In the race to differentiate your PMC, don’t try to be the cheapest. Focus on offering the most value.
In this recording from TWLX 22, Andrew talks with Eric Wetherington, Deb Newell, and Phil Vera as they share their first-hand experience and expert advice for creating winning experiences and exponential growth.
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Hosted by Andrew Smallwood and Laura Mac
Featuring Eric Wetherington, Deb Newell, Phil Vera
Produced by Andrew Smallwood, Laura Mac, and Carol Housel
Edited by Isaac Balachandran
Episode Transcript:
Eric Wetherington
Don't get caught up. Too many property managers get caught up in trying to be the cheapest in town. And, you know, they want to have the cheapest management fee and they want to have the cheapest, you know, leasing commission or whatever you know, and that's what they're you know, they're just trying to, you know, well, you know, be the cheapest offer, the greatest value. You know, and to approach your clients in a way that says, I will make you more money. If you work with my property management company, you will end up with more money in your pocket at the end of the year. And here is why.
Andrew Smallwood
How are companies creating revenue? What are ancillary revenue sources? What are ancillary businesses? What are ways of building exciting revenue? We can and probably certainly will talk about resident benefits packages at some point. There's going to be more than that here, which is pretty cool, too. So I'd love to is a quick way of getting oriented for those who don't know many of our esteemed panelists from other conferences or events, they've been tapped to speak at. We've got three just total pros here. I love all three of these people and love talking to them and hearing what they're thinking about. And they've helped a lot of other property managers in this industry very generously, you know, improve their businesses in a number of different ways. There are probably a lot of topics we could talk about with this group, but excited about this one in particular. So I'd love if we could just go around and you could just share a little bit about you, your company, anything you'd feel would be relevant for folks who are less familiar to get to know you a little bit better. Eric, we're going to start with you and then we'll go to Deb and Phil.
Eric Wetherington
Great. Great to be with everybody today. Thanks to Andrew for the invite and I love what you all are doing to help educate the property managers. I'm Eric Weather Intern. I'm the vice president of Strategic Initiatives at Pure Property Management. Of course, we've got offices all over the country manage about 20,000 doors all over the country, and excited to be here today to talk about, you know, new revenue-generating opportunities. These are things that we're seeing down the pike that property managers can do to help grow their revenue streams.
Andrew Smallwood
Awesome. Great. We'll come to your next step.
Deb Newell
Hi. Thank you. So excited to be here. I have such an esteemed panel to be on, so I'm really excited. But my name is Deb Newell. I am with Real Time Consulting Services. I help property management companies improve their business, and work on ways to improve their operations, growth strategies, and revenue opportunities. So this is right up my alley. I love talking about the opportunity to make more money both on the top line and your bottom line and so awesome.
Andrew Smallwood
Deb, thanks for being here. Always a pleasure. Phil, coming to you next year.
Phil Vera
Thanks, Andrew, certainly for having me on. My goal is not to bring the panel down, but I am Philip Olvera. Andrea is giving me the generous title of CEO for Paragon Property Management, but I call myself employee number one. Most of you, anybody that knows me, knows me from my previous role as a CEO for all the realty, we manage almost 1500 doors in four cities, and four months ago in April, I decided to spin off and go out on my own. So it's been very exciting. I've leaned on many of you to help me, so I'm excited to be able to give back and learn our share. Some of the experiences that I've had in this new venture are as well. So thanks for having me on.
Andrew Smallwood
Hey, awesome. And hey, just a quick thing. So Phil mentioned four months from 0 to 400 properties, by the way, in two different markets. That's pretty exceptional, especially when you think about the summer months. Right, that we're in everything going on. So employee number one doing a great job over there. Let's just give a quick snap round of applause.
Deb Newell
I think Eric and I will just turn all of this over to Phil. We're just going to listen.
Andrew Smallwood
Oh, awesome. Well, hey, we're going to dove right in because we've got some interesting stuff to talk about, some interesting questions, ask interested to hear what you guys have to share, and Phil, we'll start with you and then we'll come to Deb and we'll end with Eric on this one. What are you noticing in how PMS is thinking about its revenue and business models? You know, where are they seeing opportunity? Where are they seeing competition? Like, what are you noticing is happening as far as how you think about potential revenue sources and revenue-generating experiences?
