How to Expand Your Property Management Services
Ever thought about what it would take to expand your property management services?
Our guest on The Property Management Show today is from our own backyard. Based in Oakland, we’re talking to Carlos Veliz, the CEO of Vision Property Management. Carlos shares how to branch out from your traditional property management services to create new lines of business, revenue, and most importantly – service.
Introducing Carlos Veliz of Vision Property Management
Carlos has a pretty great story. Vision Property Management went live in November of 2017. They now manage 700 units and they’re currently negotiating for an additional 150 units. Most of their accounts are local; they serve properties that are within 20 to 25 miles of Oakland.
Most three-year-old management companies would build their business organically or by buying up companies and portfolios. Carlos followed a bit of a different path.
He comes from a property management background, but had been doing construction. Carlos was renovating an apartment complex in early 2016, and one of his construction clients had purchased a portfolio of 25 units around Oakland. This client was having a terrible time finding a good Oakland property management company. His complaints were:
- They didn’t know what they were doing.
- They didn’t provide any reports or updates.
- They spent money without trying to save it.
Property management had been something Carlos had wanted to get back to; he had been thinking about opening his own property management company at some point. So, he asked this client for three months to prepare and get licensed and up to speed. Then, he would be ready to manage those units for him. The client agreed immediately.
How to Expand Your Property Management Services With The Triangle Effect:
Building Better Businesses
“The Triangle” is what Carlos calls his business model; from his property management company, he developed a construction company and a maintenance company. His goal has been to find recurring income streams so he could make all of his companies stable.
When Vision was started, they were using maintenance vendors just like everyone else. It was really difficult to find a good, reliable maintenance vendor. Results were inconsistent; sometimes, the quality was there, and sometimes it wasn’t. The vendors he used could not be counted on to fix their errors. If something went wrong, getting them back was almost impossible. They had already moved onto a new job and a new client.
In order to control the level of maintenance service he was delivering to his clients, Carlos realized he had to open his own company. So, he did that – and now all the work orders for Vision Property Management are done within 72 hours, and they’re handled professionally and responsively.
It has increased accountability and it has fostered trust.
In property management, 90 percent of the complaints you get are maintenance-related. If you can control and limit those complaints, it’s easy to run a great business.
Speaking of complaints, you may have seen our blog on incentivizing online reviews – which will frequently revolve around maintenance issues. If not, check it out!
The construction company, of course, already existed, and it fit seamlessly into the other two businesses. They’re being invited to do turnovers and remodels and major repairs. Carlos encourages his property management clients to gather other bids, but he has a relationship with his clients that makes it instinctual for them to choose his company. They’re more comfortable because they know him, they know his company, and they know his work ethic.
So the Triangle, or the Trifecta, for Carlos and Vision’s success is maintenance, construction, and property management.
Accountability and Service
We have talked to other people in the property management industry who say it’s a conflict of interest to blend all these services. But, there is a simple benefit. At the end of the day, the accountability lies with one entity. A lot of the bad reviews around property management start with maintenance. So, if you have the bandwidth and capacity to own the maintenance piece, why leave that opportunity hanging?
You can control the experience for renters and owners.
Everyone is familiar with the tenants who don’t want to wait for anything. They want their repairs now, and instead of calling a vendor and going back and forth, Carlos and his team can send their own maintenance crew immediately. This is especially effective during emergencies.
It also helps for any owners who are paying too much for good maintenance. Emergency or after-hours work can cost three times the normal amount. You’re paying much more for the same work, and having a dedicated maintenance team attached to your property manager can solve that.
Carlos is committed to charging market rates for hourly labor and materials. Then, there’s a 10 percent mark-up for hourly rates, which he is transparent about with his clients. He’s a Certified Property Manager and accountable to a code of ethics. Conflict of interest is a big phrase for him and his team. He is careful to disclose everything and be upfront. All of their clients know who they are, how their business model works, and why it’s successful. It makes sense to a lot of people.
Trials, Errors, and Challenges
Trial and error is essential in building a new business model, and Carlos is comfortable with it. He’s willing to try what he thinks will work and then try something else if it doesn’t.
Finding loyal employees was the first challenge for Carlos to face. He’s 43 years old and he’s had four jobs in his life, so loyalty is important. With a strong economy and everyone wanting to make more money and do new things, it was hard to hold onto staff.
He came to learn that good employees work for good companies. He stopped hiring from a place of desperation and started to be intentional about the new team members he brought on board. One of his mentors advised him to hire slow and fire quick. It took some time for him to pay attention to that, but he eventually saw the importance of it. It was one of his challenges, but now he’s doing a better job with it.
At Vision, mistakes and failures are never about pointing fingers. The team talks through things. Maybe something wasn’t advertised correctly or the wrong tenant was selected or the accounting got messed up. Instead of pointing fingers, there’s a group hug and a big discussion. Everyone learns from the mistake.
