Ep009: List and COMMUNICATE Your Minimum Expectations and Non-Negotiables – Part 2 of What To Expect From Your Property Manager

Laci: Good morning. Good morning.

Chris: How are you?

Gretchen: Pretty good.

Chris: Just another day in paradise. I'm not in Ohio, so not as good as you guys, I think North Carolina is a fine place to be hanging out today. So what I want to talk about today is a continuation of our first episode, which was about getting clear on what you want in a property management relationship and kind of that big picture, why. And today I really want to challenge our listeners to drill deep into the tactical detail, the day-to-day stuff you cannot and will not bend on, and I think that's important because obviously, if you hire a property manager, it's money out of your pocket. You know and again we absolutely believe it's with the right person it's an investment, it's not a cost, but still it's a cash outlay and nobody wants to, you know, lay out cash. So the question is what are you going to get for that cash and what are the things that you're just not going to take note for an answer on? So really it's about getting clear on your non-negotiables that make sense.

Gretchen: Yep.

Chris: And I think it's the kind of thing that you know if you can't get clear on this for yourself, if you can't detail your expectations for yourself, there's just no way you're going to be able to communicate them to anybody else. So it comes down to what do you want? What's important to you? Talked about on previous podcasts, but a question that you might ask yourself as a real estate investor, as an owner, is, if you were sitting here a year from now and you looked back over the course of that year, what has to happen for you to feel like you hired the absolutely perfect property manager, right? So if you could put, if our folks we're talking to could just put themselves into the future a little bit a year after you've hired that person to help you out that team, what has to have happened? What has to change in your life? I guess personally as well, because the whole idea of this is to get back your time you know what has to happen for you to feel like you hired the right person, you have the right relationship.

Laci:So I think that's a good good place to start.

Chris: Who are you? Who are you talking to this week? Gretchen, about that, I think you said you talked to a couple of owners that may be adding a couple of properties this month.

Gretchen: Yeah, I'm talking to actually have an appointment tomorrow, talking to someone who hasn't purchased yet, but I think they own a few now out of state but they are trying to purchase their first one in Ohio, in Columbus. So we're talking tomorrow.

Chris: So that's an opportunity to ask them the question you know, what is it you want from me? What's going to make this relationship work for you? And maybe you try to ask them that question. You know, if we were sitting here a year from now we look back over that year what has to happen for you to feel like you hired the right person? Because what we want to get out of this is we want to get clear on what they're. We want to know what they're. Everybody needs to be clear on what their own motivations are, and if you don't know what your own motivations are, if you don't know what you want out of this relationship, it's really hard to to get what you want. So I feel like I'm talking in circles here this morning, so forgive me, but no, I think that's a really good point because there's absolutely nothing.

Laci:You know, we talk about Nana here a lot as the property owner, the investor, and I don't think there's absolutely nothing you could say to Nana other than, oh, I'm going to do all of these things and not charge you, right, like that would make her want a property management company versus her team of ragtag McAlpins, my dad, my brother, my uncle, you know, and their network.

So I think that's a really good point because you know, I think that if you really dig down, if, even if you ask Nana, if you ask Nana, you know what would happen in the next year, that would make you feel like you made the right decision. It would be oh well, I'm gonna make more money than I would have, because it's just a very she's kind of narrowed it down to a bottom line issue. So what do you say to folks who are worried about, you know, not making as much money in spite of you know, forget the fact that time is money and headache is money and all those things are money. But what do you say to somebody who's like, well, I just am not sure it's worth the investment is my question.

Gretchen: I guess.

I think that comes. So I think there's two different investors, right. You have the seasoned investor that's been doing it by themselves for 30 years, who are scared to let it go because no one's going to do it as good as them. And then you have the person you know I'm talking to someone today, actually after this, who just bought an eight unit and he has no idea what to expect. So I think it's a little bit different.

