efficiency assistant rather than a brand killer. Stay tuned for the finale with Todd. And if you’re hungry to turn your fresh margins into high-quality owner leads, contact us at Fourandhalf. CompanyThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post Maximize Property Management Revenue Part 2: Churn, Lifetime Value, and Legislation appeared first on Fourandhalf Marketing Agency for Property Managers.

Ray Hespen, who is a frequent flier on The Property Management Show, joined us again to discuss maintenance metrics and how measurement improves resident satisfaction and owner NOI. The last time he was on the podcast, in late 2023, his team was just beginning to establish this concept of maintenance analytics. He was investigating what it would look like if property managers looked at maintenance from a data-driven standpoint. He was beginning to collect all the necessary data. It’s been more than a year now, and we brought him back to talk about what he’s seen since then. The Evolution of Data-Driven Maintenance If you get good measurements, you never lose. Property management has been in this black hole of information and according to Ray, that’s because we relied so much on having exceptional people run our business. It’s a super-high trust game. But, you can’t move what you can’t measure. So in order to scale, Ray and his team at Property Meld released a product that’s the best industry representation of the real world. Insights and Insights Pro are basically ways to understand your own property management business against a ladder of maintenance excellence. It’s a deep diving into: Vendor efficiency Technician efficiency Coordinator efficiency Benchmarking Finances You know what the performance actually is instead of trusting someone’s gut. Ray says it’s been surprising to see how the market has wrestled with some of this. There are some components of the data that people don’t like. They’d rather not look. Then, there are some customers where the metrics are so good, but they still want to get better. Essentially, providing access to all of this data and insights has opened Pandora’s Box. There’s no going back. It’s possible to measure leading and lagging indicators. And now, it’s possible to consider how to move those numbers. Knowing they exist is one thing. Using them to improve performance is what comes next. Geographical Insights in Maintenance Performance The most interesting data gathered from maintenance requests and responses is geographical. Ray says what’s most important in the information that’s been gathered is that property managers can see their performance against geographical regions and areas. It’s clear to see that property management companies in the southern states, which have warmer summers, have a high speed of repairs and increasing maintenance costs in May. So, it would be unfair to compare yourself to a property management company in Minnesota that does not have air conditioning repair costs until July or August. The geographical impact to maintenance in weather regions is important. Property managers don’t want to think they’re killing it or falling behind when the data is geographical. That’s what Ray calls a “big a-ha.” Customer Satisfaction and Its Impact on Retention Customer satisfaction has become a much-discussed part of property management, and that covers the satisfaction of residents and owners. It’s important to remember that resident satisfaction also affects owner satisfaction. Technically, property managers have multiple customers, but there’s also a hierarchy. Would you rather lose 50 percent of your owners or 50 percent of your tenants? Exactly. So, the hierarchy starts at the investor. Property managers do not have a business if they don’t have an investor customer. But, if property managers can make the resident happy, it’s much easier to hang onto those investor clients. So, one of the indicators of investor satisfaction is resident retention. One of the reasons that tenants leave is that they hate the maintenance. In the macro environment today, no one wants a rental on the market. Avoiding that as much as possible is important. Also, maintenance costs are growing 8 percent year over year. No one wants to turn a property when maintenance costs are higher and rents are holding or even compressing. When you’re driving investor retention, a property manager needs to look at resident retention and annual maintenance spend per unit. That’s what matters: resident experience and maintenance costs. It’s more than just wanting to be better with maintenance. Property managers can drill down from every point in the ladder of maintenance excellence. Identify the problem so you can improve it. A resident satisfaction issue might be approval speed. If it’s taking too long to get the repairs approved, you need to get into those details instead of running after different things. Don’t do work that doesn’t have an impact. Measuring things allows you to look at problems more critically. There’s a lot to be said for gut instinct, but once you start using data, you have to be methodical. Perhaps you’ve heard the W. Edwards Deming quote: “In God we trust but all others must bring data.” Following your gut is important, especially if you’ve been in this business a long time. It’s probably not wrong. A lot of data has been gathered and processes created around operator gut instinct. But, your gut should lead you to a deeper investigation. Gather more information to validate it. Key Takeaways from the Benchmark Report Ray’s team recently released a benchmark report. The Monthly Meld is released month over month and year over year to highlight the trends that have been detected. Here are some of the key takeaways and general trends: Everyone cares about residents staying in their rentals, more so than before. This has driven a focus on speed of repairs and an emphasis on satisfaction. We have to sort through the concept that maintenance costs are still going up. Cumulatively, on properties, they are. BUT, the average cost of a single repair has gone down for the first time in a while. That means total maintenance spend is going up but the ticket prices are going down. This indicates people are doing more repairs, but each of those repairs has a lower cost. Owners are investing in preventative programs. Property managers are trying to save their investors from sticker shock. There’s a higher frequency but lower costs. We’re seeing still a larger uptick of operators doing internal technician work. They’re bringing maintenance in-house. That internalizes and integrates processes, and it also controls cost of the market. You’ll find in that report that vendor invoices went down one or two percent. Internal technician repairs went down 15 percent. So, the in-house teams are being used for profitability and to control costs. Property managers and owners have reported it’s been difficult over the last year or two to get trade people into properties. There has not been enough supply for the maintenance demand. But, hiring technicians is harder than finding vendors. The same talent pool is being hired by property managers and service providers. The high-lever view is this: vendors are still constrained. There are great professional vendors out there, and Property Meld has a product that connects these providers. Property managers can get onto the app and check for availability by zip code. Annual Cost of Repairs per Owner: The Magic Number On his previous appearance, Ray said that the magic number is 12 percent of rents collected. Staying near that magic number means that a property manager will retain that owner client. If maintenance costs are higher than 12 percent of collected rent, the threat of churn begins to grow. Is that still true? With rents not rising but maintenance costs going up, is the 12 percent rule still accurate? Ray says that analysis has not been re-evaluated because everything has been so dynamic and the data set needed is so large. He knows that investors will stick around if residents are happy, and now he knows that maintenance behavior impacts that. Tenant satisfaction with maintenance is about the details. If you have a lot of plumbing issues, will that change renewals versus electrical issues? Does it matter if most repairs are within three months of move-in versus six months? The goal is to avoid whatever leads to dissatisfaction. Imagine telling an investor that you can change lease length based on what gets done maintenance-wise, and then being able to show how much more it earns them. Your investor client will love that. Ray intends to will go back and determine whether the 12 percent is still the right benchmark. Trends in Repair Costs and Customer Satisfaction The benchmarking report shows that in many cases, even where the median invoice amount was higher, customer satisfaction still went up for owners and residents. Higher costs may not mean lower satisfaction. It’s undoubtedly true that the emphasis on resident experience is the largest focal point right now. Trying to control costs is essential, but there’s a zero tolerance for bad experiences. That reflects the market. In 2022, a property manager could rent a home sight unseen. Now, rentals are on the market for 44 days. Few things are trending down with resident satisfaction because property managers and paying attention and emphatic about that experience. Leading and lagging indicators that get the most attention include: Speed of repairs Resident satisfaction Vendor health score Annual maintenance spends Understanding Triage in Property Maintenance Property Meld recently acquired Mezo. Ray calls it one of the most impressive AI intake and triaging assistants he’s seen. Mezo has a bot called Max, and Max is the world’s friendliest tech. It asks residents questions. It provides empathy. It gets all the necessary information about a maintenance requests and it prevents emergencies. Follow an engineer’s thinking on why this acquisition is so important: Mezo’s unique selling proposition is that they figured out how to automate maintenance triage. Triage has not come up as often as the other leading and lagging indicators. But, getting triage right has a big impact on speed of repairs, satisfaction, and vendor health scores. It impacts resident happiness. It gives the proper work to the proper vendors. When a property manager triages well, you’re saving money and sending technicians who are right for the job. Property maintenance isn’t just about remediating a problem. It’s about getting the right information to the technicians so they know what they’re working with and how to respond. It’s about preventing an emergency, and there are a lot of downstream benefits. Maintenance operations is not about making repairs. It’s about how well you can complete that repair, and how much better you can make the experience for your resident. That’s the part of the job that’s really important. When everything aligns, annual maintenance spend per unit goes down. Property managers have the scoreboard now. There should be: Faster response times Better scheduling Single trip repairs Lower cost repairs That’s what intake and triage does. Submitting a maintenance request with this program is remarkably easy. It’s intuitive and interesting. Everyone has experienced a bad chatbot, but this experience with Max and Mezo is a great experience. The Role of AI in Property Management and Maintenance AI has become popular, and a lot of companies are slapping AI onto their product and doing a bad job with it. That’s lazy, and an untrained chatbot loaded with zero knowledge is only going to make an experience worse. It’s not an improvement of anything. AI is not magic. People either get too excited about AI or they have already decided to hate it because of a bad experience. Ray says the effective use of AI is all in application. Amazing things can be done, but only if you’re willing to map it to do what you want it to do. AI should help the scoreboard change. The cost of a wrong decision can be catastrophic. One plumbing issue that does not get caught as an emergency can be a disaster. Property managers can afford to make bad decisions in some cases, but not with maintenance. Eventually, the bad AI tools will be obsolete. The good ones will improve. Be intentional with the technology you’re implementing. The goal is not to implement AI. AI is the tool. It’s a how not a why. Data-Driven Decisions in Property Management In recent years, there’s been a move in the property management industry to become more data conscious and to make data-driven decisions. But it’s easy to get lost in those numbers. The benchmarks do not have to be taken as absolutes. It’s meant to be blended and applicable to local markets. Ultimately, the goal is to affect your net operating income. If you can get to a predicable NOI, you’ve done something good with the data. You’re understanding how your market performs on returns. And, money follows the returns. When it comes to NOI, we’ll soon all be on the same scorecard. Ray believes we’re not far off from being a very transactional business in terms of delivering great returns while providing housing services. Where money goes, opportunity and wealth are created. When money jumps into the industry, wealth is created, and while there are some unknowns, running after better NOI today will mean you’re ahead. Focus on your customer’s NOI. That needs to be your north star. When you’re delivering better returns to investors, you cannot lose. Find more information from Ray by checking out Propertymeld.com and Mezo.io. And if you have any questions about your property management marketing, contact us at Fourandhalf. LinkedInThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post Residential Property Maintenance Metrics and Improving NOI (with Ray Hespen) appeared first on Fourandhalf Marketing Agency for Property Managers.

