In today’s competitive property management landscape, having a world-class internal maintenance team can be a game-changer. Whether you’re considering transitioning from using external vendors or are just curious about the benefits of bringing maintenance in-house, the insights shared in Justin Mann’s presentation at the 2024 MX Summit will help guide your decision-making process. This post delves into why internalizing maintenance can improve outcomes, control costs, and add value to your property management business, based on real-world experiences from industry leaders.
Understanding the Importance of Internal Maintenance
When Justin Mann, CEO and co-founder of Stonelink Property Management, began his property management journey, he quickly realized the critical role of maintenance in keeping clients happy and assets well-maintained. Operating in Rhode Island, where 80% of the housing stock is older than 1978, Mann manages approximately 1,500 doors, primarily in scattered-site, low-density multifamily properties. With such old properties, maintenance is an ongoing and substantial responsibility, making it a central focus of the business.
In fact, Mann jokes that Stonelink is essentially a “maintenance company masquerading as a property management company.” The sheer volume of work is staggering—over 12,000 melds (maintenance requests) were processed in 2023 alone, with the company averaging 900 to 1,000 labor hours per week just from its internal team.
So, why should property managers consider building an in-house maintenance team instead of relying on external vendors? Mann’s journey provides a compelling case for internalizing maintenance to improve outcomes, manage costs, and ultimately enhance the client experience.
Why Internal Maintenance Matters
Control Over Outcomes
One of the primary reasons Stonelink opted for building a world-class internal maintenance team was the ability to improve control over maintenance outcomes. Every time maintenance was outsourced, they had less control over the work quality, culture, and values of the external vendor. Internalizing maintenance allowed Stonelink to ensure consistency in service delivery. As Mann emphasizes, “When we looked back at where things went off the rails, more often than not, it was when we externalized it.”
Internal teams are not only easier to manage but also more accountable. Employees align with your company’s mission and values, unlike external vendors whose priorities might differ. Having direct control over staff ensures that maintenance aligns with the overall business goals and delivers the quality clients expect.
Cost Management and Value Creation
Another significant reason for bringing maintenance in-house is the opportunity to manage costs effectively. Mann highlights that controlling salaries, tools, vehicles, and schedules provides a far better chance of reducing overhead costs. By having direct control over labor, Stonelink was able to optimize routes, streamline operations, and lower operational expenses.
Not only does this help reduce costs for the property management company, but it also allows property managers to add value for clients. Instead of being perceived as a line item expense, property management can become a value-enhancing service that boosts a client’s profitability. As Mann points out, “I’m not a line item cost. I’m actually enhancing your P&L because I’m delivering better value.”
Becoming a Value-Added Service Provider
World-class internal maintenance positions a property management company as more than just a coordinator of repairs—it makes them a true value-added service provider. By delivering end-to-end maintenance services, property managers can help clients save money while ensuring high-quality work. This increased value makes it harder for clients to replace the property management company, as they would lose access to the in-house maintenance team.
This advantage is particularly critical in a competitive market where clients face rising taxes, insurance premiums, and other overhead costs. Property managers who can demonstrate cost-saving, efficient in-house services can become indispensable to their clients.
Enhancing Asset Management
Property managers are often viewed as mere facilitators of repairs and resident relations, but the role should extend further into asset management. Mann stresses that property management companies need to demonstrate their value in managing the long-term health of a client’s asset, whether it’s maintaining the property condition, strategizing for repairs, or planning for future renovations.
By internalizing maintenance, property managers can implement proactive strategies that help clients manage their properties more effectively. This shifts the focus from reactive maintenance to asset management, where the goal is to preserve and enhance the value of the property.
Building a World-Class Internal Maintenance Team
Specialized Teams and Structure
Stonelink’s maintenance team is structured for efficiency, with a total of 30 maintenance technicians divided into specialized teams. There are dedicated turnover teams, break-fix teams, and a back-office support staff of seven people, including a maintenance manager and assistant managers. This specialization allows for better management of both daily operations and larger, more complex projects.
Defining Metrics for Success
Mann emphasizes the importance of clearly defining metrics for maintenance teams, just as you would for property management staff. Using key performance indicators (KPIs) helps set clear expectations for technicians. In Stonelink’s case, they implemented measurable goals, such as completing a set number of maintenance requests or earning high ratings from residents.
To motivate technicians, Stonelink recently ran a three-month contest where maintenance teams competed to gather positive Google reviews. By splitting rockstar technicians across different teams and providing regular feedback on performance, the company garnered 83 five-star reviews in just 90 days. This success was a direct result of setting clear expectations and holding technicians accountable.
Maximizing Revenue Potential
While internalizing maintenance can improve service and control costs, it also opens up new revenue opportunities. Mann believes that an in-house team can not only handle everyday repairs but also take on larger, more complex projects that were previously outsourced. From rebuilding staircases to exterior painting, having a skilled internal team allows property management companies to take on higher-ticket maintenance projects.
As the internal team grows in skill and confidence, it becomes easier to keep more work in-house, reducing reliance on expensive external contractors. This shift also strengthens client relationships, as they see the property management company delivering high-quality, comprehensive services.
Reducing Resident and Client Churn
One of the key benefits of an in-house maintenance team is its direct impact on client and resident retention. In Mann’s experience, poor maintenance is often the number one reason why good residents leave. Having a well-trained internal team ensures that maintenance requests are handled promptly and effectively, increasing resident satisfaction and reducing turnover.
Additionally, when residents stay longer, clients are more likely to stick with their property management company. This retention helps property managers grow their business without constantly needing to replace churned clients, leading to more sustainable growth.
Starting the Process: A Continuous Journey
Building a world-class internal maintenance team is not a linear process. Mann describes it as a continuous journey, much like the ongoing efforts property managers make to improve their services. The first step is assessing the specific needs of your portfolio. Door count is not the only factor—understanding the types of repairs that frequently occur and the skills required to address them will guide hiring decisions.
Ultimately, bringing maintenance in-house offers property managers a competitive edge, improved outcomes, and the potential for new revenue streams. As more property managers adopt this model, the question shifts from whether to internalize maintenance to how quickly they can build their world-class team.
