Month: August 2016

What Makes You Different?


Matthew Whitaker - Thursday, August 25, 2016

Choice and decisions: businessman thinking with question marks written on adhesive notes stuck to a brick wall

This is the question every property manager is attempting to answer . . . when a potential client is calling and asking about their services. What makes you different from other managers? Why would I choose you over the 3 or 4 other managers I’m talking to?

We absolutely love it when this question gets asked! Very few other managers have put specific thought and some intentionality behind this question and it is something we have spent a LOT of time thinking about. Why WOULD you want to be a client of ours? Or, better yet, why would you NOT want to be a client of ours?

Wouldn’t it be important for you to know our “flavor” of management before you choose to do business with us?

If that is something you are interested in, I implore you to read on!

We sat down about two years ago now and thought about this question. This is not one we wanted to take lightly, because we felt that our management strategy was something we would build our business around for quite some time.

What came out of that meeting was what we call the “Three gk Uniques”.

Unique #1 – Communication. When clients come over from other property managers, this is the biggest reason they come over . . . lack of communication.

It is interesting to see the dynamic of a new landlord who is calling and asking about services for the first time. They generally want to know the answers to what I call “The big three” . . . How long will it take you to rent my home? How do you keep from renting it to the wrong person? AND How much does it cost to do that?

However, once we’ve rented your home, the questions all shift around communication. How do you communicate? How often do you communicate? What forms do you communicate with?

At gk we use 3 forms of communication with our Owners . . . phone, email and reports. Let’s take a look at each one.

Phone. We currently have an “Owner’s Only” line that was created about three years ago when as our leasing call volume went up, Owners began having a hard time getting in touch with us. We realized how important it was to continue to answer our Owner calls, but had to solve the dilemma of sorting through the 95% of calls who were not Owners. That is how we came up with the Owner’s only extension.

And that is exactly what it is . . for Owners only. Occasionally, a sneaky tenant will get through on the line, but we do our best to deflect those to the appropriate place.

We, additionally, have engaged the services of a call answering service called “Call Ruby“. Many of you have been very excited about the attitude on the phone and I tend to agree, they have an awesome attitude. Call Ruby has really become part of the team. They are so much a part of the team, that sometimes our Owners will get confused that they aren’t in our office and don’t know certain information. Either way, we’ve seen them as a tremendous asset to our business and getting you to the right person in our company when you call.

Email. We love to have everything in writing. And, despite what people are saying, email isn’t going anywhere. When you send an email to us, it goes into our ticketing system and that ticket is assigned to the appropriate person to handle the ticket.

The reason we came up with this fix is two-fold. First, Owners wanted a single point of contact. The only challenge with that for us was that we managed departmentally and we have specialist working in each department. The same person wouldn’t answer a leasing question who would answer a question about your repair bill. Thus, the support email was born. Secondly, when it goes into the ticketing system, we can run all types of metrics on how quickly our team is getting back with you AND ensure that emails don’t get overlooked and never answered.

So what happens to an email when it comes in? First, it is tagged and connected to your profile in our system. Next, it is read and assigned to one of our team members – the person they deem the best to answer that question. Then it is answered by one of our team members. The cool thing is that once it gets answered by one of our team members and sent to you via email, any email back to us from you on that matter will go directly to the person handling the ticket. So the process of assigning only happens once. Lastly, we close the ticket when we feel like the matter is closed. BUT, if you email us back, then the ticket is reopened.

Reports. One of the best ways we’ve found to communicate with our Owners is by delivering to them reports – whether that be Owner Statements or Inspection Reports – that are accurate and occur on a regular basis.

Our Owner Statement Day in Birmingham is currently the last Wednesday of the month. That means we deliver the statement into your inbox on that day. And we work VERY hard on maintaining that day.

Many of you remember Snowpocalypse 2015 . . . that occurred the day before Owner Statement Day and we STILL got the statements out! Whew! That is how important us delivering what we promise on time to you is.