Can vendor bidding solutions like RoDevia Brigham’s Proposabid create more transparency and detect fraud? That’s where we left off during Part 1 of this discussion on The Property Management Show. Let’s pick up the conversation about how the bidding process is broken, and how property managers can avoid wasting time and money. Here’s Part 2. How has Proposabid Contributed to Fraud Detection? When RoDevia was talking with her partner, they discussed how a lot of vendors would inflate pricing or maybe there would be work that was needed but didn’t really have to be done in the particular way that a vendor believed, or at a higher price point. There are a couple of specific cases that she was able to detect, and she cautions owners and property managers that things like this could be happening without them knowing about it: On-site staff may claim that work is necessary, or they’ll be billing you for work that may not be completed or required. If you’re an owner in Arizona with properties in Tennessee, you may not know that what you’re being told isn’t true. If your manager is overstretched and has 76 different properties to manage, she may not know that 34 doors need to be replaced in a specific way at one property. There could also be a conflict of interest or some self-dealing going on. Staff or property managers may use companies they own. In San Francisco, we had a cleaning company that got a $15,000 per month contract at one property for 150 doors. It was on-site staff that was registered and had an EIN. Family members worked at this company, and they managed to claim contracts across other properties for almost $500,000 over three years without the owner knowing. There was no bidding process at all. If you have a third party that doesn’t have a dog in the fight and can source bids for you in timely fashion and has comparables for you, the process is fully transparent. Proposabid also posts their bids online so other vendors can compare. Any number of issues can crop up when a company is just assigning someone to source bids who isn’t qualified to do it or is too busy to give it the necessary attention. Challenges for Property Managers in Analyzing and Comparing Bids Let’s say a property manager does manage to get some bids. Now it’s time to analyze and compare them. What are some of the challenges and issues would a company face at that point in time? First, RoDevia would be wondering if you have enough bids. When you do, you have to ask if the bids have expired to the point where they’re no longer viable. One of the main things she has noticed is that property managers won’t necessarily know what the vendor does not offer. For example, there was a hazmat fentanyl situation at a property, and the building had to be closed down. Police were involved. To get bids for the cleaning, you also have to think about what the vendors are not offering in those bids. Proposabid needed to analyze that particular piece. What all five vendors didn’t offer was to post drug testing. Can you post it once it’s clean? Also, what about repairs and renovations after the cleaning. It might be necessary to tear into a wall. Asbestos and lead testing might be necessary depending on what’s found when you do open up the wall. Always consider whether you know what you need beyond the bids themselves. This is the most challenging part. Another challenge can be the number of hands in the pot. If you have a board or an HOA, there could be some extra time needed. One HOA client had three good bids, but they wanted more. That’s fine, but the three best bids are still going to be the three best bids. So, who is making the decision? Can you get in touch with the right people at the right time? The person receiving the bid probably cannot sign off on the awarding of that bid. Often, staff does not know what they’re looking at or what the next move is. Another example: RoDevia had a client with seven roofs. Four had allegedly been replaced and three more needed to be replaced. But as she gathered the bids from roofers, all of them pointed out that one of the four actually had not been replaced by the original vendor. Because of her RFP process, all the vendors bidding went out to have a look, and they all reported that four roofs actually needed replacing, not three. So, is there a lawsuit with the previous vendor, and how do we prove this? It’s proven with the bids. Multiple roofers confirmed it. So now the owner has to decide whether to pay for three roofs or four. The challenges are everywhere. What you want is someone who will strive to get you in line to make the next decision and help you narrow down the options so you can make educated decisions. Property Managers or Owners: Who Is Making Decisions? Even after good bids have been gathered and all of the information makes sense, someone has to make a decision. Marie asked RoDevia in her experience, who should bear the brunt of making the decision? Each relationship is different, and in the property management world, it can play out any way. The property manager is representing the property and has the authority as outlined in their operating agreement. Many owners want their manager to handle it for the purposes of efficiency and expertise. They’re just not there and they just don’t know. And, if the property manager has relationships established and the expertise that’s needed, it’s an easy call. But, there are a lot of owners who want to make the final decision, especially if it is financially impactful. So in this case, a property manager would gather bids and present them. The owner gives the final approval. In a mom-and-dad situation or with independent owners, it’s whoever has the resources and the bandwidth to make the decision. It’s also how did the vendor make them feel. That gut feel aspect along with the warranty and the expertise and quality assurance and safety record and insurance all counts. Bidding and Documentation Documentation is always your friend, so document the bidding process. The problem is that over the last few years, RoDevia has noticed that documentation is all over the place. It’s in emails. It’s in a text. It’s in a voicemail. There’s no real solid database where all parties will go to find the same information, and that’s something Proposabid has built in for clients. Here’s how Proposabid works at a high level: They get to the property and do an intake. They create an RFP. That RFP is marketed out to their vendors. They gather those bids and aggregate them. Those bids are submitted to the property and the property makes a decision. The process is completed in 15 business days or less. This works for a $15,000 bid or a $3.5 million bid. It covers office remodels, concrete, and whatever needs to be done. Looking to the Future for Property Management and Vendor Bidding What do you need to know about future trends? RoDevia shares lessons from the field: Cash for Bids. This is starting to happen more and more, and it will be devastating for property management companies. Vendors are looking for cash deposits and payments up front to secure the bid. Those payments can be several thousands of dollars. And that’s just to get the bid. Some of these things have to do with reduced risk of nonpayment. (It’s highly recommended to pay your vendors on time). This will probably not become a gold standard. Some vendors may adopt it, but overall it shouldn’t be normalized because of client pushback. Rising Costs. When projects are delayed or bids are incomplete, costs rise, and that is a huge burden on the budget. More so than it was five years ago. For commercial buildings, the average increase is 5 to 8 percent per year on labor expenses and materials. There are also continued supply chain challenges. For multifamily buildings, that rate of increase is 6 to 10 percent annually. Inflation pressure is outrageous. A project costing $90,000 four years ago would be $124,000 now. Get your properties in order. Get your bids organized. One big recommendation RoDevia has is to be honest with your vendors. This will protect your reputation. When you’re sourcing your bids, be honest if you’re just shopping for bids. We always let our vendors know when we’re just budgeting only. A client may simply need some numbers. So you’ll just get the quote not the full breakdown. If you just go fishing and then never award bids, your reputation is damaged. Mitigate around that and be honest about your intentions once you do have bids. Each estimate costs about a hundred dollars an hour, so most vendors will give a bid even if they know they won’t necessarily win the award. They know up front that they might not get any work from it, but there’s still a bid in place that may be honored later. It actually lowers costs for the client. If any of our listeners want to learn more about the bidding process or what to look out for, visit Proposabid.com. And if you have property management marketing or reputation questions, contact us at Fourandhalf. EmailThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post PART 2: Why the Vendor Bidding Process Is Broken (and What It’s Costing Property Managers) appeared first on Fourandhalf Marketing Agency for Property Managers.

Welcome back to The Property Management Show. On today’s episode, we’re talking to an expert on mergers and acquisitions, who has specific experience in property management. We’re talking to Scott Duke, of OpnRoad. He’s talking about the things that make a difference in the sale of a property management company. Your buyer and your profit will depend a lot on your contracts, your efficiency, and your team. Introducing Scott Duke Scott and his wife bought and ran a property management company in Revenstoke, Canada. They grew their company for seven years and then sold it for 10 times the amount of what they bought it for. The company was sold to Western Trust, a private equity company out of Utah. Before that, he worked at a property management company in Ontario. He has experience working with three-person companies and those that have a staff of 25. His story of buying and selling that Canadian property management company is a bit of a cautionary tale. When they bought the company, there were 30 properties under management. Out of those 30 properties, only six had proper contracts with the owners. It wasn’t a sellable asset when they took it over. But, what they really wanted to buy were the brand and the website, and otherwise it felt like they were starting from scratch. It was not a massive acquisition. Scott realized that he thought property management meant taking care of people’s properties, but really, he was managing finances. It’s a cash in – cash out business model, and he had to make sure his owners had the money they needed for their mortgage payments. One specific event triggered his desire to sell that company. It was Christmas Day in 2016 or 2017, and he was under a trailer, defrosting pipes so the family living there could have water on Christmas. That’s when he realized he didn’t want to own the company anymore. When the owner is under a trailer with frozen pipes, you know that the company relies too heavily on that owner. So, he spent three years making it an acquirable asset. Scott wanted the company to be something that someone would want to buy. The starting point? Making the business less dependent on Scott. Making a Property Management Company Less Owner-Dependent Scott says it’s all mindset. At OpnRoad, Scott and his team sell businesses. They work within all industries, but a lot of businesses they sell are property management companies. They all have to get to a certain size before they can be sold. So, he’s talking about owner dependency all the time. How do you remove yourself from that dependency? Scott says you will be trapped in your business until the business cracks through the million or two million revenue mark. Until that point, there’s just not enough cash in the business to pay to replace yourself. You are buying your time and you’re buying your freedom. You want to focus on yourself as a business owner, not a business operator. A lot of owners get hung up on the idea that no one can do what they do as well as they do it. Scott tells entrepreneurs to embrace that. It’s true. But, it won’t be that way forever. The person you hire isn’t going to be as good as you on Day One. The training and the investment into that person makes them as good as you. His slogan is this: Every Day a Step Away. You’re getting a further step away from operating your business every single day. How to Avoid Hiring Bad Apples A lot of business owners worry about investing time and training into someone who may not work out. Having hired across 11 companies with a total of more than 200 staff, Scott understands that bad apples do get into the bunch once in a while. He has a specific model: Be a good leader: Make yourself better. The people you attract to your company will be 70 percent as good as you are. Humans only want to work with people who are further along than them and achieving more. They want to grow to your level. So, to get good people, you need to be a better person. Invest in your education. Become a leader locally through volunteer work. Grow personally and develop professionally. Have a good marketing package: You want to attract good people to your business. You’re posting a job into a competitive labor market. Stand out with marketing materials that will attract better people to your job and your company. Otherwise, you’re recruiting from other companies to find good talent. Retain those good people: You want to keep your best employees by having consistent operations and good training within your business. You want a solid and positive company culture full of people who are happy to be there. All of this stuff is hard, he cautions. But, the drudgery for the rest of your life is worse. How do you avoid the employees you don’t want to work with? Scott has two ideas: Run them through psychometric testing. You can use different models like PSIU or Myers Briggs. This will ensure you have the right person for the job. If you’ve never done this type of testing before, go into that rabbit hole. You need to know personality traits. The type of person who excels at bookkeeping is different from the person who excels at leasing and showings. And, a lot of people don’t know themselves. Test to find out what they don’t know. Get them to do some work before you formally hire them. Offer trial work, for which they will be paid, and see how they do before you make an official offer. When you get the A player, your life changes. So does your company. What Property Management Owners Need to Know about Selling Scott says the most important thing you can remember if you want to sell your company is that you’re selling contracts. You’re selling future cash flow streams that come through contractual agreements. If your contracts aren’t in good shape, you don’t have a saleable company. Contract quality matters. Recently, a sale was delayed by over 4 months because a property management company’s contracts were outdated, expired, or not even signed. Term and contract length is the value of your business. You need a good staff. You need a good reputation. But, your buyers will look at your contracts before they make an offer. Scott also reminds company owners that you cannot sell to someone smaller than you. That won’t maximize your value. When you’re selling to a company that’s bigger, they’re probably more sophisticated and organized. If you don’t have everything in place, those companies won’t want to acquire you. What about the team? Buyers are acquiring teams of people as well as contracts. This is especially important now, when finding good talent is so difficult. Good operators of companies are hard to find. People will buy companies just to get management teams and technicians. But, here’s the truth: company buyers are only going to care about bringing on the good team members. They probably already have good team. They won’t want your mediocre people. Efficiency is important, too. When your profit margin is above average, you’ll earn above average on the sale. You’re showing that you’re more efficient and your buyer will know that they get to keep more of the money that the company makes. That’s attractive. Is technology the answer to efficiency? Technology is a big part of the efficiency bullet, especially when you’re looking at your profit and loss statement. Most property management companies can see that people are their biggest expenditure. Property management is a service business, and humans are delivering that service. So, while technology can help you be more efficient and profitable, you need to have people in place who can leverage that technology. Otherwise, you’re just spending money on new software and systems and it’s not improving anything. If your people aren’t being as efficient as they should be, they need to be trained better. Scott put everything on iPads so the team could take photos and notes and keep everything in the same place. Leases were digitized. He has nine people running a business that should require 20 employees. This is possible because they’re more efficient and they know how to use technology. Preparing to Sell Your Property Management Business: Your Timeline Once deciding to sell a business, an owner can sometimes just check out, feeling done with it all. But, it should be the other way around. If you decide to sell and you want to maximize the value of your company, put in the work. Scott says it depends on the timeline, and also acknowledges that most people don’t want to do the work. Property management companies are in high demand right now. So even if your business isn’t in the best shape, you’ll be able to sell it. Clean up your contracts and get the financials in order, and you can sell. If you’re planning to sell within a year, just get the basics taken care of. If you’re planning to sell in three to five years, it’s worth the effort to build that business into something even better. Then, sell it for more. You’ll make more money now, and as your business begins to work better, you’ll have more free time. You can really move the dial if you have a few years to work on this. A million dollar company can increase their valuation by $200,000. If you’re a five million dollar company, expect to move that dial by $1.5 million or even $2 million. A 10 million dollar company might move the dial by $5 million. Exit Strategies: Who Will Buy You? Scott has a guide that breaks down who the likely buyers are for your company. He offers earnings thresholds as an easy way to understand what’s possible. If you’ve got $250,000 in earnings, you’re probably selling to an individual owner/operator. If you have earnings that hit $500,000 to $1 million, you could sell to private equity firms as well as strategic buyers. Anything over $2 million in earnings, and you can sell to anyone. You unlock different buyer classes as your company grows. These buyers are not that different under the hood, but the way you earn money will be a bit different. A strategic buyer will hold your company for the long term. They’ll pay cash and some terms for the acquisition. Private equity firms are strategic. They’ll pay a bit more because they know they’re going to ultimately sell your company for more. You’ll get cash from them at the sale, and you may get a bit more later, when the private equity buyer sells the entire fund, which includes your company. There are claw backs and contingencies when it comes to how many contracts the new company keeps. Scott reversed that, and actually got paid more by bringing in more contracts after the sale. This is not something everyone is willing to do, he cautioned, but since he had more free time, he was able to get out there and hustle up more business for the property management portfolio he had just sold. Scott’s big pieces of advice as we conclude this interview are: Remove owner dependence and decide on the next strategic hire. Systemize and organize your business. If you haven’t implemented tech yet, do it now, and here’s a tip: look at companies that are five times bigger than you. What kind of software do they use? You should use that too, because those are the companies that will ultimately buy you, and if you make tech integration easier on them, they’ll pay you more. Keep your contracts up to date. Cultivate a good team. Check out OpnRoad and their approach to mergers and acquisitions. If you have any questions about Scott and what we’ve discussed, please contact us at Fourandhalf. URLThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post Preparing Your Property Management Company for a Profitable Sale with Scott Duke of OpnRoad appeared first on Fourandhalf Marketing Agency for Property Managers.

