When we started this business we had a big dream of driving around Birmingham and seeing gkhouses.com signs all over the place. We thought the more signs we could get in yards, the more tenants and owners we would attract.
Now that we manage over 1,000 houses, we worry that tenants and owners may be turned off that we are somehow “too big”. While there is validity to the argument that there are certain benefits smaller property management companies can offer their clients – and for some those benefits make smaller management companies a better option – we believe the benefits of a larger company greatly outweigh the smaller alternative.
We think the benefits can be found in all the categories – leasing, management, home maintenance, and communication.
Marketing Homes: Marketing homes is like a sales funnel you may be familiar with seeing. Driving prospective tenant traffic to know that a property exists and is available for rent is the beginning of that funnel.
Large management companies have a unique opportunity to drive an inordinate amount of traffic to their website and to their leasing lines.
This is a screen shot of our gkhouses.com website traffic from October 6th to the 29th. We believe the majority (95%+) is from prospective tenant leads.
The largest sources of prospective tenant leads other than our website is Trulia, Zillow, Craigslist and Multiple Listing Service (MLS). While we do market on all those sites, savvy large managers will drive traffic back to their website so they can market that home and remarket other homes, which drives up the number of people that see that the home is available.
Going back to the sales pipeline, more prospects on our site looking for houses means we will receive more applications. See the illustrated sales funnel below:
Application Processing: Large managers are also at a unique advantage with regard to application processing in two areas:
The first is their underwriting skills. Large managers are used to hearing certain stories that don’t add up and are disciplined to lease homes based on their underwriting criteria, not on the whims or “gut feelings”.
The second is the ability to remarket other available homes should the home the prospective tenant applied for be leased while the application is in process. Once approved, an applicant is much more likely to pick from the available inventory of a large manager, instead of going out and beginning the process over again.
The last point on the marketing of homes is the focus a large manager is able to devote to leasing.
Small managers typically have property managers that do leasing, managing, accounting and talking with owners. At large companies, they typically have a dedicated leasing person.
At gkhouses.com our leasing department comes to work every day with the goal of leasing homes. They have no other “more urgent” items that take their time away from leasing.
Once a property has been leased the work of a large manager has just begun. The benefits of using a large manager also stand out here.
Handling Tenant Inquires: Whether you manage 1 or 1001 homes, managing tenants is a full-time business. Tenants expect to be communicated with quickly when they have a need. Large managers should have a specific person that is in charge of tenant communication. Small managers don’t have the time or the resources to communicate with the tenant because (again) they are typically handling all aspects of this process – marketing, leasing, managing and maintenance.
Accounting: Tenants are getting loads of bills in the mail, shouldn’t yours be one of them? The “mom and pop” manager expects the rent to be paid on the first and for the tenant to remember – after all shouldn’t they remember to pay their rent? Large managers don’t think that is a good process, because it’s not the service people are used to receiving. Heck, sometimes you might forget to pay a power bill even when you DO get a bill!
Large managers should have an efficient system for billing – most of ours is done through email – the tenant for the next month’s rent and any other charges they may have accrued during the previous month. Again, if the tenant has a stack of obligations, don’t you want yours to be one of them they think about?
Here’s a sample of one of our Tenant Statements.
Services to the Tenant: Don’t you want it to be as easy as possible for a tenant to pay rent or submit a work order? Would it be possible that a tenant would stay longer if the manager offered modern day services such as online rent payment and online work order submission that the tenant would stay longer?
Large managers certainly believe this to be the case. They set up these services and others – perhaps lawn care – to make the tenant’s life easier and make it easier to interact with the manager.
Houses frequently need some TLC and large managers are in the perfect position to provide a tremendous value to their owners and their tenants with regard to maintenance on the home.
24/7/365 Hour Emergency Service: What happens when the oven breaks on Thanksgiving or the air conditioning shuts down on the 4th of July?
Large managers have the unique ability to offer solutions to these types of problems. When you manage a lot of houses, you don’t hope something like this doesn’t happen, you EXPECT it to happen! And…you are prepared for it when it does.
Typically large managers will have someone assigned to handle these types of calls through a rotating cell phone or we have a call service that handles these calls on our behalf. They are able to dispatch emergency vendors to handle these and other emergency situations that may arise. Tenants will remember how quickly you handled these situations and will stick around longer if they are handled appropriately.
Access to Multiple Vendors and Pricing Power: More vendors should mean more options on bigger projects. Large management companies are forced to utilize multiple vendors to get the job done.
Additionally, it makes sense that larger managers have more pricing power with vendors. More work orders should equal better prices.
Owners want to know what is going on with their home. We recently surveyed our owners (see survey results here), and what stood out to us is how important communication is to an owner. Large managers have the ability to communicate in three ways:
Online Owner Portal:
Large managers have the ability to provide online data and reporting to their owners. Owners have the ability to log in and see an owner statement, paid bills and work orders. Access to this owner portal allows owners to get information from the large manager without having to go through the hassle of contacting them.
Large managers have support staff dedicated to owner communication. Should an owner need something from the large manager, they should have the ability to pick up the phone and either get someone on the phone or receive a call back very quickly. At gkhouses.com we have that person who spends all day tracking answers down for owners and fielding questions.
Large managers likely use software in their office where support emails can be tracked, sent to the right department and answered on time. This way an owner is not wondering who he should send the email to in order to get an answer…he/she simply emails the support email and the correct person answers the question. At our office we use Fusedesk as our support ticketing platform. It allows us to even see if anyone in the office has a support email they haven’t addressed. This allows us to make sure that balls don’t get dropped!
We understand that we’re a bit biased, but large managers provide very unique benefits over smaller management counterparts.
When it comes to leasing, no one will get you more prospective tenants to your house than a large property manager.
When it comes to management, a large outfit is well equipped to deal with unique situations that arise in the tenant world.
When it comes to maintenance, a large manager will work with quality people who are properly licensed and insured to work on your house.
And when it comes to communication, having dedicated staff to get answers and relay important information is a must.
Our advice to you is to do your homework on the front end and decide what’s important to you as an owner before you choose your property manager. Like we mentioned at the beginning of this article, there are benefits to smaller managers (we’ve been both)…but not enough tip the scales.