Fear is a powerful thing. It can be the driving force behind professional success, or become a barrier between you and your goals. Fear of failure can keep you stuck in ‘analysis paralysis’ constantly looking at new opportunities, but never picking a single path. Even if you do pick a path, fear of failure can keep you from taking the first step. While these are not unreasonable fears – any new business venture does include risk – it’s important to ask yourself one key question: If I keep doing what I’m currently doing, will my family achieve our financial and retirement goals?
If your answer is anything but an enthusiastic “Yes!” it’s important to stop and define for yourself what success looks like. Consider what might happen if you invest in a business with a proven franchise model: not only will you decrease fear of the unknown, but also will see reduced risk, increasing your chance for success.
If you have strong communication skills, enjoy networking and interacting with people, and want to be part of changing the standard for property management companies in your area, a Real Property Management franchise might be the right fit for you. Not only will you receive expert guidance and advice, you’ll become a leader in redefining what property management can be for both the investors and the residents you serve in your local community. The industry needs passionate professionals, like yourself, to offer quality property management services to the public.
Unlike other franchise opportunities that have a limited life expectancy due to current trends, property management has been around a long time and isn’t going anywhere. It is one of the most stable industries you’ll find, which means the business you’ve invested so much of yourself into won’t disappear in five years. The industry potential is substantial and growing: right now, in your own neighborhood, there’s a good chance that 1 in every 3 homes is a rental.
With over 300 locations nationwide and over 1,000 employees, Real Property Management is helping homeowners and real estate investors nationwide to grow their wealth and manage their properties. Our team of experts and franchise owners is dedicated to changing the property management industry for good. Would you like more information about being a part of the change? Contact us!
A successful property management company is one that has weathered the inevitable bumps in the profession’s road. Many newcomers to the industry start out with little experience but a great deal of determination, doing everything they know how to do to create a sustainable, successful business. But unfortunately for many of these determined business owners, their best intentions are simply not enough. One of the top reasons that a property management company ultimately fails is that it is missing the essential business systems that support long-term success.
The business of running a successful property management company requires certain systems to be in place from the start. No property management company will last long without effective sales and marketing programs, streamlined operations systems, solid accounting processes, functional information systems, and more. Expertise in each of these areas is a fundamental component to sustaining and growing a successful property management company.
Once these systems are in place, the key is to make sure that they are repeatable.
Hiring great people to handle advertising your rental homes or showing properties and signing leases is important, but if they are the only ones in your company with expertise in these areas, you might find yourself in a difficult situation if and when they decide to leave. Similarly, relying too much on your operations expert for handling tenant requests, maintenance and repairs, or evictions can concentrate too much knowledge in one position and leave a gaping hole in your business when your expert moves on.
This is why documented, repeatable systems are the key to a successful property management company. Creating them yourself is an option, but when you become a franchise owner of a Real Property Management office, these critical systems are provided for you. No need to build them from scratch, keep using what you have now, or make many of the common errors that most do-it-yourself property managers make early on.
As a franchise owner, you’ll have access to a team of property management experts as well as business coaches, IT professionals, marketing specialists, and more. The Real Property Management marketing program is fully realized and ready for your use. Another key benefit of owning a Real Property Management franchise is the preferential pricing they can offer on necessities like repair and maintenance supplies, bookkeeping and payroll, software, and much more. Finally, their innovative systems and processes come with comprehensive training and owner support, meaning you’ll never flounder around looking for answers to your most pressing business questions.
Whether you are just entering the property management industry or looking to maximize your current business, Real Property Management has the tools and expertise to help your property management company not just survive, but to thrive.
When people think of property management what comes to mind most times are maintenance issues and rent collection. However, a successful property management company is built upon strong relationships, both with property owners and residents. The cultivation of these solid relationships will pay big dividends in the future by establishing trust and setting expectations to avoid future conflicts.
