It’s no secret: Most property management companies are dealing with a healthy amount of change in 2020 (to say the least). And while it’s good to switch things up, so much has happened over the past 6 months that it can be overwhelming for the average business owner to process.
Building change into the day-to-day is something that Deb Newell, CEO of Real-Time Consulting Services handles every day. We talked with her about how property managers can learn from the pandemic, push forward, and continue to adapt to win in 2021.
The following transcript below has been edited for clarity and brevity.
Tell me a little bit about yourself and Real-Time Consulting Services.
Deb Newell: I have a consulting business called Real-Time Consulting Services out of Minneapolis. We focus on helping property management companies specifically with anything to do with people, process, and technology. That’s kind of my quick, 30-second elevator pitch on that. You can be a brand-new property management company. You could be established with years behind you—30 years, maybe only 14 years, maybe only 7. Companies find that as they continue to grow, staff comes on, staff leaves, processes sometimes get neglected, or they never were established in the first place. Basically, I look at the foundation of the business. I act as the interim CEO or COO, not CEO, sorry. Who knows, maybe both? [laughs] I don’t know. And then I really help with the foundation and the operations of the company. Because a lot of times what’s missing is somebody to really drive that implementation and drive that movement to get going and going forward.
Tony: Because it’s much easier said than done, right? You have to organize all the processes.
Deb Newell: The people who own property management companies are the visionaries. They’re the entrepreneurs. They’re the ones that have this great idea. But sometimes they’re not always the greatest implementer of the business. So they struggle with how to take that idea, or even something that they’ve heard or seen at the conference, and bring that into the business successfully and training their team, whether it be software or an idea—even a new process. But the cool thing about property management companies is that they aren’t these large corporations, right? We can actually change things a little bit more on the fly. So a policy one day may be changed the next day, based off of how it worked.
What do you make of the pandemic on property managers’ businesses?
Deb Newell: I probably take a different approach than most. I actually think it’s really good. I mean, the pandemic’s not good, but the whole idea of us having to refocus our entire outlook of our business, and what we’re doing, and the services we’re offering, both to the client and to the tenant, has changed. And that’s actually been really good. So I’ve really looked at this, and kind of coined it as a “hard reset” for companies. This is an opportunity for you to say, “This was kind of put in our face. A lot of times we weren’t prepared for this, but how can we overcome the current situation, but then keep that momentum going to continue on to the future?” So that hard reset tells us that we need to look at our business differently. We need to really dissect it differently.
I take in some EOS tools, some Six Sigma tools ,and really focus on defining and analyzing the business in a very different manner, and then helping them structure it. Especially, if we’re working from home, which many of us are now…it’s that whole accountability. So looking at it, and really giving your team different accountability than they probably had before when they were working in the office. How do you track that accountability? How do you make sure that everybody’s now owning the role and function that they were originally doing, which is now different?
So it’s really about looking at that piece of it and then helping these owners find the tools to bring into their business and streamline it. There’s a lot of cost savings in all of this as well. You know, as the businesses changed, our priorities and how we are set up have changed, even how we show properties has changed. So we may now spend money in a different part of the business. My budget in spending money on leasing is going to be different than it was before. I may not need a physical leasing agent anymore, but I do need the software.
How do you use Six Sigma to dig into your clients’ property management processes?
Deb Newell: I do it under the radar. So a lot of people don’t know that I’m actually using it, but I’m defining and I’m measuring the business. I’m looking at the metrics of the business very differently. So how are you today looking at your KPIs? How are you measuring your business? What reports are you using? And then I’m kind of helping them redefine it, and then look at then bringing in different tools and that technology to do it. And so I’m really building out a roadmap, kind of like a Gantt Chart to help them really look at phases of their business.
Because a lot of times people will come to me and say, Oh, this just isn’t working. And when I start asking questions and diving into their business a little bit more, a lot of times what they see is on the surface, but what I see is underneath. And it’s kind of like the… I always coin it, “Oz behind the curtain.” So I’m looking at it more behind the curtain to see, well, what’s really going on? Because what they are seeing is the symptom of really what’s the root cause. So I’m looking more into the root cause of it, and then fixing that piece.
