By Fred Matera, CIO, Redwood Trust A lack of affordability will lead to near-term weakness,…
by Johns Prins, Originations Analyst
There’s no two ways about it—property management for single family rental portfolios is no simple task. This type of property management requires not only a deep understanding at the individual property level, but also a tremendous deal of efficiency and organization of the real estate portfolio. Unlike an apartment building, the assets managed cannot all be located under one roof—and in some instances—not even the same zip code or state. With this in mind, it’s not unusual for property managers of this asset class to constantly find themselves juggling an extensive group of tasks for people with diverse needs and desires. The dynamic preferences of tenants ultimately leads to a cycle of trial and error. While there may be no single best solution for managing real estate properties, there are certain ways to assure that the best efforts are taken to increase the rates of success.
Listed below are three tips that could assist in improving your real estate property management practice while offering the potential to save you time and money in the process:
It may seem simple on the surface, but improving the way you communicate with your tenants may be the most surefire way to improve in the realm of property management. Communication in this context can be broken down into two distinct things—notifying and listening.
a) Notification: I touch more on this concept below (see tip 2 pertaining to proactivity), but notifying your tenants of any upcoming changes, maintenance, or other ongoings at or around the properties is an easy way to improve landlord-tenant relations and subsequently avoid any potential disputes. Further, in the instance of outstanding payments, make sure to reach out and let your tenants know. In many instances, outstanding payments are the result of a simple miscommunication, and simply communicating with your tenants can help resolve potential issues before they even start.
b) Listening: It may seem silly, but listening to tenants can often be what separates good real estate property managers and excellent ones. Listening in this case involves listening to the tenants’ wants and needs as it pertains to maintenance and upkeep of the properties, as well as any other comments or concerns they may have regarding the properties themselves, or even the processes or procedures of your management. Simply listening may offer you tremendous insight into the potential shortcoming or inefficiencies of your current management style, and thus allow you to make the necessary changes for the ultimate goal of not only improving your ability to acquire new tenants, but assure the retention of those tenants you currently have.
Perhaps the most important part of successful real estate property management is proactivity. Proactivity can be applied in several different contexts.
a) Maintenance & Repairs: When it comes to maintenance and repairs, make the necessary repairs early and often. Don’t wait until a tenant approaches you with a necessary maintenance request. Be familiar with your properties and the upkeep needed to meet your tenants needs and wants, and address them proactively.
b) Rehab & Renovations: In the inevitable instance of turnover and vacancy, be proactive about scheduling and conducting the rehab and renovations needed or desired to not only accommodate future tenants, but allow yourself to charge more because of it. Renovations also help fill vacant properties or units in a timely manner and promote quick and seamless turnovers.
c) Dispute Resolution: Whether it be that a tenant’s rent isn’t received on time or if the tenant has another serious issue (and yes, as any landlord can confirm, these will happen), make sure to tackle the problem head on. Be sure to prepare to address these problems before they happen—not after. Have the necessary procedures in place to appropriately deal with outstanding payments. Have the means, whether it be in staff or other resources, to address disputes and resolve them on a proactive basis. Preparedness pleases tenants.
3. Consistency & Standardization in Processes/Procedures
When dealing with diverse single family rental portfolios, along with that special, unique feel of each asset, come diverse needs that may need special attention and/or consideration regarding maintenance, upkeep, and even soft renovations. Single family rental home portfolios are typically comprised of homes built at different times, homes with varying unit structures, different electrical and plumbing systems, etc. Despite the special, unique features, one way to improve your property management service is to streamline your practices—from management style to the use of third party vendors.
Streamlining your approach as a property manager across your single family rental portfolio can offer an abundance of benefits.
a) One-Stop Shopping: Contracting consistent 3rd party vendors can offer you the luxury of “one-stop-shopping” when it comes to maintenance and upkeep of the properties and ultimately save you a great deal of money by means of bulk pricing or repeat business along the way.
b) Building a Brand: Beyond these benefits, it also helps you in building your “brand” as a real estate property manager or management company.
c) Increased Credibility: Consistency offers you increased credibility with tenants, often generating positive reviews and buzz that will help you with prospective tenants, as well as others who may be interested in your property management services.
At the end of the day, excellence in the realm of single family rental property management is an ongoing process—a perpetual feedback loop fueled by trial and error at the discretion of a dynamic group of tenants—each with unique, distinct needs and wants. With this in mind, if the proper means of communication, proactivity, and consistency are employed, they will collectively assure that meaningful feedback and response is given/taken and that your management style and practices will improve in the eyes of the tenant. Afterall, the ultimate goal is to keep both your tenants safe and happy and your real estate properties in the best condition possible.
CoreVest is a leading provider of financing solutions to residential real estate investors. We provide attractive long-term debt products for stabilized rental portfolios as well as credit lines for new acquisitions. For more information about how Corevest can help grow your rental and rehab business, please call John Prins at 212.230.3341 or email email@example.com.