Phil Vera
I think I think it's been somewhat of a traditional model, traditional approach, kind of the rent collection, the maintenance, that sort of thing. And I think where we see a lot of the future is the value add, right? And so a lot of the ancillary services, what value can we provide that's above and beyond? So not just I think with the growth of investment, real estate, property management companies, additional competition, just kind of being the standard basic property management company isn't going to get you this far. And so what can you do that kind of goes above and beyond, and that's where the value proposition is. And so you can obviously you can make more money by increasing profits, adding additional services or decreasing costs. So we're seeing a lot of consolidation, a lot of back-end technology, a lot of virtual assistants. I think that part of it is efficiency in the operations. How do we get efficient there? And then the other piece is what value we provide. And so there's, you know, anything from resident benefits packages to pest control, investor benefits packages, preventative maintenance, landscaping services, those are a lot of things of ease. And I think a lot of that is stemming from the culture. Our average resident, the average age of our residents in our investor base. I think we're used to the traditional investor of being like the 55-plus-year-old kind of retiree, that sort of thing, or somebody headed into retirement. We're seeing a lot of younger 25 to 35-year-old investors. We're seeing a lot of residents of that same age. And so because of that, we're seeing a huge culture shift in kind of the housing space. And how do we adapt to that, to provide ease? I think a lot of people are looking for these. We talked about kind of the Uber or GrubHub type mentality where it's just like we want it now. How can you do that in the real estate space as well? So I would say I guess the short answer is value proposition and value add. How are you? How are you different from your competitors or what are you doing above and beyond your competitors?
Andrew Smallwood
I mean, that's great. Deb, I'm going to pass it to your next thoughts on just having a quick macro look and how people might be thinking or what people might be paying attention to as far as revenue models, programs, and what's happening to the business model of property management.
Deb Newell
I'm just going to say ditto. He did touch on a line. He touched on it, some really great opportunities, and ideas of what to do. One thing I wanted to kind of piggyback on what he said is everybody has kind of their mission, how they do their business. And Mike had said earlier, that there's no wrong way or right way necessarily to run a property management company because every one of us does it differently, but we each have our own. The issue might be luxury. It might be C-class or a depressed property. So each of those brings its own value to our clients. And what we should do is look at what the value add for that could be and it might be an RFP or it might be something completely different that is catered towards that niche. And so once we kind of figured that out, then I think we can actually look at the business a little bit differently. I think as well if we look at our business as more of an opportunity to treat it as this as an actual business and not this is just kind of a part-time pastime thing for us. We can actually do account reviews with our clients more regularly, and have it be more of an experience for our clients and for the residents. And what would that look like in the end?
Andrew Smallwood
Thanks, Steph and Eric. We'll let you bring us home on this one. Anything else you'd like to add as far as what you're seeing out there for revenue programs, business models, interesting things to be paying attention to, attention to where it's getting competitive, where differentiation might be?
Eric Wetherington
Sure. I think there's you know, there's been a push in the industry over the last couple of years, and I guess I would say mind's a word of caution, Andrew. There's been a push in the industry to do, you know, pet guarantees and offers various kinds of eviction protection programs and all of those things. And, you know, we need to be careful as property managers to make sure that, you know, we hear an idea we need to, you know, go home, check out our state laws, check all the appropriate things and places that we need to get to get, you know, make sure that things are going to get blasted, get done. Right. We're seeing now or I mean, I'm starting to see now in some states where states Department of Insurance and other regulatory bodies are starting to come out and say, no, you shouldn't. You can't be doing this, you know, and you know, you can't be selling insurance if you're not a licensed insurance agent. And you shouldn't be you know, you call it a guarantee, but we think it's really insurance. And so you shouldn't do that or whatever those things are. So, you know, there are a lot of great ideas out there. You know, revenue is all about providing a service and finding out what people need. They're looking for that experience. As Philip said, the younger and younger generations that we're dealing with in property management, want convenience and they want experiences and they just want things simple. And so they're willing to pay, you know, the property manager, they're willing to pay to get to have things taken care of for them. We just need to make sure that when we add these things into our businesses that we're we're cautious to not run amok with various and sundry regulatory bodies that might have a different view of what we're trying to accomplish.
Andrew Smallwood
Yeah, that's an important caution, I think, Eric, for a lot of people to make sure they're being compliant and especially in the world of financial products like is it insurance or not that's it's a good and people may have differing opinions on that. Right. But make sure you're getting, you know, getting eyes wide open about any, any business you might be taking.
Eric Wetherington
Yeah, and people always have different opinions on that. Andrew But there's one opinion that matters and that's the state insurance commissioner. And you know, the last thing that you want to do even as a, as the property manager is, is finding yourself on the wrong end, of dealing with the State Insurance Commission. So, yep. Don't want to go there.