But when it comes to the seasoned person or the person who's been doing it for 30, it's a little bit different. But when it comes to the seasoned person or the person who's been doing it for 30, 50 years, it's just making sure that they understand that we care as much as they do, that we understand it does take time and effort and patience and a little extra attention on some certain things. And then the new people, you know, the new investors that are coming on with us. It's more of I don't want to say hand-holding but or babys us. It's more of I don't want to say handholding but or babysitting, but it's more of explaining every day-to-day tasks to them so that they feel comfortable and then, once they get used to the routine, it just becomes easier for them.

Chris: Yeah, it's sort of a you don't know what you don't know. And you know the guy you're talking to today. He truly doesn't know what he doesn't know, he's scared to death, he's going to make a mistake, he thinks there's something he should be doing and can't fathom the fact that there's nothing to do at this point because everybody paid the rent this month, right? So that's a different thing. But you know, if I could talk to the guy today or the guy tomorrow two different, varied people this sounds kind of crazy, but you know, I would really want them. I hope they ask you a similar question, right? I hope, as they interview you or us or Roost Real Estate Company, that they want to find out what's important to you, what's important about this relationship from our side and that's a crazy thing because, again, it's about what's in it for them. But I think if you're interviewing somebody, it's an interesting question to ask. So you know, if we said to, if I'm a property owner and I say to you okay, gretchen, let's turn the tables you know, if we're sitting here a year ago from today and we look back over that year, what has to happen for you to feel like you took on the perfect owner, and I think that's an interesting thing because a lot of property managers have never thought about it in those terms. If they're not curious about what's in it for the person they're working for, they may not even be curious about why they're really doing it for themselves, which it's a little bit touchy-feely, it's a little bit out there, but it's something to think about, because what does drive this company or individual to offer property management services? And understanding their motivation, you know, can give you some insights into their commitment to you, to their profession, and how they approach the business of property management and, more importantly, the business of property management relationships.

You can also get down to sort of the nitty gritty, obvious stuff that you want to, you know. Ask a property manager do you specialize in managing scattered lot housing or do you specialize in complexes or apartment buildings? You know, on the basics, you want to make sure that they have a proven track record with the types of properties you own. You want to confirm that they actually have a real estate license, because practicing real estate for another without a license is a felony in every state that I know of. So you know being licensed, it's not just about the legal legality of it, but it's also about the professionalism and commitment.

Now, having said that, you know, does the person that you're interviewing to be your property manager you know? Are they? Are they property owners themselves? Right? Do they have any clue about what you're going through Like when you talk to Bobby this afternoon? You know exactly what he's going through because you've dealt with this before and I think that's huge.

And, as an owner interviewing a property management firm, or multiple firms, you've got to figure out if the people you're talking to you know understand your, or at least a willingness to understand your situation. And that sort of brings us to what I wanted to kind of talk about today and I think, gretchen, you know you're the perfect person to help us answer this is but what is our motivation? You know, why are we in the property management business? You know, at our company, what's it? You know what turned the tables, I guess what's in it for us, and I, you know, I think, gretchen, you'll agree that property management was never a sideline for us. You know, it was always a way to add value for our clients, and I don't know if you. Well, how did we started? You started in 2009,. Right, that's when you got your license 2008.

Gretchen: Yeah, 2008. And then you know, we were managing um your units. And then that's when Dustin Owens came on, Dustin and Kathy, and we started managing theirs, and then it just grew over time.

Chris: Yeah, so we started managing for other people with Dustin and Kathy in roughly 2009, after trying to figure out what we were doing looking after our companies, and, of course, I was the worst owner in the world because I was absolutely clueless and didn't know I was clueless. So that's a bad combination. But you know, Dustin and Kathy if I remember right, you know they called you know because they knew we were managing our own properties and asked if we could help them out, and the only reason we were able to pull it off was because, you know, Gretchen had just gotten her license, you had just started, Right, so you were willing to take it on and we said yes. And then, you know, over the course of eight or nine years, you know, Gretchen, you were looking after 600 units or so in Springfield alone. So what do you?

