CEO and founder of LA Property Management Group and Crown Commercial Property Management.
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Imagine you’re a presidential candidate and about to give the most important speech of your life at your party’s national convention. You don a bright green suit with brown polka dots and an orange bow and ask your top advisor if the outfit “works.” Do you want that consultant to lie through their teeth and say it’s perfect for the occasion, or do you want them to be honest and say you look like the owner of a chocolate factory? (More Willy Wonka than Woodrow Wilson, if you will.)
That’s right, you want the first. It may hurt to hear, and it means choosing a whole new outfit, but in the long run, it increases your chances of winning the election. If you own a rental property, you don’t want a yes nod to manage it. You want a manager who is honest and has challenging conversations in the short term that will increase your profits and make your life easier in the long run.
Some landlords see their property manager only as an extension of their own investment acumen, someone to whom they can delegate the activities they would perform themselves if they managed themselves. But I would encourage those owners to consider the wide range of specialized skills a top executive has that they may not have, and to take advantage of that valuable resource.
The first steps to doing that are to hire a manager who is willing to question your assumptions about your property and open yourself up to those conversations. You don’t want what we call a yes manager: someone who never misses the mark by proposing changes that can lead to higher profits in the long run. A yes manager says yes, keeps his head down, remains complacent and never claims his own professional knowledge, even if it could benefit a client’s bottom line. For example, if they found a roof leak that would later cause wood rot, they might not speak up right away if they knew the owner wouldn’t be happy with the short-term cost of fixing it. They may be tempted to wait for tenants to bring it to the owner’s attention in the future to avoid a difficult conversation in the present.
To be fair, you don’t want the opposite either: a manager who always thinks he knows best and refuses to constructively go back and forth with a customer. Collaboration is the key to a healthy partnership between owner and manager.
That’s why it’s important to find a manager who is willing to push you slightly outside of your comfort zone in the immediate area so that you can achieve significantly higher profits across the board. Rather than refusing to give in or build rapport to keep your business, this third type of manager will work with you to maximize the earning potential of your property. Primarily, this requires your manager to have a high level of real estate management understanding, as well as the communication skills needed to respectfully converse, provide, and then wait for feedback. If you’re looking for a manager, the best way to identify someone who meets these criteria is simply to ask them to provide an example of a time they had one of these conversations with a client in the past.
If you are a manager reading this and thinking “I’ve gotten too complacent and I’ve become a yes manager”, it’s worth noting that it’s never too late to have this kind of honest and mutually beneficial relationship with an owner who has been your customer for years. Like any relationship worth maintaining, the one between a property owner and property manager is constantly changing and requires a renewed perspective to improve. Don’t be afraid to have the challenging conversations that take owners to greater heights and lead to higher returns.
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