Unique #2 – Uncomfortable Transparency. Trust is the foundation of any relationship, especially when you have someone managing most people’s single biggest asset.

It always surprises me that Owners will turn over their home to someone based on price alone. While we have some of the most aggressive prices in the business, I beg you not to choose us just because of that.

Would you turn your keys to your Ferrari over to someone to professionally drive it based on price? No way! You would want some credentials. Why would you treat your home any differently?

This unique allows us to build trust with our Owners. They don’t expect us to be perfect . . . well most of them don’t. But what they do expect is us to tell them the truth. Even when it is hard and ESPECIALLY when we mess something up.

I tell our team that a screw up is the best thing to tell an Owner because it helps build that trust. Now we don’t want to screw up all the time . . . but that falls more under incompetence.

Uncomfortable transparency is a byproduct of our core value, Integrity. It is something that we hire team members on and something we fire team members if they ever violate.

It is very important to us.

Unique #3 – Celebrate the Tenant. Your home isn’t, by itself an asset. It is the combination of your home and the RIGHT tenant that is the real asset.

This unique came from my good friend and industry veteran Robert Locke in Atlanta, Georgia. Robert used to own Crown Real Estate and Property Management and was explaining to us last summer how he had kept a tenant for 10 years.

We got so excited about the idea of our Owners having long term, paying tenants who take care of the home, we decided to go “both feet in” on his philosophy of celebrating the tenant.

What does that mean tangibly? We recently invested $1,000 in gift cards in different denominations to tenants we noticed being exceptional tenants. Perhaps they are like clockwork paying rent. Maybe we drove by their house and their yard looks like a fairway. For some, we noticed that it was their birthday.

We were very excited about how well this was received by our tenants. While nobody held us on their shoulders and threw us up into the air, we consider it an investment that we will continue to do on a quarterly basis that will hopefully pay huge dividends in keeping tenants for a really long time.

Another way we tangibly celebrate the tenant is by making it up to them when we screw up. There are times when work orders take too long or we forget something on their move in and it causes a real disruption in their lives. We see those as opportunities to let them know that we recognized that we messed up and not only rectifying the situation, but going above and beyond by sending them a card and typically a gift card.

Lastly, celebrating the tenant is also an attitude that we carry. Many managers tend to look down on their tenants. We seem them as the reason we have a job.

At gkhouses, we believe that you must standout and be passionate about certain things and not attempt to be all things to all people. We are passionate about these “Three gk Uniques” and talk about them almost daily.

What we hope is that like minded Owners will find us and be willing to partner in a relationship by letting us manage their home.

If you have questions or would like to find out more about our services, please reach out to us . . . we’d love to hear from you.

Proud To Be Named To Inc Magazine’s 2016 List Of Fastest Growing Companies


Matthew Whitaker - Monday, August 22, 2016

gkhouses_group_picture

There is not a lot of recognition in the residential property management business. There is, however, a tremendous amount of hard work involved in managing 1,200 tenant relationships and over 500 owners. That is why we were excited to discover that Inc. 5000 recognized gkhouses as one of the Fastest Growing Companies in America!

The great S. Truett Cathy once said, “If we concentrate on getting better our customers will demand that we get bigger.”

This award is truly a testament to the excellence our team has dedicated themselves to; as well as the disciplined hard work that ensures we provide both owners and tenants an excellent property management experience.

We were able to catch up with gkhouses Founder, Matthew Whitaker, and ask him his thoughts about the recent honor, “I’ve always admired the people who made this list. Now, the fact that we made it is really exciting for us. We felt like it was a waypoint to reaching our ultimate goal. I’m excited for our team because they’ve put in the long hours, getting to the office early and staying late, to make this company a success. I applaud them.”

As our team has grown and we have been able to provide excellent service, more and more owners have chosen gkhouses as their ‘go-to’ Birmingham and Nashville property manager.

