Small property management businesses have a lot of opportunities, even as they’re competing with larger companies. As a small business in the property management space, you have a lot of unique abilities, such as your talent for providing local service. The local knowledge you possess is irreplaceable, and it takes those big businesses some time to understand the local dynamics in your city and the different microeconomic environments.
You also have the benefit of being able to move quickly. When you’re small, you’re nimble. You can maneuver and get more business when you use that to your advantage.
Another way to get more business is by doing what the big companies do to optimize their services.
One of the most important things they do is automate. If you can embrace automation, you can grow faster and smarter.
Today on The Property Management Show, Alex is joined by John Bykowski, Fourandhalf’s COO, to talk about automation with Inaas Arabi, the new vice president and general manager at Propertyware who is in charge of single-family homes.
Introduction to Inaas Arabi
Inaas’s career has a lot of depth.
He started his property management game in 2005, when he was the regional property manager and real estate broker at HelpUSell. Within 18 months they became the seventh largest company for volume sales within their state. They were working to get investors reasonably priced rental homes that brought in high returns.
Then, he became the regional director of operations at American Homes 4 Rent in 2012. Today, that company is the second largest owner/operator of single-family rentals in the U.S. They own 62,000 units. The business model is to buy a lot of properties at good prices, remodel them, and rent them out.
Inaas understands timing, and it has helped him build an impressive career with a lot to be proud of. His instinct for switching gears and taking advantage of the right opportunities has helped him compete as a small business owner and grow companies into larger businesses.
Now, he’s working his magic at Propertyware, and his experience in property management is bringing companies better products and better results.
Investing in Operators to Develop Programs
Propertyware serves a unique market, where it’s important to choose an operator rather than a technologist to run programs. Technologists are great at what they do and they come up with outstanding products. But, if you’ve never been in a property manager’s shoes, it’s hard to understand the reality of the job and the pain points.
You can talk to property managers about what they need, but to provide an effective product, you have to understand where they are and where they want to go.
Propertyware has a competitive advantage in bringing on a property management operator at this level to help bridge the service gap with industry knowledge and unique systems.
Property Management Growth: How to Help
Growing a property management business is done in one of three ways. You can add units, produce more revenue per door, or cut your expenses through customization and automation.
Propertyware doesn’t see itself as a marketing company, but they want to help businesses grow by adding doors. So, they’ve decided to partner with companies that are great at marketing (like Fourandhalf), thus giving them a product that will help property management companies grow.
It bridges a gap.
This is how an operator thinks.
- First, partner with a company that helps clients get more doors.
- Then, the business owner can provide more value and more money per door.
- Then, the business owner can reduce business expenses with automation.
While a technologist can build a tremendous platform, it will come with a lot of tools and widgets that an owner/operator doesn’t necessarily need. And, those tools and widgets are expensive, so the costs go up for everyone. An operator can look at building a system that focuses on what’s really necessary.
Providing Value: The Listing Widget
Inaas provided an example on how to offer additional value.
Propertyware has a fantastic listing widget. Property managers can take all their vacant property listings and plug them into one place, then they’re syndicated to 256 different rental sites. No one has to re-enter any of that information, so the experience is standardized.
This solves the problem of finding tenants for your vacant properties.
Why not try to bring in more owners this way, too?
The added value was for Inaas is this: On the last two lines of the listing, describe your property management services and include a link to your website or a landing page that allows people to learn more about you and maybe leave you their contact information.
Think about the listings on Zillow and other sites. Tenants are going there to find a home, but owners are going there, too. Landlords and asset managers are going on those sites to look for price comps. If they see your description of management services, they might click on that and then get to know your company.
These are free leads. You’re posting that listing anyway. Why not add those two lines and bring in new owners?
Inaas calls it a double whammy. The listing widget is not built to attract owners. The purpose is to market vacant units. But, you get something extra when you can convert new owners and bring in new business. These are leads who see you know how to write a good listing with professional photos and maybe a video tour. It adds to your value proposition.