PJ Clay, the Director of Client and Partner Services at Rental Beast, joins us on The Property Management Show to discuss the company’s role as the rental MLS, and how they provide back-end technology to MLS associations across the United States and Canada. We also discussed whether this type of technology can help or hurt property managers. PJ says it helps. Introducing Rental Beast Rental Beast calls itself the rental MLS. It provides back-end technology to MLS associations in certain markets throughout the U.S. and Canada. The Multiple Listing Service (MLS) is highly customizable, but also built for the For Sale side of the real estate industry. Rental Beast knows that rentals are different. The process of renting is different from the process of buying and selling. So, they built the technology that can integrate rental listings. MLS members can add or search for rental listings. The second piece of this technology is a productivity suite of tools making it easier for property managers and real estate agents to access lead generation, lead qualification, and rental applications. At the core of this technology is a very large database of rental listings. Members of Rental Beast have access to 12 million active listings in the U.S. and Canada at any given time. Putting all the rental listings into one database is the central part of our technology. Members can get as close as possible to reaching 100 percent of their market. Accessing Reliable Data and Listings for Rental Markets Rental Beast is currently working with MLS associations in cities like Boston, where they’re based, Chicago, Raleigh, Miami, Colorado Springs, Toronto, and other markets. They’re actively growing, too, because the demand for this platform has increased. With home sales still out of reach and unaffordable for so much of the market, people are renting. Having the technology for real estate professionals to make the rental process easier has driven that growth. So, where does the data come from? Where do they gather their listings? The rental market is fragmented. On the general MLS, you have 80 or 90 percent of available homes for sale on that site. Not all rental listings go onto the MLS, however. Some cities will include rentals on the MLS, but even then you’re only getting about 40 percent of the rental market listed. Rentals come onto the database from a lot of different sources. The Rental Beast database integrates with property management software. So, platforms like Appfolio, Yardi, RentTech, and Buildium can use Rental Beast as a syndication destination. Any listings on those software sites can be shared with Rental Beast. The other piece is more difficult and labor intensive. These are rental listings that aren’t found on the MLS or on any property management software sites. Staff at Rental Beast must find the listings and then make actual phone calls to owners and property managers to verify them. PJ says it took 10 years to build the process the right way. They’re calling any listing that doesn’t come from the MLS or property management software. It’s a huge undertaking, but it’s necessary to avoid scams. There are also a lot of details that are confirmed for those listings; they ask if there’s an agent compensation fee, what the showing instructions are, and how a tenant can access an application. These listings have to be updated every week or two, depending on the location. If they cannot get a verbal confirmation that the listing is active, it gets dropped from the database. Are These Listings Professionally Managed? The majority of listings on Rental Beast are not managed by professional managers or real estate professionals. They’re managed by the property owners themselves. PJ believes this is hyper-local. He says that in Boston, property management firms aren’t as recognized or understood as they are in other markets. If a real estate investor owns a few properties, they might hire leasing agents to market the home and get the property rented, but then they take care of the day-to-day management. Even the National Association of Residential Property Managers (NARPM) has a limited presence in the northeast. Recently, they established a local chapter in Philadelphia, but that has only been in the last years. Compare this to Arizona or other markets in the southwest U.S., he says, and things are different. There’s a larger percentage of listings that are professionally managed. The estimate is that around 40 percent of the listings on Rental Beast are managed by small, mom-and-pop operations. We’re not talking about large, professional property management companies. It could also be a terminology issue, PJ says. There may be someone who owns 100 doors, but they don’t see themselves as a professional property manager because they own those units. Proximity can also be part of the difference. In markets like Texas and Atlanta, it can take an hour to get from one end of the city to another. There’s a concept called leasing and locating where real estate agents will get paid for showing a property without being there physically. The metro area is too spread out. Is Rental Beast a Threat to Property Management as an Industry? With all these For Rent By Owner (FRBO) properties in the Rental Beast database and tools that make it easier for those owners to rent out a home, is Rental Beast dangerous to property managers who are trying to grow their business? It’s great to have a single source of data that’s potentially more complete, but there are also solutions being offered to an owner who may self-manage instead of hiring a professional. PJ is quick to point out that Rental Beast is not trying to be a property management software tool. They understand that a lot of real estate agents hesitate before getting into property management because it’s so much work. Their platform, he says, is more about ease in listing a rental. No one could manage a property only using Rental Beast. Realtors and agents on the For Sale side have been struggling to sell recently, and so they’re getting into rentals a little bit so they can preserve the relationship with their clients who might be ready to buy in a year or two. Plus, they know they can potentially list some rentals, so it’s a natural shift. According to PJ, Rental Beast is not looking to replace property managers. They want to complement your work and make your business more efficient, especially in terms of listings. You can get access to a lot of listings, and you have an easier time listing the properties you’re renting out. You get extra syndication, and that drives more showings. Recently, they worked with a property manager who listed 20 properties on the Rental Beast MLS in half an hour. That’s not something you’d be able to do manually. This is technology that was built for property managers in order to make listings more efficient and easy. Rental Beast 2023 Market Report What does the market look like? PJ suggests you check out the Rental Beast 2023 Market Report. He shared a few highlights: Rental prices will seemingly increase slightly. This depends on the market, and there’s really no consensus on what’s going to happen with rental values. The data and predictions Rental Beast has gathered say that there will be slight increases, generally. Supply is a big variable. There are additional multifamily units coming onto the market in 2024. Supply and demand will impact pricing. The sales side of real estate will remain unaffordable for most people, keeping the demand for rental housing strong. There’s also a Sentiment Report, which reflects what people are feeling about the market and what might happen. They’ve found that 75 percent of the people surveyed believe rents will remain unchanged. Twenty-six of those surveyed believe applications for rental homes will decrease because fewer leads are coming through. Concessions are also something to consider. Will you have to motivate renters to apply for your property? The national median for concessions is around 18 percent. But, in some markets, 30 to 40 percent of active listings include some kind of concession. That’s artificially creating demand because it means nearly half the listings are offering some kind of concession. But, that’s not nationwide. For example, in Boston, only 8 percent of the active listings offer concessions. For Rent by Owner Listings: Is This a Blue Ocean? As we discussed earlier, a lot of active listings are not professionally managed. Could this be a blue ocean situation, where property managers can target these owners who are not using professional services right now? Ten years ago, property managers chasing FRBO business would have to pull ads from Craigslist or similar sites to get owner information. Or, you could buy databases from PMLeads. If Rental Beast can capture so many self-managed listings, however, is there an opportunity for property managers to market themselves? PJ says property managers are already using the platform to grab leads because of these advantages: They get as close as they can to 100 percent of a market’s listings. They’re typically at 70 or 80 percent of all active listings. All those listings are verifiable. Property managers can access owner information and get a sense of what type of property they’re renting out. Listings are updated regularly. Maybe you specialize in one part of your city. The listings in the Rental Beast database can be sorted according to neighborhood. You can also set up alerts in the system so you know when a listing that meets your criteria shows up. Closing Piece of Advice: Watch Your Price PJ says that based on the data he’s seen, the most important thing property managers can do now when renting out their properties is to be careful about where the rental value lands. He sees wildly fluctuating prices in a lot of markets. Remember that you’re competing with an entire market. So use as much data as you can. If you’re interested in checking out the Rental Beast report, visit their website. You can also check out the Rental Expert Series, which is updated quarterly and includes several specific markets. To sign up to receive the next report, click here. If you have any questions about marketing your property management, contact us at Fourandhalf. Thanks for joining us on The Property Management Show. LinkedInThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post Rental MLS: A Threat or a Tool to Help Property Managers? appeared first on Fourandhalf Marketing Agency for Property Managers.

Marc Cunningham is a property management consultant and he’s also the President of Grace Property Management in Colorado. He’s joining The Property Management Show today not only because he’s a prominent figure in property management, but also because he’s one of the first property management professionals who embraced video marketing. Marc is still promoting video marketing, and he believes it’s the most effective way to bring new business into your company. A Bit of Background: Marc Cunningham When Marc started his property management career as a child going to the office with his dad, things were incredibly different. It was the 1970s and buying their first copy machine was the most technology they had. The phone with an answering machine was fancy. Ledger cards were used to manually record when rent was collected, and checks were written to owners once a month. His father recognized that technology was a great tool, and they not only got a computer before anyone else, but they also even hired a programmer out of California to write a custom property management program for them. In the property management industry, there’s a big scare every couple of years. The narrative goes, if you don’t do X, you’ll be left behind. Right now, it’s AI. If you’re not using AI, you’ll be left behind. Marc says this is not always true. Provide good customer service to owners and tenants, and you’ll be okay even without the latest tool. You won’t wake up one day and be left behind. It’s the shiny thing syndrome. If there’s something that everyone seems to be doing, you feel like you should be doing it, too. It’s easy to chase the next big thing because everybody is talking about how cool it is. Marc doesn’t chase the newest thing. Technology is something to leverage in order to improve your property management business. After graduating from college with a degree in finance and real estate, Marc worked in the industry but not for his father. This helped him when it was time to go to work for his father. He brought a different perspective and a different set of skills to the family business. He always tells people in a family business to send the young people out to work outside of the business for a few years. It generates better ideas and higher level thinking. Marc arrived at his father’s company with more of a business mindset. His father was very good at property management, and Marc found he was very good at business management. Pioneering Video and Property Management Marketing Marc is one of the first property management professionals to begin marketing his company with video. He still believes this is the best marketing tool for property managers. Here’s how it happened. He was at a conference, and on the way home from that conference, he began thinking about how much time he spent talking to potential owner clients. They all ask the same questions and he found himself having the same conversation over and over again. Wouldn’t it be great, he thought, if, instead of answering those common questions over and over again, he could put those answers in a video and have it on his website. Then, potential owner clients could watch the video and decide if they wanted to know more. Marc thought that if a video could save him multiple five-minute conversations, it would really add up to getting some serious time back. He’s action-oriented and he doesn’t over-think. So, when he got home, he had his then-11-year-old son stand on his desk with an iPhone and take a video of Marc talking about common property management expenses. It was a three-minute video that included no script, no special lighting, and no microphone. The point was not quality. The point was to get it done. This has worked better than any other marketing, Marc says, because prospective owner clients will call, and they’ve already seen the videos. That puts them at about a 7 out of 10 in terms of likelihood that they’ll come on board as a client. Those owners feel like they already know Marc and the company. Marc says he’s not afraid to tell people to use video more because he knows they won’t do it. His competitors don’t. The reason this works for Marc, he says, is because he’s not a perfectionist. The Power of Action vs. Perfection If you believe in the power of action, you’ll get the videos done, and you’ll let the results fall where they may. Video marketing has been successful by keeping the acquisition costs for each client down. There’s no need to spend a lot on marketing when you have a YouTube channel full of great video content. The video version of Marc is available 24/7, and that means that the real life Marc has time to focus on other parts of his business. One video could be equal to 20 conversations he didn’t have to have in real life. Even if the video results in zero leads, he didn’t have to have all those chats with people who would not hire his company anyway. The willingness to make videos creates a filter. No property manager is designed to serve every owner. The training Marc does with his property managers internally is called We Don’t Sell. When a lead comes in, he doesn’t want the goal to be closing the lead. The goal is to get to know the prospect and to decide if they’re a good client to do business with. There’s no starting with a sales mentality. Videos will: Attract new potential clients. Filter out the clients you may not want to work with anyway. Answer common questions. Video also snowballs for marketing and SEO purposes. The more times those videos get watched; the more Google promotes the videos. When they’re promoted, they’re watched more. And on and on. Remember that this is a public space. You don’t have to make perfect videos, but you also don’t want to insult anyone. Marc made a video called “Five Things to Never Say to Your Tenant.” He’s not an anti-tenant property manager, but he must have said something in that video to upset someone, because it went viral in tenant groups and he started getting really hateful messages and comments. So, he took that video down. It’s a fine line to walk. You want to be cautious, but you also want your personality to show through. A video won’t be as effective if it’s scripted. If you want to