But that may actually be phase 2. So they see a problem, but it may not be the thing that I need to fix first. So I’m looking at really the entire scope of the business. They’re looking at this micro piece of it, and I’m looking at the entire thing going, “no, we need to look at all of it.” Because in property management, what people don’t realize is there’s all of these different puzzle pieces. So they do overlap, and I’m looking for those gaps, and where that is not overlapping—because they should. Because there’s those cross-functional responsibilities that happen. And I need to figure out how to make those puzzle pieces fit again, where they’re at right now.
How are your business and services shifting to accommodate PMs’ most urgent needs?
Deb Newell: Well, I think the biggest shift for me has been, I usually go on site. I’ve actually still had a couple of clients who have asked me to go on site. And if it’s safe, I don’t mind, and I will go. It’s a lot easier if they’re working in the office for me to kind of observe, because I really do take some time to observe how that team is functioning together. Because that’s really important, especially if one person is doing a function and they’re yelling across the room to the other person saying, “Hey, did you get the application,” or whatever it is. I’m really observing and absorbing all of that to help me realize where I need to start and what needs to happen. So for me, that’s a big change if I’m not going into their office. It does make it a little bit more difficult, but I am still interviewing the team.
So I will still hold Zoom meetings with the team independently of the owner of the company, because I need to find out how they are also functioning, a little bit what their mental health state is, because that’s important, and how do we need to shift our priorities to help good employees stay motivated. Especially now, it’s been very trying and challenging, and I’ve noticed that productivity may go down in certain areas, but it’s how we can shift that. If you think about it, school is going to be starting soon, and for a lot of people, if they have small children, or even if they have older children who have now had to come back home because maybe college is now online, how are they now functioning with their business, or as an employee, how they’re functioning within their role.
So the normal 9 to 5 may not be agreeable to what they can do, but some things don’t require us to necessarily do during the business day. So what can we take and put aside and do differently—and maybe at a later time or at an earlier time. So I have to look at all of that, and help them really put it into some sort of a workflow-automation tool to help them manage that efficiency a little bit differently.
Tony: And you just have to adapt to the times. And another example that we’ve seen are virtual tours and self showings, and those technologies of course are a direct result of COVID-19. And actually from the Leasing Demand in 2020 survey that we fielded recently of 1200 property managers, we found that really 1 out of 2 property managers had adopted a virtual tour or self showing technology.
Deb Newell: Yeah. Well, they are changing, but here’s the other piece. There’s still a human factor involved in all of that, right? You can still bring in the technology, but someone still has to put the lockbox out on the property. That’s for the self showing technology. They have to done remove it when the place is filled, somebody has to set up the camera to take the 360 video tour. So it’s interesting when people say, Oh, I just want to implement all of this, you still have to have a piece that can’t be a hundred percent automated. This is where I think, that Castle Property Management Group out of Detroit had failed years ago, because they wanted to automate every single piece of business, with no personal touch. And in just our industry, you can’t do that.
Tony: Yeah, it’s not that kind of industry. People are at the center of it. We’re talking about people’s homes.
Deb Newell: Exactly. It’s an emotional transaction. Buying and selling is an emotional transaction for many people. But so as an owner, letting go of this asset that they’re trusting you with, I always say that there’s two important things an owner tends to not… That they entrust others with that are the most valuable, which is your property and their children. So babysitting your children, and in a sense kind of babysitting the property. So these are the two most important things. These are emotional transactions to people. And so even if they’re an investor, it’s still an emotional because it’s money. And so that money drives the emotion, especially with the pandemic going on, emotions are even more heightened. So it’s understanding that psychology of what’s behind it and what’s driving it.
What areas do you recommend for your clients to focus on these days?
Deb Newell: Oh, that’s kind of a loaded question. I think it depends a lot on the client, the size of the company and what their needs are. So there’s a lot of variables, I think, that come into that. If I were to like really say one thing, maintenance is probably the number one factor people go, how am I now going to address maintenance? What automated thing can I bring in? You still have to have somebody kind of troubleshooting the issue. This is all, so this is kind of where that emotion comes in for tenants, right? So they are already stressed out about everything, they’re at home, stuck with kids. They don’t maybe are… They are not working, or working now from home, and they have a maintenance issue going on. So what was an emergency before is now even more of an emergency now.