Andrew Smallwood
An important word of caution. Thanks for the PSA. All right. Next topic, your next question. So, you know, an elephant in the room is resident benefit packages. We've seen the average property. We're excited to see this in our benchmark. You know that that profit coach in Nevada working on the second iteration of that be released with, you know, more companies more data submitting and also changes, you know, over the last couple of years of, you know, how people are monetizing and adding revenue, what is the average revenue per unit of a company, a management company to that? And you know, Deb, I'd like to start with you on this. One of, you know, how are you thinking about and as you talk to consulting clients, you know, how are you thinking about? We used to see our VPAs be like $10 a month to 15, $20 a month. People were very afraid even to charge ten or $20 a month depending on what was in it. And maybe there was some stuff out there that was really more of, you know, monetizing something that was an amenity previously versus bringing new service and new value. But we've seen resident benefit packages evolve even over a short period of time where it's very typical to see stuff, you know, double or more, those original price points and even some people in that 50 to $100 range a month, you know, is there anything you would share as you think about what's the potential role for this? What should we keep in mind as we do this to do it responsibly? And how do you teach clients to think about how they might take advantage of whether it's a resident or investor benefits package? You know, what they're including pricing and how that interacts with their management. I know that's a lot to set up the question, but yes.
Deb Newell
Okay. So I think there are a couple of things. One, you have to be able to, just like you do with your management fees, you have to be able to speak comfortably to what it is you're offering. So if you're not the person that's talking to the clients or initiating what's going on, your team has to feel like they have to adopt it. For one, they have to understand it. And then they are the ones who are going to be having these hard conversations because they are hard conversations. Sometimes tenants will raise concern over why they have to pay an additional amount and they have to be able to say, this is the benefit you're getting and this is what we're providing on a monthly basis, maybe a yearly basis, I don't know. That's going to be first and foremost because if you can't get your team involved and adopt what you're doing, then it's kind of a moot point. Already people think that we charge a lot for management fees and that we're, you know, we're making and raking in all this money. So I think we want to be careful because you can really have a lot of add-ons. And at some point, you could have more add-ons than you can have everything else. So what is that? What is that benchmark going to be? And I think we have to figure out what our breakeven is, what we're looking at making, and what our profitability is, what we want it to be. And then how can we execute that in a way that is digestible for everyone involved, both for our owners and for our residents, and for our team? Because again, the team is the one who's having to manage all of this and really execute it. And if they can't do it, then then we have to kind of go back to the drawing board and figure out what it is. And it's really a conversation to have with the team first on why we're doing it, what it's going to do, how we're going to benefit, and then maybe set KPIs with the team around that as well. So incentivize them to help push this initiative through.
Andrew Smallwood
I really like you covering some great tips there on just like change management in general and, you know, getting the team on board because that's so important with new things like this and making them successful that implementation. Really appreciate you sharing that. Eric, when it comes to you next, you know, what are your thoughts on you provided some caution to start like what else do you think people should be thinking about or, you know, requirements? And when I think about what programs am I adding, what revenue sources in my adding, you know, what requirements do I have? What considerations or tensions might I have in place as I think through that and do that responsibly?
Eric Wetherington
Really understanding who your audience is, you know, who is who are your owners, what are their needs? What are they wanting you as a property manager to provide? But even in even beyond that, what is it that they're not thinking about that is a pain point to them? They may not know how to articulate or they may not think of you as the property manager as being able to provide X, but it's a pain point for them in owning that investment property and so, you know, uncovering that. And then on the residents, it's the same thing. You know, understand again, if you have a, you know, if your portfolio that you're managing is predominantly Class C properties, you know, and your average rent is six or $700 a month, it's going to be really difficult for you to tell a tenant that they're going to have to pay you $50 a month for a resident benefit package, which I'm just throwing out a number. But you know, and so you've got to really understand your audience, understand what your client base is, what their make-up is, and then figure out what are the things that you know that they're already paying for or the services that they need or the things that they want. And then craft solutions around those issues.
Deb Newell
Can I add something to that? Andrew I think, Eric I think what Eric is saying is spot on. It comes back to the expectations, of what our clients are. So, they have preconceived expectations of what they want from us. We need to find out what those are right away and we may not be a good fit for them and that's going to be okay. But we want to make sure that we're meeting their expectations as well as they're meeting our expectations. We have to set the boundaries for them in addition to setting the boundaries for our residents because this is about the experience and we're going to fail immediately if we haven't met, whatever expectations they have of us that we didn't ask about. So that's on us if we don't find that information out first.
Eric Wetherington
And Andrea, as I was researching resident benefit packages recently, I came across a company in Georgia, in Atlanta that is low-income housing. And that's what they specialize in. This is a property management company and included in their resident benefit package is telemedicine service.
Andrew Smallwood
Yeah.