I mean? Here's what I love about the business. I love the property management business because our property management clients are incredibly loyal and they're very appreciative and for 90% of the people that we've ever worked for, it's been a great collaboration. I mean, what do you get out of it, Gretchen, other than getting to work with your father every day?

Gretchen: So I love talking to the owners when, like this afternoon, with Bobby buying those eight units, I love teaching him how this works, making people feel like we're going to take care of you, working together with them. You know if they're one of the seasoned ones, we use property meld and I tell them. You know, if you know something, you know if you see a meld come across and there's a leak under the sink and you know this has been going on for however many years or however long, we can have those conversations of how to figure it out together. I like that we involve the owner as much as they want to be involved in. If they have questions, we're always there for them. We use our specialty in managing these properties to literally just supply their income for them. They depend on us and we do a great job taking care of them. I love the relationships and they want to add more properties and we help them buy and sell as well, but they usually add more units with us.

Laci:Yeah, if it works out, they tend to buy more as soon as they possibly can, and that's a beautiful thing for them, and it's a beautiful thing for us, and you know it's a beautiful thing for me me too, I would just like to point out all the way here from North Carolina because, as the marketing mind of the group, like I'm always thinking from a marketing perspective and one of the most difficult things to do is capture what you guys are saying right now without it making, without making it feel inauthentic or insincere, or but I hope that people listen to this and realize that it's not, this is not a scripted conversation, right?

We all just met here at nine this morning and we're all just having a conversation about it and this is real and you guys kind of passion about it and your expertise in it and your joy surrounding it is very real and you really do love what you do and you're really good at it and all of this is true. So, for you know, for somebody who's marketing you're helping to market your business it's really the ideal situation. The challenge is really, you know, I would love to get just this, this piece of audio, out into the world so people can hear how sincere and authentic you guys are when it comes to the business that you work every day. So dream come true for me, too, over here.

Chris: Oh, thank you. So Gretchen was in Springfield and you know, over the course of eight or nine years she got to like 600 units and then we had the opportunity to get started in Columbus in 2018. And then things really started to take off in Columbus and you know we've been here ever since. And again, going back to motivation, you know it also kind of started at the beginning, right so when we were doing management in 2008 and 2009, I think we were still either with Remax or Real Estate 2 at the time. We didn't start Roost Real Estate Company in 2014. But the whole idea of Roost was informed by that property management experience, those property management relationships. And I go back to Roost was founded as a real estate firm that services all of the people in a given market that needs a roof over their heads, not just the 60% of the people who own the roof, and that meant from the start that we were going to be working with investors and the people who rent from them, the tenants that rent from them, and that idea of being quote in the shelter business has really been the essence of our success for the last 10 years at Roost. And it's interesting, in the midst of all the changes with the National Association of Realtors and what's going to be happening with buyers and sellers later this summer. It's really caused me, or given me, the opportunity to rethink how we got started in the first place and it's really the same as it ever was. It was important then. It's 10 times as important now. So again, I'm glad we're in this business and I want to take it to the next step that Laci's been helping us with.

But this whole concept of home and the marketing campaign for Roost of home is where that home campaign that's not just about you know, typical people who think about you know, working with a realty company that need to buy or sell a house. For us, home is not just for people who are buying, it's also people who are renting and I don't want any distinction between the two. Everybody has reasons to buy or other people have reasons to rent and a lot of real estate companies look at tenants as second-class citizens. That's not where we're at. We look at tenants as just as quote worthy for lack of a better word of needing a great roof over their heads and a place to call home as anybody else does. So as we go forward for the next 10 years. You know, if somebody was interviewing us, it really is about home and about servicing those people in a given market that need a roof over their heads.

The other sort of non-negotiable points, or the other thing that I really would urge people to keep in mind and ask about when they interview a property manager, is just the basic idea of communication and accessibility. Who is your go-to person? You know you don't want to be in a situation where you know you're suddenly getting communication or emails or texts or whatever from multiple people and then, god forbid, those people aren't on the same page. So you, you know, one of the things you want to know is who do I go to for what? You know, who's my primary contact?

