On this week’s episode of The Property Management Show, we have invited the co-founder and CEO of Property Meld to talk to us about the subject everyone’s talking about – COVID-19. Ray Hespen is specifically discussing what’s happening with property management maintenance right now and what we can expect and prepare for once this pandemic is contained and we are all moving on.

Property Management Maintenance During and After a Crisis:

Introducing Ray Hespen and Property Meld

Property Meld is focused on property management maintenance. The company provides a platform to automate a lot of steps that help property managers follow-up with maintenance work, verify what’s been done, and communicate with residents, owners, and vendors.

Ray and his team work with management companies to improve quality, create efficiency, and keep costs down.

Since the entire industry is in a weird situation right now, he’s the obvious expert to talk about what this means for maintaining rental properties. He’s also going to shed some light on what property managers can expect maintenance to look like after this crisis passes.

Rental Property Maintenance and COVID-19: The Big Picture

Property Meld has analyzed data to look for changes in behavior. They’ve found a few key things:

  • Renters are concerned about submitting repair issues and having people come into their homes.
  • Not all landlords and management companies want to send techs out to complete repair issues.
  • There have been some big shifts in behavior. The drop-off has actually been about 25 percent fewer maintenance requests than the normal curve this time of year.

That’s pretty significant.

An Absence of Repair Requests Leads to Ghost Issues

This is the “COVID effect” on maintenance. When renters don’t submit the requests for repairs that are needed, ghost service issues are created. These are things that exist, but as a property manager, you don’t know about them.

People are at home more, so a higher number of repair requests would normally be expected. But, the 25 percent drop tells us that a lot of repairs are needed but not noted.

Some property management companies have told tenants that if the repair is not an emergency, they shouldn’t submit it. That’s one way to do it. But, as more information has come out, the better recommendation may be to encourage your tenants to submit the repair request, and then prioritize what really needs to be done. That will reduce the number of ghost service issues that are floating around out there.

If you don’t have tenants submitting their necessary repairs, you’re not going to be able to prepare for what you need to fix.

After the crisis subsides, there’s going to be a huge influx of maintenance work that needs to be done. It will likely be overwhelming for property managers and their maintenance teams. So, you need to have a sense of what kind of work you’ll be looking at.

Property management companies are generally taking the requests that they currently have and prioritizing those that absolutely need to be done. The completion rate is 56 percent lower than the normal completion rate. This tells you that only half the work is getting done.

With these two contributing elements and a backlog that’s growing every day, there’s going to be some deferred maintenance. The work that’s needed will pile up. Assuming that the social distancing requirements ease up a bit in May, there’s still going to be a large backlog that takes you right into summer, which is the busiest time of the year for most property managers and their maintenance teams.

Renters aren’t submitting but they will at some point. Their property issues are not going to fix themselves. When people are comfortable submitting maintenance requests again, things may get a bit chaotic.

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Examples of Cautious Renters

There may be a tenant who has a broken refrigerator. That’s an emergency since no one is going out to eat. The tenant needs a working fridge, and vendors who are sent into that home will need to be careful and sanitize everything. It’s about balancing the need of the tenant with the safety of the tenant and the repair worker.

Marie shared two examples of work that she has recently needed done in her rental property. First, there was a window that started leaking during heavy rain. She did everything she could to minimize the damage by using towels and keeping the area dry. She let her management company know that the window was leaking, but she also instructed them not to make the repair if they didn’t have to, because she didn’t want anyone in her home. This is pretty typical of how most tenants are feeling right now.

Marie’s second repair need involved a garbage disposal. She tried her best to fix it and troubleshoot it herself. When she couldn’t, she submitted the request and removed the disposal herself, leaving it outside her door for the repair person to fix. Then, she re-installed it herself. That’s probably over-cautious, and Marie says she knew there were a lot of risks involved in this strategy. But, those risks were tolerable compared to the risk of having someone come into her home and possibly increase the risk of exposure to the virus.

The Automatic Pause Before Submitting a Repair Request

These anecdotes highlight the automatic pause renters experience about whether to submit or not submit a repair request.

A good way for property managers to help tenants feel more at east is to send an automatic notification when a repair request is submitted. You can tell tenants how you are preventatively protecting them and the vendors and service technicians. As a property manager, you can advise tenants not to be in the home when the workers arrive. You can assure them that masks, gloves, booties, and other protective equipment is being worn, and that everything will be wiped down.

The alternative is this hesitancy, which is creating the ghost service issues.

Removing the mystery of how repairs are handled will help tenants feel safe about reporting them. The Property Meld feature that sends an automatic notice of procedures can help tenants feel supported. In other industries, you see a lot of talk about how they’re ensuring people are kept safe. The property management industry can do the same. If you tell tenants exactly what you’re doing during a repair to prevent exposure, you’re a step ahead of most other property management companies.