Eric Wetherington
And I mean, you know, who would have thought that the property manager would be thinking about that? But when you look at their average, you know, a resident that makes $25,000 a year, probably doesn't have health insurance or limited access to health insurance. And so a telemedicine service included in that resident benefit package was a very positive thing and very well-received by their residents.
Andrew Smallwood
Yeah, great point about like really understanding who you're for and there's going to be different needs across different asset types, different, you know, ultimately you're marketing and attracting a certain type of investor or property or residents. How you're thinking about doing that and making sure it's aligning with what your strategic vision is for, what's the winning experience that we're going to create? Like, I think there's some there was a lot of agreement earlier today, but we also saw some like competing visions, I would say, for like what kind of experience people think is a winning experience out there. I think that's great to see people having different opinions out there, trying different things, attracting different groups of people, and seeing what works. So it's cool to see. Phil, I want to pass it to you at this point, you know, the same question, like what should we be thinking about as we approach these revenue-generating opportunities? What potential or opportunity, you know, do you see with this?
Phil Vera
You know, sort of just you know, I think a right on it's it's understanding the setting the expectations understand the need for the client and the residents but also understanding your niche and what better than we've got an office in Augusta, Georgia, in an office in Nashville, Tennessee. I think your price in Nashville, anyone will pay it? I guess so. We've got to be a little more strategic. But on top of that, I think really any time I see a new benefit just gets added into I think we see like let's test the waters and everyone's just property management, in general, it's a little more our has traditionally been more reactive and proactive so it's like, well, let's throw it out there at ten or $15 and see what happens. So we're going to have longer days on markets because the residents don't want it or understand it or the client is going to get upset because they're not getting ten or $15 more in rent. And so I think what we're finding is that it's more PMs on board. We're understanding, we're setting expectations and just kind of understanding the value that's being provided. We're rich in equilibrium, I guess. And so understanding what price point works for the added benefits in each market. And the only other thing I'll add is just in that competition between investors and like, hey, that could be whatever, $50 more in rent or $35 more in rent, but I'm not getting how we kind of discuss it with the investor is your rent is based on the market, the location, the finishes of the property and the resident benefits package is the value of the experience. What are we providing to the resident? Right. And so those are two totally different things, but it's not affecting your rent, your rent. You're going to get what you're going to get based on the market value. But we're also going to see what we can get to be able to provide this additional experience to the resident. So I know that's always something that comes up with like how do I sell this to my investor or how do I sell this to the resident? And how why are we competing? But you're not competing. You're just providing rent, additional service.
Andrew Smallwood
Mm Yeah. I love that because I remember a couple of years ago we were talking so much, some of these initial fee amounts like when you're talking about $5 or $10, something like that, like there was a common approach to build it into the rent, right? And so you just advertise the rent and a slightly higher price and you offer these amenities and that's been multifamily. A lot of multifamilies is approach, right, for some of what they've done and it's been, you know, maybe effective. You know some will debate that it's there but you know, it's what they're doing in a single family. It's like it seems like are smaller residential properties versus multiple hundred units in one place. You don't have all these shared amenities, everything else. It's really a distinct value proposition. And that's what we're seeing as the best practice of the rent is the rent amount. I'm looking for this amount in this school zone, right? This bed bath or whatever it might be. And I've got my box there potentially. I'm not keeping that separate from where an investor might feel, yeah, I'm not getting the rent amount I should be. Right, there's a rental rate for this. And then separately from that here's all these additive differentiated services and experiences that are a distinct value proposition in their own right. And I think a lot of people are proof that you can do that, you know, and be pretty successful with that. So love that, love that comment when I want to shift here from the resident side to the investor side and then want to hit some like practical tactical things here, takeaways, people we can get into, we might get some questions as we head this next section in the chat. Deb, I'm going to come to you first on the investor side. You know, as far as programs for investors, offerings for investors, you know, maximizing investor revenue, but thinking, okay, to get to the revenue, we also are going to maximize investor value. There are a lot of, you know, comments about asset management versus property mentioned earlier today. I'm curious, you know, how are you seeing and what do you see as the future for the offerings and ultimately monetization strategies that could be possible on the investor side?