Three of the Vision Property Management employees have been with the company from the beginning. Problems are less scary now; they’re usually a reason to laugh.
Communication is Critical with Three Companies
Communication and structure is important in keeping everyone on the same page. There’s a handbook with all the company’s policies and procedures which started at three pages and is now 25 pages. More things are consistently added to make sure everything is working.
With separate maintenance and construction companies, Carlos can make sure his property managers are dedicated to tenants and clients. That freed up a lot of time and increased service levels.
All three companies work well together because they all work from the same office. It’s a communal space that allows for the free flow of communication. Carlos jokes that everyone is nosy and always listening. But, this is valuable to keeping each company and team member informed. They have solved problems and shared ideas together.
As an example, one of Vision’s properties had a water leak. It happened at 7:00 at night, and the maintenance team took the call and dealt with the problem. In the morning, the whole office talked about it and received an update. The tenant called while it was being discussed and it was easy to work that tenant into the conversation that was already happening.
Preparing to Create a Triangle
Carlos knew he was going to start with a 25-unit portfolio, so he went on Yelp and Google and looked at other companies. He was surprised that he couldn’t find a single company with more than three stars. As he analyzed the reviews, he got to know the leasing and maintenance clients who were leaving those reviews. Most of those bad reviews were maintenance-related. He was busy with construction and thinking about property management, but maintenance seemed like an obvious place to go.
Starting a maintenance company wasn’t the best idea for ROI. It didn’t bring in a lot of money early on. The reason Carlos did it was because it was such a perfect fit. He knew that if the maintenance services went well, Vision Property Management would do well. It was security.
Client feedback was also important. He began talking to his property management clients and offering his maintenance services. He was hoping for cooperation, and they were actually surprised he hadn’t asked sooner. It seemed like a natural progression.
This is a big mindset shift for you if you own a property management company and you’re thinking about opening a new line of business. Making money isn’t the only reason to do it. It’s a long term investment because it turbocharges your whole business.
Tracking the Success of Vision
Vision Property Management has 4.5 stars. So, the vision is working.
Carlos keeps a big spreadsheet because numbers never lie. He organizes all the data he needs to see what kind of success he’s having. He can check the spreadsheet to see how many new clients he has, how many vacancies are coming up, and how many tenants are delinquent on rent.
After three years of doing business, Vision has finally broken even. So now, Carlos also has a profit spreadsheet.
Building a Supportive Team Culture Fosters a Supportive Client Relationship
Vision Property Management has a good culture and they’re having fun.
Carlos checks in with his teams all the time. They have lunches, coffee breaks, and one-on-one sit-downs from time to time. He’s an entrepreneur who likes to have the pulse of his business at all times. Carlos is detail-oriented when it comes to customer surveys and he’s involved in automating processes. He loves to listen and observe and he always asks his staff to teach him something.
This company culture can be seen in the way they care for clients.
Carlos is intuitive and attentive to what people need. He recently interviewed a new client, a young couple, who were upfront with Carlos about seeking a property management company that they could rely on, while they pursued their lives and careers. Carlos knew that if Vision landed the business, he would want to check in with them frequently. He knew from that first interview they wanted to feel cared about. As a result of Carlos’ attentiveness, the couple agreed to work with Vision.
Carlos also sends a personal introduction email to all new clients. He tells them who he is and he provides his personal cell number. Clients can call him directly if they can’t get in touch with their leasing agent or property manager. It’s more than an account; it’s a personal relationship. He thinks it’s special.
Alarm bells might be going off at the idea of giving clients your personal cell phone number. The good news is, clients rarely need to use it because the management team is so accessible. Still, it gives those new clients an extra feeling of security.
It’s easy to have automated solutions. But, human interaction shouldn’t be taken for granted. It’s more impactful now than ever. People want to work with a company that offers more than a button on a website.
Carlos says he likes automation and Vision will always work for volume and fight for big accounts. But, he wants to make sure that clients feel they can connect with his company. There is a middle ground to what’s automated and what needs to be communicated in person.
Risk Management: Controlling What May Fall Through the Cracks
Many things fell through the cracks as this whole thing was starting. Risk management is one of the best ways Carlos stays ahead of things. Controlling risk is important.
There’s a weekly meeting where the whole team gets together and takes responsibility for the agenda. It’s a 30-minute meeting that relies on bullet points, but anything that pertains to risk management is written in big red letters. All these issues get raised.
Keeping Up with Industry Changes
Given that Carlos is basically in three connected but still separate businesses, there’s a lot to keep up with when it comes to laws and best practices.
Oakland and Hayward and Alameda and the surrounding areas are always updating their laws. The best way Carlos has found to stay current is through association memberships and subscriptions. They update him and his team. He also believes strongly in ongoing and continuing education. It prepares his team for new challenges.
We hope this discussion on how to expand your property management services was insightful. If you’d like to hear more or you have any questions for us or for Carlos, please contact us at Fourandhalf.
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