How to Turn an Under-Performing Property Into a Cash Cow
Sloppy turns, exhausted employees, and unhappy residents can be a nightmare for those of us in property management. Quest Management Group was facing these same issues, but by enabling our employees with the right technology, we turned our bottom performing property into an award-wining, profit-generating machine. Keep reading to see how…
Three years ago my company, Quest Management Group, was facing a dilemma. Our bottom performing property had a delinquency rate of 15 to 18 percent (almost double the national average of 8.9 percent), and we were considering several options, even selling it. The problem wasn’t demand; it was the chaos. We were receiving 300 to 400 leads per month, but the staff was so inundated with busywork that they couldn’t follow up properly, offer proper customer service and were performing sloppy turns, which led to a huge number of complaints.
As the VP at that time, I took a step back and started to ask how I could enable our employees to take this underperforming property and turn it into not just one that made us money, but one where the employees were actually thrilled to come to work.
What did we do? Did we hire a big consulting company to review our procedures and reduce delinquency by a percent or two? Not even close. Today this very same property is now having its best year ever. We’re stable at 97–98 percent occupancy, delinquency is around 4–5 percent and it is beating its Net Operating Income (NOI) budget by 11.8 percent—and after its end-of-year, looks to be closer to 12.3 percent!
How did we take our struggling property and turn it into an award-winning, revenue-driving asset? By enabling our employees with the right tools and resources to get their job done effectively and efficiently. We wanted to make their job simple, easy and functional, not just for their own peace of mind, but also for the residents. Here, I’ll show you…
When I began at Quest Management Group in 2013, we had few fixed policies and procedures, but since our property management firm was making money and turning a profit, everyone was happy doing things as they had always been done. If it ain’t broke, why fix it, right? But that philosophy fails to capture the amazing opportunities change can bring.
I knew that although our 3,200 units were turning a profit, there was room for improvement. But we couldn’t just emulate what the big guys in our industry were doing—we had neither the funds nor the need (yet) for robust resident software systems and the big tech-y prospect-driving programs. Instead, we looked outside our industry to what innovative companies of all kinds were doing. What made companies like Google, Pinterest and Apple unique was that they valued their employees enormously, to a capacity that makes the employees drive just as fast to their job as they drive home.
We looked at our business and asked, ‘How can we make our employees feel that excited about coming into the office?’ The answer: enable them.
I began by writing over 1,000 pages of policy, procedures, web-based training courses, templates, letterhead/logos and resources that were simple and user-friendly. We gave the managers tools to make their residents happy, because as anyone in property management knows, happy residents make for happy employees.
Reducing Busywork with Technology
Administrative duties were one of the biggest burdens for our staff. Filling out leases, completing filing, processing work orders, answering phone calls—these things take up tons of time, and they affect customer service. How can someone who’s struggling to keep their head above paperwork take the time to follow up with prospective residents and give each one the attention they deserve?
One way we reduced busywork was through our Green Initiative. We digitized all of our leases, renewals and communications, using technology to make everyone’s lives easier. This also saved us money and allowed us to budget new things. Like marketing. Quest had never actually done any marketing before. None. Zero. We paid for the industry ads, and the marketing efforts pretty much stopped there.
Following our trend of enabling employees, we decided that rather than hire from the outside to fill our new marketing department, we would promote from within. That meant the department was staffed with people who knew our procedures, our properties, and more importantly, knew our mantra of innovation.
Taking a playbook from successful B2C companies, we started using Constant Contact (which cost us about $100/month) to send fun communication to our prospects and residents and follow up on important issues. From our initial Green Initiative, we had collected about 75 percent of our residents’ email addresses, which gave us a great starting point to start working on brand marketing. Next, we set up Green Stations in all of our offices where residents could check their email, sign their lease/renewal and put in work orders. Now they didn’t need to interrupt agents with these routine, time-consuming requests. Green for the environment, chaos savior for our employees.
The next technology we used to streamline our communications and lessen the burden on our leasing agents was text messaging. Potential residents could text a number and receive a digital copy of our brochure, saving time and printing costs. These virtualized communications also meant our specials and pricing lists were in our residents’ or prospective resident’s inboxes, whenever they needed them. I don’t know about you, but flyers and pamphlets always end up in the same place for me: on the floorboard of the car and then the trash. Who can keep up with all those papers!