Deb Newell
So I've talked about this several times. I feel like what we need to do is kind of go back to this old approach of where account reps and we have to do a review with our client. I mean, we have this back in the day when we all when a lot of us first started in the industry, we would hear from our software providers, sometimes monthly, at least quarterly when there were new add-ons that we could add onto our software some we even got it with like maybe our cell phone provider or something, but we've kind of gotten away from that. And so I want to see us go back into this customer experience, like providing more than somebody mentioned it earlier on the chat I read, I think it was actually Jim, he was asking about what are you providing more than just your income statement every month. And I wholeheartedly agree that we should provide a lot more than just that. And but again, going back to our investor, what is it they're expecting from us, and can we provide that? Can our software provide that? Is that something that we can do? So maybe giving them more of a packet, that's what multifamily does. Multifamily is really good about. They provide a whole packet. It talks about their marketing strategy, what they're doing for listing these properties, what are the delinquencies, what's what the maintenance has been like providing a bigger picture. Because investors are becoming a little bit savvier about what they're putting their money into. And so we should treat it like a financial advisor and give them more of a report. And then maybe every quarter kind of doing this account and review, looking back and saying, here's, here's how much you spent maintenance and here's what we need, here's what we're budgeting, which is something else that we've talked about earlier. And that's really important as well. Looking at this differently and what can we provide that level of service? And is that in our wheelhouse to do?
Andrew Smallwood
Awesome. Thanks for getting kicked off there. Phil, if I can come to you next, then we'll go to Eric after that.
Phil Vera
Yes. So just recap the question, Andrew, just kind of what the investor what we're seeing as a feature of the investor experience and property management.
Andrew Smallwood
That's right. Opportunities for value creation and monetization on the investor said yes.
Phil Vera
So I think the biggest thing that we see with investors is setting expectations, communication, and transparency, right? And if we can have that, we'll generally have a good experience. I think with investors, what we're saying is they don't really want to do anything, but they want to have all the information right. And so if we can supply that to them, then they can be passive investors. It's when we don't supply that to them or they don't know everything that we're doing for them, that the question arises, the phone rings, the emails come in, it's like, Hey, what's going on here? Etc. So, Jeff, for that proactive approach, how how do we turn that into revenue? I guess I think there's a lot of attention on the client because we've got to get the client, we got to have the properties to be able to make an income. There's a lot of attention on a resident, I think. I think it was like Helena mentioned earlier, we forget about the assets sometimes like this is really the thing that's the revenue generator here, right? When someone's invested in a property, there's a certain class or grade of property that it is. It's our job to find the right resident for the right properties and to be able to manage that entire relationship effectively. And so I think the asset is a huge revenue opportunity. This resident benefits package has allowed us to capitalize a little bit on a resident experience, I'm sure an investor and there are some groups that have investor benefits packages that are going to allow us to capitalize on the investor side, but also asset management and proper true property management where we're looking after the assets of the property, that's additional inspections, preventative services, servicing, gutter cleaning roof inspections, just a just an annual checklist went through to say that, hey, how can we be proactive? Your water heater is two years old. Your age back is X years old. You should be prepped. You need to start saving if you have it, your CapEx reserves, and sort of just that little of that level of proactivity, communication, transparency. But we've found the resident side opportunity. I think there's going to be a shift to the investor side opportunity added value. But let's not forget the property that's out there also. And how can we protect that? Because without that we can't lease and we can't supply rent income to the investor. Let's not forget about the property.
Andrew Smallwood
Hmm. We're going to circle back to dig in on some practical stuff here, Phil, that I'm sure the audiences want to. Maybe they feel teased a little bit. We've talked about some of the things in concept and getting into it more specifically, but I want to come to Eric first. Eric, anything on the investor side that you're seeing as, hey, this is going to a way to think about or be thoughtful of in creating value on the investor side, big opportunities there and potential monetization strategies.
Eric Wetherington
Yeah, I mean, two things. First of all, Deb and Phil have said that you know, we as property managers, we've got to start thinking more like asset managers. And, you know, we're here to you know, this client has made an investment in we should be guiding that client through the management of that investment, not just collecting rent. And that's unfortunately what property management and the third-party single-family space have been for so long. Of course, the multifamily space for, you know, decades has been focused on our ally return, on investment, you know, what's the ROI? And we've got to become much more focused on that in our space. And then you start and then you start looking at ideas like, well, hmm, okay. So my owner client has this property that they bought in my community and I'm managing it and we've got a great resident in, in place and my owner client says, Hey, you know what? Rather than waiting months to get my rent checks, what if I could take six months of rent as an advance and I would be willing to pay that, you know, off of that to get six months in advance, or what if I went 12 months in advance or, you know, and now you start to create different ideas or different things that a property manager could be involved in, either with third-party service providers to help with or do that, you know, funding those things themselves where they say, yeah, we'll guarantee that tenant will go ahead and write a check and send you, you know, 12 months of rent, less a fee and then we'll just manage the property and, you know, so there's just there are all kinds of different things around that that you can think about. Again, insurance products, you know, that you could legally offer. You think about, you know, all of the different all the different investments that need to be made in a property on an annual basis that Philip mentioned that, you know, we just don't we don't spend enough time, I think, as property managers really understanding and realizing, you know, in real estate, we say the rule of thumb is if you don't spend 1% of the value of the property per year in capital expenses, then you're going to spend it. You're going to spend all of that money at once when you go to sell the property. And, you know, just look at the just wait for that inspection report to come through and you'll you know, you'll get a big bill at the end of the day. And, you know, so we've got to be we've got to do a much, much more education coaching, advising, really, of our clients to help them understand when it's just as simple as buying up property and then sitting back and collecting the rent. They've really got to think about this as an investment, as as an asset. And they've got a plan for expenses, they've got a plan for repairs, they've got a plan for CapEx events. And then they should be looking at their ROI every year and comparing it just like they look at their stock portfolio every year and saying, you know, am I up and my down and you know, how am I doing? How is this asset helping me build wealth and reach the goals and dreams that I have as an investor?