Because now we’re in the home all the time. Before, they’re out eight hours, nine hours a day. So it was an issue maybe during the evening or early morning hours. Yeah, I got to get that fixed, it’s really kind of a hassle. Now, it’s because I’m there all day long and my kids are with me.
Tony: The kids are jumping around in the background. You can see the apartment flooding, and they’re trying to work at the same time, all in the Zoom meeting.
Deb Newell: And it’s totally understandable. So this is kind of why, again, this is that domino effect of, that’s going on, but you have to take care of your employee who’s literally handling these issues every day, all day long. It’s very taxing, and your employee also has their own concerns with their own personal life and their own things going on. So it’s that whole domino effect of, how does it play out? So with maintenance, it’s probably the number one issue of, how do I address that, and how can I… What is an emergency? How do I troubleshoot it? How am I effectively getting somebody out there to do it? Do they have COVID? Do they not? What safety measures do I need to take in? Things like that. So it’s all very… That’s probably the number one thing.
Then it really comes down to, which is kind of a very opposite direction, it’s marketing. So people are concerned about, well, I still need to grow the business. They can’t, just because the economy or the whole world is kind of at the standstill of this pandemic, they are still wanting to grow their business, and continue that momentum that they had the goal in 2019. They made all these goals for 2020 for their strap plan, and now that came to a halt, but at the same time that they invested or they contracted with a marketing company, let’s say, that’s not going to change. So how can we keep that momentum going? And so it’s looking at their marketing a little bit differently, and how do we restructure it?
Tony: Yeah, that’s a great point, because any company still has goals where you still want to try and grow your business. And what’s interesting about property management is people of course still need a place to live. So there’s still opportunity in our industry. And we actually found this in the Property Managers’ Outlook on Growth Report we recently did. Three out of four property managers still anticipated revenue growth, in spite of all of the challenges they’re facing with COVID.
Deb Newell: Well, and so sometimes I will tell them, it’s not so much the focus shouldn’t be on the quantity of doors, but necessarily the revenue per door. So what is your profit per door at this point? What was it before, and where is it at now? Because that is going to shift based off of what people can pay, right? Or not pay. So that’s going to change.
And so it’s kind of looking at that bigger picture, of their whole growth plan, their goals. Their goals can still be there, I just think we may push their goals out a little bit, or we just restructure their goals, again, dependent on where they’re at. Some of my clients are extremely busy. They can’t… They’re busier, like you said, they’re working longer hours, the business is just coming in. And some aren’t as busy. So I do think where you live is a factor, what’s going on in that area, for… Even what the state, are they able to do… What phase are they in really? So are you in phase two, and phase three and phase four? That actually plays a big factor.
Tony: In Boston, right now, they’re talking about rolling it back to the prior phase [of reopening]. If that happens, I’m sure that rents in Boston will continue to be affected. In Boston proper, I think, as an example, rents have dropped I think roughly 6% year over year. And of course that’s due to the pandemic, and it’s due to the regulations, and what we all have to do to get through this. You mentioned that some of your clients are really busy, others are not.
Could you share any success stories or hard lessons learned?
Deb Newell: Yeah. I think one of the biggest success stories I have is actually helping, and I’ve done this with a few clients, is helping really their bottom line, that number come into the triple digits. And really it’s… I kind of go back to maintenance. I actually really love maintenance. I think maintenance is essential to our business, and it’s how we approach it. A lot of companies don’t want to tackle it. It’s very difficult. And you have to kind of know some… There’s different nuances with maintenance. Some are just doing it more as a triage, and reactive. But I feel like if you could be a little bit more proactive, there’s a lot of money to be made just on the maintenance side of it. It’s a lot of work, and it’s about educating the owner, our client, when if you’re the property management company, on why we’re charging for maintenance. And why it’s different than literally just managing your property.
Owners will seem to think that, well, you know, wouldn’t that just be included because you’re managing my property? But it’s helping property management companies actually come… It’s really building out. So I like to build out a spreadsheet catered to each property management company, and helping them with their KPIs and helping them understand their actual numbers, pulling numbers then from their property management software and then putting it into the spreadsheet to really say, well, this is actually how much you’re really making, and this is how much that door is costing you with all of the maintenance. And when they kind of see that, and then I tell them, Oh, and you’ve employed somebody, by the way, to manage all of this, but yet you’re not charging for it, but you have an additional head count.
Tony: Right. That doesn’t really make business sense, does it?