You know if your initial contact is with a sales or a marketing representative, you know in many companies that relationship, you know, ends the moment you sign a property management agreement.

So if you've been dancing with a salesperson for a year or so until you finally decide to make the leap, one of the questions you want to ask is well, you know, before I sign this PMA, I really want to talk to, I really want to meet the people that I'm going to be dealing with on a day-to-day basis.

I've made that mistake with several purchases and different things in my life. And you know you think, wow, this is going to be great. And then suddenly the salesperson gets the signed contract. They disappear off the face of the earth, never to be heard from again, and then you kind of have to start over building a new relationship and that's not good for anybody. And you know, gretchen, while you don't have time to do quote sales, you know eight hours a day, it's still critical that you get to make the time to talk to. You know Bobby today or the group that you're going to speak to tomorrow. So you know you know Bobby today or the group that you're going to speak to tomorrow. So you know why don't you just give us a quick rundown of who owners talk to at our company? If they're not talking to you, who else might they have a relationship with or be speaking to, and why?

Gretchen: So when I get them signed up and I have a whole checklist that I do. You know switching waters no-transcript person on the end of the property mail chat. She wrangles the maintenance people, sets up their schedule. Heather does the turns. Here's brenda. She's going to be advertising your property, she's going to be running the application, she's going to be signing the lease and then you'll hear from her again in a year when it's time to renew the lease or increase the rent. I introduce everyone and then, whatever stage the house is in, I kind of let that person take it from there. But a lot of the times the team will still copy me on things. So the owner feels comfortable that the first person they talk to is still involved there.

Chris: Yeah, and I think that's that seems to be working and our owners seem to be very happy with that. And then you know we have other team members that speak almost exclusively on a day-to-day basis with tenants. And you know, sometimes the owners meet them, but sometimes they never do so. But they always know at the end of the day that you know they're going to be able to get in touch with you if that's what needs to happen. Or you know Tina in Springfield, or you know Brenda if it has to do with a new lease, and Heather if there's an issue that has to be taken care of between tenants. So it's important that you know who you're talking to and why. And I know you have those discussions about how the team is structured. You know, as you're in that courtship phase, but I think it's critical that you get that on paper at the end and it puts everybody's minds at ease.

Yeah, I think it's a fair question to say you know, why are you interested as an owner? Why are you interested in my property? Specifically Helps to see if their vision is aligned with yours. Because you know, let's say there's two extremes here, right, maybe you have complexes and maybe they're newer complexes. Maybe they're older complexes, maybe it's scattered a lot. They're newer complexes, maybe they're older complexes, maybe it's scattered lot, you know. But or maybe maybe you've got some, you know quote lower end properties that are in you know, that are functional and safe and so forth, but maybe they're not in the best of neighborhoods and maybe that's the service you provide. You definitely want to see if the property management company you're interviewing is even willing to take those on, or do they have the expertise to work with tenants in that I don't know what the right word is in that price range or what have you? That's a different sort of person to work with than somebody who works exclusively with people, say, in Columbus, that have $2,500 rents.

So you want to know, you want to know A if their business is aligned with yours. Maybe they don't do low-end properties, maybe they don't do scattered lot. You want to find that out, of course. And then you want to find out OK, you're telling me that you want to do this and you're telling me that you're excited, and so forth. Now tell me about the systems that you have in place to ensure that you're going to succeed.

So, again, it's about alignment and it's about systems. Do they have experience, expertise and the desire to work with your portfolio? And if, yes, they do, then they need to show their work and be able to explain how they're going to do that. And you know, one of the best things that comes to mind, or one of the best examples that that comes to mind, is you know, we do work with a lot of owners who have I hate the term, but I don't know what else to use a lower end property in Columbus, or it's a property that they have registered with Section 8 and they're willing to take on and want to take on, section 8 tenants. Well, gretchen, I mean, tell us, is it more work to manage for Section 8 than it is to manage for not Section 8?