Andrew Smallwood
Yeah, that's great. So here's what I want to do with most of the time we have left and we'd love to hear in the chat if anyone wants to help guide this specific, relevant direction, hey, that's a benefit of being here live. You get to have that input and we'll take questions or requests for more detail. I'll keep an eye out in the chat and try to help bring that here to the panel as we're up here. But Phil, I want to start with you. You know, you've mentioned a handful of things like you mentioned residents, you mentioned owner benefit package, you mentioned preventive maintenance programs, you know, a handful of things. Is there a couple of things specifically that you could just do here? Here's a quick kind of simple breakdown, right? Of and not asking anybody to discuss fees or specifics here writer or violate any code of ethics. But could you give a little more like maybe a couple of practical examples of here's something somebody could take as an idea and potentially runway there start to dig deeper into after this as a way to add revenue to their property management business you've had success with?
Phil Vera
So I think some folks will include it in their property management agreement as an annual inspection. And my question is, what are you inspecting? Are you inspecting the condition of the property? Or you can just inspect. Do you have a good resident? Should you renew that lease? What are you inspecting? Right. And so we can go through a full what we call use program called on a pro. We can look at your roof. Do you have limbs overhanging? You have a lot of debris. Is that causing faster deterioration of your roof, cleaning gutters, you name it? Right. Appliance ages, these water heaters, you wouldn't believe how many times I see someone put it in brand new LDP and it's like, let's swap out the water heater that's 15 years old and rusted. Now, what's the way to do that? So that's going to bust and just leak all over your brand name, obviously. But that's for another time. But yes. So I think that one of the easiest things is inspections write annual inspections. Is that included that is that a value add? And how do you make it a value add? What are you actually inspecting in that annual inspection? And how can you make it where it's more beneficial for the investor that they're paying an additional fee for that? You can just take a quick walk-through with some awesome photos or we can take a 360 camera and actually go through this checklist of things with serial numbers and dates, etc., that we're providing a value to you and we're being proactive and forecasting once again the replacement roof replacement, whatever the case may be along with, is a resident taking care of the property, sugar renewals, etc. That's just an amazing name.
Andrew Smallwood
If I can follow up on this one just a little bit. So it sounds like a preventive maintenance program and annual property review. We've got Phil owned on here, by the way. I know On-Site pros isn't nationwide in every market, but a number of people use them to get some property awareness and very detailed reports and as a way of doing things like this, I mean, it kind of takes me back to Eric's comment of saying like 1% of maintenance, you know, you're going to pay for it. The question is when, right, and how and it sounds like there's maybe an option too, hey, this could be included and it's part of our management fee and we've got a marketed and communicated appropriately. But there's also an option to take it outside of the management fee, you know, and, and do that, do that differently. Like how are you approaching it as far as how you're structuring it, where you're structuring it? And why did you choose to do it that way?
Phil Vera
I mean, we're it's an additional benefit right now. We'd like to get everyone on that. But I mean, we're investor based, right? We're not the accidental landlord or somebody that's Midway that's coming back. We're heavily investor focused. And so we want the responsible landlord that is aware of, you know, proactive maintenance. We sell it as you can pay for it now or you can pay for it later. Essentially, Eric mentioned it's always going to be cheaper now, right when the property is vacant, when we do the initial renovation. And so when we go through these inspection reports or itemized quotes, we're offering suggestions. And that's exactly what they are. But we want to have the conversation that if you decline that, that's totally fine. We just want you to be aware, of our knowledge, and our experience. And we've learned this lesson a hundred times and we're trying to prevent you from learning that same lesson. So right now, it's certainly optional, but we'd like to continue moving towards just having that built in.
