Property Management 3 Part Game - Part 2
I asked a trusted, experienced colleague what’s the most important component of Property Management and her response, without pause, was People.
“Without people, the property cannot run sufficiently or reach its full potential financially.”
I couldn’t agree with her more! The people of your property are your lessee, your future lessee, and your stakeholders. Together, they make your property the success or failure it will be. You must do your level best to keep the wheels turning smoothly, and create the perfect balance. We’ll start with the first group of people that determine success; lessee.
The worse thing that a property owner can do is ignore the feedback of current lessees. You won’t always be able to rely on suggestions, reviews or even surveys to get the pulse of your lessee. Plus, you don’t want them to reach the point of extreme frustration that usually leads people to review a product or service. Show appreciation for your renters who make your job easy! If you have the cash flow, I’d recommend rent credits which promote longevity and renewal. A simpler, and cheaper, alternative could be a simple “thank you” or “anniversary” card to let them know that you understand and value the fact that they could choose to be anywhere else. Future lessees are where the “strong start” comes in.
When marketing your property, the quality of leads you get is essential to building a strong reputation and client list. Make sure you’re using the right marketing approaches that fit your property's brand and the community culture. If you’re leasing a commercial property, the same rules apply! Is the potential business a good fit for the community? Will it be received well and have the necessary foot traffic or marketing to drive business? This may seem strange, after all, if it’s a commercial property the success of the lessee’s business would seem like their problem. Don’t be fooled! It’s very difficult to collect rent on a property where the business isn’t doing well.
Who are the stakeholders in your investment property? You are! That’s the obvious answer, but not the entire answer. Do you have a mortgage on this property? If so, your lender is a stakeholder. Investors, tenants, property management team, vendors, the surrounding community, are all important stakeholders. Prioritizing the needs of your stakeholder can be difficult. Often different stakeholders have different goals and expectations. Who you consider to be your top stakeholder is going to depend a lot on the type of investment you have, and how it operates.
If someone were to ask me, I would tell them my top priority stakeholder is my employees. Does that seem strange? Would the correct and logical answer not be tenants? After all, if you don’t have tenants than you don’t have income and you’ve violated a huge law of business: ROI.
What if I told you that the biggest driver of ROI is your employees’ engagement? Face it, we’re in a service economy. You could throw a rock in a crowded room and hit at least 20 people who provide a service as their main occupation. That’s true for you as well! You might want to sit back, kick your feet up and let the internet do all the hard work, but that’s not realistic. You have to provide an experience, and your employees are a direct reflection of the experience you provide. If your employees are happy, your clients will be happy. That’s not business theory, that's proven fact!
Juggling the people involved in investment properties is no easy task, but if you can find the right balance, you’ll have low employee retention, low vacancy, and an every-climbing ROI.