Gretchen: In the beginning. Absolutely, it is, absolutely it is. There's a lot of paperwork, there's inspections to go through. You really do have to work with Section 8 a lot to get it to flow well.

Chris: If you have Section 8 properties and you want to continue to rent them Section 8, we applaud that, we support that. But you've got to make sure that the property management company has experience working with Section 8. And it's not just that they understand what it is or what the paperwork looks like, that they have relationships with the people at section eight. You know you can pick up the phone and somebody will talk to you. At this point Not everybody has that luxury and you know as important as section eight is and as much as we appreciate it and our owners appreciate it.

It's hard, it's not consistent, it's a pain in the ass, but it's something that we do, we're happy to do. Our clients appreciate it. But if you're out interviewing people to look after your properties and that's where you are and conversely, if you're looking at talking to a company that does almost exclusive assisted type financial assistance housing, they may not be the right person to list your $3,000 a month property in Victorian Village. So ask the questions, make sure they're aligned but, more importantly, make sure that the systems that they have in place, the people and the expertise, support what you're trying to do.

Laci:What happens when you're not aligned? Can you give me an example of something that like yeah, I think you guys do a great job of asking the right questions in advance, right To make sure that you're aligned with your property management owners? We didn't always do that, Laci. What can happen if you're not in alignment with your property management company? Give me a worst case scenario for people out there. Make this like the murder mystery of podcasts for real estate today.

Chris: We've been very open about the fact that this business has been. It got really tough coming out of COVID and it took us a good year and a half to, you know, get back to where we're super excited and proud of the business and excited to expand and, you know, collecting five-star reviews and all that stuff. But God knows, we've made a ton of mistakes and we made a lot of mistakes when we first moved into Columbus and the biggest one was we just literally signed up any owner that you could, possibly, that we even knocked on our door looking for help. You know we didn't do a good screening of the owner. We didn't do a good screening of the properties. We really didn't know what we were getting into.

And you know, and things would get to the point where issues would come up, issues would escalate to the point where you know they were on my desk and I would go back and it's like holy crap, why did he sign up with us and why did we ever sign up with him? You know it was just a stupid thing to do. We weren't aligned. We didn't have anything in common. What he wanted was very different than what we could provide. What we expected from him as an owner was nothing that he was capable of giving us.

And again, I don't want to get too deep into it or start naming names and all that, but we have made the mistake in the past of signing up owners that we weren't aligned with and it's been a disaster. And what I want people to hear out of this podcast is you want to make sure, when you're interviewing for a property manager or a new property manager, that you ask every question that we can think of for you to ask, to make sure that you don't make the same mistakes we have or the same mistakes that other owners have made, Because, at the end of the day, it's our fault. We signed them up, so we're the ones that let them down. But just don't put yourself in that position to have to go through six months of hell and, you know, give up on the whole idea.

Laci:Yeah, I love the analogy, you know, I love the franchise analogy, where you know you've made mistakes so other people don't have to, and I feel like this is that's very common in the franchise business. You know, maybe don't go out and buy, you know, a restaurant franchise if you've never desired to have a restaurant, or never eaten at that restaurant, or you don't know anybody who enjoys that restaurant like there's.

Just, there has to be it's an, it's a business decision. There has to be that discernment and and that time and all of that energy put towards making the right one. So, yeah, I'd love the the you guys take on that.

