When you’re a third-party manager of an apartment community, you have two groups of customers: the owner of the property and the residents. At first glance, it may seem as though balancing the needs of these two groups would be difficult.
After all, their objectives are quite different: the owner wants to see consistent revenue growth, reduced expenses and year-over-year NOI growth, while the residents want a place that fits their lifestyle needs and truly feels like a home. They couldn’t care less about the property’s NOI. On top of that, they’re not crazy about rent increases, which owners want to see.
But in the end, a third-party manager should see that the interests of these two groups really are aligned. They both want a well-run, customer-service-centric apartment community. Such a property will attract prospects and make current residents happy, compelling them to renew their leases; in turn, that will lead to strong financial performance that delivers rent growth and the returns ownership is seeking.
Along the same lines, keeping both ownership and residents happy involves similar tactics. Below are some of those tactics:
Open and Frequent Communication
This is a big one. Residents need to be kept firmly in the loop about what’s going on at their community. For instance, if the water supply to a building is going to be shut off for a period of time, they need to know as far in advance as possible. If work on the front gate is going to impact their drive in and out of the property, they need to be told ahead of time. And when their renewal offer contains a rent increase, operators should offer as much transparency as possible.
Similarly, if there are any issues affecting the occupancy and rent growth of a community – be it the community’s marketing program, its amenities, its onsite leasing staff, problems with its revenue management software, etc. – a third-party manager must alert ownership to the problem as early as possible and be ready to collaborate with ownership and work together towards a solution. Perhaps solving a community issue will require some kind of additional investment on the part of a community’s owner. In an instance like this, the third-party manager should be prepared to work with the ownership group to properly budget and coordinate bids to enhance the residents’ experience while also meeting the overall financial objectives of the owner. This type of cohesive effort strengthens management’s position with both residents and ownership.
Additionally, it’s imperative to have a solid relationship built on trust with ownership. Third-party operators must regularly and proactively update the owner on the financial performance of a community; if there are any reasons to believe the community will not meet its fiscal goals over a certain time period, that needs to be pointed out as soon as possible to help mitigate circumstances and to proactively work together to address underlying causes.
This sounds so simple and yet apartment communities struggle with prompt responses to residents and prospects. If a resident makes a maintenance or other type of request, an operator has to address it quickly. And if, for whatever reason, a quick response isn’t possible, the resident needs to be told why and given a timeframe for when the problem will be solved.
Likewise, any query from ownership needs to be answered as soon as possible. If the requested information will take some time to compile, that needs to be made clear with realistic expectations about the delivery date established.
Both residents and owners have a lot at stake in the community a third-party operator is managing – and the strength of the relationship between all three parties is crucial to the success of each.
The most crucial point of success in the relationship between third-party operators, residents and owners is an open and honest path of communication. When each party feels listened to, supported and valued, a community will nurture happy residents, create a high-performing apartment community and ultimately reach fiscal goals.
As ROSS’s Vice President of Residential Operations, Don brings a wealth of experience and expertise as the company focuses on growing its owned and third party management portfolios throughout the Mid-Atlantic. Reprinted with permission of Multifamily Insiders. Multifamily Insiders was created to provide the first true online networking group for the multifamily industry and its partners. For more information, visit www.multifamilyinsiders.com.