A Chat with Aaron Robertson of Authority Property Management
About a year before Alex Osenenko started Fourandhalf, he met Aaron Robertson, and they were both doing different things. Alex was working for Appfolio and Aaron was running a property management company with some business partners.
Today, Alex is hosting The Property Management Show, continuing to grow Fourandhalf, and presenting The PM Grow Summit, a conference for the top level property management entrepreneurs. Aaron has started Authority Property Management, and after only 30 months is up to 435 units.
The two are on the podcast to discuss leveraging tech experiments, marketing, and the importance of running an emotionally intelligent company.
Experimenting and Decision Making
After nearly 10 years in the property management business, Aaron realized that he didn’t need a business partner who wasn’t his wife or his bank. He likes to make decisions quickly because it’s easy to start something, fail, and then get up and try again. Usually, that process is a lot faster and more successful than taking months and even years to contemplate whether or not to adopt a particular business strategy.
Making decisions in two or three minutes makes sense to Aaron and his wife, and it’s helped their business grow.
To grow quickly, you need to implement technology that puts systems into place and automates a lot of the work. This is a huge factor in fast growth.
Those experiments cost money. But, it may be worth it to you to spend a couple of hundred dollars to try a system or a product for a month. In that time, you’ll know if you want to use it or if you want to look somewhere else.
Run tests on software. Experiment with new technology. Every management company is different and you need to adopt whatever works for you and your customers.
Automating and Saving Time: Some Examples
Aaron is willing to invest in high quality walk-through videos of his properties. A prospective tenant can look at walk through video and really get an idea of what the home looks like. His team writes beautiful, detailed descriptions that read like real estate sales ads.
There’s a cost, but it gives a property management company an edge. It also gives the property owner an edge, and it helps the prospective tenant who is looking for a home. A lot of companies talk about the importance of quality walk-though videos, but very few invest in them.
Remember that you don’t always have to hire out for these services. Maybe you will pay for drones and camera equipment, but a staff member can go out to the property and take and edit photographs. The equipment is then worth the investment because it makes that staff member’s job easier. The result of this process is better quality for tenants and owners.
Appfolio is another amazing tool that can save a lot of time. Use software in a way that works for you and your clients. Property managers need to think past the generic things that are offered by software, and add to it when necessary. Do some integration and overlap your systems for optimal functionality.
Google Suite is a good example. You get calendars and Gmail and hangouts and messaging all on your phone as well as your computer. The efficiency and collaboration makes a difference. Put it to work for you.
The advice here is to experiment with what you already have.
Adapt your process to see what sort of efficiencies you can gain from a piece of software.
Stop Saying We’ve Always Done it This Way
Don’t be afraid to re-evaluate your systems. It’s pretty easy to do things because they’ve always been done a certain way. But, the world is changing. Ask your team if they have the tools they need to do their jobs. Your staff can provide feedback on what’s working and what isn’t.
One of Aaron’s mottos is: We Make Rentals Simple.
To live by that motto, it’s important to always re-evaluate and make sure the best programs and technology are in place.
But…Don’t be a Squirrel
There is a squirrel mentality, and you want to avoid that, too. You can get carried away with all the vendors out there who are trying to get your attention. There’s so much tech out there, and the industry is ballooning into something much bigger and more advanced than what it was.
It’s hard not to try everything.
But, you need to be disciplined. Find out how long a company has been in business before you jump into discussions about what they have to offer.
Aaron won’t waste his time sitting through sales webinars and demonstrations. He’ll ask if he can test a product on his own for a while. If a company is willing to let him run his own demonstration and sample what they have to offer, he feels comfortable that it will be a decent project. This criteria protects him from the squirrel mentality – or the need to try everything.
Marketing a New Property Management Company
The quickest way to introduce a new company to landlords and investors is likely through the local marketplace. Aaron talked to the Chamber of Commerce, met with the Board of Realtors, and networked with brokers, lenders, and anyone who dealt with investment properties.
He wore a logo shirt.
Beyond that, you need to get tech savvy with marketing. Aaron was easily able to use social marketing, and focused on Facebook because he knew that’s where most people spend at least 30 – 50 minutes of their day. He invested in Pay-Per-Click advertising campaigns and got his company in front of the right people.
Reputation: People First, Profits Second
If you look at property management in Redding, California, you’ll see that Authority Property Management inspires trust through their online presence. They’ve got 37 5-star reviews on Yelp. They built this reputation by putting people first and profits second.
Treat tenants like people, not rent checks. A lot of property managers look down on tenants, and such attitudes create a humongous death spiral.
When you are humble and service-oriented, you have the opportunity to move someone from a customer to an apostle. Many companies prioritize how to get an extra dollar out of someone. They have a list of ancillary fees that they’re quick to charge, and they boast about having the biggest late fees in the industry. You don’t have to go about your business that way.
Instead, you can do good business with good people.
That’s what spurred their growth and created profits that they could be proud of.
Whether it’s waiving late fees or rewarding on-time rental payments, there is a strategic advantage to treating tenants like people and investing in their well-being and their experience. Property management companies need to look at their tenants as valuable constituents.
Making people feel welcome, special, and appreciated is easy to do.
If you’re not into the feel-good stuff, understand this: Aaron and his company are making a lot of money. You can do good business and make good money.
Measuring Success: KPIs and Feeling Out the Future
Aaron measures success through profits, not number of units. His company is selective about the properties they work with. His goal is to double the company’s profits, but not necessarily by doubling their doors.
That’s the one-year plan. The four-year plan is to have the company set up so well that it can run without him while he and his wife are enjoying la dolce vita in Italy.
There are a few key KPIs that Aaron tracks, and one of them is a bit unusual: tenant re-rents.
A re-rent describes when a tenant moves out of one of your properties, but right into another one of your properties. Maybe one of your tenants needs a larger home or a smaller home. Rather than look around at what’s on the market, they just want to know what else you have available.
That’s pure profit to a property manager because you’re saving on turnover. If you spend $385 to get a property rented, most of that is saved when you’re moving a tenant from one property to another.
The results are pretty astonishing: 70 percent of Authority Property Management tenants re-rent from them. Not a bad record.
Spending on advertising versus new client acquisition is also tracked. Right now, they spend $551 for a new client.
Next, Aaron will work on tracking annual customer value and lifetime customer value. He’s promised to return to The Property Management Show with those numbers, so make sure you stay tuned.
Thanks to Aaron Robertson, who can be reached at authoritypm.com.
If you have any questions about how to achieve this sort of growth, contact us at Fourandhalf. We can help you with property management marketing and share some ideas on sales and business development.