We also believe there are three ‘unique’ aspects of the gkhouses model that have helped triple our business since 2013.

1. Communication – We have found that consistent and efficient communication builds trust…trust that we have our owner’s and tenant’s best interest in mind at all times. We are constantly discussing ways we can improve communication and thus, build trust.

2. Uncomfortable Transparency – This ties in so closely with one of our Core Values here at gkhouses – Integrity. And we not only want to be transparent in our actions, but also in our motives with both owners and tenants.

3. Celebrate the Tenant – We are proud to have the absolute best tenants in Birmingham and Nashville. We are extremely disciplined in our underwriting approach and know that when we find a great tenant, it’s important to make them feel appreciated so that they want to stay long term in the house they now call ‘home’.

This award is truly a team effort. From our leasing department to accounting, to the property managers and maintenance team out in the field. Everyone is dedicated to providing an excellent product for our customers and we couldn’t be more proud of our team.

Because of our team we have recently received testimonies like these:

“I would say that gkhouses has been a great help for me…I do really appreciate the care of my property and collecting the rent each month. I appreciate the notices received when there is a needed repair or replacement that will make my tenant happier and want to stay in the rental. Application of The Golden Rule is most important…gkhouses has given me the feeling that they are there to help both me and my tenant!” – Richard Nichol

“Excellent customer service, great management team, beautiful, well-maintained homes, ability to pay, submit requests, and communicate with the company online at my convenience…and understanding, knowledgeable employees.” – Brittany Rogers

Again, we couldn’t be more proud of our team and their hard work that has allowed us to receive this award. And we couldn’t be more thankful for our owners and tenants…you help make our jobs fun!

We hope to see you next year closer to the top of the Inc. 5000 list!

The gk Team

Why Owning 10 Rental Houses is Better than One


Matthew Whitaker - Friday, August 19, 2016

Real Estate and Cash concept on green blackboard

Birmingham, Alabama is a hot market for rental house investing. It has so many benefits to offer an investor. But, I’m not here to talk about why you should buy in Birmingham, but why you should buy MORE than one house when you start your investing career.

One principle of investing I’ve learned is to purchase more houses, rather than fewer, to be successful.

I purchased my first investment home in 2004 and have owned as many as 30 rentals at one time. Currently I own 23. I purchased my first house when I was 24 and did the work on nights and weekends to fix the home up.

Fortunately, I no longer spend nights and weekends painting and repairing plumbing, but I have learned some real valuable lessons in the last 12 years. This lesson is one of the most commonly misunderstood, so let me see if I can help you understand why owning 10 houses is better than one.

1. Cash flow – This actually could be the only reason. . . it is why professional investors prefer buy multifamily (apartment) buildings. If one person moves out, it doesn’t have such a tremendous affect on your cash flow. 9 people are still paying rent while you spend the necessary money working on your home for the turn and re-letting the property. If you only had one property, you are not only not receiving rent, but you are coming out of pocket (hopefully using some of the cash flow you received previously) to perform the turn.

2. Law of averages begins to work in your favor – You are going to have a bad tenant. Statistically speaking, there are bad tenants out there and regardless of how well your manager or you underwrite their application, someone is going to slip through – or even change over the course of time. When you have one house and you have this unlikely and unlucky situation happen to you, it can be devastating. If you have 9 good tenants and one bad tenant, it is frustrating . . . and it stings; but it is never terminal.

3. Discounts for volume – if you can believe this, people (like us managers) will actually give you a discount for giving us MORE work! Therefore, it is cheaper to have a house managed, a pipe repaired and a roof put on a house when you have more houses than just one. Having the work of 10 houses reduces your cost to operate your business significantly. This holds true operationally in management, getting work completed and even in your accounting.

So now that we’ve established three reasons to own 10 properties, let’s take a look at a plan for you getting there. I’ve seen a number of these plans over the years and I’m going to share a few with you . . .

