On our first episode of the year, The Property Management Show wants to start by identifying what’s happening in the property management industry.
This industry has accelerated at an extreme rate. We’ve talked about it multiple times, and new things continue to happen.
For example, not only are private equity backers getting into the property management business, we’re also seeing Tier One Venture Capitalists in Silicon Valley putting money into property management. That has never happened before, and we’re expecting this trend to open some floodgates.
If you’re a property manager or you own a management company, you’re in the right spot at the right time.
This means that investing in and operationalizing your sales and marketing procedures is no longer a privilege. It’s a requirement. You have to do it to survive, grow, and thrive.
We’re all about innovation on The Property Management Show, and our guest today is in charge of the largest single-family focused property management company in the U.S. He’s Kevin Ortner, the CEO of Renters Warehouse, and we want to know how he handles his tremendous responsibilities and what he’s planning for 2019.
You Have to Love the Grind
Don’t forget the basics.
That’s Kevin’s approach to running a large company that just keeps getting bigger.
Take great care of clients and employees.
That sounds cliché and you always hear about it, but it’s true. You cannot just be about the next client, the next acquisition, the next deal.
What are you doing to fundamentally shore up your foundation?
That’s what Renters Warehouse wants to focus on – being the best they can be for their clients and employees. This takes time and resources as you’re growing. But, good leaders will execute a great strategy and try to stay in front of that growth. You need to make sure you are performing those basic things well, and then you also need a great vision of where you’re going and how you’ll stay in the lead.
That’s what it’s about. Looking down the road, forming the right strategy, and executing the pieces of the puzzle.
You have to love the grind.
If you’re running a property management company, you’re part of changing an industry. You’re helping to make it more sophisticated and you’re delivering great value to your customers.
You should be excited about that.
Renters Warehouse Acquires Own America
Renters Warehouse recently acquired Own America. This is a major shift in the industry and a vision move. It’s something you need to pay attention to.
Own America allows owners of single-family rental properties to sell those properties with tenants in place through an online marketplace to new investors.
This reduces a lot of friction and costs for both buyers and sellers, and the tenants are not disrupted.
When you sell your investment property with a traditional real estate agent who has no experience with rental properties, that agent usually wants you to move the tenants out of the home before it’s listed. They’re thinking of owner-occupant buyers, not investors.
Own America changed that – and allows buyers to buy with tenants in place. Kevin acquired the company because it fits well with what they do, and they have set up the Renters Warehouse Investors Marketplace. Clients can buy and sell single-family homes online with tenants in place. The tenants don’t move out, and both buyers and sellers are paying less commissions than with a traditional broker.
And, Renters Warehouse continues to manage those homes.
The benefits to this acquisition are numerous.
- Buyers can shop in markets they are not currently in.
- Buyers can use the online search function to explore properties in any market, whether it’s Alabama or Texas or a city on one of the coasts.
- Buyers get to acquire an investment with cash flow already in place.
- Search functions include photos, tenant history, maintenance history, and other analytics.
- Sellers have access to an engaged market of interested buyers.
- Tenants stay in place, and you don’t have to disrupt a family of good tenants who are paying rent and taking care of the property.
- Renters Warehouse doesn’t lose business when a property they manage is sold.
Renters Warehouse is the largest single-family property management company, and now they can facilitate these sales. It’s a new way to service current and future investors.
Build It or Buy It: How to Gather the Right Tools
Here’s an interesting statistic from the National Association of Realtors.
There are over 1 million single family homes sold every year as investment properties.
That’s 20 percent of all single family homes bought and sold.
So, investors are buying a lot of properties. There’s a market for you if you want to focus on those transactions.
You can take a piece of that market, and you don’t necessarily have to do it at the scale that Kevin is currently operating. Maybe you want to build your own business without buying a company like Own America. Do you have the tools you need to pick up maybe 10 to 15 listings per year?
The good news is, you don’t need a ton of tools. You just need a good program in place.
You need to know how to talk to your clients about it. Figure out how you will market this service and talk to investors. Let your clients know you can help them. This is possible through an email marketing campaign. If they’re interested in selling their investment property, tell them you want to talk about it. Train yourself or some people in your business to break down the numbers and examine the yield and recruit some potential buyers.
You already have a portfolio of potential sellers doing property management business with you.