Upgrading Our Technology
These new initiatives were working, and we could see real gains. But then we quickly started outgrowing them. Constant Contact was all manual and required a large effort to keep our email lists up to date. With this additional administrative work came a decline in customer service once again. Our team was missing phone calls, not completing timely follow-up and falling behind in our customer service. With that decline came an increase in complaints as well. Remember what I said about happy residents making happy employees?
We knew we needed to make another change. Our website at that time was a way for residents to communicate with us, put in work orders and contact the office. But it was limited to our current residents. We needed a way to harness our online presence to engage prospects.
So, in 2016 we began looking at other options. We were paying a nominal amount per year for AMSI property management software, but there wasn’t a lot out there that could integrate seamlessly with this existing technology. We looked at Yardi, but it would have cost us triple to quadruple per year; we just couldn’t justify the expense.
Through our research we discovered On-Site, which fully integrated with AMSI and could do the things we needed. Plus, this property management software wasn’t going to cost us an arm and a leg. On-Site would give us the capability to do individual websites through its in-house Ellipse Design studio for our properties and give us more control over the content that we could update on a minute-by-minute basis. Residents could pay rent online or put in a work order at their convenience like before but on a much more sleek and easy-to-manage platform. Again, without having to take up the time of our agents and administrative staff. And I don’t know about you, but if I can’t do it with an app on my phone, I just won’t do it. So the new websites gave us the ability to build app-based downloads through Apartments 247 for all our residents to give them a new line of communication. The increased ability to communicate with our office from anywhere was great for our residents; the ability for all to be stored in our emails/software was great for our staff. It was a win-win, what more could you want?
On-Site also helped us with another one of the big issues we were facing. Many of our properties were built in the 1950s and 60s, and the floor plans varied in minor ways that sometimes got lost in translation from leasing professional to prospective resident. So we were renting apartments to people and they would show up and the available apartment was different than the one they thought they were getting, and they would blame our leasing professional. With the availability feed on On-Site, residents can come into our offices, use our Green Stations and select the floor plan they want. This eliminates any sort of selection error, saves our leasing agents time and keeps residents happy.
After seeing the benefit of this streamlined process, we began looking at all our ad sources and thinking about how we could use this technology to ensure our pricing and specials were up to date. There’s nothing more frustrating than thinking you’re paying one price only to come in and be told something different. So, we started using AdBlast to keep our prices and specials current. Now there’s no more confusion from site to site. It takes only a few minutes to update, opposed to the hours we would spend before going to each site and making weekly changes. Best of all, it integrated perfectly with our AMSI software!
The last piece to our technology puzzle was to move from the manual processes in Constant Contact to a more centralized, scalable solution: Relate 24/7. It put our residents’ phone numbers, email addresses and contact info in one place. We could track our leads, and it gave me visibility into errors that were costing us money. Now I don’t have to guess at what’s keeping agents from closing, I can really assess the story behind the performance. Whether it’s a price, product or lack of leads issue or if it due to missed calls or poor follow up creating customer service problems, I have more data to tell me the full reason. With this information, I can quantify mistakes and steer our training to areas that have the biggest impact. No more wasting time—and money—fixing problems that don’t exist.
With the newfound time this property management software technology has created for us, our team can spend more time in the units to focus on eliminating sloppy turns, which has done wonders for our new resident satisfaction. In addition, the one-on-one with residents and prospects doesn't feel rushed. Our employees have time to offer A+ service, which makes the residents happy...which makes my team happy!
From a mom and pop company that barely had an employee handbook four years ago to being oversubscribed by investors when we purchased the largest multi-family real estate transaction in D.C. in 2016, it’s clear that these changes have been instrumental in our amazing growth. We’re now seeing numbers like 95.89 percent average occupancy, a decrease from over 25 percent delinquency at some communities to around 4–5 percent, and our growth from 2013 to now is insurmountable. It feels great to see all of the positive change, and all of this can be attributed to fixing inefficiencies.
In addition, we’re now seeing employees from large competitive companies who want to work with us because of our culture. We are still retaining that community aspect of the mom and pop structure, and it is one that enables employees with technology to do interesting, innovative work. So, if your property management business is facing change, don’t fear it. Embrace it, and invest in the technology that isn’t just going to keep the status quo, but that gives the employees the tools they need to be agents of growth.