Andrew Smallwood
Awesome. Thanks for sharing that. Deb, when it comes to you, something practical, actionable, could be one idea. It could be two or three, but enough for people to go on if like, hey, I can actually take action following this on revenue programs.
Deb Newell
So I had the pleasure of speaking at the metal conference and my topic was how to make money in maintenance. Because if you will, for those who know me, I love maintenance and I love making money and maintenance. So I'm going to share one slide that I presented that is just kind of to your point, Andrew gave some ideas. This isn't going to be applicable for everyone, but you can kind of definitely get some ideas of some maintenance program things that you can do. Phil actually mentioned a couple of these. You've got back, you've got a roof, got pest control. Like some of these things we do on an annual basis, maybe a semiannual basis, snow removal for those who live in the Arctic, and ice melt programs, same thing. But these are ideas that we can put into an owner benefit package and then present to our investors something preventatively, how can we implement some of these services and ideas to really increase not just the revenue on the property management side, but also to preventatively take care of the asset? And because that's, you know, that's the goal and budget, those things into it. So in the end we're presenting a full package that really increases the value over time the of the asset and not just the immediate need.
Andrew Smallwood
Awesome. Now, thanks for that, and thanks for sharing the slide that was like on the fly there. That was great. You're welcome. Eric, I want to bring to you a couple of practical, actionable ideas for folks here.
Eric Wetherington
Well, I mean, don't the thing that sticks out after listening to Phil and Deb, I mean, that doesn't get caught up. Too many property managers get caught up in trying to be the cheapest in town. And, you know, they want to have the cheapest management fee and they want to have the cheapest, you know, leasing commission or whatever, you know. And that's what they're you know, they're just trying to, you know, well, you know, be the cheapest offer, the greatest value, you know, and to approach your clients in a way that says, I will make you more money. If you work with my property management company, you will end up with more money in your pocket at the end of the year. And here is why, because we are very responsive to maintenance issues, you know, and if we respond to maintenance issues on time in a timely manner, then tenants will be more likely to stay in your rental property and pay their rent. And we're proactive about looking at these, you know, these CapEx issues that some of the things that were on Deb's list, I don't know what snow removal and ice melt are, but, you know, but you know, things like gutter cleaning and things like, you know, roof inspections and I mean, you know, down here in, South Carolina, a roof bent boots have to be replaced about every five years because the sun beats down on them so much that and they just they crack and they deteriorate. And so, you know, that's a proactive thing that if you're in the South, you know, you could be doing for your owners. And that prevents roof leaks. And man, any time you prevent a roof leak, you've saved somebody's, you know, thousands of dollars. And so if we can change the thought process and the narrative to, well, I'm the cheapest property manager in town so I am going to help you, Mr. or Mrs. Client, make more money, have more money in your pocket at the end of the year and we can prove that with the data and the statistics and the results that we have produced for other clients, then I think, you know, you've got a winning situation.
Andrew Smallwood
You know, I think Mike Catalano threw a jab when he was talking about tenant versus renter versus resident earlier today because second nature is very particular in using language like a resident as opposed to tenant or we say investor as opposed to the owner. And Phil, this may be a tee-up for you for something that I don't think we've covered yet. But, you know, it's a big commitment to say I'm going to be an asset manager, I'm going to educate investors and do this kind of thing. But taking a lot of people from owner to an investor based on the education program, etc., and thinking from that investor mindset of I'm looking to maximize, you know, a financial result over time, as opposed to an owner I just like have to have something, is where my kind of identity is that that may seem very subtle and to some people they may just think it's annoying and you're entitled your opinion. We don't force ours on anybody else's but that's a big reason we believe in that because, you know, some of these programs you guys are talking about, it can create great value, but you need a time horizon right on it. That's long enough in order to create that value over time. Right, that kind of relationship over time. And so, you know, Phil, I think you were whether it was chatter somewhere else mentioning something you guys are doing the kind of to that end, how are you guys approaching that?