Now, you need to attract buyers into your ecosystem. They are out there. They want to invest in property, but they don’t know where to go or how to start. Not a lot of agents specialize in investment properties. Put together a plan for reaching them. Establish a communication cadence and show people that you care before you ask for their business. You can create a video message to your owners and put a face to your name and make sure that you’re the company they think about when real estate needs come up.
This is an actionable thing you can do in 2019 to really start a new revenue stream.
Growing New Business and Maintaining the Current Client Base
For Renters Warehouse, acquiring Own America has increased their lead funnel. The top of the funnel is bigger and growing with owners and others who are clamoring to get in but don’t know how. Renters Warehouse provides the tools and education and technology.
The company is growing because they’re attracting new business.
Not only that, they’ve created a system where they can easily maintain the client base they currently have.
As a property manager, you know this is sometimes a challenge. It’s hard to create opportunities for a new audience while nurturing the clients you’ve already paid to acquire.
This year’s PM Grow Summit will focus on customer experience. Renters Warehouse is doubling down on that exact premise. They are providing wider services to their current customers in order to keep them engaged with Renters Warehouse. These are satisfied and happy customers who will not only stay, but will rave about the relationship.
You can succeed by looking at what the leaders in this industry are doing, and then copying them. Stay with the trend. You don’t have to invent anything new unless you have a really amazing strategy that no one else is using. Look at what the leaders are doing – and follow.
Maintaining a high level of service is not what people want to do every day. You’re concerned with growth, and you want to focus on new products, more doors, and better technology. That’s fun, but don’t let your customer experience suffer.
We want you to hear that again: Don’t Let Your Customer Experience Suffer.
Making Your Marketing Dollars Go Further
If you can increase your lifetime customer value, you can maximize the money you spend on marketing. You’re getting an extended lifetime customer value when you provide the types of services and value that keeps your customers around.
Kevin and Renters Warehouse have always been heavy on traditional marketing. In addition to producing great content and using Google AdWords and pay-per-click, they’ve also done radio and television advertising. This year, they plan to focus on targeting the investors they want through social media.
Marketing their educational content will also be huge. They have a core belief that educating people is important and a responsibility. They don’t want to work with passive investors. They want their customers to understand what they’re doing. So, there’s a lot of content to leverage for their audience.
Content is not expensive, remember – it just takes time.
Fighting Against an Industry Reputation
Everyone working in property management has to combat a lingering negative industry reputation. Property managers fall somewhere between attorneys and used car salesmen on the trust spectrum. There has never been transparency, there has never been good communication, and it hasn’t been a good experience for people.
Things are shifting, however. Property managers are realizing that customer experience is important. You’re fighting the industry reputation every day. Your clients expect you to screw them over, and you’re changing that perception with every good experience you provide.
Kevin has found that over-communicating is not necessarily bad, especially when he’s on-boarding a new client.
For Renters Warehouse, over-communication looks like a lot of automation and technology. Videos are used with letters and handbooks. Every new owner gets a handbook, but 90 percent of people don’t read handbooks. So, there are emails that go out with videos discussing all the things that owners need to know. Topics include what to expect in the first month’s statement and how the rent collection process works.
Setting expectations is also important. Most new landlords think they will get their rent check on the first of every month because that’s when the tenant pays. So, you need to set the expectation for how rent is processed and when they can expect to see it.
Over-communicate and set expectations. This will make a great customer experience possible.
Business Owner Tip: How to Help Your Peers Without Sacrificing Your Time
Content and education – these are the things you hear about all the time on The Property Management Show. You want to invite people to ask you questions, especially when your field of expertise is real estate investing and property management.
But, everyone is busy. So, how do you engage with people without costing your company your time?
Kevin wants to help but if he spent an hour with every person who has a question, nothing would get done. His solution is to provide some of the content he’s already spent time creating. That’s an easy way to deliver value without having to do a lot of extra work.
If you’re regularly creating blogs, videos, podcasts, articles, eBooks – whatever, you probably have eight or 10 things that are really great and really helpful. Direct people to those things, and then let them get lost in your other content if they keep finding things that are interesting and useful. When someone wants advice on how to do what you do, let them start there.
Self-education is also important to success and growth. Kevin’s advice is to squeeze as much juice out of what you currently have. Instead of chasing after 20 podcasts you want to listen to, stick with the five that you really love, and make sure you’re working every point that you can. Go deeper into that information and get everything out of it that you can. Then, move on to the next thing.
To learn more about Kevin and what he does, check him out on LinkedIn, which is where he spends most of his social media time.