1. Buy a house a year – I like this kind of disciplined approach to investing. Basically you use the “Warren Buffett punch card approach” to purchasing homes. I’m only going to buy one house, the right house, every year. I have one punch every year, so I’m going to be disciplined to make sure it is the right house, on the right street, in the area I really understand. While I understand this doesn’t get you to 10 houses immediately, it does get you there over time and is something almost anyone can achieve.

2. Be willing to use debt – Debt can multiply your return . . . it can also divide your return . . . so you must be very careful with how you use it. I’d suggest putting a minimum of 20% down on a house and I like the idea of putting much more than that on it. I’ve seen programs as high as 50%. Money is currently so cheap to borrow, it makes sense to use it as a tool in your investment belt.

3. Convert a huge sum of money into houses – There are times in SOME people’s lives that they inherit, receive a bonus or (for whatever reason receive a large sum of money). I’d like to suggest you putting that into owning homes. One of the things I like about the homes I own is that I can drive by them and see a tangible asset. I have a lot of say so in how that asset is operated, thus I have a lot of power in how much money it makes. Try getting that from owning Apple stock. . . “Hey Tim, I’ve got an idea for a few products I’d like to see you working on.”

I’m not saying everyone is a candidate to own 10 rental homes. What I am saying is that owning 10 is a lot less emotionally draining than owning one. Birmingham is currently as hot of a market as I’ve seen in my 12 years to invest in real estate. If you are thinking of doing it, all you need is a good plan.

3 Reasons to use a small property manager over a large one


Matthew Whitaker - Tuesday, August 16, 2016

small-property-manager-for-your-home

Once again, I’ve decided to take on a topic that is the proverbial, “shoot yourself in the foot” post. To remind you, one thing I think that separates us from other managers is our ability to be uncomfortably transparent. So, in an attempt to do that, I do believe there are some times that a smaller manager would be a better choice than a bigger management alternative.

Before we get started, let me begin by defining what I mean by a “small manager”. Since small can be a relative term. In my opinion this is a manager who typically manages less than 300 homes and every person that works for that company (including the owner) is directly involved in daily working IN the business.

We recently purchased a company in Nashville that describes this scenario exactly. The gentleman who owned it started the company 25 years ago. All of his clients had his cell number and could call him 7 days per week if they needed to. He ran an excellent business for 25 years and this type of management did very well for him and his clients.

Again, choosing a manager is all about preference. So let’s talk about what it would look like for you to choose this style of management over a larger company. . .

1. You don’t trust very easily. One of the cornerstones of property management is this idea of trust. You have to trust us to manage your property properly. If it is hard for you to trust, the idea of a smaller manager maybe a better solution, because there is a good chance you will be dealing with the same person during the length of that relationship. Once you trust THAT person, you would be able to allow THAT person to handle all the important decisions regarding the management of the home.

2. You want control. If you don’t trust easily, it will be very important for you to have control. A small manager is better equipped to take on the “a la carte” type requests you may ask them to do. Larger managers are built on systems and processes. Smaller managers are built to react.

3. The smaller manager specializes in an area you have a home. Much like real estate agents in certain neighborhoods and vacation home managers in certain places, some small property managers have learned to specialize in one certain area of town. This may be one condo complex or one subdivision or neighborhood. Bottom line is they are happy simply managing those homes and making a living doing what they know really well and have no goals to branch out into other areas or other types of homes.

As you can see there are some real benefits for certain types of people or certain types of properties being managed by a smaller property manager. While it is important to look at all the good things you get with a smaller manager, let me point out a few of the challenges when choosing a smaller manager.

1. You are at the mercy of one person or a few people. This means when someone gets sick, there maybe nobody managing your home. Larger managers have enough people that they shouldn’t skip a step when managing your home and someone didn’t make it into work that day.