do some bullet points for yourself before you talk on camera, do it. But don’t read a script or generate something from your computer. Talk the way you’d talk to a client. It can be intimidating, but it’s effective. It’s effective, but people don’t do it. Most property managers don’t use this effective and untapped marketing tool because they’re too obsessed with making the perfect video and they can’t, or because it’s easier to run ads and pay Google. What Makes a Video Educational? Marc has two distinct categories of video. One is educational and one is an FAQ that outlines how he does things. They’re separate. Under the educational content umbrella is the content marketing that appeals to both prospective owner clients and current owners. It works to market for new business and retain current business. Here’s a soft rule he says to remember: When you make a video, decide if you can show it to both audiences – the prospective clients and the current clients. If the answer is ever no, then it’s not providing enough education. When you have this rule in mind, you’ll keep your video from being too sales-focused. You won’t say “call us for a free consultation” because why would say that to current owners? When you can say yes, it applies to both current and prospective clients because you’re talking about tenant screening or maintenance costs, then you know it’s an educational video. Marc believes content matters. His videos won’t be about how great his company is or how many degrees he has. Nobody cares. He maintained one massive email group of all current clients, all previous clients, and all prospective clients. Anyone who has ever provided an email address is in the group. It doesn’t matter if they’re working with a competitor or self-managing or if they’ve been with the company for years. These videos educate everyone. People want to be educated. They’re not going to call you because of your great technology. They’re going to call you because you posted a video with some information on a new law that matters to them. Marc doesn’t invest a lot of time in making videos. He began doing two videos a month and he’d record them both at the same time, and they’d end up being seven or eight minutes each. It’s not a production. There’s a simple backdrop. There are some good lights. There’s a tripod and a microphone. There’s usually one take. If he stumbles over a word, he reps going. It does not have to be perfect, and that’s why it doesn’t take too long. Slight imperfections keep the video conversational. If you can pretend you’re recording for a potential client, you’ll have an easy time talking to them. Now, there’s only one a month that needs to be recorded because quite a library has been created. One hour every month is the time investment that’s required, and the video keeps working as soon as you put it out there. Marc says this is the only true evergreen marketing there is. Blogs and videos go on websites. They get shared on social media. Videos are converted to blogs, but Marc says the video should come first. When someone reads a blog, they don’t necessary get a sense of who you are. Video shows them. And it doesn’t take much time if you’re not a perfectionist. Sometimes, people will give up too fast. They’ll hate their hair. They’ll hate their voice. They’ll want to re-record over and over again. Marc says get over that. You’re not auditioning for Hollywood. You’re trying to attract a new client, and it gets easier the more you do it. Advice to Property Managers Not Loving the Video Marketing Idea Marc has some advice for when you’re making your video, and he even has some advice if you’re not feeling like you want to make videos at all. Be more energetic in your video than you think you need to be. There’s something about video that sucks the life out of people. You don’t want to be boring. As you’re recording, be a bit more animated than you normally would be. Deliver more energy than you think you need to. It might feel goofy while you’re doing it, but it will come across on video the way you want it to. If you’re worried you don’t have time to make videos? That’s not the point. If you want to have more time in your business, you need to do this kind of marketing to get there. Success comes when you follow the steps to success. You can’t wait to be successful before you start showing your stuff. Marc reminds all of us that he began video marketing with a wall, an iPhone, and an 11-year-old. If you want to save yourself time on marketing, there’s no better way to do it. As a property management business consultant, Marc stresses the importance of video as a marketing tool, and he has another secret weapon that he’s surprised most companies don’t realize is so important. That’s having a photo of yourself or your company or your team on your website. It’s a big fail if you’re not featured on your site. People want to SEE who they’re doing business with. Get your picture on your site and let people know who you are. The mantra for Marc is to be professional yet friendly. Those are the boundaries. You know where you fall. Maybe you trend more towards professional or more towards friendly. Bring yourself back to balance. Another piece of advice: With content, whether it’s a blog or a video or a Q&A on your website, make sure you’re answering the questions that your potential clients have. You’re attracting investors and accidental landlords. Answer questions from both types of owners. The accidental landlords aren’t thinking about themselves as investors. They lived in the house they’re about to rent out. They want to know who will be there and if they’ll take good care of the home. They’ll have questions about screening. Investors will have money questions. They’ll want to know what they’re spending on maintenance and how quickly you’re filling vacancies. Answer those questions in your content. Find out what people are asking right now. What conversations are you having with current and prospective owners? What keeps coming up? Your potential clients are making decisions based on emotions. If you’re not marketing yourself this way, with video, then you’re only competition on price. People don’t choose your company because of your price. They choose your company because they know what you’re doing. You cannot expect them to turn over the keys to their greatest asset without knowing who you are. Find Marc at PMBuild.com, which is their property management education website. You can also visit RentGrace.com, which is his property management website. Check out his videos and see how it’s done. Marc’s parting words? Get it done. Get it out there. We appreciate Marc Cunningham coming onto the show. If you have any questions about video marketing or if you need help with this part of your business, please contact us at Fourandhalf. URLThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post The Power of Action Versus Perfectionism in Video Marketing appeared first on Fourandhalf Marketing Agency for Property Managers.

Marie Tepman and Brittany Jones are on The Property Management Show, interviewing Rand Fishkin, co-founder of Moz and founder of SparkToro, about the changing landscape of digital marketing. This is only Part 1 of our discussion, which includes a look at the shift from SEO-centric strategies to a more diverse approach, the distinction between platforms of influence and entertainment, and the challenges of marketing attribution. Introducing Rand Fishkin Rand Fishkin is a name that’s synonymous with the world of SEO and digital marketing. He founded Moz, which revolutionized SEO tools and education for marketers. He wrote a book called Lost and Founder, an honest take on what it’s like to be part of the start-up world and follows the journey of a founder. Recently, he’s been making waves with his new venture, SparkToro, which is changing the way marketers like us understand and target different kinds of audiences. A Changing SEO Landscape For the longest time, Rand was a prominent voice in SEO and content marketing. He was known to say that everything starts with keywords and data. Recently, there’s been a pivot to the opposite sort of thinking. We asked him to explain his pivot and his new view on digital marketing. When you have a hammer, every problem looks like a nail. In the world of digital marketing, there are hundreds of channels and opportunities to reach an audience and build a brand and show off. Because he was addicted to and grew up in the SEO world, his focus was on: Target keywords Building links Making website accessible to search engines Optimizing everything It was all viewed through the SEO lens when it came to marketing. Two things happened to cause a pivot in the way he approaches digital marketing: Over the last six seven years, and especially since the pandemic, almost everyone is doing decent SEO. There was a big opportunity from 2000 to 2015. It was remarkable what you could do if you had any kind of savvy around SEO. You could be in the bottom 40 percent of SEO skills and still get a lot of traffic. Google was growing. There was more competition. Now, every smart business owner in every region and ever industry knows what they’re doing with basic SEO. It’s not the competitive advantage it once was. Demand is not growing. Google has acquired every human with an internet connection. There’s not a lot of growth left for them. They have 91 percent of the market share in the U.S. and about 95 percent of the market share globally. With no room for growth, Google has had to change the game. Now, we’re seeing Zero-click searches where people get information without even having to click on a link. Google provides it right there in the search results. That’s great for consumers, but frustrating if you’re a business owner looking for traffic. Google is using your own content and taking clicks and traffic away from you. These forces combined to mean that SEO is not the golden opportunity it once was. If you’re creative and entrepreneurial, you look for other opportunities. That’s what Rand has done. Distinguishing Online Platforms: Influence vs. Entertainment Let’s talk about TikTok. This has been a rising trend, and there are also reels on Instagram and shorts on YouTube that are popular. These are not sources of influence for businesses; they’re very particularly focused on entertainment. The content there is not similar to the content that you might see if you are doing SEO things or business to business marketing or even participating in other platforms like Reddit or LinkedIn or YouTube or Threads, which is more like the old version of Twitter. Unlike entertainment platforms like TikTok, those other platforms are serving niche functions. You might find botanists in U.K. clustering around a few account on Threads and some YouTube channels and some SubReddits. They’re all following the same sources, and all of the conversations are focused in that field. That’s not what happens on TikTok. There, you’re looking for distraction for 7 to 70 seconds. You see a series of videos to distract and entertain. The botanists don’t cluster there. They’re on TikTok, maybe, but they’re like the rest of us, watching a chipmunk dance with a squirrel. On YouTube or on a SubReddit, you’re subscribing to get specific and curated content. TikTok is prioritizing not what you necessarily want to see, but what will guarantee that you stay on the site and scroll to the next video. TikTok followership is the lowest value of any social network that has existed yet. That’s the entertainment mindset that drives people there. It’s not going to help a property management company find new owners. When we talk about entertainment networks versus networks that are a source of influence, you have to think about the places where you’re having relevant conversations. If you’re a marketer in property management, you care less about reaching the broadest possible audience for a few seconds. You want to be present in a highly relevant space where important conversations are going on. If you’re trying to attract property owners to your rental management company, Rand would put TikTok lower on the list of platforms where you want to appear. Try LinkedIn or Reddit or YouTube. Start an email newsletter and get on podcasts. Service businesses have a specific market, so if you’re putting all of your effort into a platform like TikTok, do you really think those TikTok followers going to work with you? Trends like TikTok do a great job of creating a psychological panic among marketers. They think they have to chase trends. You don’t. Remember this: Marketing is fundamentally about going to the right places with the right message at the right time to reach the right audience. So, you can wait. Just because it’s popular doesn’t mean it’s for you. Attribution Challenges in Marketing Marketing attribution is a complex problem, according to Rand, and relying solely on attribution dashboards can be misleading. Channels that have an incentive from the platform or network to show you attribution with always be overweighed. Google or Meta advertising will show you fantastic data in the dashboard about every ad you buy. They’ll tell you who saw it, who visited your site, who converted. The tracking pixel shows you all that. Those channels look like they contribute a ton of new business to you. BUT, here’s the thing. You would have earned a lot of that business anyway. Rand says that if you s hut off that marketing spend for a month, you’ll likely get 91 percent of the conversions that you were seeing with the spend. These companies are good at knowing what the customer journey looks like. They have data about where people go and what they do. So, they can do a great job of making sure your advertisement is seen. But, they’re taking credit for sales that were already going to happen. These online advertising platforms do create a wider potential audience for you. But not as large an audience as they claim. Choose relevant marketing channels and focus on lift-based measurement rather than relying solely on attribution dashboards. This attribution problem has always been a challenge. What actually changed a consumer or business owner and got them to buy? You can do all the sophisticated measurements you want, but Rand says he believes it often sounds like pseudo-science. If you’re investing hundreds of millions of dollars a year in an advertising spend, you can make reasonable estimates. But the models are not compelling if you’re a small or medium-size business. So, you don’t have to prove every attribution. We know marketing works. You know it too, even if it’s hard to prove. There’s a great Wanamaker quote that goes: “I know that I’m wasting half my advertising spend, but I don’t know which half.” Rand encourages you to waste half and not worry about which half is being wasted. Put it into channels that you think will reach your audience. Occasionally shut things off to see what happens. This is the only way to truly and logically invest. Turn off any given advertising channel for 60 to 90 days in a business to business service world. See what happens. Forget Keyword Ranking Instead of obsessing over ranking for money keywords, focus on generating leads and increasing brand strength through diverse marketing strategies. Everyone wants to rank for the money keyword. For our industry, maybe it’s property management in San Francisco or Austin property management. There’s an obsession with ranking at number one. It doesn’t matter what you’re ranking. What matters is the business you’re generating. Focus on that. That’s a far superior strategy. Get more leads and you don’t have to show your competitors that you’re ranking for the vanity terms that everyone is chasing. That’s the strongest position to be in. You’re not only competing with other property managers, now. You’re competing with the zero click search or AI-generated results or the paid searches that always go above any organic ranking. The obsession with being ranked at the first spot is vanity, and that’s a powerful psychology. Stop trying to look good and work harder at providing the best services. That was a lot of information. So, we’ll pause. There’s a lot more to discuss with Rand. We’ll continue our discussion on money keywords, vanity metrics, and AI. We’ll also talk about how to make the immeasurable – measurable. If you have any questions about this podcast or you need help with your property management marketing, please contact us at Fourandhalf. EmailThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post Shifting Tides in Digital Marketing with Rand Fishkin appeared first on Fourandhalf Marketing Agency for Property Managers.