Phil Vera
Yeah. So I think this is kind of an off-the-wall revenue-generating idea. But you know, outside of just resident benefit packages, property, preventative maintenance, but something we've done that's worked really well for us and a lot of success is, I think so many times property managers, we got to learn how to value our time. Right. And what is your time worth? And one of the benefits we have is I'm an investor myself. I've learned many hard lessons over and over. But I've also got to see firsthand with, you know, managing hundreds of properties. That is just repetition, right? So we've done it over and over again and we've learned what works and what doesn't work. We have different personalities of clients, some sort of thrifty ones. We see how that goes. Some are the preventatives maintenance people, we see how that goes. So we have a lot of knowledge-sharing experiences that we can share with others. And so what we actually did was we started a mastermind. And so I know there are some estimates for property management, but we went to the investors to say, let us show you how to invest and let us introduce you to our network of people. This works a lot with out-of-state investors, so we actually get paid a monthly fee. We get on Zoom calls, we walk you through how to borrow properties, how to buy your first investment, what to look for, and how to build your team. It doesn't have to be with us. You can invest anywhere else in the country, but we're trying to teach you how to vet these people. And so as a revenue-generating idea, we're getting paid to teach people how to how to look for an agent, what to look for the investor agent, how to vet a property manager, whether it's us or someone else, or maybe we know Deb or Eric and their locations. And we can refer you over. And here's your instant team. And so they're paying for a lot of the value in relationships. So we've created in turn, a lot of those folks who end up becoming our clients. So we actually trained our future clients, on how we want them to act. We want them to be responsible to do the preventative maintenance. So now we're actually getting paid to teach our clients how to act and then converting them into sales clients, renovation clients, and ultimately property management asset clients. And that is a huge, huge it's somewhat of a trend, but a huge value opportunity for a lot of PMCs here is create that mastermind B be the investor community in your market and open it up to doesn't have to convert them to you refer them out to other people and it'll come back tenfold.
Eric Wetherington
And fill we found if I can piggyback on that we have found that our team loves the interaction with our owner clients and with our residents when it's not about a water pipe just bursting. You know, we need you to send us 1500 dollars for this repair. You know, we had a cold shower this morning. You know, all of those things. Our team really energizes the teams when they can be interacting with an owner, clients, and our residents in these positive, educational, you know, uplifting ways rather than just as always, we're always calling about a problem.
Deb Newell
This is why you want to proactively talk to your clients, not just when there is a maintenance issue, right? So this is like we already built. It's all about building relationships of trust. They don't trust us. The minute that they've hired us, they're hiring us because they have a need, but they haven't trusted us. They don't know what we can do yet. So we have to build that trust and it takes time. So once we build that relationship of trust and we're calling them not about maintenance, to Erick's point, then when we do call them about maintenance, it's going to be like, I totally trust you guys. Go for it. And it's not that. Will you get a second bid? I mean, how many of us have heard that? Will you get a third bid? The answer is no because many of us I know are not charging for our time and doing that. And it does take a lot of time and we don't want to have those combative conversations. And this is the reason why our team struggles with talking to owners because it's all about conflict. And naturally, as humans, we don't like conflict unless we're taught. So other than that, then, then, you know, that's how we build this relationship and this over time. Remember, in the end, we're the experts. We're the ones who know exactly what to do. And if we don't, we're going to fake it until we make it. We're going to steady up ourselves. We're going to educate ourselves. And then we're going to educate our clients.
Andrew Smallwood
Awesome. And I think from a time standpoint, I got to pause it here. I feel like we got I mean, we could probably talk about this till the cows come home, as they say. Phil, I love what you shared and what everyone added there. I mean, it almost sounds like you're doing great marketing and like teaching people about how you view getting great outcomes and they're paying you for that marketing, you know, along the way, which really helps with acquisition cost and just even having any dollar amount, even some dollar amount, very modest. It probably shifts from this is free content paid. Like there's probably a mentality shift there about what people are getting, the value you're creating there. It doesn't have to be exorbitant to be a good idea. So really cool, great love that we got that added in. Here's what I want to do. I want to say thank you again to this panel. Phil, Eric, and Deb, really appreciate you all generously giving your time here today, your expertise, and what you shared with us. Super. Appreciate it. That's all for today's Triple Win Property Management podcast. Thank you so much for listening. Thank you so much for sharing a piece of your life with us. We do not take it for granted. I also want to give a shout-out to Carole Housel for everything she and our team does to make this possible. It's crazy to think about. Over 5000 professional property managers have press play on episodes and season one and season two now, and we really want to encourage you to keep giving feedback because more and more people are listening. It's getting better and better and better thanks to everything that you're sharing with us. If you liked this enough to listen, I want to encourage you to share it with other people. You can give us feedback directly on these social media channels, Facebook, LinkedIn, or wherever you're hanging out, you can also send us an email, at triplewin@secondnature.com and we just want to give more there's no sales pitch here just want to offer more resources that help you find and stack your next triple win and become a triple win driven property manager. So where can you find that? You can find a private Facebook group, you can find our blog, you can find our newsletters to find more resources all at RBP.secondnature.com to search for what you're looking for there. And every time we see you, we want to see a better version of you and your business. To that end, keep it going, feel inspired, take our encouragement and we'll see you next time.
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