As your portfolio grows, it’s necessary for to take a closer look at your property management team and determine whether it’s still a good fit for your needs
Property management is a core function for real estate investors who own portfolios of single-family rentals. No wonder the majority of real estate investors have a property management team. The real question is whether they have the right team.
That is the question you need to be asking yourself as you growth your SFR portfolio. Of course, that question leads to even more questions and you may not have the right answers. Here are five ways to answer your questions and get more out of your property management team.
- Define your role on the team
This may sound simple, but this decision will impact your entire property management team strategy. Are you the coach or the quarterback on the team? In other words, are you actually getting on the field to do the work, or are you making sure the work gets done from the sidelines? If you want to set up a long-term game plan and have someone else 0implement it, then you are a coach. If you want to be working daily with your property management team, then you are going to have to take more of a quarterback role. Your personal time investment is a huge decision when it comes to with property management. You need to decide where you need to invest time, and where you need to invest money by paying others. This isn’t a one-time decision, by the way. You may need to spend less time on day-to-day property management as your portfolio grows, or other things going on in your life may require you to staff up your team. Making this decision intentionally is vital to the ultimate success of your property management function.
- Fill in your gaps first
A great running back isn’t going to do much with a weak offensive line, and your property profits will only be as strong as your weakest parts of your property management team. The easiest way to accomplish this is to list your own strengths and weaknesses and prioritize from there. You may really enjoy the finance side of things, so you could want to do that yourself to start, but hire people who handle things such as leasing up properties or managing maintenance.
- Establish company culture
You may already have a property management team filled with leasing agents, grounds crews, and bookkeepers, both on staff and via contractors. When you’re fully staffed, it’s time to focus on your company culture. This is an important step many businesses overlook. However, the difference between the best football teams and good teams (and the bad teams) is culture. That is everything from setting clear goals and expectations to having dress codes for on-site staff to providing strong training programs. Setting up the right culture helps you keep your team motivated and satisfied, and also helps you better serve your tenants—which leads to lower vacancy rates and even higher rents.
- Finding the right software
As in football, if you don’t have a good set of plays, you aren’t going to do well. In property management, you need software tools now more than ever. We aren’t going to recommend one product over another in this article, but look for something that meets your needs and fits your budget. Real estate meetups and online forums like Bigger Pockets are good places to ask other investors what software they use to collect rents, screen tenants, and more. By the way, a lot of real estate investors worry about spending too much on software and will use outdated equipment that takes more time to operate. Don’t fall into that trap. We’ve already seen that many investors choose to spend money to save time personally—do the same for your team. If you can find software that frees up your team’s time to focus on more profitable work, then it’s an investment well worth making.
- Bring in your specialists
As you grow, you will need to hire people full-time for many of your tasks. However, it is wise to always have a core group of contractors that you can turn to for help on projects that your regular team can’t get done. For example, it probably doesn’t make sense for you to employ a full-time HVAC technician—but you definitely need a dependable contractor you can call.
The Bottom Line
The answers to these questions are personal to you and your real estate investment strategy. That’s why we’re not telling you what to do. But we hope that knowing how to make the right decisions will help you develop the kind of property management team that helps you grow your portfolio and accomplish your real estate investment goals.
Rob Parsley is the western division regional sales manager for Lima One Capital.