Communication and Over-Communication Regarding Maintenance

Communication is always important, but it’s more important now. In fact, you should be over-communicating with everyone – tenants, vendors, owners. Focus on positive communication. It’s the only thing that will allow you to manage going forward. Don’t share any kind of negativity or fear because a lot of this crisis is out of your control.

It’s also very tactical to communicate. People need to feel comfortable to submit service requests, and you’re not going to lead them to comfort if you’re not communicating your process and your safeguards.

As the property manager, you want to be in control. Property managers should decide what’s critical and what isn’t when it comes to repairs. You don’t want the renters deciding what needs to be done. Encourage them to make the request and allow the property manager to decide. It’s important.

Property Managers and Their Vendor Relationships

The Property Meld data has shown that most property management companies are maximizing the use of their in-house maintenance teams and minimizing the work they send over to outside vendors and contractors.

As you probably know, vendors only get paid when they’re doing work. They may be anxious to accept new work and potentially less cautious. If you send a vendor to a property, make sure you know what they’re doing to protect their workers and your tenants. Ray has heard that rubber gloves are standard, as are masks and booties. Most technicians are trained to stay six feet from other people. Many companies are using goggles as well.

There’s a strong sense that this is not business as usual.

Financial Stress for Property Management Companies

As a property manager, you’re now aware of the ghost issues that may be lurking and you know you’re going to have a huge backlog of maintenance requests to work through once the stay-at-home orders are lifted.

What other risks are out there?

The obvious risk is financial. If you run a maintenance company as part of your property management company, you’ve likely seen a huge drop in service requests. That could be half of your income as a company, and you may be wondering how long you can survive. It creates serious financial stress, but it also puts you in a competitive position going forward. It will be even harder than it is now to find good vendors.

Property Meld has done some math on what the backlog will actually look like.

If things get back to some version of normal, and you can increase your maintenance output by 20 percent in June, it would still take you until October to clean up all the backlog. This is going to impact resident retention and client satisfaction.

It’s going to get complicated.

This makes it even more critical to empower your techs and vendors to get the work done. The further away completion rates become, the more massive your backlog. This will cause serious problems for property management and maintenance companies.

Maintenance is a huge part of tenant retention. Just improving the time it takes to complete a maintenance request is a big part of a company’s online reputation. The industry is in a weird spot where online reputations are on hold because reviews can be submitted but won’t be posted right away. The sense is that Google reviews will start showing up again as soon as businesses like restaurants can open, but we don’t know what will happen to the reviews that are being written now, but not posted.

Set Expectations with Communication

Setting expectations is the only way to protect your reputation and keep your tenants happy even while maintenance may take longer. Ray talked about a cabinet he ordered for a kitchen remodel. They apologized and told him it would take nine to 12 weeks to be delivered. Normally, this would only be a two-week delivery window. There’s a difference between knowing it may take 12 weeks and not being told about the delay. If the company had not communicated about the delay, Ray would have been waiting and angry by week three. But, he knows now what to expect, and that makes the wait tolerable.

Communication is absolutely critical, and so is working through those backlogs systematically.

Here is your to-do list as a property management company:

  • Empower the tenants to submit requests.
  • Empower the vendors and technicians to fulfill any requests they can safely.
  • Prioritize the service issues.
  • Communicate to everyone.

During all this, don’t forget empathy. Everyone is going through something pretty traumatic right now. You’re running a business, and you can come out winning by being empathetic and transparent.

This is an opportunity for smart property managers to up the game and elevate the industry. You can separate yourself from those terrible landlords who give owners and property managers a really bad name. It’s an excellent opportunity to tell the story of WHY people need a property manager like you.

Shifting Towards Property Management Technology

There’s going to be a massive shift towards technology when this is over. People who have been planning to upgrade their tech in a year or so are finding a new sense of urgency now. Five-year plans have become one-week plans.

The technology in the property management industry will be more important than ever. That’s one of the biggest shifts Ray sees for the future. Technology is a lasting trend, not a temporary fix.

It’s easy to worry about whether or not you can afford technology. There’s an investment of time and money to learn a new platform or incorporate a new system. Each business has to survive, but remember that technology exists to solve problems. That’s its purpose. We have new problems, and we need new technology to solve them.

Being a problem solver is the only way you can sell your services, especially now.

Landlords are wondering who they can turn to, to navigate the legalities of eviction moratoriums. That’s a new problem. As a property management company, you need to be there with a solution. If you can meet the challenge and be a solution, you can keep selling – even during a global crisis.

Key Takeaways from Property Management Maintenance During and After a Crisis:

Your final insights are probably the same as Ray’s:

  • Find a way to get your renters to submit service requests.
  • Come up with systematic ways to address and prioritize those issues.
  • Over-communicate with everyone.

If you do these three things right, you’ll be at the top of the property management and maintenance food chain.

Thanks to Ray and Property Meld for talking about property management maintenance during and after a crisis today. If you have any questions about what you’ve heard, please contact us at Fourandhalf.

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