Deb Newell: Exactly. But I’m helping them look at it going, well, yeah, but I figured I just had to do that. I always say, when somebody moves into a property, you’ve got that life cycle of property management, right? You’ve got the onboarding, the marketing of the property, I’m showing the property, I’ve done the application process, then I’m moving them in. Well, what happens after you move a tenant in, before they move out? Two things, rent and maintenance. That’s really it. I mean, there’s other little things that may happen, but those might fall under accounting. Some may happen under that property management umbrella, to say, well, it was an issue or a violation. Those are really few and far between. What happens consistently every month is rent is paid, hopefully. And maintenance is pretty much an issue with any property. And it could be minor, or it could be major.
So if you’re having to employ somebody, or you’re having to literally put that onto an existing property manager’s role, then we have to look at your door count per that property manager. We have to kind of… What are their entire functions? How are you making money on all facets of the buckets of property management, maintenance being one of them? So it’s helping my clients look at that differently, and actually adding more dollars to their bottom line. That’s probably been my biggest success in helping them reevaluate their revenue streams, and how they can comfortably talk about their services without kind of feeling sick to the stomach to say, or cringe when you have to say, here’s my fees and I’m sorry, here’s my fees. You don’t want them to apologize. You want them to say, these are my fees and this is why.
Tony: Yeah. Be confident about it. That’s how you’ll sell it, right?
Deb Newell: Exactly. And you’re not even selling it. I don’t actually like to coin it that I’m selling my services. I like to say I’m educating you on what our services are.
Tony: I like that better.
Deb Newell: Because then it’s naturally sold.
Deb Newell: Nobody likes to go to the car sales place, right? Because we know we’re getting sold ad-ons. We don’t want that. Instead, I just want you to tell me all the good features about the car, and I might be like, I just want the car. This is great.
Tony: Exactly. You’re trying to train, or help your clients really be advocates for their customers and their clients. And advisors to an extent, because they’re really caring for one of the most important things—the livelihood of their clients—which is their investments a lot of the time.
Deb Newell: Yeah, exactly. And part of it also is then helping them dive into their contracts that they have. I’ll review their current management contract, see what could be missing, what can we do based on the laws of their state. And what are your competitors doing? What differentiates you from everyone else? What makes… Because everybody’s different in how they… There’s no right or wrong way in property management. I think there’s just different ways, but it all goes down to the culture of who is owning that company. Because you may have somebody who’s like, I don’t really want to grow to 200 or 300 doors. I just want to offer a really good customer service. Well, what does that mean? Or my niche is high end only, and luxury rentals. Well, that’s going to be very, very different from somebody who’s just doing a $1,400 a month rental. So it’s really… So it has to go with what their focus is, for that business as well.
Tony: Yeah. That makes a lot of sense. So obviously we’re going through COVID still, and it’s still a huge concern for the whole world, really. What do you think, what opportunities and risks do you think still exist for property management companies? Because we’re truly, we’re kind of at a crossroads right now, where there’s a lot of uncertainty.
What opportunities and risks do you think exist for property management companies today?
Deb Newell: I think that’s a really good question, because I think there’s still a lot of opportunity. First off, there’s a lot of people who need jobs. So the opportunity is your employee. Train your employees, make sure you have good employees, because if they’re not working and it’s not a good fit, there are other people who will be a good fit. So there’s more opportunity for hiring really good people. The risk is that you don’t do that, and you become complacent and you don’t change at all. Or you kind of throw your hands up and go, I just don’t know what to do. I can’t invest in my business.
So when people say, well, I can’t afford to hire somebody to help me consult through my business. Then they’re not… They may not be invested into making their business better and getting to that next level. Because it’s hard to do on your own. You only know as much as you know, and sometimes it’s important to, if you really have this goal to get to that next level and you can’t really manage your time well enough to get there, find somebody to help you do that.
Tony: Yeah. I think that’s a great way of looking at it. And really the core of what you’re saying, I think, has to do a lot with the culture that a property management company is trying to create for their employees. Like you want to have a great team that cares about other, that works hard, and that it’s an attractive place to work. And you do that first, and you mentioned communication initially with the staff. And I think that that rings true, especially here, just because you have to learn all of those things.
