The Future is Customized

Why Standardization has You Stuck in the Past

At the LeadSimple University (LSU) user conference last month, the much-anticipated results of a large-scale survey of landlords in the United States were released. You can get a copy of the full report here, and you’d be crazy not to read it if you’re in the PM business. The report was put together by Peter Lohmann (property manager), Jordan Muela (LeadSimple CEO), Jay Parsons (economist), and Rob Hahn (real estate consultant). There were too many sponsors who helped fund it to list all of them here, but kudos to all of you who helped to make this a reality.

As I read through the report, I was struck with one very big conclusion: property managers who are going to be successful in growth and reducing churn are the PMs who figure out how to customize their service offering and not stick to a rigid set of policies and procedures. And for those of you who have known me for many years, you know that I used to advocate the exact opposite of this. Until a few years ago, standardization was the name of the game, because it prevented mistakes and made it easy to systematize your business when automation and process software was not really a thing for our industry.

However, the only constant is change, and this has definitely changed. With software like LeadSimple now on the scene, along with Zapier to spruce it up with automation, it is no longer necessary to have a rigid set of policies and service offerings. We are now able to use the wonders of conditional logic and automation to make sure that no matter how many different service offerings we have, and no matter how customizable it may all be, we can still make sure that we’re doing it right for each and every client and resident.

Why Customization Is a Necessity

As you read through the report, you’ll see what I mean about this. But let’s look at some of the results that I think are most telling:

More than a third of owners strongly want to be involved in day-to-day decisions, and when you factor in those who somewhat prefer it, you're looking at nearly two-thirds of owners. If you are limiting owner options to keep things standardized, you are basically pissing off the vast majority of clients and driving away potential clients. They don’t want a “one size fits all” model. They want options. They want to make decisions.

Now, obviously not all decisions can be allowed. For example, let’s take a look at something that really caught my eye:

That second item, owners approving tenant applicants, is a complete non-starter. This is a fair housing nightmare, and that doesn’t change with technology like many of the other items can. Keep this in mind: customize what you can, but don’t forget to protect yourself (and your clients).

But we definitely do need to take this seriously. When asked why they don’t use a property manager, nearly half of owners said that they want full control over their property:

It has long been discussed in this country that we have an absurdly low adoption rate of professional property management by landlords. In Australia, where there is a very mature real estate investing mindset among the public and a very established PM industry, about 75% of properties are professionally managed. As you can see in the report, that number is almost completely reversed in America, with the vast majority of rentals self-managed by landlords. This is obviously bad for us as an industry, but also bad for those landlords, as we all know that a great many of them get themselves into all sorts of problems because they simply don’t have the knowledge and experience to keep themselves out of trouble for very long. Eventually fair housing, management of trust funds, handling repairs, bad screening practices, etc. will catch up with them. But they’re either not aware of the risks or they don’t care because you aren’t willing to let them have enough control if they work with you. We have to solve this problem.

How Do We Provide Greater Control?

The answer to this problem is that we need to give owners a better sense of having control when they want it. That last part is important, because while they say that they want control, the survey results also indicate that owners are well aware that there is a lot of benefit to having a professional take care of things for them. For example, owners stated that their biggest challenge is managing maintenance and repairs, and they also cited this as the activity that professional PMs are most useful for handling: