With so many of our owner/clients falling into the role of Landlord by chance, rather than by choice in the last few years, it’s no wonder we’re facing challenges gaining their loyalty. Often times, the rental property owner doesn’t have the slightest clue how to manage such an investment. In many cases, the property wasn’t originally purchased as a rental. The investment strategy, if one exists at all, is vague and constantly shifting.
A single expense, a “bad” tenant, or a month without income, and the “Accidental Landlord” panics. “How am I going to make my mortgage payment?” “I can’t afford to pay for that!” Does this sound familiar? Before you realize what’s happening, this property owner is moving on to what he perceives as greener pastures, with another property manager.
Gaining client loyalty is one of the greatest tests of a property manager. Without that loyalty, we cannot succeed. How can we, as professional property managers, create an environment in which the owner/client trusts us enough to remain loyal, even when management difficulties arise?
In our rush to sign a new property management client, it’s tempting to downplay the risks and real-world costs of rental property ownership. We might not ask the important questions that will tell us the client’s true circumstances and expectations. We might tell ourselves that it will all work out, as time goes by. Unfortunately, this strategy sets the stage for failure, for both the property manager and the owner/client.
The initial interview with a new owner/client is the most critical time in the client-manager relationship. Take your time, and make the effort to be sure you and the client are starting off on the right foot, with clear expectations.
Every property manager’s style is unique, but some things are vitally important, to us all. For example,
- You want to be sure your new client knows what it’s going to take to get the property in “rent ready” condition. Depending on your market and property type, that might mean new paint, new floor and window coverings (or, those that look new), recently serviced systems and appliances (HVAC, smoke detectors, fireplaces, pools, etc.), damage-free screens on all windows, professional cleaning (including light fixtures and windows), and landscaped areas free of weeds and trash.
- Does the client expect to do his own cleaning and “make-ready” repairs? If money is so tight that the owner cannot afford to hire professionals to do the make-ready, what’s going to happen when the property goes a month or two without generating income?
- How much money does the owner/client have in reserve? This might seem like an awkward question to ask, but it’s important for you to know. We often tell our owner/clients that they need to have at least 3-6 months of cash in reserve, to take care of any contingencies that might arise during the term of our management.
- What about tenant screening? Does the owner wish to have input on tenant selection? From a risk management perspective, it’s important that your owner/clients agree to your objective method of qualifying tenants, and are comfortable leaving this important aspect of management entirely to you, the expert.
- What kind of spending authority will you have, and what are the client’s expectations as to communication, once the property is rented? Are you expected to contact the owner before having routine repairs made? Or, does the owner understand and accept your authority to oversee the day-to-day operation of the property?
These are just a few of the items you want to discuss in the very early stages of the relationship with your new owner/client. By setting clear expectations from the very beginning, the foundation for a strong relationship built on mutual trust and loyalty is established.
Do you have tips to share on building client loyalty? Please do so, by leaving a comment on this post!