We at Real Property Management seek out property investors with goals that align with our own. We get to know a property investor first to determine whether their expectations of a property management company are realistic. This initial conversation may be difficult, but establishes trust and results in a quality long term relationship. Although a property management company does do a significant amount for a property investor, there are still some expectations, including making necessary repairs, responding in a timely fashion to repair requests, complying with local laws and obligations as a landlord. We at Real Property Management sometimes will turn down business, for example, when a property investor is not willing to comply with habitability requirements. Additionally, a property manager must put forth realistic objectives on aspects such as rental rates, maintenance costs, what normal wear and tear is to be expected, rates of return, and numerous other aspects.
Similarly, building positive relationships with residents will also pay big dividends by retaining quality tenants and reducing turnover costs. A similar process occurs in that those difficult conversations must happen at the beginning to set expectations. In particular, many residents leasing a single-family residence have previously only had apartment living experience. They will need to know the many differences between these two types of leasing. For example, a good property manager will inquire as to what experience and knowledge a resident has with single-family residences, and then ensure that the resident is adequately informed of responsibilities, such as yard care, plumbing, lighting, utilities, pest control, and other aspects that may have been taken care of by an apartment management company, but are not covered with a single-family residence.
Property managers act as the middle-man between the property investor and the tenant. By setting proper expectations up-front, conflicts are avoided and everyone involved benefits from the relationship.
DOL Overtime Rules In Effect December 1, 2016
On May 18, 2016, the Department of Labor (DOL) released the final rule increasing the salary threshold for overtime exemption to $913 per week (totaling $47,476 per year). This means many employees currently classified as exempt from overtime will now have to be reclassified as non-exempt and be paid overtime. The new regulation is effective on December 1, 2016.
Many small businesses, such as property management companies, are unaware of these requirements or think the requirements don’t apply to them. However, if you are an employer whose annual sales total $500,000 or more or are engaged in interstate commerce – this regulation applies to you. Please note that the courts have interpreted the term “interstate commerce” very broadly so that these regulations apply to most workplaces. Let’s review the problems that the new regulations can cause, as well as suggestions as to how your office can comply.
In a typical property management office, you have employees who would currently be classified as salaried – exempt from the overtime regulations. These employees may be an office manager, property manager, or a maintenance supervisor that work many hours (often more than 40 hours per week) to keep the business running smoothly. Many of these employees make under the new threshold of $47,476 per year and will now have to be paid for all overtime hours worked. Most of these employees enjoy the flexibility of being salaried and the distinction that typically comes with that classification.
Before determining how you will comply, look at the potential problems first:
- Many employees will feel that being changed from salaried to hourly is a demotion.
- Employees lose flexibility – i.e. an employee might work fewer hours one week, but make up hours during the next week. As an hourly employee, this is not possible since any hours spent working must be compensated within that workweek.
- Can your employees accomplish all their assigned work within a 40-hour workweek?
There are several ways to make sure your business complies with this rule and they will all affect your employees one way or another.
- Raise employee salaries to maintain their exempt status. This might make sense especially for those employees whose salaries are close to the threshold.
- Convert salaried employees to hourly and track their time. This may potentially end up costing your business more if you don’t limit overtime worked by your employees.
- Reclassify salaried employees as hourly, adjust their base pay to account for overtime. If this is done right, employees will earn the same amount they did before the change. This option might be the hardest sell to the employee as their hourly rate will go down even though they will be earning the same annual rate.
With these changes, some re-training will also have to take place.
- Employees will need to be trained on timekeeping. As a salaried employee, they are most likely not used to keeping track of their time – especially accounting for lunches or other breaks.
- Employers will need to retrain themselves on how to work with a non-exempt employee. Any time worked must be compensated, so, if you are used to emailing, calling, or texting an office manager or maintenance supervisor after hours (and expecting a response), this time will now have to be tracked and paid. These types of interactions are typical in a property management office as after-hours requests from tenants and property owners are the norm.
- Employers may have to adjust assignments to account for the employee who will only be allowed to work 40 hours/week and used to work more.
Whatever actions your property management business decides to make, keep in mind the effective date of the new regulation is December 1, 2016!
Additional Note: The Fair Labor Standards Act (FLSA) is a federal regulation and some states have more stringent laws. Make sure you know your state’s laws as well as federal.
Property Management as a Career
Stacy Brown is a professional property manager who trains and supports all the franchise owners and staff in the Real Property Management franchise system. Following is her perspective about making property management a career choice.