So, your takeaway is pretty exciting: Put the link to your services page into the bottom of your listings and get exposed to free leads.
Automation and Its Influence on Property Management
Think about the days before automation.
As recently as 10 or 15 years ago, the accessibility property managers had to products and technology was nowhere close to what is available now. You had to build it yourself or you used TenantPro.
Fast forward to today.
The property management industry has been professionalized. Wall Street has looked at and evaluated the results property managers produce, and they’ve taken notice. So, money is pumping into the production of fantastic technologies that have completely transformed how we manage properties.
The auto industry was the same. Cars in the 1960s and 1970s were entirely mechanical. Then, they slowly began to rely on technology a little more. Today, your transmission is 50 percent electronic and 50 percent mechanical. Real estate, and specifically property management, is moving the same way.
For example: Inspections
In 2005, property managers took care of inspections with a piece of paper and a clipboard. You went through the property yourself and checked off every box by hand. Today, there are at least a dozen inspection apps available to property managers that allow you to take care of inspections electronically. You can even pay someone else to do it for you.
That’s where we are today. The tasks that took most of a property manager’s time have been automated.
The property management business is never going away, even if we get to a point where it’s all virtual. You still have to connect with people. Tenants will always need homes and owners will always need those homes managed.
A property manager is necessary for relationships. You have a relationship with your tenants, owners, HOAs, the courts, the taxes, and all of the areas touched by property management. Automation doesn’t replace human property managers.
It simply makes your job more efficient.
Drawing the Line: What Won’t We Automate?
Property managers are in the business of communicating and marketing their services.
- You have to market what you do to owners so you can earn their business.
- You market your services to tenants so they’ll rent your properties.
- You have to market yourself to vendors so they’ll decide to provide you with their best services and costs.
When automation helps you do your job, it’s good. When automation tries to replace your job, it’s bad.
Think about automated payments. It’s a huge benefit to everyone when rental payments are made electronically. Fifteen years ago, your property management company probably needed someone sitting at a desk to collect rent checks, log them into your system, deposit them in the bank, and make sure they didn’t bounce. Now, your online rental payment system does all that for you and the person who was sitting at that desk can do something more meaningful for your company.
That’s an example of good automation.
Bad automation would be making the entire process virtual where the tenant talks to no one and sees no one and has no way to communicate if they’re having trouble with the website or their bank isn’t linking properly or they have a question.
No one respects a machine. People respect people.
Some owners refuse to work with companies that are entirely virtual. They want to speak with property managers. It’s not like asking Alexa what the weather is today. You’re not going to ask Siri how your rental property is performing.
You need specific and valuable information from a human property manager.
As a property manager, you’re protecting the largest asset that many investors will ever have. You’re also providing a home for tenants. People need homes. After their food, drink, and safety are taken care of, the next thing on Maslow’s Hierarchy is shelter. Artificial Intelligence will never be able to provide housing without humans.
Automate the Painful Processes
If you are going to automate something successfully, automate something that’s painful.
Think about car buying.
It’s a crappy experience, and people generally hate it. So, companies like Carvana and Shift have automated the car buying process, and it’s working.
Consumers go online and buy a car without the haggling or the four hours spent at a dealership. These companies will even deliver the car to you or offer a fun experience like a vending machine. It’s not painful anymore; it’s automated.
When humans can concentrate on things that only humans can do, like emotions and relationships, there’s no reason not to automate everything else.
Inaas worked for a company that managed to automate between 80 and 85 percent of what a property manager did on a daily basis. That allowed him to hire property managers with portfolios of 1,000 units each.
One thousand units per property manager.
This wouldn’t be possible without automation. And, it allowed the property managers to do the meaningful work instead of the busy work.
Propertyware is sponsoring the PM Grow Summit this week in Austin. If you’re here, make sure you stop by and say hello. If you’re not, start making your plans for next year.