Solving the Riddle of Scattered-Site Management
Managing smaller properties and single-family homes presents challenges, but technology, planning and customer service can ease the burden.
There are 42.8 million units of rental housing in the United States, most of which are not conventional apartments. In fact, only 8.6 million of those homes are in buildings with 20 or more apartments. These homes usually are below the radar of institutional investors and big-money players, giving smaller, entrepreneurial owners (and managers) an opportunity to earn a good living by buying a couple of duplexes and repairing or repositioning them.
There are challenges. Larger apartment communities can afford the support that comes from a leasing and maintenance staff. Smaller communities need to be managed remotely. Operators who have rental homes scattered throughout a metro area, they must drive across town for a prospect tour or to fix a toilet, which can become a horribly inefficient use of their time.
Fortunately, there are tools to help. By borrowing best practices from experienced owners and managers and utilizing new technology, scattered-site operators can improve their marketing, leasing and even maintenance operations.
Grassroots Marketing
Though she is responsible for more than 35,000 large apartment units as Chief Operating Officer for Capstone Real Estate Services, Tina West is no stranger to scattered site rentals. When she worked at Sunrise Management, the company had a small property division and, more recently, one of her current clients acquired a small property portfolio.
When marketing these communities, she learned one important lesson.
“When you are managing multiple single-family homes and they are scattered, you must create a single source, whether it is a database or website,” she says. “For each of those addresses [of the rental properties], you could do unique SEO campaigns to drive traffic to those addresses. Most of the SEO work was focused on its company’s main website. All of its properties were within this database.”
Once inquiries come in, West says it’s important to respond quickly to incoming leads.
Sarah Greenough, Chief Marketing Officer and Executive Vice President for Princeton Properties, cautions that scattered sites can create digital challenges.
“On the listing sites, sometimes we have an issue because they use the office address as the actual physical address of the rental,” she says. “That can send the prospective resident to the wrong location.”
Mark Hurley, President of Highland Commercial Properties, relies on a much lower-tech marketing solution for his single-family rentals. He puts out a sign in the front yard, which he says can generate a lot of demand. “People stop by all the time,” Hurley says. “Maybe they already live in the neighborhood and want to change homes or they have family members moving in and they want them close by.”
When those people stop by, Hurley often has maintenance teams working onsite, fixing up the homes or turning homes. He empowers them to show the homes, which eliminates the need for an office staffer to set up an appointment and make the drive to do the tour. “We will offer the construction team a bonus to show the house to people who stop by,” Hurley says.
In situations where someone else cannot show the home, team members step in to show the home.
When she worked at Sunrise’s small property division, West said the company employed leasing managers, whose job it was to show properties.
“They were roving,” she says. “They went from one end of the county to the other to do so. Trying to figure out how they had the least amount of ‘windshield’ time was a challenge.” If you have multiple leasing agents, West suggests breaking it up geographically. One agent could take the northern end of a county while another concentrates on the southern end.
Regardless of how it is divided, it is also important to have the ideal person showing the single-family rental or duplex. With properties spread out, they will have to do more homework than a leasing agent who is responsible for an entire 200-unit community. “You have to make sure they have a knowledge of the inventory, even if they are in different neighborhoods or school districts,” West says. While virtual tours have potential and could conceivably reduce a leasing agent’s windshield time, West still thinks today’s customer wants “to touch it and feel it” unless they’re relocating.
Another strategy is to install lock boxes on the property. “Programmable locks on the front doors with specific scheduled times for self-guided tours are an option; however, best practice would be to ensure you have appropriate identification and protection such as camera systems and waivers in place if following a program like this,” she says.
Operational Concerns
Maintenance has traditionally bedeviled owners and managers with scattered rental sites.
“Maintenance has the same challenge as leasing,” West says. “It is geography. If you have someone going from one end of the county to the other to fix problems, that is not very efficient.”
Fortunately, technology and apps can help streamline the maintenance process in these situations.
“Technicians don’t have to wait until they are in the office or online to be assigned a service request,” West says. “It comes to their mobile app. If they are in the area [where the request is originating], they can coordinate appropriately, document everything in the app, handle move-out charges and provide other information by using the app.” Hurley also utilizes GPS technology to ensure that maintenance is performed as efficiently as possible.
“When we get maintenance calls, we often have people in the area,” he says. “We also use a mileage tracking program to make sure they are getting to the location as quickly as possible.”
Residents can help to make the process more efficient. Hurley’s team is working to train customers to submit more detailed, accurate work orders.
“Having our support staff asking them the right questions and getting their customers to send in a picture or video is very handy,” he says.
Hurley strives to eliminate technicians’ drive time (which helps to increase customer satisfaction and the value of his assets) by “plusing” (which consists of performing regular upgrades to a home in his portfolio every week. His teams replace rotted wood and replace toilet valves that look old, which cuts down on maintenance calls overall. Water heaters are flushed and HVAC systems are cleaned every six months.
“We are making sure that we don’t get more maintenance calls by systematically hitting every house on a regular basis through the preventative maintenance programs and the plusing programs,” he says. Maintenance is not the only geography-based challenge for scattered-site operators. Without a central office, collecting rents can become complicated. Online rent payments and bank transfers can eliminate these issues.
“I have an arrangement with my bank regarding ACH payments approved by my residents,” says Norbert Huston, who manages 145 units of homes, duplexes and triplexes in San Joaquin County. “It works well.”
Though online payments are available, Hurley says his lower-income residents are not as interested as other customers. Often, they will turn to money orders. That requires Hurley to be flexible. “We are fortunate to have a mix of apartments and houses,” he says. “We will have an apartment community near most houses so they can just stop in and drop it off.” Hurley also will send associates to pick up the rent if necessary. “We try to make paying rent as easy as possible,” he says. “If they let us know, we’ll go by and we’ll knock on their door and ask if they need anything. If they allow us to enter when they are not home, they can leave the check on the table and we’ll pick it up.”
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