A real estate agent brings buyers and sellers together, to assist with the steps both must complete to ensure the property purchased is closed. Agents have knowledge of laws and procedures to keep property transactions running smoothly. In contrast, property management is the operation, control, and oversight of real estate as used in its most broad terms. Management indicates a need to be cared for, monitored and accountability given for its useful life and condition. This is much akin to the role of management in any business. (Wikipedia)
When making the decision of a career path, many with their real estate licenses wonder whether there will be enough housing inventory to make a living with sales alone, and may be dipping their toes into the property management field as an alternative course of action.
If this describes you, then there are many reasons property management might be the right career choice. If you are a people person, like sales and customer service, and have an eye for details, you will hone these skills in this industry. You also have the opportunity of working both in an office and outside. No cubicle and easy listening music here!
I started in Property Management thinking it would just be a job that would help me with housing and to pay my bills until I found a real job. Yet many years have passed, and I am still in the industry and still passionate about shaping its future and image.
Early on, I found that I had a knack for aligning people and homes that were a perfect fit. Indeed, residents I had assisted usually renewed their leases many times in part because of the service they received from me. As my career as a property manager progressed, I learned that leadership is doing the right thing, and management is doing things right. I also learned that to truly succeed, you need to build a team — not a staff. Moreover, I found that there are many career paths within the property management industry, including the residential side with single or multi-family units, as well as commercial, common interest communities or industrial. Once in property management, you can choose which sector of the business is best for you. At this point in my career, I am teaching, coaching, and assisting the next generation of great property management leaders. How many industries have such a diverse arena of opportunities in so many different directions without asking for a specialized Degree?
So if you are capable of keeping owners and tenants happy, able to oversee repairs, and good at showing properties and are a multi-tasker at heart, then property management is right for you.
Darus Trutna went from high school to directly joining the US Army. He was soon deployed overseas, including a year in Egypt. Upon returning back to the US, he enrolled at Humboldt State University in Arcata, California, where he began studying business. While at Humboldt, he began exploring investment property options, and along with a partner, he bought his first investment property and fixed it up. However, rather than selling the revived property, he and his partner decided instead to put a renter in the house. Additionally, Darus decided to manage the property by himself, and acquired tools and other items needed for a single unit. He later purchased a second investment property and repeated the process.
Darus soon realized that property management could be a business for him. He knew about other companies’ poor reputations and saw an opportunity to compete. He started as an independent property manager, and soon started growing, and then reached a point of needing employees and better structure. As such, he started exploring franchising, which led him to RPM.
In June 2012, Darus started his Real Property Management Humboldt franchise with 35 units and by November 2013, had grown to 135 units, along with two full-time employees.
Then in November 2013, he began the acquisition of a significantly larger competing property management company, the owner of which wanted to retire.
The acquisition has presented a number of challenges. In particular, Darus needed to know how the previous owner had done things to continue servicing existing customers. He could not simply stop the previous owner’s machinery and immediately shift to his own process. At the same time, though, he built out new methods and trained staff, so that he could then replace the previous methods with his own for a smoother transition.
Darus is now at 1,585 total properties, about 1,300 are residential, along with some mixed use and commercial properties. He has a team of 17 in the office and six full-time maintenance technicians. How did he achieve such an undertaking? Darus says that he focuses on empowering his team to manage day-to-day operations. Rather than solving all the problems himself, he focuses on empowering the team and removing the obstacles for them to serve clients.
Darus says he looks forward to the bright future ahead for his team and his RPM family. One of his favorite quotes is “Entrepreneurship is living a few years of your life like most people won’t so that you can spend the rest of your life like most people can’t.”
Are you ready to grow your property management business? Watch this video to learn more about how joining the Real Property Management franchise can assist your business.
Video Transcript: Are You Ready to Grow Your Property Management Business?
As you know, demand for residential property management is growing faster than ever, and you have the competitive edge as part of the leading brand. It’s an exciting time for property management, and a critical time for you. But are you ready?
Have you checked your p’s and q’s, dotted your i’s, crossed all of your ts?
