Landlords: Do You Have An Operations Manual For Your Rentals?

General Landlording & Rental Properties
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Landlords: Do You Have An Operations Manual For Your Rentals?

Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes

I saw an excellent piece of advice in our Official BiggerPockets Facebook Group today. 

"I created an operating procedures manual. Details all vendors, bills, banking setup, tenant details, current outstanding projects and objectives, and how to handle the common tenant issues. If I needed to step away, I could hand it to someone and they could pick up exactly where I left off without trouble. Also helps me stay consistent."

Someone else suggested, "Add a section on how to handle payments during a pandemic-a topic that would have seemed overboard a year ago but totally relevant today. Update your manual consistently as you run into issues+solutions so you can apply them to your next lease. Have your tenants read through each section and initial for shared understanding."

So landlords, do you have an Operating Manual and if so, what's in it?

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Gregory SchwartzBusiness Member
Rental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes
6y

 SOPs (Standard Operating Procedures) are huge no matter the size of the operation or organization. We have templates for the major notifications, lists of primary venders, and basic how to's for things like listings, leasing process, evictions etc.  

@Robert Lipscomb I love a good After Action Report. The key thing to remember about AAR is that its very easy to sit around and discuss what went wrong and what you would have done differently but its another to actually reference that material to improve your processes.   

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  • Robert Lipscomb
    Member since 2019 · 18 posts · 23 votes
    6y

    Wow, that is a good idea. I don't have one but I'll definitely be working with my property manager to create some type of product like this. 

    I would probably emphasize a "lessons-learned" section. There have been many situations that we've worked through but have not documented. Over the years, this information could get lost or "mis-remembered" if not documented. Starting to sound like an AAR....@Gregory Schwartz

    5Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    6y

    I have manuals, but only because I'm a property manager with employees. As a private Landlord, it doesn't make much sense. Let's say you have 20 rentals. How many issues will pop up while you're on vacation for two weeks? In most areas of the world, you're still accessible by text, phone, email, or whatever and could walk your help through the problem. 

    The odds of a pandemic hitting while you're basking in the Bahamas is pretty low. Would you be better off with a manual? Maybe. Is it worth the time and effort necessary to build it and train someone on it? Probably not.

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  • Gregory SchwartzBusiness Member
    Rental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes
    6y

     SOPs (Standard Operating Procedures) are huge no matter the size of the operation or organization. We have templates for the major notifications, lists of primary venders, and basic how to's for things like listings, leasing process, evictions etc.  

    @Robert Lipscomb I love a good After Action Report. The key thing to remember about AAR is that its very easy to sit around and discuss what went wrong and what you would have done differently but its another to actually reference that material to improve your processes.   

    [email protected]443-812-0357
    Schwartz Realty Group5117 Reviews
    WebsiteView Page
    8Reply
  • Robert Lipscomb
    Member since 2019 · 18 posts · 23 votes
    6y

    @Nathan Gesner - maybe we have significantly different levels of time and effort in mind. With 20 units, from your example, I think this would be well worth the time. Doesn't need to be a thesis, just a usable document to reference. 

    3Reply
  • Dale Schmick
    Member since 2020 · 1 post · 1 vote
    6y

    Can anyone recommend a resource where i can get a sample policy & procedures manual for a start-up property management firm?  

    I have a lifetime of experience in owning and am a retired executive, so Im seeing this as a critical need pre-launch, but of course its hard to create something from scratch.

    Thank  You In Advance

    1Reply
  • Sarah Brown
    Real Estate Agent · Nampa, ID · Member since 2017 · 439 posts · 361 votes
    6y

    I have one in the works that I will have finished up this here. I am a small company (me, plus a VA and a bookkeeper), but I think it's important to have it to keep things consistent, and from a liability standpoint. When I left the corporate world, I was writing SOP's. Before that job, I HATED them. Still not my favorite thing, but understand the necessity of them.

    2Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    6y

    Agree with @Nathan Gesner. Not worth the time for a landlord and any PM with employees that is any good probably already has one for training purposes. 