Chris: So the next point of alignment, the next place to get clear in your non-negotiables is under the heading, for me, of commitment and legal understanding. So your property manager has to recognize that they have a fiduciary duty as well as an agency duty. They have a fiduciary duty to you and that their agency is always to you, the owner. That's critical. It's a legal distinction. We are required to treat our owners as our clients and we also have legal and ethical responsibilities to our tenant customers as well. But there is a choice between who we represent. At the end of the day, we always represent the owners, but we obviously treat the tenants with the same, with all the respect and so forth that we possibly can. But licensing, agency, fiduciary duty, you know those are big words but they are a big deal and you do want to find out if the property manager you're interviewing has any sense of what that means. The other thing you want to be aware of and it has to be a non-negotiable is successful management requires, you know, full broker involvement. And I'm fortunate that we have Gretchen, but make no mistake, gretchen is also a broker in Ohio as well. So you know she's not just an agent, she's a licensed real estate broker. So you want to make sure that you know whoever's in charge of that company, that they are as devoted to you as the person who's trying to sell you their services. So there's a lot. They need to understand the complexities of maintaining. You know trust accounts, you know escrow accounts, things like that. The thing that could cause a property management company to lose their license in 10 seconds is if they aren't keeping accurate records on behalf of their owners or God forbid they're commingling owner money with brokerage money and so forth. So that's a critical, non-negotiable point that I would hope that you would adopt.

And then the other question is you know, when you think about commitment, so you've got the legal part, the accounting part, but the other question you want to ask, what you really want to figure out, is you know for the person or the company you're interviewing, is property management their primary business or is it just a side hustle for extra income that's going to affect their level of commitment? There are a lot of folks out there who you know when their sales business gets soft, for whatever reason, they'll start to take on a few property management clients and then it grows and grows and it's a side hustle. The problem is, you know somebody can get away with that for a dozen units, let's say. But if suddenly they've started to do that over and they got 50, 60 units and they have no help and they don't have the support of their broker and they're just doing it because it's extra income on the side, I would say be excuse me, very aware of that.

Now, that doesn't mean that there aren't incredibly professional, you know, boutique brokerages or agents that you know only work with specific clients and they're able to do that. That you know. I don't mean to disparage that, but I do want you to be aware, you know, if the person you're talking to is only interested in this as a side hustle versus something that their entire company is committed to, does that?

Gretchen: make sense. Absolutely.

Chris: And then we talk about compatibility and performance.

You know again, ask them you know, do they manage portfolios that are similar to yours? And if that's the case, that's a great place to start. Ask them do you own real estate yourselves? A great place to start. Ask them do you own real estate yourselves? You can't tell you how many property managers, or people who hold themselves out as property managers, don't own any rental property whatsoever or have never owned rental property. And somebody who's never owned rental property, they're going to have a hard time putting themselves in your shoes as an owner. Again, relationships with entities like Section 8, prc Code Enforcement, the Water Department you want to find a property manager who has good relationships with them. It's the biggest red flag you can find and you can kind of sense this. If your property manager sort of has an adversarial relationship or an us and them attitude towards these other stakeholders in the community, if they don't embrace those folks and take them on as collaborators and partners, then they're going to have a hard time managing your properties the way you want them managed.

Laci:And like that's an opportunity, I feel like, for so many people who have not had the expertise or the time or the desire even to pursue something like Section 8, you know, like your property management company can really, if they're able to do that and willing to do that and have the right relationships and the right mindset about it and are able to find good tenants and have a good, you know, screening process and all of those things, that's a huge opportunity for folks who maybe weren't open to Section 8 before right.

So I think there's an argument to be made that a good property management company who does have the expertise and the experience can really open you up to additional opportunities as an investor. I just think is there anything else other than Section 8 that kind of fits that bill I think about, like other properties on the market that you might be interested in, or really that turns the property management company into in kind of an advocate for you, always looking to make you more successful, because in turn, obviously you guys are Roost is going to be more successful, or your property management company is going to be more successful if your clients are Well.

Chris: I think that's absolutely critical to a long-term productive relationship for both parties. You know, no question. But I would drill down a little deeper in the day-to-day thing. You know, I don't know, gretchen, if it happens so often in Columbus, but there was a time, you know, in Springfield where if a tenant didn't mow the grass, or if somebody dumped trash in the alley behind a house or whatever, you know, the people at code enforcement at the city would pick up the phone and call you because they knew that you would respond immediately and take care of it. But they wouldn't have done that if you were the kind of person that says you know aggressive, go pound sand, you know send me a letter.