Hello and welcome to The Property Management Show podcast, your go-to destination for exploring the dynamic world of property management, entrepreneurship, and marketing. Brought to you by Fourandhalf Marketing Agency, a leader in the industry since 2012. Fourandhalf helps residential property managers get more owner leads and improve their online presence through website design and development, SEO, online reputation management, video and blog content, social media, and targeted advertising. Recap of Part 1: Establishing the Foundation of Mid-Term Rentals In Part 1 – Maximizing Profits with Mid-Term Rentals: Property Management Blue Ocean Strategy, our guest speakers Jessica Schirmeister and Jason Zimmerman from Trend Property Management in Texas discussed the growing trend of mid-term rentals. These types of rentals, also known as furnished rentals, have become increasingly popular in recent years. That episode highlighted the unique niche that mid-term rentals occupy, situated between short-term and long-term rentals. Key focus areas included the demand for these types of properties, their profitability potential, and the evolving rental market trends influenced by remote work and lifestyle changes. The episode provided foundational insights into the benefits, challenges, and operational dynamics of managing mid-term rentals. In this episode (Part 2), we’ll delve deeper into the operational challenges and strategies for managing mid-term rentals. We’ll discuss finances and the subtle art of balancing tenant rights with property management objectives. Evaluating Investment in Mid-Term Rentals Part 2 starts with a discussion about the financial feasibility of investing in mid-term rentals and ensuring a reasonable return on investment (ROI). Jessica shared an example of how a month-long tenant could provide up to four times the revenue compared to a traditional annual lease. However, she also emphasized the necessity of factoring in additional costs such as furnishing, utilities, and cleaning fees when evaluating the profitability of mid-term rentals. Jason stressed that property managers should be strategic in their investment, considering the demand and market conditions. It’s important to understand potential risks and always have a backup plan in case the rental doesn’t succeed as expected. Financial Considerations and Return on Investment Investing in mid-term rentals is an intriguing proposition, blending the stability of long-term rentals with the higher earning potential typical of short-term stays. For property managers and investors, understanding the financial landscape is key. This involves assessing the initial investment costs against the potential returns. Mid-term rentals often demand a higher rental rate, reflecting their furnished status and flexibility. This can be an attractive proposition for tenants looking to avoid long-term commitments. Cost-Benefit Analysis: Investing in Furnishings and Amenities While discussing the financial aspects of investing in mid-term rentals, Jessica and Jason also shed light on the pros and cons of furnishing a property. Furnishings can attract more tenants: Mid-term renters are often looking for fully furnished properties to make their stay comfortable and convenient. Furnishings can add value to the rental experience and justify higher rent prices. In a competitive market, furnished properties may stand out and attract more tenants. Furnishings can also come with additional costs: Investing in quality furniture can be expensive upfront. Managing and maintaining furnishings requires time and effort. There is always the risk of damage or wear-and-tear from tenants, which may require replacements or repairs. To get an initial understanding of whether furnishing a rental makes sense, evaluate if the property in question can generate an additional $4,000 or more each month. Jason says that after evaluating over 50 deals, this seems to be a key threshold for justifying the investment in furnished rentals. Here are some other key financial aspects that were discussed during the interview: 1.) Fixed Costs vs. Property Value: It was noted that the fixed costs associated with a property do not necessarily decrease with a less expensive property. These fixed costs can erode the benefits of furnishing a property if the additional revenue generated doesn’t sufficiently cover these expenses. 2.) Revenue Threshold for Profitability: Looking at the big picture, furnishing a property starts to make even more financial sense when it can generate significant additional revenue – in the range of $50,000 to $70,000 a year. This extra gross revenue is needed to cover all additional expenses such as utilities and other costs associated with furnished rentals. 3.) Increasing Rental Value Without Increasing Taxes or Insurance: One of the strategic financial advantages discussed was the ability to significantly increase the rental value of a property through furnishing without correspondingly increasing the property tax base or insurance expenses. Most property improvements and upgrades can translate to higher insurance or property taxes, and this puts furnishing in a unique spot. This aspect is particularly important as it implies that furnishing a property can lead to higher income without proportionally higher ongoing costs. What are the Goals of the Property Owner? In addition to financial considerations, you should also think about the long-term goals of the property owners. Key points from this part of the conversation include: 1.) Owner’s Net Profit Goals: The decision to convert a property into a furnished rental is often influenced by the owner’s specific financial objectives. For some, an increase in net profit of around $5,000 a year is a benchmark that makes the investment worthwhile. However, this threshold can vary among different property owners, depending on their individual financial goals and circumstances. 2.) Long-Term Strategic Planning: Another critical factor in this decision-making process is the owner’s long-term strategic plan for the property. If an owner intends to keep the property in excellent condition for an extended period, such as for inheritance purposes, they might be more inclined to furnish it. The rationale is that a furnished property can be maintained at a much higher level, ensuring its longevity and preservation over the years. These considerations highlight the importance of aligning the decision to furnish a rental property with the owner’s long-term financial and strategic objectives. It’s not just about the immediate returns but also about how this decision fits into the broader picture of their property management and investment goals. Having explored the financial considerations and owner’s objectives in detail, it becomes clear that the decision to venture into mid-term rentals is multifaceted. Now let’s dive into the nitty gritty of what types of furniture will and will not work for a furnished rental property. The Art of Furnishing Rental Properties When it comes to furnishing rental properties, it’s a delicate balancing act between expense and attractiveness. Quality furnishings and amenities can significantly increase a property’s appeal and rental value. The key is in finding the sweet spot – investing enough to make the property desirable and competitive, while ensuring that these costs are recouped through higher rental income and occupancy rates. This strategic approach to investing can lead to enhanced long-term profitability. Can I Use Old Furniture in the Rental Property? We know the thought of using old furniture may have crossed your mind, or at least the property owner’s mind. We don’t blame you. Jessica shared that it’s common for property owners to consider using their existing furniture to save costs. However, several important points were raised about the potential drawbacks of this approach: 1.) Quality and Aesthetics: It was emphasized that for rentals charging higher rates (e.g., $4,000 and above), tenants expect a certain level of quality and aesthetics. Using old furniture with visible wear, like stains or damage, could lead to negative reviews and dissatisfaction among tenants. 2.) Why Does the Owner Want to Part With It? The conversation also underscored the importance of effectively communicating with property owners about the standards expected in furnished rentals. It’s crucial to explain why old furniture might not be suitable and how it could impact the tenant’s experience and the property’s appeal. Our guests suggest asking a very simple question “Why don’t you want to use this in your own home?” This straightforward query can help property owners understand why it may not be suitable for a rental. 3.) Cost of Replacement or Repairs: It’s also essential to consider the potential costs of maintaining and repairing old furniture if it breaks down during a tenant’s stay. These expenses could add up over time, making it more cost-effective to invest in newer, higher-quality furnishings. The speakers discussed the possibility of using some of the owner’s existing furnishings, but not all. The selection process involves assessing each item to ensure it meets the required standard for the rental market. The Best Furniture for Rental Properties Part of the property manager’s job is guiding owners through the process of updating their furnishings, including providing them with estimates for new furniture. This helps owners understand the financial implications and the value added by investing in quality furnishings. Here are several tips and tricks to help identify the best furniture options for mid-term rental: Durability is Key: Mid-term rentals are subject to more wear and tear than traditional long-term rentals, making durability a top priority when selecting furnishings. Investing in quality pieces that can withstand heavy use can save money in the long run, as they will require fewer repairs and replacements. Make Practical Choices: When selecting items, practicality is a key consideration. For instance, choosing white towels and linens that can be bleached between guests was cited as a beneficial practice. This approach adds value for guests while simplifying maintenance and upkeep. Neutral Designs with a Touch of Personality: When it comes to furniture design, opting for neutral colors and styles can appeal to a broader range of tenants. However, incorporating small touches of personality, such as through throw pillows or artwork, can add character and make the space feel more inviting. Multi-Functional Furniture: With space being a premium in many rental properties, it’s essential to maximize functionality. Multi-functional furniture, such as a pull-out sofa bed or storage ottoman, can provide additional sleeping or storage options without taking up extra space. Consider the Location: It’s also crucial to consider the location of the rental property when selecting furniture. For example, a beachfront property may benefit from more casual and comfortable furnishings, while a city apartment may require a sleeker and more modern design. In conclusion, furnishing rental properties requires a combination of strategic planning, understanding market demands, and investing in quality pieces that will withstand heavy use. By aligning the owner’s objectives with these factors, mid-term rentals can provide a profitable and attractive option in the evolving rental market. So, property managers need to stay updated with industry trends and continually adapt their strategies to cater to emerging demands. Treating Furnished Rentals as a Business Mid-term rentals require a business mindset. This means understanding the financial aspects of investing in furnishings and ensuring that these costs are recouped through higher rental rates and occupancy rates. Additionally, treating furnished rentals as a business also involves focusing on guest satisfaction and continuously making improvements to the property to meet market demands. Our guest, Jason, provided the perfect analogy to help drive home the point. He likened starting a furnished rental business to opening a restaurant, emphasizing the need for good-quality furnishings, much like a restaurant needs good tables and chairs. This analogy highlighted the importance of viewing furnished rentals not just as properties but as full-fledged businesses that require investment in quality assets. Depreciation Is On Your Side One significant advantage of furnished rentals is the potential for tax benefits. Property managers and owners can take advantage of depreciation deductions on furniture, effectively reducing taxes owed on rental income. Jason suggested that property owners consult with their CPAs to understand how investing in furniture (e.g., a $45,000 investment) can be depreciated. Unlike real estate property, which is depreciated over several decades, furniture typically has more favorable depreciation schedules, allowing for faster recovery of investment through tax benefits. Buying Furniture – A Great Investment Opportunity Investing in furniture for a rental property can be a smart way to add value to the property, especially if the owner has funds available for investment but is uncertain about the best way to utilize them. The depreciation aspect makes this investment more financially attractive and can be a strategic way to enhance the property’s value. Additionally, furnishing a rental property can also increase its overall appeal and attract more desirable tenants. Viewing mid-term rentals as a business opportunity that requires strategic planning, understanding market demands, and investing in quality furnishings can lead to success. Now that we’ve talked about the business side of things, let’s talk about the other piece of the puzzle: your renters. Resident Rights vs. Property Management Objectives In the realm of property management, especially in the context of mid-term rentals, a crucial yet often delicate aspect is striking the right balance between tenant rights and property management objectives. The core of this discussion revolved around the principle of ‘quiet enjoyment,’ a tenant’s legal right to use and enjoy a rented property without undue interference. This principle is a cornerstone in real estate and applies universally, regardless of whether the arrangement is short-term or mid-term, and whether the occupants are referred to as guests or tenants. Understanding ‘Quiet Enjoyment’ Quiet enjoyment refers to the tenant’s right to use the property as intended without unnecessary restrictions or intrusions from the landlord. It’s a foundational concept that underscores the tenant’s autonomy over the rented space during their tenancy. Marie and Brittany shared a recent Airbnb experience where they were not allowed to wear shoes inside the house and they were also not allowed to adjust the thermostat freely. These seemingly minor restrictions significantly impacted their overall experience and their satisfaction with the property. The Landlord-Tenant Relationship in Property Management A critical insight from the podcast was the emphasis on