    0Reply
  • Account Closed
    Property Manager · Salem, WI · Member since 2020 · 23 posts · 20 votes
    6y

    Operating manuals are essential to keep everyone on the same page, to enhance smooth operations and for risk management.  We have one for the office and one for maintenance. I actually do believe that it is a good idea to have some form of an operating manual for self-managing landlords as well which may be used as a guide to keep consistency on track to avoid potential Fair Housing issues.

    3Reply
  • Suzette T.
    Rental Property Investor · Acadiana / South Louisiana · Member since 2019 · 115 posts · 49 votes
    6y

    @mindyjensen We have something in this vein saved in multiple documents in cloud storage. Probably easy enough to print it out and staple it together. "A stitch in time saves nine."

    0Reply
  • Jill F.
    Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    6y

    We have a property management operations document that defines our policies and specifies the procedures for our key property management business activities.

    0Reply
  • Ruth Blue
    Realtor · Pigeon Forge, TN · Member since 2018 · 230 posts · 111 votes
    6y

    @Mindy Jensen

    Yes we also have an SOP. We refer back to it when we get really busy. But also we have a standard template for Cabin SOP. Each property has its own doc to help containing pictures, instructions, locations of all devices to refer to when guests have questions attention. So helpful.

    0Reply
  • Nick Rutkowski
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    @Mindy Jensen

    Yes...kinda. My girlfriend (who is more organized than me) came up with a template. We can wipe one up in two minutes if we leave for vacation. When we get more properties and can hire a PM in house, then we’ll get a fully written op manual. Love the idea, it’s a great way to off set your workload.

    0Reply
  • Melissa Gittens
    Real Estate Broker · Windsor, CT · Member since 2015 · 1k+ posts · 268 votes
    6y

    I definitely do not have the time to create one but will definitely consider this in the near future.

    0Reply
  • John HertePro Member
    Rental Property Investor · Lakewood, CO · Member since 2020 · 5 posts · 5 votes
    6y

    I have one in the works.  I have four doors, and what I hear from trainings is that it is important to have one so if you ever brought into a claim about fairness, you can show your policy and the steps you take in various situations.  (Rental criteria, getting property ready, handling complaints).

    0Reply
  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    6y

    Yes, we do and yes, we have developed an entire section on covid-19 and pandemics and are continuously revising. 

    That said, I agree with @Nathan Gesner, I don't see how it would really apply for small portfolio landlords. Maybe a considerably abridged version more like short few page version would be of value if you are in that class and feel a need to do so. 

    I think it's important to understand what our Operations Manual actually is in size and complexity of detail, I have a sense there is some disconnect on that side. In my office I'd say it's about 200 pages, maybe 300. It's consists of 2 giant 3 ring binders, double-sided prints. there is abridged smaller versions that are position-specific for individual staff personnel. There is also automated systems on pc's that have template libraries coded per situation (PhraseExpress). I have a feeling Nathan G. can second this or similar. It's not anything you just throw together in a week or even a month. 

    1Reply
  • Nicholas Mann
    Valhalla, NY · Member since 2013 · 132 posts · 84 votes
    6y

    I have been running a small Landscaping business for the past 6 years. The first year or 2 I kind of kept track of stuff but nothing significant maybe a few invoices and hand scratched notes. Now In year 6 I have every Job I have done over that time. Using the notes app on the iPhone I have processes and equipment lists and my own form of an SOP. I have created a big binder where I have sections of how I do certain things from the most basic of tasks to the more complex. I am a sole proprietor in my company but I believe it’s good business practice to track everything I do. As I am beginning my Real Estate investment journey I will be applying the same principles as well. There have been many good business books on the topic of business systems,

    Work The System

    Traction

    The Hard Thing about Hard things

    Small Giants

    The E Myth

    Interested to see everyone’s input on this topic.

    2Reply
  • Nick Johnson
    Investor · Leclaire, IA · Member since 2019 · 1 post · 0 votes
    6y

    I am relatively new, but I am working on SOP's (standard operating procedures). Might end up being a waste of time, but I have one I am building for Due Diligence, basically a calling list of businesses I use, from offer to purchase, from purchase to renting, etc and high level process of buying a place trying to add things I learn so future nick might not forget to do something. Pulled the concept from the BRRRR book, creating checklists to break down each step to make it a system I can adjust. I have a ways to go yet.