Deb Newell: Yeah. And that’s probably another risk I see, especially with everybody kind of remote working. Your communication does go down, and people are kind of left to their own devices on really running their area. And if you don’t have the guidance and that structure in place, it’s going to fail, unfortunately. You just won’t grow. You may just remain stagnant. You may continue to struggle in certain areas and not know why. And it’s also, when do you pull everybody back into an office setting maybe, or when? Because people are going to get complacent with also working from home. And some team members don’t want to do that, because again, it’s too distracting. They want to get back into an office. So you have to kind of be on top of what’s going on in your state, in your area, your community, and how can you safely bring people back into the office to work more efficiently.
Tony: Yeah. And it’s about the touch points as well. Like when you’re in the office, you decide to have a meeting, right? And you call everybody together. If it’s worthwhile, we’ll have it. We’ve heard from a lot of property managers, just having those touch points even virtually, and having special types of meetings where people, they do something a little bit differently to communicate. I think like that’s a muscle. Like that communication is not always necessarily done right in the office at all times, but it’s always effort, right? And as a leader or as an owner, a business owner, you really have to exercise that muscle all the time with your team, and just keep them talking.
Deb Newell: Well, and that’s a really good point, because I’ve seen that happen as well. People neglect meetings, they were having them, maybe. Maybe, maybe not. And then they neglect them, and now it’s no longer an appointment on the calendar anymore, right? It’s no longer blocked off to say we need to… And it could be a Zoom meeting. It could be a park where you socially distance, or however you make sure it’s safe, to kind of get them out of their own environment as well. But yeah, mix it up a little bit, try to be creative in what we’re doing, and make your staff feel like you are invested in them. Because again, you need them.
How do you see technology helping your clients to adapt and become more efficient?
Deb Newell: I think what I’ve found and what I’ve seen is one, it’s essential. I think they all know that it’s essential. They have to have it. But there’s a couple… There’s two parts to that. So a lot of clients before, and even now, still weren’t or are not using their software to what it can do, right? To its fullest capacity. They were using segments of it, or we just kind of log in and we’re just looking at who’s living there. Or they’re not using all of the data fields the way they should. So that’s one step I try to fix right away, is to make… Because I’m really big on reports, and reports are only good if the data is good. So the data points are essential. And so I help them understand their software better.
So that’s one piece. The second piece is, I also see the software companies, because of where we’re at now, improving their software. They’re like, now they’re spending a little bit more in development dollars to actually get things done in a more efficient way, because the rules have changed, right? The rules of property management have changed. So they have to now kind of change with it, and change some of their features. So there’s been… I am very privy to kind of all of the software, and I see a lot of feature changes coming out with everyone. And more than there has been in the past. I think they’ve all kind of sped up their whole development on rolling things out. They haven’t had things hold them back as they did before. They’re able to kind of do things faster. Well, that means on the user end, we have to keep up with that. And how do we maximize our software usage and what we’re using?
So back in the day when we all went to conferences, if we can all remember when that was, we would go to these trade shows, and we’d be like all starry-eyed and you know, Oh, this looks like a great thing I can integrate in my business. And they signed up, and then they don’t use it or they don’t know how to use it. And so it’s kind of figuring out was that the right piece to bring in, and how do we train you guys to use it and be more efficient.
Tony: Right, exactly. And that’s I think a crucial piece of the kind of software that we’re talking about here, and the kind of platforms that I know at Buildium we love to support the property management industry with, is it’s always iterating. We’re always trying to make it better. And with those, I guess with those iterations comes opportunity and change to use the product even better. And that’s exactly why we have a whole part of our content that we put out into the world is called Buildium Academy. And it really helps to train property managers on the Buildium product. So very important to us, for sure.
Deb Newell: No, and it is really important, but what I help clients do is take that information, whether it be from Buildium Academy or anyone else, is that you take that and then how does that apply to your business? Because remember, their operations are going to be very different than somebody else’s. So it’s taking that information that they… And then really integrating that into the structure of their business.
Tony: Thanks so much for talking with me today, Deb. We’ve really learned a lot of great things, and it’s awesome to see if there’s someone out there that supporting property management businesses through these crazy uncertain times. Because although a lot of things have changed, there are challenges, there’s also a lot of opportunity. And I know that we’ll be here continuing to communicate with property managers, and I know you will be too.Read more on COVID-19