recognizing the inherent landlord-tenant relationship in property management. This relationship holds, irrespective of the rental’s duration or how the occupants are labeled. Every tenant, whether in a short-term Airbnb setup or a mid-term rental, is entitled to specific rights, which include the use of the property as designed. Challenges for New Property Managers The discussion highlighted a common challenge for those new to property management or hosting. Many enter the field without a formal real estate background, which can lead to a lack of awareness about fundamental tenant rights. This knowledge gap can inadvertently lead to infringements on tenant rights, such as unnecessary meddling in the tenant’s use of the property. Striking the Right Balance For property managers, the key takeaway is the need to balance effectively managing their properties while respecting the tenants’ rights. This balance is essential not only for maintaining a positive tenant relationship but also for adhering to legal standards in property management. Recognizing and respecting tenant rights, such as quiet enjoyment, plays a crucial role in successful property management and ensures a harmonious landlord-tenant dynamic. Property managers must navigate the fine line between upholding tenant rights and ensuring their own objectives are met. This may involve setting clear expectations from the beginning, regular communication with tenants, and addressing any issues promptly and professionally. Resident Privacy in Rentals Privacy is a fundamental aspect of the rental experience, especially in mid-term rentals that serve as a temporary home for renters. It forms a crucial part of the tenant’s right to quiet enjoyment, and violations can significantly impact their satisfaction and overall rental experience. As a property manager, you should ensure that the tenant’s privacy is respected at all times. This includes avoiding unannounced visits or inspections, and not restricting tenants’ use of the property unless necessary for maintenance or other justified reasons. Respecting privacy not only helps build trust and a positive relationship between the tenant and the landlord, but it also contributes to attracting and retaining quality tenants. A rental arrangement that respects privacy can set your property apart in the competitive rental market and help enhance your overall business success. Video Surveillance in Rental Properties: Yay or Nay? An interesting anecdote was shared by Jason Zimmerman about his personal experience with video surveillance in a rental property. This segment of the conversation sheds light on how surveillance can impact the guest experience and, in turn, the property’s reviews and reputation. Jason Zimmerman’s Creepy Anecdote Jason recounted an incident that occurred while he was staying at an Airbnb for a funeral. He had family members come over to the rental property so they could travel to the funeral together. However, the rental’s host sent him a notice, having observed six people entering the property through the doorbell camera. This intrusion prompted Jason to unplug the modem, essentially saying, “leave me alone.” His reaction stemmed from a feeling of being monitored or stalked, which is a common discomfort among guests in such scenarios. The Unintended Consequences of Surveillance This story highlights a crucial aspect of guest relations in the rental business. Surveillance, intended for security purposes, can often cross the line into privacy invasion, leading to guest discomfort. Such experiences can be particularly jarring for guests who are there for sensitive occasions, like funerals. Jason shared that there is data showing that a staggering 98% of Airbnb guests dislike any form of video surveillance in rental properties. This strong aversion to surveillance cameras, including popular devices like Ring cameras, was emphasized as a major concern for guests. Balancing Security with Guest Comfort The conversation points to the need for property managers to carefully consider their approach to security measures like video surveillance. While ensuring property safety is important, it’s equally crucial to maintain a level of privacy and trust that guests expect. Infringing on this trust can lead to negative experiences, as demonstrated by Jason’s reaction to being monitored. Implications for Reviews and Property Reputation Instances like these can significantly affect a property’s reviews and overall reputation. Guests who feel their privacy is invaded are more likely to leave negative feedback, which can deter future potential guests. The story shared by Jason underlines the importance of respecting guest privacy and carefully evaluating the use of surveillance equipment in rental properties. Prioritizing Tenant Privacy The key takeaway from this discussion is the importance of prioritizing tenant privacy in furnished rental properties. While security is a valid concern, it must be balanced with the need to provide a welcoming and private space for tenants. Intrusive surveillance measures can undermine this balance, potentially harming the relationship between the landlord and tenant, and ultimately affecting the property’s appeal and reputation. Reviews Can Make or Break Success In the rental industry, particularly in furnished and mid-term rentals, guest reviews play a critical role. Positive reviews can significantly boost a property’s reputation and desirability, leading to higher occupancy rates and rental income. Attention to detail and responsiveness to tenant needs are paramount. Property managers are often tasked with addressing maintenance requests promptly and efficiently. This proactive approach not only ensures tenant satisfaction but also helps in maintaining the property in top condition, thereby enhancing its long-term value. Strategies for Positive Reviews To encourage positive reviews from guests, it is essential to: 1.) Provide High-Quality Furnishings: Furnishings should not only be functional but also aesthetically pleasing. This enhances the overall appeal of the property and contributes to a positive guest experience. 2.) Prioritize Comfort and Convenience: Comfortable furniture and well-equipped properties are more likely to receive positive feedback from guests. 3.) Respond Promptly to Requests: Addressing maintenance issues and guest queries promptly shows attentiveness and care, leading to better reviews. 4.) Ensure Transparency and Communication: Clear communication about property rules and amenities helps in setting the right expectations, thereby reducing misunderstandings and negative reviews. 5.) Solicit Feedback Proactively: Encouraging guests to share their experiences and suggestions can provide valuable insights for improvements and also show guests that their opinions are valued. Legal and Regulatory Landscape for Mid-Term or Furnished Rentals As with any business, it is essential to understand the legal and regulatory landscape that governs mid-term rentals. This understanding can help property managers ensure compliance and avoid potential legal issues. In the podcast, when asked about the potential for increased regulation in mid-term rentals similar to what has been seen in short-term rentals, Jessica Schirmeister and Jason Zimmerman provided insights into the current state and future possibilities. City and HOA Regulations Jessica Schirmeister, one of the speakers, highlighted that regulations over rentals could come from two main sources: the city and homeowners’ associations (HOAs). She emphasized the importance of being aware of the specific rules and regulations set by these entities. In client meetings, they often check the city’s regulations and the HOA rules to ensure compliance. She urges other property managers and investors to conduct diligent research and compliance checks with both the city and the relevant HOA as a starting point. The Significance of the 30-Night Threshold A crucial point noted in the discussion was the prevalence of a 30-night minimum stay requirement, often seen in both city rules and HOA regulations. This requirement seems to be a common benchmark distinguishing short-term from mid-term rentals, with mid-term rentals typically starting at stays longer than 30 nights. Property managers and landlords must be aware of this threshold to ensure compliance with regulations. The Future of Mid-Term Rentals: Trends and Opportunities Jason Zimmerman provided insights into the anticipated trends in the mid-term rental market. His perspective was rooted in the current usage patterns and market developments. Stability in Tenant Activities One of the key points Jason raised was the similarity in tenant activities between mid-term rentals and traditional 12-month leases. Whether it’s for six months or a year, the impact on neighborhoods and the way tenants use the properties are quite alike. This observation suggests that mid-term rentals are unlikely to cause significant disruptions or attract undue regulatory attention, maintaining a level of stability akin to long-term rentals. Regulatory Outlook Given these similar usage patterns, Jason expressed his view that mid-term rentals might not face the same level of regulatory challenges as short-term rentals. Short-term rentals are often scrutinized for their potential neighborhood impact, but the consistency in tenant behavior in mid-term rentals could spare them from such intense regulatory focus. A Rising Trend in Furnished Homes Looking towards the future, Jason highlighted a growing trend: the increasing demand for furnished homes for various lease durations. This trend, particularly evident in college markets and upscale areas over the past decade, points to a robust and expanding market for mid-term rentals. The demand for furnished homes, suitable for a range of leasing terms, is on the rise, signaling a significant growth opportunity in this sector. Conclusion As we wrap up this episode on the vibrant world of mid-term rentals, it’s clear there’s a lot to get excited about. From savvy investment strategies to the fine art of balancing tenant needs with business goals, mid-term rentals offer a world of opportunity for the savvy property manager. We’ve navigated through the nuts and bolts of furnishing, tenant privacy, and the all-important reviews that can make or break your property’s rep. Plus, we’ve tackled the ever-changing legal landscape to keep you in the know. Thanks for diving into this rental adventure with us! If you haven’t subscribed to our newsletter yet, head on over to https://fourandhalf.com/subscribe/ to make sure you don’t miss future episodes of The Property Management Show Podcast. P.S. If you are looking to get more owner leads, improve your online visibility, and grow your property management business, fill out the form below to see how Fourandhalf Marketing Agency can help you reach those goals. PhoneThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post Mid-Term Rentals Part 2: Strategies for Success in Managing Furnished Properties appeared first on Fourandhalf Marketing Agency for Property Managers.

Welcome back to ‘The Property Management Show,’ where we deep-dive into the world of property management, marketing, and entrepreneurship. Your hosts are Marie Tepman and Brittany Jones from Fourandhalf Marketing Agency. Since 2012, Fourandhalf has helped hundreds of property managers get more owner leads through digital marketing. Whether you need help with your website, SEO, online reputation, content, video, social media, or even advertising campaigns – we can do it all. Our guest today is Jordan Bennett, who is the Senior Director of Network Risk Management at Nacha, and a former Risk Analyst at the Federal Reserve. We are discussing ACH fees and payment fraud, and to put the entire discussion into better context, we asked Jordan to explain what his job entails. Management Payment Risks Nacha is the rule-making body and trade association for ACH payments. They are always promoting ACH, and Jordan’s job is thinking about how to prevent risk. He wants to keep people’s money in their accounts, and he wants to stop the schemes that can rob them of that money. Not only does he want to make payments safe, but he also wants to educate consumers on the fact that ACH is one of the safest payment methods they can choose in the U.S. He works with banks and companies to decide how to utilize it and better manage any risks that may be present. ACH Transaction Fees For the longest time, ACH has been popular because it’s free. It’s always been the free option versus credit cards, where consumers have to pay transaction fee. Some companies, however, are beginning to charge transaction fees for ACH payments. Why is this shift happening? Jordan reminds us that there has always been a cost to run an ACH system. It’s a low cost because it’s a batch system, so it doesn’t cost as much as credit cards, which operate on an interchange system. With ACH, there’s a lower cost to the financial institution and the property manager who is accepting the payment, but there is still a cost to running the network. So, it makes sense that a property manager and their financial institution may want to recoup these fees. A lot of systems and anti-fraud tools and infrastructure needs to be maintained with ACH. It’s never been free (even though the customers see it as free). Nacha cannot suggest or encourage or discourage fees. With antitrust laws what they are, Nacha cannot tell an industry whether they should or should not charge a fee. However, it’s important to remember that this process does not automatically happen. People get paid to do their jobs, and it takes jobs to keep these payments safe. What we don’t want to do is set a precedent where it’s preferable to pay with a check to avoid the ACH fee. Consumers who do not want their information available and want the convenience of an ACH transfer will continue to use this method and not return to the days of using checks. Even from a management company or HOA perspective, accepting checks means you physically have to open an envelope and process the payment every time it’s made. If you have hundreds of rent checks coming in, that’s going to take time and require personnel. There will be a transaction cost regardless of how the payments come in. Your check fees may be higher from the bank than the ACH transfer fee. Property managers should not encourage checks. When a check is paid, the consumer knows they have money in their account, but they may forget. And, if that check takes a few days to get through the mail and be deposited, the consumer might have forgotten about the rent check that was written and they’ll spend the money that’s in the account. Everything could bounce. That’s an unnecessary risk that landlords and property managers don’t have to take. ACH can be a regular recurring payment that comes out every month on the same day. It takes a few minutes to set up, but once it’s there – it’s there. Unlike checks, there’s not another entire process every month. Checks have routing and account information printed right on