Like many property management companies, Home Finders Leasing and Management, Inc. started out with a handful of management contracts and a single licensed broker. When my business partner, