As soon as people find out I run a property management business in addition to managing a sales force, the ritual comments fall along the lines of "Well that business must be booming, People still need places to live." Or "I bet everyone wants to rent right now." Well that's true everyone NEEDS a roof when it rains, and must of us are fortunate to have a place we call home. However, no one is closer to the struggling economy then REALTORS. Its just activity is so slow and we are so close to the problem and feel the pain so directly that we often become cool to the harsh symptoms. It seems a lot more good people then not, are still struggling to keep their homes and a roof over their head.
Well how does this relate to Property Management? It's true that the Property Management model when run like we are trained to run it by the fine folks at NARPM is certainly better situated for sustainability in these troubling economic times.
Business is hardly booming! In fact just about everyday we have to deal with a Landlord and tenant whose rental is in foreclosure or a potential renter that can't get qualified. Vacancy rates are soaring, rent competition is fierce and rents are be driven lower and lower every day. Rent deflation has been a way of life in Gainesville, Florida for Residential Property Managers for close to 18 months now.
Our customers and clients are feeling it on both sides and we of course are caught right in the middle. I'm going to share an email exchange we had just this past Saturday. We all need to be concerned about the economy, the markets, and of course profitability but more then that we need to stay focused on what really matters most, people.
Keep in mind our staff meeting is on Fridays where we discuss all the weeks happenings and events including the decisions we get from our third party screening company, and I know all of you property managers out there are using a third party screening company like you should, but that's another discussion. Let's cut to the chase, the team got this email this just this past Saturday:
Hi all -
In a recent issue of The Wall Street Journal, there was an advertisement for the Foster School of Business , at the University of Washington. Howard Behar, the former president of Starbucks International, who built a culture focused on the human side of business , was featured in the ad. He was quoted as stating: "Think of your staff as people, not labor costs. Think of your customers as humans, not revenue. It turns out this kind of thinking creates very successful organizations."
Tying this in to our property management business, I feel that we have to think of our rental applicants as human beings, not just names on a piece of paper. Some of you may wonder why sometimes I get so passionate about some of our applicants. The reason is that I am dealing with them on a ' one-on -one ' basis and they sometimes confide in me as to the predicaments they have encountered in their past and present lives. If we can do it with a minimum of risk to our company and to our owners , we should try to be as compassionate as possible with people going through a divorce , or faced with staggering medical bills , or with working single moms who are struggling , but are not living off of government welfare and our tax dollars. We don't know what events may cause those statistics that show up on credit reports and we don't know how many of those statistics were caused by matters beyond the control of the applicants. I have found in my long business life, that if you cut some people a break, you are most often rewarded with very surprising and satisfying results. Not always, but most of the time.
Maybe I should have saved this 'epistle ' for tomorrow, Sunday! :-)
Hope everybody has a great weekend. Go Gators!
When we are behind closed doors we also have to remember that people can only be fairly evaluated based on their actions. It is in that venue that we know if someone hasn't paid their rent in the past they are more likely to not pay it again in the future.
After all, we must also remember that our landlords are people too and even though their is risk in any business it is our job to make sure they never take an unnecessary risk, that might result in predicaments for them in the future.
But back to my point, when we discuss these situations behind closed doors we are weighing risk against risk. Is it better to rent to this applicant or risk staying vacant in this market? Business isn't business as so many might tell you, (How come they always tell you this when they are about to do something really bad!). Good business is good business and well bad business is bad business.
Sometimes we also have a moral obligation to let renters know they are biting of more then they can chew.
In the end we have to make good business decisions for those people paying our wages and treat all people as human beings. Compassionate, but accountable.
There you have it. I'm not sure how much interest anyone on active rain has about property management, but if you care to know we are all in the same boat.
If you're interested in the status of the Gainesville Real Estate market through October, Ill have a quick summary up by Wednesday on the company blog page. http://blog.bosshardtrealty.com/the_bosshardt_blog/