them. It’s an opportunity for fraud. When an employee is processing an ACH payment, however, there’s no visible access to the routing or accounting numbers. Online Payment Fraud and How to Prevent It Nacha has put out a framework for risk management in order to fight fraud. There are several fraudulent scenarios that are addressed. Debit fraud causes most of the problems. Usually, the fraud begins when someone debits an account from the information found on a paper check. Or a consumer continues to be charged for a subscription that they let go. Rules have changed on the ACH network in order to get those bad actors off the network. The banks have also been enlisted to help fight this type of fraud. Previously, banks said they were not responsible for those originator issues. But, if someone is debiting without authorization, it’s a problem that comes with consequences. There will always be debit fraud, but Nacha has worked hard to minimize this problem. A lot of check fraud can also be found in the industry. Don’t use checks. Fraudsters are conning businesses and consumers into sending them money. They aren’t creating a debit with a routing or account number; instead, they’re convincing an employee to pay them by pretending to be a vendor. Let’s say your company does a trade show, and the cost to rent space at the trade show is hundreds of thousands of dollars. If someone dishonest knows that you’re planning this, they can call and represent themselves as working for that venue. They might tell you that they’ve changed their account number, and when you think you’re paying the convention center, you’re actually paying the fraudster. Tenants and landlords can get scammed this way too. Tenants can be fooled into believing a landlord has changed their account number, and then all that money goes to someone else instead of their landlord. Accounts takeover fraud is when someone accesses an account within your company system and authorizes payments. This is preventable with education, proper policies, and dual controls. These schemes are out there, and they’re targeting everyone. Prevention is better than the cure. Sometimes there’s insurance, but not always. If a vendor calls and says they’ve changed their account number, the process should be that you call them back at the number you have on file. Communicate in a known way. Put together a policy and a procedure. Business emails can be compromised. Email addresses can be compromised in subtle ways so that you don’t notice the difference in the person who is corresponding with you. Fraudsters can log into an inactive account that once belonged to a former employee. If you’re not checking that inbox or if you have not disabled the account, it’s easy for them to hack in. Make sure all of your employees are educated. They should know that the CEO is not going to reach out and tell them to pay an invoice. An employee’s emails and accounts should be inactivated when they leave. There must be dual controls – even for a small company. You don’t want just one person creating and paying invoices and accessing the bank accounts. The Nacha website has a lot of detailed accounts on schemes and how to prevent them. How Are Property Managers Setting Up Payment Controls? Be consistent with all of your protocols and payment controls. If you only allow your employees to set up an ACH transfer up to $10,000, why would you allow them to send a $100,000 wire? If two people need to approve a payment, why would only one person be able to sign a check? Be consistent across all payment methods. Most fraudsters always act with a sense of urgency. If there are two business partners with dual controls, and one of them sends a text saying that a typo was made and a payment needs to be sent to a different account, you want the business partner to call the other party immediately after receiving the text. There’s always a sense of urgency with fraudsters, but no payment needs to be made immediately. Fraudsters look for opportunity. They look for businesses without good controls. They want to target businesses that aren’t paying attention. They’re looking for CEOs who are on vacation and things are out of the ordinary. It’s important that all of your business policies are written down. Recourse for Victims of Fraud What happens if they get you? Jordan says it’s not helpless or hopeless. Nacha has been working to help the industry recover from fraud events, and it’s not always a total loss. Work with your financial institution and remember that the faster you respond to a fraud event, the more likely you are to recover what you’ve lost. So, don’t wait. Recovering your funds is less likely if you wait, because fraudsters are working as quickly as they can. As soon as they have your money, they’ll move it somewhere else. Here’s a scenario that may affect property managers. Let’s say a tenant has paid rent for six months or a year, and then they dispute the charges with their bank, claiming they were not authorized. Who will the bank favor in such a dispute? Jordan says this is more common with credit cards, but ACH payments can be disputed. In a situation like this, banks are more likely to be consumer friendly. If a renter claims their withdrawal was unauthorized, the money will probably be returned to them. In low value cases, the financial institution or the merchant losing the money won’t choose to go after them. But they can take the matter to court. They can file a claim and fight to get the money back. Landlords and merchants can also go to the policy if this type of fraud occurs. Jordan wishes there was a better way to stop consumer fraud of this kind, but the rules are generally there to protect the network as a whole. If a consumer claims there’s fraud, a statement has to be signed saying that a charge was unauthorized. They’re signing off on their own fraud, and there could be repercussions for that. This isn’t a common scenario. Plenty of laws are in place to combat fraud, but the rules are generally consumer-friendly to protect people from unscrupulous originators. There are more bad actors on that side. A long time ago, it was easy to get rid of these guys. We could see that an account was being debited $29.99 a month for no reason. The amount is small enough and normal enough that it looked legit. Resolving such situations is a huge priority. No payment method is immune to fraud or risk. Given the risk associated with online payments, it’s easy to feel spooked. Just remember that online methods of payments are far more secure than cash or checks. The physical movement of funds is out there, and it’s dangerous because it shows your routine and displays your account number on a check. There’s no recouping actual cash that’s stolen; it’s not secure. Check fraud is on the rise. Your electronic payment methods are much much safer. It’s easier to control your own personal information. There are rules around keeping that data secure. Checks travel. You have to walk it to a mailbox. If you leave it in your own mailbox with the flag up, you’re signaling to fraudsters that there might be something inside the mailbox, with your personal information on it. If you absolutely must mail a check, take the envelope into the post office and hand it to an employee. But who has time for that? Electronic is the way to go, whether it’s a wire or ACH or credit cards or any of the new online payment platforms. Those are protected, and you should always use all of your authentication methods. Listeners who have questions can reach out to Jordan at jbennett@nacha.org. Emails get quick responses. For fraud incidents, report them to your bank. And that’s all we have for this episode of The Property Management Show brought to you by Fourandhalf marketing agency. Since 2012, we’ve been helping property managers get more owner leads through marketing – from websites, SEO, videos, content, reputation, social media, pay-per-click ads, you name it. Visit fourandhalf.com to learn more. As always, feel free to send us your feedback and thoughts by emailing marketing@fourandhalf.com. And, if you’re enjoying our show, show us some love by leaving a review on your favorite podcast app. Thanks, and see you next time! PhoneThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post Understanding ACH Fees and Payment Fraud with Jordan Bennett from Nacha appeared first on Fourandhalf Marketing Agency for Property Managers.

In typical fashion, we ended up covering so much ground with Ray Hespen of Property Meld that we had to split our full conversation into two episodes. In Part 1, we discussed what maintenance analytics is, why it’s important, and what it can do for a property management business. This is Part 2 of our chat on The Property Management Show, where we’ll talk about the current shortage we’re having on tradespeople, its effect on net operating income (NOI), and what property managers can do about it. Maintenance Analytics Surprises Some data around owner and investor retention was surprising, according to Ray. While looking at landlords and investor/owners who had one to four units, it turned out that owners who renew their property management agreements for a year or two or three had a higher maintenance rate per unit annually. More maintenance was performed. The number of actions were about 20 percent higher than in the cohort of owners who churned and left their property management company. The actual maintenance spend was lower, but the number of maintenance touches was higher. This seemed impossible until the team dug a little deeper and realized there were more preventative repairs, on average. So, it ties back into that big correlation we discussed during Part 1. Drive spend per unit down and resident satisfaction up. That behavior is triggered by more preventative programs. Maintenance is getting more expensive and it’s harder to find people to do repairs. There’s a high demand for tradespeople and vendors, and no one is running out of jobs. It’s supply and demand. Given that, how can property managers invite more maintenance but lower maintenance costs? Ray doesn’t know. He points to a report released by Invitation Homes and American Homes for Rent that forecasts an increase in costs that have dropped their NOI from 11 percent to five percent. It’s an industry-wide challenge. What’s becoming more important is keeping renters in a unit. Someone Ray recently talked to said that they could get a price increase on a lease renewal, but not by putting that same property on the market for a new tenant. That’s where rents are right now. Renewals are an important part of revenue generation and they also keep your expenses down by avoiding turnover costs. On the maintenance side of things, you have to find ways to get work done during the shoulder months. Schedule your inspections, your work, and your preventative services before summer and after summer. The Case of the Disappearing Tradespeople The trick in keeping up with the necessary speed of repairs is ensuring vendors WANT to work with you. If vendors are avoiding you, maintenance suffers and so does tenant satisfaction. Three or four years ago, property managers could set forth a list of demands before agreeing to work with a vendor. Maybe you had legal and insurance requirements that had to be met. Maybe you wanted your vendor to accept your work request within an hour. All of that has evaporated. The balance of power has shifted, and you have to find a way to make it easier to work with you. Ray has over 40,000 vendors working within the Property Meld platform. The want some of the requirements taken away before they’ll work with a management company. Scheduling and communication has to be easier on them. His recommendation to you? Grease the skids so you can attract vendors and tradespeople. They don’t need your work, and they’re going to be selective about who they’ll work with. Non-monetary incentives are important. Vendors are willing to negotiate better rates with property managers, and you’ll always pay less than an independent consumer. It’s part of relationship building. They’re going to choose the work they want to do. Don’t leave yourself on the retail side of a vendor relationship. Make sure it’s easy to work with you and that there are incentives such as simple systems and processes. Scheduling should be automated. Payment of invoices should be immediate. These things matter. Non-monetary incentives. Most vendors have fewer than 10 employees. These are small operations. People start a plumbing company or electric company because they want flexibility and freedom. Controlling their calendar is more important than driving a profit number. So, attract vendors by reducing the friction points that often come with scheduling, updating property managers, and invoicing. Why is it so hard to find vendors and tradespeople? Ray’s hypothesis is that the pipeline of talent cannot keep up with the demand. A lot of capital was invested into the economy during and after COVID. Home improvement projects became huge. It was easy to borrow money. Build to Rent is now an industry. The tradespeople who are in business are busy. There’s also still some social pressure around these types of jobs. It’s not cool to be an electrician or a plumber. There’s societal pressure to go into debt getting a degree. It’s actually a really good idea to become an electrician right now. The solution that Property Meld is looking at is this: how can maintenance professionals complete more jobs in the same hour with the same resources? Most of the 40,000 vendors in their system work with more than one property management company. So, helping them to serve more clients without sacrificing time, talent, or quality of work is the goal. How can the data they gather help tradespeople maximize their time? Scheduling maintenance in a way that maximizes time and resources is a great application for A.I. It could be meaningful. Data and How to Start Using It Are you interested in doing more with data but unsure of how to get started? A lot of property managers might not understand how to use good data to make smart decisions. Ray says that data should always be easy to understand – even if you’re not a data scientist. Also, don’t be afraid of what you’re seeing. Sometimes, property managers don’t want to know what they’ll find. But, if you’ve read the book Good to Great by Jim Collins, you know that great companies are willing to accept the brutal truth about where their challenges are. So, just take a look at where you are and take some steps towards making your business better. It’s okay to know what you’re good at and what you’re not good at. We hope you enjoyed our conversation with Ray. If you have any questions, as always, feel free to ask them. We’d also love to hear your feedback, so please don’t hesitate to get in touch with us at Fourandhalf. URLThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post How Property Managers Can Deal with Rising Costs and Labor Shortages in Maintenance with Ray Hespen – Part 2 appeared first on Fourandhalf Marketing Agency for Property Managers.

