Based on the team’s answers to the questions from Step 2, we now dig into the nitty-gritty of asset and property management.
If you hire a great property manager (PM), this section will be easy because they already have the knowledge and robust processes for it all.
If you instead have a good PM, an ok one, or are self-managing then you’ll need to check and/or develop the processes and measurement systems to keep the property (and your business) on track.
This boils down to one question:
COMMUNICATE
The more time you spend on how, where and what will be communicated by who up front the smoother the whole business plan will run.
What communication platform works best for your team?
For us, we use a combination of Asana, regular meetings, email and (for time sensitive issues only) text messages. This way we drive as much as possible communication in written form. This helps avoid confusion and can be referred back to over and over.
The Asana platform also automates a number of great things like:
- Recurring maintenance task reminders
- Recurring CAPEX reminders (inspections needed for roof, HVACs, water heaters, sewer pipes, etc)
- Recurring asset/property management task reminders (taxes, insurance, filings, 1099s, K-1s, etc)
- Alignment between vacancies, turn work and up coming move-ins
- Documents/photos embedded right in the tasks
- Email reminders to the people for that task when the due date is coming up
- You can even get fancy and use workflows, templates, goal trackers etc all in one place.
Other teams use Notion, Google Tasks, spreadsheets or really anything that works consistently where communication can be as centralized and standardized as possible. The point here is to DECIDE on something and get your team on board with it.
Don’t take this part for granted. It makes keeping everyone rowing in the same direction much easier.
PERFORM
Once you have a platform, now you (preferably with your PM) has to fill out all the process and decisions that can be made ahead of time.
This way, the team can act more independently (no one wants to be micromanaged). Even better, if someone has a question, they can write it down in the platform. Then everyone sees it, you can update the standard process, and now it doesn’t come up again!
Here are a few ideas for standard processes to develop up front – even if you change them later after operating for a while:
- How “Market Rent” is calculated
- How often to calculate key metrics (also called key process indicators or KPIs), and what those are
- What items are covered by Property Maintenance (very specifically) and what items are considered tenant responsibility
- How will emergency situations be handled, and what phone numbers are to be called?
- How to do a property inspection (checklist of items, what to take photos of, where to store the report, how to report issues so they get to maintenance, etc)
- Script/QA resource for people speaking with tenants/potential tenants so all the answers are the same (or refer to the right person)
- Which items are categorized CAPEX and which OPEX (yes, this is done wrong all the time by PMs who just don’t pay attention to it)
Hopefully, you’re beginning to see why setting up the right communication platform and process at the beginning is so important.
Having a plan and the milestones to get there are necessary first steps, but the work to do it comes down to communication and standard processes. The better you do those, the closer you come to your plan with less stress from the whole team.
MEASURE
How well is the team sticking to the processes?
How will you know this?
Measuring is very helpful, IF the right things are measured.
Successful business plans and operations plans include key metrics, otherwise known as Key Process Indicators or KPIs. These give insight into how well the team is working together and progressing towards the business plan goals.
If you can integrate these measurements into your processes, that’s ideal.
For example, lease-up time depends heavily on marketing and traffic. Measuring how many people are seeing the listing, doing shows and ultimately converting gives you an idea of how effective the lease-up process and team are. This can be done automatically with digital tools (Rently and Apartments.com both offer data), but also needs to be recorded by on-site PMs (how many people just dropped in, how many phone calls were taken and resulted in an application, etc). Coming up with a few metrics that encompass all that data is really helpful. In this example, we use conversion rate to help us see how many people have to be interested for a unit to ultimately rent.
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REVIEW
Finally, have a team review.
Go over the strategy, processes and communication initially and often. It doesn’t have to be every aspect, every time. However a stale process almost certainly isn’t helping the team perform at its best.
And?
You joined with this team because they are smart and capable. Let them influence the processes and listen to them. Your business will be better for it and your investors will thank you.
Now you know the process for success –
Let’s get to work building our own luck!
Enjoy being part of the team but don’t have the time?
No problem!
Let’s talk about how you can make an impact – both in your life and the lives of others.