When anyone asks me what the most difficult job I’ve ever had, the answer is easy – property manager. That answer includes my time as an in-patient psychiatric tech and my current role as CEO of Vesta Capital.
I remember my first time being promoted to property manager (PM) my new regional manager gave me advice. She said “keep in mind you are now the CEO of this property.” Between the tremendous expectations, the long hours, the incredible stress, and the daily disasters, she was totally correct. Well, with one major exception – you certainly aren’t paid like a CEO.
So, how, other than paying them more, can we executives do better by our PMs and on-site teams? There are probably many answers, but one sticks out to me more than the rest; make sure they know they will never be alone.
Property Managers often find themselves seemingly on an Island. They can’t raise rents fast enough for their leadership team to be happy, but they are often the villain to residents who are getting priced out of their apartments. They are quickly admonished for spending too much money by leadership, but equally as quickly denigrated as cheap by the residents who need work done in their apartment.
When things go well on an asset, they are often overlooked both by leadership and by residents alike. Unfortunately, when things go poorly nothing is overlooked by leadership and residents alike. That’s why a little support can go a long way.
For day-to-day support, PMs always have a regional manager to roll up to. That’s how it should be. However, the danger zone for many PMs lies in issues beyond day-to-day normalcy. I’ve found that the more effort I put into building relationships with our managers the better results we get.
The first advice I now give to PMs when I talk to them is that if there is anything sensitive that they need to address, but don’t want to speak to their regional manager, find the person in leadership they feel most comfortable speaking to. Once we establish comfort, people can be more free to be open. I’ve found that out of that openness can come the best advice – if we as leaders choose to listen.
I’ve had instances where our PMs have more answers than the regional managers, VPs, hell even than our executive board myself included. For example, Vesta closed on our first property in June of 2017. The deal we bought was 93% occupied. Within 3 months our occupancy had tanked to 78%. I was distraught. I could see my entire career failing. The only answer I could come up with was to reduce rent. Granted, even if it worked it would have been a loss because the property would have lost value.
My first PM told me that wasn’t the problem. He explained that he had spoken to many of the residents and around 25% of our residents came from one single family developer and each time he completed a house the resident moved out. I was shocked, but I still felt reducing rent was the only way we could build back occupancy. He convinced me what he needed was one additional leasing agent.
My now wife, Alicia, agreed to take on the task. I remember it was February 2018 and she got 16 applications in one month. I was blown away. The team, under the PMs leadership and with the help of a special leasing agent, fought their way to stabilization.
It would have been so easy for them to ask to reduce rents. But I listened to our manager no matter how worried I was, and he and his team delivered our first win for our investors. Of course, there have been many instances since then.
One of my assets in OKC needed not only a new manager but an entirely new team. That level of turnover is always scary. We had a new manager start in mid-2023. I quickly saw how strong a “CEO” she was. I often reached out to her to find out what she needed. Truly the only thing she needed was our support and belief. She knew what she wanted for the asset, and she knew what she wanted for the community.
Repositioning a struggling asset can take time. Obviously when our name is on the loan and our reputation is on the line with our investment partners patience isn’t particularly easy. I made a pledge to both her and myself that I would be patient and trust her process. I realized that if my investment partners trust me then they also trust her.
Since she started, occupancy is up over 20% and more than that I get consistent feedback that the property has never looked better. She wasn’t and isn’t afraid of anything the day sends her way.
Of course, we at Vesta can always do better supporting our managers. If anyone reading this needs some support that they aren’t getting they can always reach out to me. Property Managers have the hardest job in the industry and it doesn’t go unnoticed.