Byron Thompson from Monument Real Estate Management is joining The Property Management Show to talk about a subject we’ve never addressed on this podcast: urban real estate markets. Byron has been a listener for a long time, and we’re happy to have him in the guest seat today to talk about the unique challenges and opportunities for both investors and property managers who work in urban markets such as Cleveland, where his company is based. Introducing Byron and Monument Byron owns and operates Monument Real Estate Management in Cleveland, Ohio. They manage properties and portfolios in Columbus as well and recently, they’ve begun expanding into the Carolinas. There’s a strong growth mindset in his business operations, and he’s always looking for new opportunities. What’s unique about Cleveland is that it has a strong urban market that he talks about in his book: Your Guide to Investing in the Urban Real Estate Market. The urban market doesn’t get a lot of attention from influencers in our industry and speakers at conferences. No one has been talking about it, so we asked Byron how he found himself in this niche. Discovering and Exploring Urban Real Estate Markets His journey began in 2016, when he got his Realtor license and immediately started working with investors who had good portfolios. Many of these investors had been buying properties all around the country and finally landed in Cleveland. While he worked with them to locate and purchase properties, he learned a lot about real estate investing. They were buying 15 or 20 or 30 houses a month. This was a big education, both in real estate and property management. The investors asked him to manage the homes for them when they became rentals. At first, he said no. But, he soon realized the opportunities this could provide. That’s how Monument Real Estate Management began, and it didn’t take long to realize how different the urban market of Cleveland was from other real estate markets. How We Define an Urban Market According to Byron, there are three conditions that must be present in order for a market to be considered an urban market: 1. The overall economic conditions of the city. It’s usually poor. Crime rates are likely to be higher. Available housing and employment rates are likely to be lower. 2. The assets investors buy are going to need more maintenance for asset. Most of these homes will be older; potentially 100 years old, even. 3. There’s heavy government compliance to the management that’s requirements in an urban market. There are more Section 8 homes. There are more inspections. You’ll have more transient tenants and potentially more evictions. Byron has identified and researched similar markets in cities like Birmingham, Memphis, and Detroit. There are a lot of similarities there, but also unique challenges in each urban market when it comes to investing and managing. Urban markets will generally focus on C and D class properties. These are high risk and high reward, versus other markets that provide a slower yield. They’re generally safer. They focus on A and B class properties, which provide less risk and fewer headaches. If you’re going to specialize in the urban market like Byron does, you have to know what makes them lucrative for property managers and investors. For property managers, it’s all about volume of business. The number of rental homes in urban markets is high. They need management because these markets are heavily impacted by investments. Most of the investors are out of state or even out of the country. For investors to make money, they must have the appetite for high risk and high reward. There’s an opportunity for heavy cash flow and these can be cash-positive investments. You need to know the risks, as a property manager, and you need to gain the trust of your investors. Managing Investment Properties in Urban Markets Property managers need to help investors earn their returns. It’s also a property manager’s job to educate investors who may not know the market. Sometimes, an agent will sell you a property and you’ll never see them again. At Monument, that won’t work. They find that in an urban market, you have to be there for the long term. You have to support your investors on their entire real estate journey. Educating them and making sure expectations are understood are important qualities in a property manager serving this market. Urban markets generally have lower purchase prices. That’s going to attract a lot of investors who want to make money. You need to help them understand what they’re getting into, and what will be required in order for that money to be made. Byron says it’s important to keep investors informed. He provides quarterly assessment reports that show them what they need to know about their asset. These reports commonly highlight the deferred maintenance that’s often found in an urban investment. Often, investors won’t do their due diligence before buying, and you want to make sure they understand both their asset and the market. It’s important to dive deeper into asset management. Property management is collecting rent and scheduling work orders. Property managers in an urban market have to go further and talk about how the asset will perform for five years or more. They’ll have to talk about the neighborhood and any surrounding areas that may be up and coming. Choosing the Owners You Work With We’re not sure there’s a property manager who hasn’t had to let go of a client. Byron says the power of saying no is important. You have to learn and know your own value. As a team, Monument has focused on knowing who their ideal client is. They have a good grasp of that, and they’ve developed a detailed onboarding process that ensures they’re working with people who fit their model of service. A lot of processes have been streamlined. That’s because of the volume of properties being managed. Their model works with their specific systems and processes. It’s a strength. When he has to accept or deny a client, Byron says it comes down to expectations. He tries to set those upfront so there are no surprises. Every client wants to feel like a VIP. But, their onboarding process is the same for every client: this is what they do, this is how things work, and this is step-by-step what they’ll be doing. They cannot deviate. Byron says they’re professionals and they trust their process. Before he takes on a new client, he wants to be sure they’re aligned with those processes. Some of their clients have already purchased a property and others are thinking about it. Byron loves taking the sales calls because he likes that there’s a mix of everything coming in. He likes hearing about where investors are coming from. For an investor who is new or hasn’t bought a property yet, he’ll help them navigate the process from the beginning. The goal is education. For an investor who is transitioning or working with an occupied property, it becomes less about the investor and more about the asset. He wants to know what they’re getting. At one point, he would just take everything and anything (like most property managers). Then, he says, you realize you are managing a house without a water tank and there’s a tenant in place. Now, he decides if he wants to take on the asset. He’ll think about a 30-day, 60-day, and 90-day timeline and decide what can be done and what wouldn’t work. Defining Wealth in an Urban Market Here’s another insight from Byron’s book: everyone defines wealth differently. Most of us think that you need money to make money. Not necessarily, Byron says. He believes it all comes down to defining what you want first and knowing yourself and your temperature for things. Next, you need to build relationships. Byron has found it’s amazing that as you put things out to the universe, the wealth mindset starts. He believes that anything is possible because there have been plenty of times that he was surprised at how perfectly things worked out. Those things never would have happened if they hadn’t been spoken into existence. He believes in aligning himself with the right people and doing the right things for other people first. Opportunities can and will fall into your lap, and it turns out you don’t have to cut a check for them. Byron is also a big believer in sweat equity. That’s his secret sauce for the wealth mindset. It’s the way to gain success. Don’t do everything he does, Byron cautions. If you read the book, you’ll learn that he and his wife began their real estate journey while she was pregnant with their daughter. Byron quit his job, liquidated his 401(k)s and got started acquiring properties. It worked out for the best because he had his wife’s support and a lot of faith and good relationships and they worked hard. The Book We asked Byron why he wrote “Your Guide to Investing in the Urban Real Estate Market.” He said it was the culmination of all the pain points and the triumphs he had experienced working in real estate. He was thinking about his own portfolio and the mistakes they made and also how they ultimately found success. He’s had the opportunity to work with people from all over the world. He’s seen where they made mistakes. He’s worked with contractors and tenants. He’s navigated laws and lifestyles and worked with judges and bailiffs. He said he would have gone crazy if he didn’t get it all out and write the book. And, Byron loved the idea that his experience could help others. It is intended to be read by would-be investors and existing investors who don’t understand what they’re getting into with urban real estate markets. There’s also a lot of value in this book for property managers. If you’re a property manager thinking about expanding into urban markets, Byron’s advice is this: Continue your education. He says one of the best things he did was to join NARPM. You can only grow when you’re around industry leaders like yourself. He makes a point to invest in education, and also in automation. Everyone knows you have to get the right people on your team, he says, but automation is equally important. There are a lot of variables in the urban market. Automation keeps things from going off the rails. Property managers need to think about revenue per door and not just volume of doors. Three things will make you successful in the urban market: 1. Maximize your profitability per door. 2. Provide excellent service to owners. 3. Provide excellent service to tenants. Make your management more efficient and effective. For a copy of the book or to learn more about Byron, visit www.monumentmgt.com. The book is also available on Amazon. If you have any questions about what we’ve talked about today, please be sure to reach out to us at Fourandhalf. FacebookThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post Investing and Managing in the Urban Real Estate Market with Byron Thompson appeared first on Fourandhalf Marketing Agency for Property Managers.

Heather Nicely is a Realtor, broker, and loan officer, and also the president of the Arizona chapter of NARPM. She’s been on all sides of property management and today, she’s joining us to talk about short term rentals and how managing those properties are different from managing long term rentals. Heather’s Journey to the Short Term Rental (STR) Space While other little girls were fantasizing about growing up into princesses, Heather was fascinated with real estate. By the time she was 12 years old, she knew she wanted to purchase a home in the mountains or near the beach so she could vacation there. Ultimately, she wanted to buy 52 properties so she could live in a different home every week of the year. She also wanted to make money off the properties while she wasn’t living in them. As she grew up, the idea seemed silly. But now, it feels like maybe she was onto something. Short term rentals were part of a platform within a software company she and her husband owned. She took the time to dig into it and learn about that space. Then, she became Vice President for an after-hours emergency call center and serviced some short term rentals while there. Heather learned that short term guests have more persistent needs than long term tenants. It seemed like a difficult market. As her career evolved and she became a Realtor and opened a brokerage, she began to gather clients who were purchasing investment properties to be used as short term rentals. It made sense to her as she began to manage properties that she would include short term rentals in her property management portfolio. Are Short Term Rentals the Future? When COVID happened, short term rentals were the worst place to be. But, since the pandemic has dissipated, there’s been a surge of binge travel. Now, short term rentals are more popular than ever. As a property manager, you might have heard about other long term property management companies dipping into short term rental management. We asked Heather about the pros and cons of adding these properties to a long term management business. Short term rentals can be lucrative. Anyone renting out a short term home can tell you that there’s money to be made. Everyone wants a piece of the Airbnb market. But, if you’re generally doing long term rentals, you have to wrap your mind around the different business model that’s in place for short term rental homes. Your 15 or 20 years of experience managing long term properties won’t help you. This is a different beast, and trying to offer short term management services through an existing management company can be trouble. Here’s the main difference: In the long term rental space, you’re developing a relationship with tenants over time. Your property owner is your main client. In the short term space, you’re renting out more than a roof. Vacation properties especially require you to rent out an experience. You have to cater to those guests. They’ll want coffee filters in the kitchen when they wake up on their first morning. If they’re checking in at 2:00 a.m. and the lockbox doesn’t work, you can expect a frustrated phone call. Short term guests will want refunds if everything is not perfect. And, everything is an emergency. So, it’s different. But, Heather says that when you can hone in on those differences and create a good experience, you’ll do very well in that space. Educate yourself and understand the industry. Most importantly, separate yourself from what you already know about property management. Short Term vs. Long Term Property Management Mindset Heather worked on the vendor side in a call center, and that demonstrated the difference between long term tenants and short term guests. If someone is in a home for only two days, they’ll expect everything to be perfect for those entire two days, otherwise they’ll want their entire reservation refunded. This requires a mindset change for long term property managers. You’re not dealing with residents. You’re dealing with guests. Two things need to be established if you’re a long term property manager considering short term rentals: Property turns are frequent and fast. With long term properties, you have a couple of days and can take time to renovate. With short term rentals, there’s maybe a four-hour window to do all the cleaning, change the linens, take out the trash, and make sure everything works. You’ll need high expectations for your cleaning crew. Be ready daily for those property turns. With long term rentals, you have a checklist and you have more time. Short term rentals require you to get it right immediately. There’s no second chance. You need to be more available than you are with your long term property management business. There are no 9-5 hours, and you don’t get weekends off. In the short term rental space, you’re on the clock 24 hours a day. People check in early or late and they’ll always have questions. There has to be a communication process built in. There’s no ignoring the tenant until Monday. Technology and Short Term Rentals Most property managers are familiar with the long term rental software. There’s even more tech in the short term space, and it’s completely different from what’s available in the long term space. So, if you have 14 tabs open on your computer screen as a property manager of long term residential leases, you can expect to have at least 14 additional tabs open when you start managing short term properties. Can you handle a lot of new software? Can your team learn it? Heather recommends having part of your team handle long term properties and another, separate part of your team responsible for short term rentals. There’s a lot to learn when it comes to: Guest relations software Noise management systems Key systems Data and metrics checking pricing comps Dynamic pricing tools Rating software If you already don’t love learning new technology, prepare for this because it’s a learning curve. There’s no single platform that takes care of everything. So, you’ll have to go through an evaluation process to decide what works best for you. There’s also some controversy in the technology that’s used. Noise monitoring systems, for example. There’s a sensor you can install that picks up decibels in a rental property. You can be alerted if there might be a party going on. This might seem invasive, but a lot of owners and managers find it’s better to find out this way than to field phone calls from angry neighbors or the police. Cameras are often used in short term rental properties, too. Guests may complain about that; they don’t want to feel watched while they’re in the pool. Property owners may want access to those cameras. Privacy is a big issue with technology and short term rentals. Pricing Short Term Rental Homes Comparables are also much different in this space than in the long term rental space. Property managers will have to look at pricing trends more frequently. If there’s a concert or a festival or a major event one weekend, prices will jump. There’s software that automates this, but it sometimes needs human intervention. In Arizona, the Super Bowl was in town in February. If one owner priced his home at $5,000 a night, it threw off the entire pricing model. Technology is only a tool, and to be successful and keep your property occupied, you have to watch the market all the time. It’s a lot of work and a different type of property management. So, is the juice worth the squeeze? Heather says yes, as long as you go into the space with a lot of knowledge and your eyes wide open. There’s a lot of money in the industry, but the work won’t be easy. The people who do well already have systems in place to effectively run long term rentals. They’re dialed in and they have a team. Don’t try to just tack this on as another income stream. You’re opening a second business. It needs to be treated as a separate entity. You’ll have to learn about things you never considered before, like the importance of having separate linens for makeup removal. If you’re struggling to make things work as a long term property manager, you’ll probably have some tough challenges as a short term property manager. Marketing and Reputation Long term property managers are often inundated with negative reviews because no one can really avoid those crazy tenants with a list of complaints. The guest experience with short term rentals is different. But, there’s less negativity and more positivity, generally. Airbnb asks automatically for reviews from guests. There are a lot of positive stars and reviews on that platform. Most managers in the short term space are review-driven. You want to get five stars on every booking. You’ll be able to show off good reviews, and you can turn them into testimonials. It’s not so much that your reviews will show up on Google or Yelp. They’ll be on Airbnb and Vrbo and similar rental sites. But, if you’re trying to get direct bookings off those sites, you’ll have to ask your guests for reviews. Build your reputation by asking. Licensing and Regulation Most states do not yet have clear licensing requirements for short term management companies. Maybe you own three units and rent them out and then you manage your friend’s two rentals and then a rental for your doctor. That makes you a company. In Arizona, Heather does not need a license to rent out properties for fewer than 30 days. Other states are different. Or, there are no requirements in place at all. This might seem crazy, especially since you are dealing with other people’s money and the activities are so similar to long term rental management. Legislation is always changing and there’s no standard way to define a property manager. Start with your own company and define who is a property host, who is a co-host, and who is responsible for the management of the property. It can feel a bit like the Wild West. Everyone is rushing to it, but the legislation and the regulation cannot seem to keep up. On the long term management side, there’s plenty of regulation. Short term rentals have far more transactions, but a lot of people worry about government overreach. Different groups have their own agendas and priorities when it comes to regulation. People locally get mad when HOAs feel like they have a say in who you can rent to and for how long. Then, there’s the city dealing with noise complaints and traffic issues and parking capacity, and it becomes an issue for them as well. This feels like a new industry, and there’s not a lot of consistency yet. The laws and rules are very local, if they exist at all. That’s a lot of information from Heather so far, and we want to save the rest of what she says for Part Two. On the next show, we’ll go into the current state of the short term rental market and how you as a property manager can serve your owners better. If you have any questions before then, please contact us at Fourandhalf. InstagramThis field is for validation purposes and should be left unchanged.First Name(Required)Last Name(Required)Email(Required) Phone(Required)Company NameComments or QuestionsThis field is hidden when viewing the formDate MM slash DD slash YYYY <> The post Pros and Cons of Adding Short Term Rentals to a Long Term Rental Management Business with Heather Nicely – Part 1 appeared first on Fourandhalf Marketing Agency for Property Managers.