In the last issue of the Residential Investor Connection, we emphasized 2 guiding principles for residential property investors to deliver tenant service that exceeds expectations. One is to relieve stress and tension in renter relations; the other speaks to maximizing profitability and asset appreciation. Click here to read article…
Now we’ll address some real-life scenarios of the application of these principles that deliver on the promise of positive outcomes … for both tenants and landlords. We’ll start with a real-world story that illustrates the power of Guiding Principle #2:
Fixing problems is good for your tenants and for you to protect your investment.
Tenants Respond Positively When You Show You Care
KRS Holdings understands that our clients’ investment assets are also our residents’ homes. To protect both, we work to provide residences that make the tenants proud. Kyle (our Founder & CEO) periodically walks many of our multifamily properties – especially the ones that do not have an onsite Community Manager.
This additional demonstration of attention has helped develop a strong sense of community among tenants. As an example, one day this summer when he was out, a long-term resident approached Kyle saying, “I know you work to keep our building and grounds neat and well maintained. I’ve particularly noticed you don’t like cigarette butts on the ground.”
Kyle agreed and she continued, “I figured out a solution. I now buy these beers [cans] with the wide mouth. Now we all put our butts in one every day.”
An Investment to Improve Property ‘Look & Feel’ Plus Delight Tenants
Over time, many smaller multifamily properties can become cluttered with the electronic residue of former tenants (old satellite dishes, cable wires, etc.). Detracting from the curb appeal, it negatively impacts the value of an investment property.
Recently, a client who owns a small apartment complex was beginning to look at making additional investments and was considering refinancing the apartments to free up cash. To maximize the assessment for the loan, we recommended they remove all the electronic leftovers, install two satellite dishes (one per building), and provide free basic cable to residents.
The curb appeal immediately improved, current residents were thrilled and all vacancies were filled (with higher rents) within a month. The property was given a favorable assessment by the lender. Our client was delighted. All these positive results from a win-win decision to enhance the perceived value of the property and add amenities for the tenants.
An added benefit – the existing tenants were surprised and pleased by the improvements as many did not have cable and this was a gift to improve their quality of life. As an example of the excitement, the first tenant to receive her box was overwhelmed by how many of her neighbors spent the evening at her home watching her TV since they didn’t get theirs installed until the next day!
Our Clients … Landlords and Residential Rental Property Investors
As property managers, we at KRS Holdings serve residential property owners in the management of their rental properties. We refer to tenants as our clients’ customers.
As customers, our job is to fulfill tenants’ expectations to have a peaceful, safe place to live with a minimum of interruptions to the basic comforts anticipated as a renter. When the inevitable disruptions occur, how the property manager deals with the issues is what will be remembered by the renter and defines tenant/owner relations as well as the reputation of the landlord.
While people like to have their problems fixed, what they most want is to be seen and to be cared about. Of course this must be balanced with the bottom-line expectations of the investor.
So at KRS Holdings, we deliver successful property management based on simple math: Add value to your assets, then subtract unnecessary expenses.
Adding value to your assets includes the application of “people skills” that represent a substantial role in tenant retention. That’s especially critical when you have a tenant who pays on time and is not overly demanding. Fewer turnovers translate into less expense and enhanced profitability.
Our clients, landlords, profit from our tenant-centric culture to engage our property management employees and contractors with a shared value to do the right thing when responding to tenant complaints and maintenance. That does not mean giving in to each and every renter’s demands. It does mean starting with an attempt to understand and respect tenants as real people with real concerns for their home.
Training is critical! You as a landlord, and we as property managers, can initiate best practices skill development to demonstrate caring for the tenant and to empower your staff and contractors to fix things, on the spot, or encourage them to call for help when it’s needed. Some examples:
Show You Care
Lease Expiration/Renewal Process
Turns (making a property ready for a new tenant) is one of the biggest expenses for a rental property investor. KRS Holdings recognizes this and strives to retain our residents for as many years as possible while also maintaining a competitive rent rate. We clearly communicate rental increases to tenants months ahead of the renewal period. The new rent rate is confirmed the month before the rental increase will go into effect and again once the renewal period has expired.
If a resident lets us know they want to move, we seek to understand why. Often, we are able to work with the resident and the owner to find a solution that works for everyone, e.g. a 9 or 10 month extension instead of a full year to align with graduation; a two year extension in exchange for a smaller rent increase; a fresh coat of paint or other maintenance request, etc.
Transitioning Homeowner to Being a Landlord
The transition from home dweller to investment property owner can be emotionally difficult – especially when the owner plans to return and live in the property. KRS employees understand this and work to guide owners through decisions that might be made differently for a rental property than for a personal home.
Conflict Management Training
Conflict is a part of life … and when dealing with a person’s home and money, conflict gets personal. All KRS employees are trained in conflict management and policies are designed to minimize opportunities for negative encounters. Additionally, hands-on small group training is provided for our front line team members (customer service, sales and maintenance). Their participation in real-life scenarios and role plays develops skills to minimize adverse situations and diffuse heated issues quickly.
KRS Holdings is in business to make a positive impact on the lives of our landlord clients and their tenants. Minimizing conflict is a significant contribution to success in achieving these twin goals.
The Payoffs – Client Landlord Satisfaction
Just a few kudos from landlords we serve:
Remember, tenants pay down your investment property mortgage, pay your taxes and maintenance costs plus help you build your asset’s value. Treating them with the respect they deserve and responding to their perception of receiving the service they are paying for will cement longer term renter relationships and positive word of mouth that helps you gain trust and grow as a successful residential rental investor.
So property management may be DIY, or hiring a professional firm like KRS Holdings … either way, it’s the tenants’ experience that will deliver the least stress on landlords and the maximum ROI for residential rental investors.