2. Smaller managers don’t have the benefit of scale to lease your home quickly. Larger managers, with more homes to lease, have more applications per house than smaller managers due to them being a reliable source for a place to live.

3. Smaller managers don’t have specialist, more generalists in the management of your home. Large managers have team members who specialize in leasing, property management and maintenance versus the generalist who is responsible for all of these. Because, for instance, someone is only responsible for leasing homes, they should be able to lease your home faster and know better what to look for when finding a great tenant. All in all, whether you choose a small manager or a large manager, the goal is to find one who fits exactly what you are looking for. There are benefits to both and they both carry their share of negatives. Find the right property manager for you.

Three colourful reg green and yellow darts in the bullseye.

5 Reasons Renting Your Home Makes Sense


Matthew Whitaker - Thursday, August 4, 2016

makes_sense-_matthew

For those of you who think this article is going to be extremely biased . . . you are probably right. All of our articles are biased. However, I have written on the opposite idea of why you WOULDN’T rent your home in a previous article. I think that buys me enough credit here to give you some good reasons you WOULD rent your home.

There are a lot of real reasons that renting your home makes real sense. Some of them are financial, some of them are very emotional. Either way, all of them are legitimate reasons you would rent your home versus selling it.

Let’s take a look at some we’ve seen recently . . .

1. You are moving out of town, but may need to come back. This is something we see often from people who are moving to take a job. We see this when people are moving and they aren’t really sure the job is going to work out and they aren’t ready to “burn the ships” behind them just yet. For whatever reason they are dipping their toe in the water of the other city and want the option of being able to bail and come back.

I have a really good friend of mine who recently moved to California to take his dream position. While he is dead set on making in in Cali, he also wants to make sure he has a backup plan if his startup doesn’t ever . . . well startup. So he decided against selling his home and this gives him the comfort that he can come back to it if he needs to.

The other job related reason people rent their home is when they are planning on being gone for only a certain period of time and fully expect to come back to the house once the 3, 4, 5 year project in another city is completed. If you know you are coming back and LOVE your home, why wouldn’t you keep it and spare the problems of having to find a new one when you time is done?

2. You are moving (or currently live) out of town, but you plan on retiring back in this community. We’ve seen this from Baby Boomers recently. They would like to purchase a home to retire in, in a certain community, and they want to get it at today’s prices. OK people, I hear you that the market goes up and goes down. But mostly it goes up. If you believe it is going to continue to go up for the foreseeable future, wouldn’t this strategy make sense if you plan on retiring in the next few years?

3. You are accumulating rentals as you move out of one and into another. If the last one is a Baby Boomer strategy, this one is a Millennial strategy. Some Millennials are accumulating rentals by living in a home for a few years; and, once they can afford to do so, will move and instead of selling their home, they will put it on the rental market. They do this over and over again and see it as a way to build wealth.

4. You’ve found the house of your dreams, but can’t sell the one you are living in now. All you realist would say that it isn’t financially sound to fall in love with a home. My answer to that? Live a little! If there ever is a time to get emotional about something, I think it is ok for you to be emotional about the next home you want to live in. Am I saying put yourself in a bad position financially to get there? No. What I am saying is that as someone who has purchased hundreds of homes for investment purposes, I’m more than willing to spend more money than I should on a house I love. Why live the majority of your life in a house you hate?

Renting your previous home is an awesome way for you to get into the home of your dreams and is a legitimate strategy for helping you get there.

5. You need to move because _(fill in your own reason)_, but you can’t sell the house you are living in now. Yes, it is blank for a reason. You can fill in your own reason. Some I frequently see are having a baby, getting divorced, retiring and would like to downsize. . . There are a million reasons to sell your home. Each is unique to that individual. The point is, using the home as a rental home will help you solve many issues.

I’ve been renting homes for over 10 years now and I see tons of legitimate reasons a homeowner would prefer to rent over sell. If you’d like one of us to help you walk through your current situation to see if we think renting your home is right for you, please give us a call!