I don't care, right, which is a lot of people that do that, and those are the people that end up going to environmental court every 10 days. But you know to have that relationship where the code enforcement people respect what you do enough to give you a chance to fix something because they know it wasn't your fault and they know that you're going to do something about it. That's a huge selling point to me that you're going to do something about it. That's a huge selling point to me that an owner needs to look for. I remember you guys used to talk to Ray at the water department all the time, right, because Ray knew that you know you managed a ton of properties and if something was wrong that it would take care of it. So I think that's an absolute, non-negotiable that people should ask about.

Gretchen: Well, yeah, it's definitely a big deal, especially with code enforcement, because they will. They will take you to environmental court immediately or they will work with you. So even at code enforcement, the relationships are awesome right now. I mean, we just pick up the phone, hey, I got this letter, I promise to have it done by this day, or here's my plan, and we ended up being friends on Facebook and it's just. It works out fine. So as long as you're not aggressive and you know angry with people you need to take as a partner, then it works out really well.

Chris: The other thing. There's two more things that I really want to touch on before we sign off today, and this next one is profitability. I think it's important that you ask the property manager is their business profitable? Is this worthwhile for them? It's, quite frankly, any business person. But a property manager who can't manage their own business effectively is unlikely to manage your properties very well either. So, god knows, we've had periods of being comfortably in the black. Had you know periods of you know being comfortably, you know, in the black? And then we've had periods coming out of COVID where we were uncomfortably in the red, and at that point it's my job to make sure that we manage the business appropriately to get through that, because if we can't, if we can't take care of ourselves, we can't take care of anybody else. So I don't think it's too forward a question to ask a potential property manager you know how are you doing and will you be here in three years? I think that's a legitimate, non-negotiable you know. And another thing is I think you know you should ask some of the basics is how long have you been in business? What's your owner turnover like? What are your challenges? What are you most proud of? All that stuff matters because it's a business relationship, but you have to be able to relate to each other on a personal basis and sometimes those questions are absolutely appropriate. But the big headline here as far as profitability is if your property manager is not profitable, they cannot help themselves, and if they cannot help themselves, they cannot help you. So please ask the question.

Mr Owner, the last thing is researching reputation. You know, start with Google reviews to gauge public perception. You know you want to look at any positive and negative feedback. There's other platforms out there in the world, like Yelp and Better Business Bureau, but those don't always provide a full picture. You can also check with forums like Reddit and BiggerPockets, and sometimes that's useful. But you have to use your own discernment. We've gone from one extreme to the other, managing Google reviews, and for the longest time it wasn't something I paid attention to and should have. And then we had to really make some huge changes in the business and Laci had to help us from a marketing standpoint to basically get back control of our Google Place pages. And then we set up a program where you know let me preface that At this moment in time we have the absolute best property management team I've ever seen, best team we've ever had, best group of people we've ever had together. So I am very confident. Where I don't know that, I was always as confident that we're taking care of people. So once we got that hurdle taken care of, we started to open up the whole Google review process again and we set up a program in-house called have I Earned a Five-Star Review Today. So we're urging our team members to actively ask the folks they interact with, whether it's the maintenance guys fixing something in a house, or whether it's Marcy working in tenant relations, or Brenda leasing, or Heather or Jade working with PropertyMelt and getting things fixed, or Gretchen. Of course, have I earned a five-star review today and that has informed how we work with owners and tenants. But it's also starting to pay off from a marketing perspective on our Google reviews. So that's just a plug for Roost.

But whatever company you're looking at, check that it does matter and it doesn't mean that they're always fair, because they're not. There's always people out there who and property managers especially there's always somebody who's trying to hurt somebody or somebody that got evicted because they didn't pay their rent, and there's always two sides of the story. But look at the reviews, ask some questions, see if the property manager you're interviewing is even aware of the situation and what they did about it. Other questions vacancy rates. You know how many properties do you have vacant at any given time? But a deeper question, a better question to ask is what's their rate of rent collection? Right, because you can have people in a property and it doesn't show up as quote a vacancy, but they haven't paid rent either, which means that money's not getting into your bank account. So you know, gretchen you, how do you track rent collection?

