Real estate property management and its associated tasks typically fall into one of two buckets, and both need attention for real estate companies and their employees to be effective.
The first bucket contains the activities related to the resident life cycle.
Resident Life Cycle Tasks
The first consideration in resident-related real estate property management tasks is usually collecting rent. Leasing the units is also a necessity. And property management requires competent marketing to drive leases and maximize your rent.
Setting rents is another big part of property management. Discovering what rent costs are in the local market, doing surveys, and the mechanical elements of getting units rented are also factors.
Screening residents and making sure that units are rent-ready also falls under the resident life cycle. Property managers show and turn units quickly so that when a renter leaves, someone else can see and even move into that unit five days later. Those are the basic tasks related to property management in most people’s minds.
What we think of as the asset life cycle, however, is just as important. Preserving asset value minimizes costs and expenses and reduces operational risk. But it doesn’t get as much attention as resident life cycle issues do.
Asset Life Cycle in Real Estate Property Management
The asset life cycle in real estate property management involves things like preventative maintenance. Not just responding to work orders but getting involved in preventing equipment from breaking down in the first place. And that starts with a preventative maintenance schedule, which should be in place for every piece of equipment and machinery on a given property.
Risk mitigation can prevent operational risk and property risk with proper maintenance. For example, the best time to schedule roof inspections is before the rainy season to prevent leaks before they happen.
There’s property risk mitigation as well as liability or slip-and-fall risk. For property owners, that is part of having people on your property. They will fall, and they will trip, and they will do things that you think they shouldn’t be doing, and they will blame you for it. And mitigating that risk is part of the asset life cycle.
Other tasks can ensure a good experience when potential renters see the property. These include inspecting the lighting systems, inspecting the condition of the tour path before property visits, and a checklist to get the model unit ready.
The asset life cycle considers the characteristics of the asset itself. An onsite pool has certain requirements, for example, and a northern climate requires different maintenance than an asset than in a southern climate.
Leonardo247 is effective because it prompts staff to do the right thing, at the right time, with the right form or inspection tool.
Failing to maintain an asset can eat away at your net operating income (NOI) because of higher equipment costs, more lawsuits, and greater inefficiencies. When your staff can’t get to what needs to be done, Leonardo can provide a solution.
Preventative Maintenance for Real Estate Property Management
Onsite operators might get in trouble when occupancy dips. They get in trouble when they don’t meet certain achievable rent goals. And they get in trouble when units are down or don’t turn quickly.
That’s why some operators ignore preventative maintenance until the one day that they can’t. And when a major piece of equipment breaks down, people want answers. Why did you ignore this? How did this happen?
On the operator side, the honest answer is that it’s easy to let those things happen if you’re not paying attention to them. If you don’t put some urgency on these tasks, they can be ignored for a long time. But now you have a problem. And you’re costing the company money in the form of a major equipment breakdown, lawsuits, and units that don’t get rented because they’re not being marketed properly and on time.
Leonardo247 is there behind the scenes to make sure that stuff doesn’t happen. We’re like an on-site sidekick that reminds you to finish that water system treatment even though a dog is barking in one unit and another resident has questions. Those reminders prevent thousands of dollars in easily avoidable expenses.
Training Vs. Task Management
The property management industry has tried to address the disconnect between what people feel is urgent and what is actually important.
One method is a comprehensive training or certification program. We train people on standard preventative maintenance or send them off to learn what proper preventative maintenance is, or create a policy that lists all the risk management tasks employees need to complete in a given timeframe.
The problem with training is that there’s a lot of turnover in our industry. So you can teach people but in six months, or 18 months, they’re gone, and that institutional knowledge is lost.
Secondly, even well-trained and well-intentioned folks can get distracted. And if you don’t have a way to measure and track that it’s being done, then you don’t really know it’s being done. And if you don’t know it’s being done, it’s probably not being done.
That’s why Leonardo247 focuses on this part of the property management asset life cycle. We’re trying to bring transparency and insight into how well properties are doing, and keep up the less-visible parts of asset management and stewardship.
In property operations, if you’ve ever been on site, it feels like everything’s urgent. There’s always something that could take your time right now because it feels urgent. It’s a stressful environment.
And because everything feels urgent, the not-urgent-but-important things really get short shrift.
And some of the things that feel urgent have nothing to do with maximizing the value of an asset. It just has to do with placating somebody who’s loud. But the asset ultimately suffers if you can’t focus on those things that are important, but not necessarily urgent, that need to be done this week, this month, etc.
Automating Asset Management
Part of the Leonardo247 setup is an account manager and implementation specialist who work with each client to look at their policies and procedures. They identify the things that are important and how tasks should be scheduled.
Oftentimes asset management tasks only need to be checked once a quarter or once a year, not every day or every week. If something important needs to be done and it goes for too long without attention, however, you’ll have a problem eventually.
