How to Become a Proactive Property Manager (& Fix Issues BEFORE They Arise!)

If you don’t think managing rental property is a tough job, you probably haven’t been doing it long enough. Most seasoned buy and hold investors have a generous handful of interesting, provocative, and absolutely absurd stories about their properties and their tenants. The fact is, when you are dealing with people, you are bound to come across situations and scenarios that are impossible to predict. That being said, your success as a buy and hold investor is dependent upon your ability to remain agile. You must prepare your business for the potentially outlandish, yet almost inevitable, worst case scenario.

Stay on Your Toes

There are two distinct categories of property managers: proactive and reactive. Unfortunately, the vast majority of investors fall into the “reactive” category. This means that they are simply waiting for something to happen before deciding how to act. On the contrary, the proactive property manager has a plan. This is the manager who has a playbook for how to react when things go wrong. This is also the manager who takes the initiative to recognize problems that are brewing and acts to fix things before they actually break.

Being a proactive real estate investor is the same as being “on your toes” in a sport. For those with experience in organized team sports, you know you never want to be “caught flat footed” on the field. Instead, you were always instructed to “stay on your toes.” This simply means being ready for and anticipating the next move of your opponent. The “flat footed” athlete is slow to react and is often beaten by an unforeseen maneuver.

We need to be on our toes in business as well. In the world of buy & hold real estate investing, our job is to prepare for what can and will go wrong with our properties.

So what does it mean to “stay on your toes” in real estate?

Investors should anticipate the common issues that arise with our properties and our tenants. There are several common and likely scenarios that are relatively easy to predict. There are also those more obscure situations where we tell ourselves, “That will never happen to me.” Even for the low probability crisis, documenting your business processes is the first and most crucial step in preparing your business to handle adversity.

Build Your Playbook

In a previous post, I introduced the concept of creating a business process framework. Your business process framework can also be viewed as your business playbook. It should provide instruction for how your business prepares for and responds to various situations.

I like to break each of my business processes down into these four main attributes:

Trigger
Accountable person
Appropriate action
Tools

The majority of the time, your business works on relatively mundane and predictable problems. For example, consider the instance where a tenant decides not to renew a lease for the upcoming year. Here is what this scenario would look like in my business process framework:

Trigger	Accountable Person	Appropriate Action(s)	Tools
Tenant notification that she will not renew lease	Property manager: Tenants & Leasing	1. Market vacant unit	Podio/ Craigslist
		2. Manage rental inquiries and show unit	Podio/ Google Voice
		3. Fill vacant unit and sign lease	Podio/ Right Signature
		4. Coordinate tenant move out	Podio/ Email
		5. Coordinate tenant move in	Podio/ Email

Even if a process is rather intuitive, there is still a huge benefit to having it well documented and readily available to your team. Documenting and executing your business protocol inspires a consistent level of service across your organization. This practice becomes even more useful when we consider the potential of bigger and more serious problems.

Dealing with maintenance requests is an area in which most investors are decidedly “reactive.” Maintenance requests come in all shapes in sizes, but you should follow the same process no matter how serious the issue.

Do you have a consistent process documented for dealing with maintenance requests?

Ask yourself or your property manager the following questions:

How do your tenants notify you? Do they call/text you? Do they email? Do they fill out an online form?
Who is responsible for fixing the problem?
How do you ask for/receive permission to schedule work?
What is a typical/acceptable response time?
How do you notify the tenant that the problem is fixed?

Most landlords just wait for problems to happen and figure it out on the fly. This strategy can actually work quite fine for a while. The problem arises as you begin to scale your business. More units mean a higher probability and frequency of maintenance issues. If your processes are not clearly defined, you’ll find yourself getting behind while your properties slowly deteriorate.

I always advise investors to act as if they are preparing to franchise their business. You would want to ensure that your franchisees follow standard policies and procedures to maintain consistency across the organization. The only way to ensure this consistency is to have your business processes thoroughly documented.

Preventative Maintenance

My experience as a supply chain consultant has given me a glimpse into the fascinating world of manufacturing. While analyzing the operations of major production facilities, there was always a clear distinction between leading organizations and those falling behind: The manufacturers that focused on preventative maintenance were far more efficient than those that simply waited for things to break. These companies instilled an environment of proactive thinking to anticipate problems and take action to optimize production uptime.

Being a proactive investor means anticipating problems and taking steps to mitigate risks before they transform into crisis. As property managers, we can take steps to understand the overall health of our properties and the relationship with our tenants. This helps us to understand where our resources are best allocated to ensure we have a solid defense against adversity.

Nothing prepares your business like data. Historical data is an amazing predictor of what can and will go wrong in the future. I recommend having a system to record key information related to all work done on your properties, as well as key communication with your tenants.

For example, our business tracks the following information for every maintenance request that comes into our office:

Date of request
Tenant/unit making request (also have a category for “management request” — this means that the tenant didn’t call us, but we noticed something was wrong)
Urgency (minor, intermediate, urgent)
Reference images
Target completion
Actual completion
Explanation of resolution
Vendor(s) contracted to fix
Additional notes and files

This allows us to keep records on the overall health of our units. If we notice that we’ve had four maintenance requests related to a furnace in one of our units, we can prepare ourselves for the inevitability that we will need to replace the entire furnace within a short period of time. This data becomes even more crucial as you scale your business and take on additional units.

Our business uses Podio to receive and track maintenance requests. But your system doesn’t need to be fancy! Your database can be as simple as a spreadsheet. Your business will be prepared to scale as long as you track and act on historical information.

No matter what stage your business is in, it’s essential to build the habits of a proactive investor. As your portfolio grows, you’ll be able to adapt to the growing list of potential problems and crises. Even if you are not looking to scale, you’ll certainly sleep better at night knowing that you have the systems and processes in place to tackle any adversity that comes your way.

Property managers: How do you stay in front of issues in your business?

Let me know your tricks of the trade in the comments section!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.