8 min read
The Ultimate Guide to Rockstar Property Management
David Schwartz Dec 1, 2016 9:00:00 AM
Good property managers keep everyone happy: tenants, owners, even contractors. In other words, they maintain a healthy status quo. But what separates good from truly great? Property management rockstars are the ones who are able to create enduring momentum.
They build higher demand, lower vacancy and turnover and happier tenants from one year to the next. They have a vision for what their building can be, and in the process, increase its value, not just as real estate, but as a community.
So how do they do it?
How Vision makes Good Property Managers Great
Managing a property, fundamentally, is about customer service-- that everyone involved feels like they're being listened to and treated fairly. Excellent customer service is essential. It's also the limit of most property managers' influence.
With the right management chops, lots of people can successfully manage a property-- which is to say, keep things running more or less smoothly most of the time. Those who stand head and shoulders above the rest, however, do so because they approach the position as a "property CEO."
Buildings and apartment complexes work like companies. And, unlike managers in those companies, the company CEOs own the vision. They do much more than enact plans and keep things from falling apart. They make new plans, set new goals and rally the troops toward a vision of what the company (or property) can be in a year or two and beyond.
On Becoming the de facto Leader
I totally get it. Even if you want to do more for your building, sometimes many of the decisions aren't up to you. You've inherited things you can't do much about without enough budget to change things if you could. Your hands are tied, right? Yes, if that's how you want to play it. But rockstars don't play like that.
More often than not, property owners, just like a company's board members, are not accustomed to asking for help from "the rank and file." So they don't ask (or expect, or authorize) you to do things differently. That doesn't mean they aren't open to it... even if they don't know it yet.
According to Harvard Business Review, "managing up" is a broad set of skills that can help you influence (and in many ways) lead an organization without being called "the boss." It starts by taking a proactive approach to the needs of those above you in the management hierarchy and working to find solutions to their challenges. As Priscilla Claman says,
Take an entrepreneurial approach to your job and the tasks you’re asked to complete. Pitching solutions that solve your organization’s problems is standard practice for managing up. So offer ideas for new initiatives or how to do things better and faster. Some of these suggestions will require approval. Moving ideas up the chain of command creates opportunities to talk to your manager and his manager.
Not all of your ideas will be listened to. In fact, not all of your ideas will be right. That's OK. Rockstars aren't flawless, but they are influential. Realize that the stresses of your management or building owners are very different than yours. To break free of a status quo mindset, you have to adopt their perspective.
What would you do if you were the property owner?
If you were a potential buyer, what would affect your decision about this property?
What keeps your property owner up at night?
The more of their stress you work on relieving, the more credibility and authority you'll gain. The key is to start small and recognize that your own influence will take time to build, as your helpful ideas start to make an impression. You won't solve all their problems, but you'll show them you have their back, and they can depend on you.
Strategy: Acting Like a "Level 5 Leader"
Jim Collins, author of "Good to Great: Why Some Companies Make the Leap and Others Don't," identifies one key attribute that all CEOs of great companies have in common, which he calls "Level 5 Leadership." The amazing thing about this special type of leader is, you probably have more in common with them than you realize.
In a nutshell, Level 5 Leaders are not usually the outspoken, charismatic individuals you might read about in Forbes or Fortune Magazines. The highest performing companies almost always have fairly low-key, little-known leaders, and that's by design. These leaders are too busy setting their organizations up for long-term success to make a name for themselves. It's their vision that makes the difference.
Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It's not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious-- but their ambition is first and foremost for the institution, not themselves.
As a person who works in a service industry, maybe you already possess this kind of attitude about your work. If you do, you're well on your way. But there's a particular point in Collins' advice that makes all the difference.
Look Out the Window for Credit, Look in the Mirror for Responsibility
To truly advance into the rockstar stage of your career, the proven path requires a certain kind of humility that serves to make you more capable, more self-aware, and better able to lead others, especially in a "people business" like yours. It's to adopt an attitude that no matter what happens, credit should flow to those around you, while responsibility rests solely on your shoulders.
Yes, sometimes, you have a great idea no one else had. That's not the point. Your great idea is nothing without a team to enact it. Appreciate them for the value they provide you. Conversely, people screw up and it's not your fault, sure. So what? If you're casting blame, you're not solving anything. Could you have anticipated the problem? Could you have solved it another way?
Giving away credit builds a strong team culture while taking responsibility builds your competence and earns respect from others. Do those two things at the same time, and you'll be unstoppable.
Tactics: Putting Your Rockstar Persona into Action
Now that you've got the right attitude about your role as a rockstar property manager, let's delve into the details of how to apply it in your daily dealings. As you know, great property management is more about the people than it is the property.
Build Long-Term Relationships
Familiar tenants are friendly tenants, so are employees and vendors. Living arrangements are very personal and so feeling like they really know the people who keep the property safe, comfortable and convenient can dramatically alter a building's culture. The same is true of the vendors you rely on to do a great job for your tenants. It doesn't matter whether your property is impeccable. The moment something goes wrong-- from billing to lease renewals to routine maintenance-- your relationships will determine how well you weather the storm.