How do you take full advantage of the opportunities a growing rental market has to offer? How do you avoid the pitfalls and obstacles that keep too many property managers from rising up to the next level? From scaling their business to building a future, not just a career.
Well, you need tools that help you track, sell, service, and retain more customers. And Training. Step by step guidance for both you and your staff. From simple daily tasks to more complex demands like accounting and new technologies. You need innovation. New programs and streamlined process, so you stand out from the competition.
Next, your partnerships help you build trust and credibility for driving referrals. And finally, we need to measure to clearly see where your decisions are taking you and form your strategy for the future. All of these resources are yours as part of the Real Property Management family, providing you a solid foundation in a strong but challenging industry.
Yet there remains one more key component to building your future. You. Your time, energy, knowledge and commitment. You are the final critical piece of growing your future.
With 25 years of experience, and a nationwide footprint of over 200 locations strong, Real Property Management is ready to take advantage of everything the industry has to offer. Are you ready?
Dan Hayes purchased a Real Property Management franchise in August 2015. Within the first year, his Real Property Management Solutions office in Portland, OR, received the 2016 Rising Star Award by the Real Property Management franchisor, Property Management Business Solutions, Inc.
Q: How long have you owned a franchise?
I opened in August 2015.
Q: Why franchising?
Joining a franchise provides access to proven systems and resources for franchisors and franchisees to achieve their respective goals. The Real Property Management opportunity specifically provided important business resources to help with marketing, training, and operations, which ultimately offered a competitive advantage over independent operators.
I’ve also found that being part of a trusted national franchise organization has attracted business because clients identify this credibility as part of my value proposition.
Q: What were you doing before you became a franchise owner?
Before joining the Real Property Management franchise, I worked as a full-time senior executive with the Coca-Cola Company and as a part-time residential rental real estate investor.
Q: Why did you choose this particular franchise?
The professional property management industry is largely made up of small mom-and-pop operations. I was impressed with what the founders of the Real Property Management brand had built, the culture of the organization, and the overall power and knowledge I knew would come with their 25 years of experience.
Q: How much would you estimate you spent before you were officially open for business? (Please give us a cost breakdown.)
The franchise fee was $40,000. I estimate spending an additional $3,000 in marketing materials, $3,000 in furniture and fixtures, and $5,000 on miscellaneous expenses.
The average total first-year investment to open a Real Property Management franchise ranges from $75,000 to $100,000, depending on size and location.
Q: Where did you get most of your advice/do most of your research?
Outside of the information I found online, most of my research came through a series of discovery calls and meetings with the corporate office. I also spent time talking with current Real Property Management owners.
Q: What were the most unexpected challenges of opening your franchise?
Our marketing efforts really worked well and the growth we saw, as a result, was dramatic. It’s a good problem to have, but the learning curve was steep and at the same time, our capacity was challenged. Having the support of fellow franchisees and the Real Property Management HQ office was a huge advantage.
Q: What advice do you have for individuals who want to own their own franchise?
Do your research and make sure that the goals you have for your franchise are achievable within the parameters of your franchise agreement. For example, we have complete control over our pricing structure, organizational design and growth aspirations. The franchisor has complete control of brand imagery and territory, which is the way it should be, I believe. This is very much in line with our goals.
Q: What’s next for you and your business?
We plan to double our business again this year and hope to begin plans to open our second Real Property Management office.
Real Property Management is the largest property management franchise organization in North America, with over 280 locations. The brand specializes in managing single-family homes, townhomes, condos, multiplexes and small apartment buildings. Its services include finding and screening tenants, completing the lease agreements, collecting rent, arranging for any necessary repairs, and processing evictions when necessary. Real Property Management offices also manage the legal compliance for local, state and federal real estate law.
Here’s a video that includes comments by Marcus and Emery Phillips, owners of the Real Property Management Palm Beach County franchise office, discussing aspects of the property management industry.
One of Marcus’s observations about both the industry and Real Property Management: “So what really excites me about the industry today is that there are more renters than ever, and with the Real Property Management platform, we’re able to bring those best practices to bear. Real Property Management is really leading the charge for other property management firms.”