That’s the magic of the Leonardo247 setup. Things that are a little more esoteric, or aren’t top of mind but are still important, are built into the system. And then, one day, they just show up as tasks.
Also, these tasks get finished because the platform guides the employees on site.
These are the people who are really focused on the problem of the day. We can say why a certain task is necessary for ownership, however, or the management company, or for insurance, or the municipal code. And Leonardo247 offers guidance if there’s a certain form or process to follow. And from there, the system informs stakeholders that the task was completed.
The Evolution of Real Estate Property Management Software
At this point in the evolution of property management, every company is using some form of software. But how does the right piece of software impact real estate property management?
In the eighties, rent rules and digital accounting were new features. We didn’t start getting things like work orders until the nineties. And in the last 10 years, things like digital marketing and cloud-based software have given owners access to financials that the property management company typically maintains.
Transparency Between Owners and Operators
What software can do now is provide transparency between the operators and the owners. Even if you’re an owner-operator there can be a disconnect between the on-site team and the corporate office.
But software can provide transparency with real-time access to:
- Property performance
- Leasing trends
That data can reinforce the trust and good relationship between an owner and an operator.
Consistency Through Automation
Further, Leonardo247 provides consistency. The more you can automate processes through software, the less you need to rely on memory or even training.
Automated systems that guide the people turning the wrenches and doing the work onsite produce greater consistency. And that consistency produces accountability and visibility into those processes. But you need software to provide that kind of structure and automation.
Ultimately, software in property real estate management reduces your risk. Shifting the burden of operational procedures and tasks from human memory to a piece of software reduces risk. And using a platform that delivers the right information to the right person at the right time reduces risk.
The more you can do that, the less you leave yourself open to lawsuits and problems with marketing, leasing, and resident satisfaction.
Supplementing Real Estate Property Management Systems
In every case where Leonardo247 is deployed, a property management system (PMS) is also in place. We work alongside these systems as a standalone and supplemental operating system for property management.
We think of PM systems as resident-focused. The well-known property management systems are built on top of accounting platforms. Questions about leases, rents, rent collection, screening lessees, etc., are covered by any good PMS system.
Leonardo247 stands alongside those systems by facilitating everything else that needs to happen at a property to be a good steward of that asset.
In other words, when your team isn’t responding to a work order, or trying to lease a unit, or collecting rent, we give guidance on what they should be doing to maintain that asset. That includes what form they should use, what inspection process they should follow. And the results often flow back into the property management system for data collection.
Leonardo247 can serve as a single source of guidance for community operators by outlining everything that they should be doing on a daily basis. And a subset of that list should be work orders. For example, the Leonardo247 can encourage and remind operators to complete tasks proactively based on policies and procedures.
Leonardo247 also facilitates reactive work orders. the platform can provide all of the information if, for example, a resident’s broken pipe needs to be fixed. And when the work order is completed within Leonardo247, that information goes back into the PM system as the system of record for property maintenance or finished work orders.
Leonardo247 also facilitates move-in and move-out inspections. When tenants say they are moving out and employees change the status of a unit from ‘occupied’ to ‘on notice’ in the PM system, the Leonardo247 system generates a move-out inspection notice.
Further, if you have a move-in inspection on file, you can compare the move-in to the move-out and see what resident charges might be applicable. That happens in Leonardo247, and the charges from the move-out inspection flow back into the PM system.
Leonardo247 also facilitates complete inspections. The results of those inspections can go into the PM system if there is sufficient storage.
A lot of the data that Leonardo247 collects doesn’t really have a home in a PMS. Many of Leonardo247’s operations and procedures address workflows and processes that PM systems don’t cover.
PM systems are built on, and biased toward, accounting and tracking those metrics. Running the property is not on their radar. That’s why a holistic property software solution is so important. You need a standalone operations system that can pass data into the PMS when it’s applicable.
Comparing PMS in the Marketplace
The evolution of PM systems in real estate property management is interesting for a number of reasons.
First, the systems themselves have vastly different personalities and characteristics. It’s also interesting to see why a company migrates to one or another.
Second, there is so much inertia in an existing PMS that convincing a property management firm to move from one to another is almost herculean. But something still compels companies to do that
In our experience, Yardi and RealPage split the market in multifamily. MRI, AppFolio, Entrata, and ResMan are all excellent solutions, but they don’t dominate in the way that Yardi and RealPage do. And it’s not necessarily because Yardi and RealPage are the superior solutions. Entrata’s value proposition, for example, is that it’s a highly evolved, easy-to-use technical solution, but that didn’t immediately persuade people to move to Entrata.
Yardi was the first PMS system we integrated with, and the majority of our clients are Yardi clients. But even though Yardi is a robust system, and in some instances it might be the most robust system, many clients don’t always take advantage of all that it has to offer.
Leonardo247 can be easier to start using than Yardi, in part because we’ve given so much thought to make it really easy to get up and running. Yardi clients often get a lot of value right away from Leonardo247 because it fills a void in their operational platform.