    0Reply
  • Chris London
    Property Manager · Raleigh/Durham NC · Member since 2015 · 210 posts · 293 votes
    6y
    1. Mission/Vision
    2. Company History
    3. Company Links (CRM, Docusign, PM software)
    4. Templates (templates for every situation).
    5. Directory (employees, vendors, owners) Some will be in your CRM and some in your PM software
    6. Tech how-tos (CMA, PM software training)
    7. Marketing strategy
    8. V/A contact and training 
    9. Fees/compensation (if someone is taking over for you have their compensation outlined).
    3Reply
  • T. Davidson
    Cabot, AR · Member since 2020 · 7 posts · 5 votes
    6y

    I agree with @John Herte, I have 3 doors, and I won't spend a ton of time making it look super professional and fancy and it will not be nearly as thorough as someone who has 100 doors or a PM company, but I think it is smart from a liability perspective and also as Brandon Turner has always said, we treat this like a business not a hobby which for me, I want to think through how I want to operate my rentals and not just shoot from the hip everytime.  I guess some of the things I would include would be:

    - Sample Lease

    - Tenant Screening Criteria

    - All my forms in one place

    - List each property with all relevant information (insurance policy number, all utilities and phone numbers or websites for each)

    - my list of contractors and handymen (names/ numbers/ and what they do)

    - Short list of how I will handle certain situations (late rent, non-payment of rent, maintenance requests - I think this is important again for liability and I think it is important to think through how you will handle a situation so you don't make decisions in the moment, especially as you are new this might be changes and updated often, but thinking through how you are going to run your business is so important)

    2Reply
  • Jónas Tryggvi Stefánsson
    Reykjavík, Iceland · Member since 2019 · 49 posts · 13 votes
    6y
    Originally posted by @Nathan Gesner:

    I have manuals, but only because I'm a property manager with employees. As a private Landlord, it doesn't make much sense. Let's say you have 20 rentals. How many issues will pop up while you're on vacation for two weeks? In most areas of the world, you're still accessible by text, phone, email, or whatever and could walk your help through the problem. 

    The odds of a pandemic hitting while you're basking in the Bahamas is pretty low. Would you be better off with a manual? Maybe. Is it worth the time and effort necessary to build it and train someone on it? Probably not.

    I totally understand what you're saying and you're not wrong, but you're perhaps putting yourself in a an awful spot if you need to step away for a number of reasons. You're forced to stay as the property manager until you've documented the process or if you have a standard that you want to be maintained if you choose to step aside for some time or are dealt a bad hand in life that forces you to step aside.

    It doesn't mean you have to include everything, but you might want to have enough to be able to hand it off to someone who could take over with relative ease just by following the manual.

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    6y
    Originally posted by @Jónas Tryggvi Stefánsson:

    It doesn't mean you have to include everything, but you might want to have enough to be able to hand it off to someone who could take over with relative ease just by following the manual.

    I understand the issue. I have an operations manual for property management and another for sales. But that's because I'm a business with employees and a lot of moving parts. 

    The average Landlord could keep most their information on 1-2 pages. Bank accounts, software and passwords, contact information for vendors, and some basic instructions about each unit or property. 

    Calling it an "operations manual" makes it sound pretty detailed and ominous, which is probably a waste of time for the vast majority of Landlords. Until you have 15-20 units, I just don't see it as a necessary endeavor. However, some people enjoy this type of work and it's a free country! :)

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  • Justin Wallman
    Dayton, OH · Member since 2016 · 28 posts · 4 votes
    6y

    Nice post!  I am big process and procedures type of person.  Is anyone willing to share theirs? That way if anyone here would like to adopt this into their business practice or grab additional ideas, they aren't reinventing the wheel.    Just a thought!

    0Reply
  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    "So landlords, do you have an Operating Manual and if so, what's in it?"

    Tenant laws are changing as fast as the elected types that draft them, so I doubt a manual would be good for any length of time.  YOu should have a good prop mgmt system (Yardi or AppFolio are a couple of examples) for this reason.

    Main thing is that keeping good records is about your only defense dealing with problem tenants.

    I'd join your local apartment owner association, it is well worth it since all landlords are pretty much facing the same issues and they keep current.

    1Reply
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