Who are you more likely to do a favor for? A good friend, or a complete stranger? Who are you more likely to forgive when something goes wrong? Strong relationships buy you a lot of leeway to try to get things right, even when they go wrong. Be as responsive and communicative as possible, good news or bad. A lack of communication always creates question marks that don't feel good in the tenant's mind.
Beyond communicating effectively with the people you already have, be careful to choose the right people in the first place. Effective hiring is where great relationships begin.
Do More Than Listen: Ask
A lot of advice on effective property management discusses the importance of people skills, especially listening. Hearing everyone's needs is a given. You aren't reading this article because you want to talk with tenants less or avoid their concerns. The rockstar manager doesn't wait. She catches people when they're happy (and rational) to find minor issues or potential future problems, rather than always tending to the squeakiest wheel (or leakiest faucet, as the case may be).
Put your tenants in a rotation and make a point of reaching out at least once a quarter to see how things are going and if there's anything you can do for them. Of course, your staff can accomplish this using a CRM, but make a point of keeping yourself in the loop as much as possible. It goes a long way to demonstrating that you have a personal interest in your tenants' well-being. It also shows your staff that being proactive is "how we do things around here."
Create a Plan for the Property
This is what truly separates adequate from amazing. Even with an owner who has a "buy and hold" mentality without much interest in adding value to the property, a rockstar manager helps to clearly articulate what their objectives are from one year to the next, and how they are going to achieve them.
If you're working to reduce costs and conserve water, that may involve building systems for standard routines, like service calls or improved financial management (more on that below). If you're focused on the property's competitiveness, you'll focus more on identifying the factors in the market that are influencing renters' decisions, what competitors are doing in response and what types of investments will yield the best returns from lease rates as well as a sale.
Regardless of the goals for your property, take the time each year to clearly articulate them and lay out how you'll address them, quarter by quarter, even month by month, just like a CEO would do.
With a plan, it's easier to look at expenses as investments and prioritize according to whether or not a given line item will reduce costs, increase revenues, or increase a sale price over time.
Is it cheaper to install water-saving technology than to just ensure there are no leaks?
To repave the sidewalk vs seal it?
Conspicuous capital improvements can help tenants feel they're getting value right away. (Here are some of the best.) While many less visible routine fixes and upgrades are simply keeping the property "current."
Think about it as maximizing tenant value. Even though a cosmetic fix may not seem like a priority, if it matters to your tenants, it should matter to you. How they feel about living in the property has just as much an effect on your operational costs as a purely mechanical but unseen problem. Happy tenants are less picky and more inclined to understand and appreciate your improvement plans.
Almost every job today must embrace technology in one form or another. As the folks at Honest Buildings have discovered, one trait common to the highest performing property managers is their ability to utilize tools to be more efficient, and that means software. For each property management challenge, there is a software solution.
But software is only a tool. What's the effect you're trying to achieve? If it's more efficient records management, you might require a fairly complex overhaul of policy, filing, and software. If it's more timely responses, your "system" might require a staffing change. If it's fewer service calls, perhaps your tenants need a handbook or small wall placard above the washing machine to know how to manage certain basic issues that don't require a message into maintenance.
Documented systems also take operational knowledge out of the minds of your staff and make it accessible to anyone so that new hires, new tenants, and new owners all get up to speed quickly, for a lot less money. Just like a capital improvement, management systems are assets, too.
Say No Without Saying "No"
Among many brilliant relationship management strategies in this article by Buildings.com, is a particularly powerful one that can be used to help bridge the gap between what may seem like an unreasonable request and a reasonable solution.
Rather than responding, "no" to a tenant request you know you can't fulfill, start by asking for more detail about what the client needs: what's causing his concern, how is it a problem for him? Once you have an in-depth understanding of his issue, then you can do two things. First, lay out the cost of his request so he understands why it's not possible right now. Second, proceed to develop alternative solutions-- perhaps including cheaper alternatives he might even be willing to help pay for.
Understanding your financial and operational constraints helps tenants consider alternatives and even offer more solutions, so long as you listen, too.
Create a Brand for Your Property
This may be a strategic item that has "been handled" already. The property has a great name, a logo, a tagline, even a target tenant persona and so on. You might even have a templated marketing routine to follow. A rockstar property manager uses all that as a starting point.
A company's brand is more than it's logo-- it's how the company is perceived in the customer's experience. That's true of your property, too. Take care to fashion that experience carefully and conscientiously. Every interaction with you, your staff and your property is an opportunity to build a stronger brand.
Keep Your Calendar in Order
This tip is deceptively powerful. It's what allows you to plan and schedule the time it takes to be a proactive CEO. Of course, you're scheduling maintenance, a marketing calendar, events and tenant lifecycle activities, like lease renewals. What you may not be scheduling is time to educate yourself about changing rules and regulations, or auditing your finances, operations, and legal documents.
You can't be a proactive CEO if you spend most of your time as a reactive manager. Tasks that get scheduled get your attention. So stay out in front of issues by planning as much as four to six hours per week on forward-looking activities, including classes, and you're likely to have far fewer surprises down the road.
Are You Ready to be a Rockstar Property Manager?
Putting all this advice into action is easier said than done; it won't happen all at once. The tipping point will come when you start to schedule your proactive activities, plan the long term changes you want to see, and begin to effect changes further into the future. Because rockstar property managers do more than take care of the day-to-day. They lead from the front like a visionary CEO.