However, the real interesting part of the article was the calculation of the cost of a move-out.   According to SatisFacts, the cost is $4,500 (due to increased concessions and vacancy loss days).  Their top performing clients were able to beat the 2008 index by 7 points.   If you do the math, even a small to medium sized portfolio can be greatly impacted by reducing move-outs.  For instance, if you have a portfolio of 200 apartment units or single family homes and reduce turnover by 7%, that would equate to 14 * $4,500 which gives a savings of $63,000 per year.

My blog, Does Good Property Management Matter, pointed out that by using low cost technology, a property manager can improve relationships with tenants, thus making them less likely to move-out due to frustration with the property.  It seems to me only logical to explore ways to have higher retention, particularly if the cost is reasonable.

There is no escaping the fact that the internet is the easiest and lowest cost way to stay in communication with your tenants.  By using a property management website to acquire the tenant and then using a resident portal to communicate with the tenant, you have leveraged the life-cycle costs of getting and keeping tenants.  Resident portals allow a tenant to submit property maintenance requests, check out property events, pay rent online, and more.

To investigate web based portals and determine the best approach to use for your operations, refer to my blog, Picking a Property Management Software Solution, or watch a brief overview of DIY’s property management websites.

So is focusing on retention important?  Only if you want to improve your NOI.
Rob Crichlow
DIY Real Estate Solutions

But do any of us get measured in business by those qualities?  Yes and no.  If you had all of the qualities in the list and did not keep a property rented for an owner, would the owner give you good reviews?  I know a lot of successful real estate professionals that understand the ins and outs of building operations (keep the property in good repair and looking good) and know how to keep the property leased (understand how to advertise effectively and negotiate a win/win deal with the tenants), but do not know technology well.   Understanding the core of the business we are in is the essential ingredient for success in any field.

So what would my list look like if I wanted to find a good property manager?  Here are a few examples:

Property management industry knowledge - You would expect the property manager to understand the comparable rents in the area and know the direction rents were heading in the near to mid-term time frame.  He/she should be able to counsel the owner on what the rent should be in order to rent quickly and stay rented, while getting the highest rent possible for the property.

Understanding of how to keep a property well maintained – The property should be maintained to the standards set by the owner, for the appropriate cost for the area, and in a fashion that keeps the tenant happy.

You see, I believe in keeping your eye on the core business and not being distracted by the elements that other people are experts at.  A good property manager could outsource the things that do not apply to the core business.   Basic knowledge of things like contract law, accounting, and software should be required, but a lease can be reviewed by a lawyer, books can be maintained by an accountant, and software can be outsourced to a good property management software company.

The qualities that I, as a rental property management software provider, will be measured by must include a strong understanding of technology, since that is my core business.  The qualities that a property manager will be measured by will be a strong understanding of real estate.

So the answer to the question of how we are measured is very much yes and no.   A good property manager does need to have many of the qualities on the list, as all of us do.  But just as important if not more important is a strong understanding of the core business, managing properties.

Rob Crichlow
DIY Real Estate Solutions

I suspect it shows how there will be a continued focus on how to leverage the dollars that are available to spend.  This will affect how people look at the costs of their approach to technology in all areas, including property management software and how it interfaces with online resident portals and property marketing sites.  What if you could use a property management software program that interfaced with multiple marketing websites, provided a powerful online portal for advertising your properties, and costs less to use on a monthly basis than what is in place now?   Shouldn’t the same commitment to cost management for ongoing expenses, like supplies and services, also be applied to the cost of using a property management system?

The Rentbits blog ends by saying, “…2010 is going to be a much bigger year for mobile and real estate applications.”  This tells me that 2010 will be the year for making sure that all costs for managing a rental property are examined, including technology.

I challenge you to research web based property management software programs and checkout pricing.  I believe you will find a program that offers a way to save money in how you are doing your advertising, while at the same time saving money on the cost of using the software.  Check out my blog on picking a property management solution or checkout our online rental property management software.

Rob Crichlow
DIY Real Estate Solutions

Providing ways for your tenants to communicate with you and you with them is a way of determining how they are doing.  Many property management companies are starting to use online resident portals to accomplish this, letting the tenants schedule the use of common areas, pay their rent online, report maintenance requests, and check the status of existing service requests.   A good online rental property management software program should support this feature as part of the system.

Over communicating with your tenants on what is going on with the property and seeking feedback is the real key to keeping a pulse on what is going on.  It is better to learn how a tenant feels when you can do something about it than waiting for them to post a negative review online.  In his book, ‘What Would Google Do?’, Jeff Jarvis says that a company must allow easy two way communication if they want to be successful today.  The web allows information about a company to travel at the speed of light, so focusing on communication with your tenants will make sure that information is positive.

So how do you make sure your hard work is paying off?   Communicate.

Rob Crichlow
DIY Real Estate Solutions

A web based property management software solution that can be accessed anywhere you are, is by far the best approach to date.  In a well designed solution, by simply accessing a web browser when you are at your desktop, while at work or home, should alert you to all of the items that require immediate attention, while the items coming up in the near future are clearly laid out.  In many cases, simply accessing the information can start a process that will move the item on to completion.  As an example, our rental property management software places all of this information on the Home Page, so a quick review alerts you to all of the items that need to be addressed.

There are many examples of this kind of information that you would want to be tracking.  Preventative maintenance issues on a property, such A/C filter changing, frozen pipe prevention, leaf removal, and gutter cleaning, just to name a few.  The obvious accounting ones would be rent increases, lease renewals, recurring banking transactions, and payments to property owners.  Or how about follow ups on prospects, updating internet advertizing of properties coming available, and checking properties for ready to rent status.   In a good system, these reminders and action items are provided as a byproduct of simply using the system.

When I first started using a Franklin Planner, I couldn’t imagine something better.  Then came the PDA, which was light years ahead of my paper planner.  Make sure you are getting the best combination of time management and early warning system, by checking out a web based property management software program and compare.

What is a likely result?  No more frozen pipes.

Rob Crichlow
DIY Real Estate Solutions

As a service provider to the property management industry, it is our challenge to continue to search for better ways to help you leverage your resources.  Risk and cost need to be lowered as the leverage obtained from your property management software increases.

Our focus is to utilize the web, already a part of our daily lives, and distribute the online property management software we provide, to as many people in an organization as possible, with no additional cost as more software users access the service.  As we add more to our property management software through providing better information and features, it is instantly available to everyone, leveraging manpower and cost.

The only limit is simply ideas on what you need to better manage your rental properties.  Whether you manage apartment complexes or rental homes, we believe that the best ideas come from those needing the information or features.  We want to hear from you and let you know what we are doing.

Here we begin.

Rob Crichlow
DIY Real Estate Solutions