Gretchen: So we will print out all the three-day notices for non-payment, post them on the door. We keep a copy in the office in case we need to use one to file the evictions. But as the late rents start trickling in, we take those out of the folder because you don't need to go to the attorney. And then the ones that are left over. Eventually, later on in the month, we start reaching out to the owner hey, we can't get a hold of these people we drove by. They're still living there. I think we need to file one.

Chris: So we just keep looking at it throughout the month there, I think we need to file one, so we just keep looking at it throughout the month.

Gretchen: Yeah, and it sounds so simple. It is simple. It's not techie, it's not something, it's not at all. There's no fancy report. It is literally just here. Who still hasn't paid?

Chris: So you know, we know every single month and we track how many three-day notices that we have to post this month and we watched that number relative to previous months to know you know what our trend is like. So a great question when you're interviewing a property management company is you know, of course, how many properties do you manage, but the really cool question is how many three-day notices did you post last month?

Gretchen: Someone just asked me that actually, when I was talking to a potential new owner and I told him how many we posted, and he was kind of taken back because it seemed like a big number to him, I said, however, we only follow through with this many evictions and at court we try to get them to stay and we come up with a payment plan. So there's more to the story there. But he was a little taken back by how many. But we do it right away as well. Everybody gets a notice right away.

Chris: How many, but we do it right away as well. Everybody gets a notice right away. But there's a difference between 10% of a group paying late and 10% of a group not paying right. So you know, if we have a thousand units and you're posting 60 any given month and at the end of that only two, let's say, don't pay at all that month, you're doing a great job and that's the kind of question, the nitty gritty, dirty detail, that you want to talk to a potential property manager about.

Laci:But I love that. And, man, is that not the kind of thing that a property owner just doesn't want to do themselves? Is it that? I mean, just think about if you have 10 properties and you have the same, let's say, you have the same proportions right Of people who are not paying and paying late, and you know whatever like even at two right, two people that you have to serve in a month or every month, like what a pain that would be for a property owner. And before you know it, you know it said the what they don't do it.

Gretchen:
And then before you know, it's been two months or three months or so they get too emotional and they feel like they can't do it. I can't do this to this family.

Laci:Yeah, I've told Chris before I've got a friend who owns properties you know locally and they have a property management company who doesn't do the notices and doesn't effectively evict folks, and so I think the comment he made was, if I didn't want to get paid, I would just manage the property myself, right, Like that was his sole purpose. He doesn't want to evict people. He's too soft hearted for that. He like he's literally paying a property manager to please help him evict people, but then they're not doing it efficiently and I think that's it's it's heart wrenching for folks, I think, in addition to just like the bottom line impact it has. But yeah, I think that's a really good way to look at it. If you own 10 properties and you have to do this for one property each month, like what a pain that is in time and money.

Chris: So that's probably the best tip of the day is the question how many three days did you post last month? But how a management company handles evictions and so forth tells you a lot about their efficiency and effectiveness in managing challenging situations. So we're almost at a full hour here, ladies. So, in conclusion, I think just to sum it up, this whole episode comes down to communicating your minimum expectations and non-negotiables up front, and that's going to establish a foundation for a productive relationship with your property manager. And, as we talked about just as importantly, you want to know what non-negotiables your property manager has for you as an owner. So it is a two-way street. It's important that there's a meeting of the minds there. It's crucial to align your goals, your processes and responsibilities to ensure that your investments are managed effectively. So, anything else before we wrap up today, I don't think so.

Well, I think this has been pretty darn good. It's always fun to talk this through and get clear on the things that maybe we're not super clear on because we're in it every single day, but it's nice to talk it through and get excited about a few things and share them. So I appreciate you both. Thank you very much.

Laci:Thank you, see you next time. Bye.