The Power (and Importance) of Aligned Interests
Your Property Manager Should Be Making Money With You, Not From You!
The business world is best built upon aligned interests...plain and simple. With that model there are winners and there are winners. If interests are not aligned, we end up with winners and losers battling it out over the size of their piece of the pie. Can that work...sure. Competition is a key component of the capitalist system, but if you can minimize it in your internal model, the decreased friction will pay dividends. You naturally want to compete with your competitors, not your stakeholders.
In business, the goal should always be to produce win-win relationships. This ideal is at the core of any trustworthy company, and it is especially applicable in the property management industry because it is so service intensive. At Nexus Property Management®, we pride ourselves on our win-win-win model where tenants, property owners, and our own employees all benefit from doing the job the right way.
THE VALUE OF ALIGNED INCENTIVES IN PROPERTY MANAGEMENT:
History and psychology tell us that in the majority of circumstances we react to positive incentives, and subsequently make choices that will lead to more of those future, positive outcomes. Let’s apply this specifically to the property management world and we’ll start with the most important cog in the machine, the tenant:
TENANTS:
What do they want?
We know all people are different, but when it all boils down, tenants typically are all looking for the same things. They want a place to live where they feel valued. They want to pay rent that aligns with the value they are receiving. They want things to be predictable and they want issues to be responded to efficiently and effectively.
If those criteria are satisfied, you can expect hassle-free, long-term tenancy.
TENANTS:
How do they get what they want?
Like anyone, we typically get what we want when we follow expectations. If the lease was created properly [Nexus Lease Generator] and there’s a system to ensure tenants are aware of all requirements, you can expect that tenants will follow the expectations in exchange for the things they want, as listed above. The other piece of the puzzle is that tenants need to communicate with the property owner (or property manager) whenever maintenance issues arise. Maintenance is inevitable and if dealt with appropriately, it shows the tenant that they are valued (while also helping to keep the asset in good shape and the rent coming in). If appropriate maintenance requests are not responded to, well...what the property owner thinks he or she might be saving by cutting corners, will ultimately lead to costly problems down the road.
Simply put, if you’re a property owner and you provide the value that tenants expect, based on the amount of rent they’re paying, your tenants should understand their role in their own happiness.
[ Learn More: Charging Tenants For Maintenance Will Cost You ]
PROPERTY OWNERS:
What do they want?
Property owners want to make a return on their investment. They want to get the most out of the home they’ve purchased and they want things to be predictable and hassle free. Most often, they also want to feel that they’re making someone else’s life better. They are providing a necessary/top of the pyramid human need (shelter) as well as a service in exchange for someone else paying their mortgage and other expenses. And finally, they typically want to be able to do all of this with the least amount of time and effort (efficiency), because managing and maintaining homes can be very time consuming and labor intensive.
PROPERTY OWNERS:
How do they get what they want?
Property owners get what they want by helping tenants get what they want (see above). With systems in place to streamline efficiency, it’s as simple as that. Provide value that is appropriate and reasonable and other humans will literally pay your mortgage, taxes, and insurance so they can benefit from the predictability and security that you provide as a property owner.
[ Learn More: Have Someone Else Pay For 80% Of Your Real Estate Investment ]
PROPERTY MANAGEMENT COMPANIES:
What do they want?
Property managers want to make the tenant/property owner relationship work as well as possible. Through their expertise and ability to scale, they naturally add efficiency and reduce response time so they create value in ways that individual owners cannot. They expect to make profit based on the value provided by their expertise and their willingness to handle jobs that others don’t want to or don’t have the time or experience to handle. The good ones also want to grow at a reasonable rate, so they can increase their bottom lines without jeopardizing quality and so they can continually improve their best practices.
PROPERTY MANAGEMENT COMPANIES:
How do they get what they want?
Property managers get what they want by helping owners get what they want (see above) efficiently and cost effectively. By having transparent and reliable pricing, along with full leasing and maintenance teams, successful property managers shield owners from the stress that comes with inevitable surprises by packaging them with solutions and action steps. They provide services and systems that help tenants communicate their needs and property managers can then advise, respond, and act in the owner’s best interest. Because tenants and owners are both gaining value from their relationship, property managers need to create additional value to create that win-win-win model. A good property manager will do just that.
[ Learn More: The Surprising Reasons Many Property Managers DON’T List Their Prices ]
NEXT STEPS:
Learn more about your own potential as a property owning real estate investor. Contact Nexus Property Management® for more information or to talk more about why this model is right for you. At Nexus, we pride ourselves on our ability to add value and improve the lives of tenants, owners, and our employees alike. Be sure to reach out if you’d like to be part of our team or are interested in franchise opportunities throughout the country.
Mick Lefort is the Vice President of Operations for Nexus Property Management®. A National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.
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