The Role Maintenance Plays in Owner Renewals
The Role Maintenance Plays in Owner Relationships and Renewals
In this month’s Beyond Maintenance webinar on January 27, we focused on property maintenance’s role in owner relationships, experiences, and renewals.
Why Increasing the Lifetime Value of Your Owners is Important.
Billy Early, Christine Bennett, and Aaron Seaholm shared their insights on critical levers critical to owner relationships and what that means to your company.
Aaron Seaholm, Vice President of Customer Success of Property Meld, explained the importance of positive customer service and maintenance quality compared to quantity as a property manager.
“Acquiring customers is not cheap, but it’s definitely something you want to do. You want to be cash-flow positive. I always go back to the Disney customer experience… interaction within the theme park is designed for that type of experience. How can you bring that same experience to your owners?”
At Property Meld, our data shows that owners are more sensitive to the cost of maintenance, not so much the quantity. Paying attention to the cost of your maintenance repairs is crucial.
Christine Bennett, Chief Growth & Business Development Officer of Revolution Rental Management, echoed customer experiences and spoke to the value of a lifetime owner.
“When you’ve had someone that has stayed with you over two years, they are there for a while. You want to make sure you have a smooth process, including leasing, but especially your maintenance operation.”
Bennett shared that maximizing your revenue can happen by having a good solid product and additional resources for your owners.
“Everyone would agree that maintenance is one of the core values to make sure you have this smooth operation. If you neglect a property, then your resident is unhappy — directly reflecting the happiness of your owner of the deferred cost, ” she added.
In addition to exceptional customer service, having a good company reputation should be a top priority. You don’t want to be known as the company that isn’t taking care of a property that someone else is living in. You’ll see referrals if you’re doing it right.
Billy Early, Maintenance Coordinator of Colorado Property Management, added the correlation between owner trust and lifetime value.
“Trust is what matters. It would be best if you had a clear understanding of the expense of acquiring a new landlord. First, you need to educate them of deferred maintenance and how your company plans to help them by addressing issues quickly, ” Early mentioned.
What Metrics Matter When Obtaining New Owners?
Discussions quickly moved towards ways to gain new owners. In property maintenance, there are metrics relative to customer retention and acquisition. So, what are they?
Seaholm responded, “It goes back to trust. If you have a trusting relationship, that helps investors decide where to go. And then there are expectations. You have expectations of optimal performance of your service. We have found that owners expect maintenance to be less than 12% of the rent roll. If you pay attention to those maintenance costs, you’ll be in a good position.”
Bennett promptly responded with similar insights but with a different perspective.
“Your owner may be an accidental landlord, so there are opportunities to have a crash course of maintaining their property. Train them that 10-12% of rent roll will be needed to maintain their property. This is built in to “maintain their investment.”
In addition to expectations and trust, communication between you and your owners is big. Bennett shared that as long as owners know what’s going on with their property, your property management company will still have control.
Bennett continued, “Bad news is delivered upfront. Anything above $200 is bad news to them. With Owner Hub, it allows us to communicate with our owners and succeed their expectations.”
Quality vs. Quantity: How to Keep Maintenance Costs Low
During the discussion, attendees wanted more clarification on why and how to keep maintenance costs below 12% rent roll. Early and Bennett shared insights on maintaining low costs.
Early echoed the importance of trust.
“We tend to believe if there is a lack of trust and transparency, many owners think they are getting nickel and dimed. We put it in our PMA (Property Management Authorization) for our landlords: we require an annual walk-through of all properties. With this preventative maintenance requirement in place, we avoid and resolve a lot of issues that could have cost them more in the future.”
Early shared that they educate their landords/owners yearly with a preventative maintenance email — detailing what and why it’s essential for their properties. Having streamlined education and trust is just a part of their process.
Seaholm chimed in. Having oversight to make educated decisions based on data is priceless, like preventative maintenance.
Seaholm started, “At Property Meld, we found that owners stay longer when maintenance costs are below 12% rent roll. Above that? The probability of your owners will leave. It’s not about the number of work orders; it’s the cost threshold that is more important.
Bennett added, “We’re always trying to have a lower cost for the owner. If you’re measuring the data consistently, you’re creating that same controlled environment.”
How to Charge for Property Maintenance
Bennett noted that their company didn’t initially charge for maintenance as a part of their owner agreement. She believed it would be a hard sell to obtain customer acquisition.
“We didn’t initially charge for maintenance. I was concerned it would push new business and owners away from our company. But when we educated them about the maintenance charge, it made sense. It was invaluable. Just let them know what they are paying for — maintaining their property. Plus, most of our vendors are happy to give us a discount, so that small percentage doesn’t hurt anyone.”
Early admitted, ” Transparency is key. We have a management agreement, and we don’t have too many issues with it — that’s just how our company does business. By communicating and showing the value of what we do as a company is important.”
For Colorado Rental Management, Early shared how some landlords take for granted what they do, thinking they just talk to residents and collect rent.
“When we show them what we are doing — we want them to know there is more involved in what we do day-to-day. We’re here to deal with it, so they don’t have to. Then, our landlords and owners understand they made the right choice.”
More discussions arose about the right amount of transparency and communication between property management companies and their investors.
Early shared, ” We use Owner Hub significantly. We had concerns, because of how transparent we should be. But, building trust is vital. Now, when they see a work order come in, they understand they are in good hands.”
“We take our responsibilities as a company seriously. Hiring us may be the biggest investment they have ever made. Being transparent is foundational. We have to provide statements, but going outside of what we do is when you see the value.”
Imagine being a one-man show at your property management company. It would be hard to reach out to your owner all the time. But when you have a service and process, you can be more transparent without the headache. Your customers just want to know what’s happening, so stay connected as a professional.
Key metrics to track effective property maintenance
Significant metrics, or KPIs, affect how well your maintenance operation performs. Our panelists dove into this further.
Early explained, “One of the key metrics we focus on is speed of repair. Also, the number of messages sent per work order. We make sure there is communication between the resident and vendor.”
“Basically speed of completion, and the cost and quality of the repair. These metrics are equally weighed at our company. And also feedback (positive or negative) from our resident,” mentioned Bennett.
As Early, Bennett, and Seaholm shared their insight on how maintenance plays a big role in owner relationships and retention, the discussion was data-driven. Let us show you how you can utilize a streamlined maintenance process to achieve successful results in owner relationships and implement low-cost maintenance strategies.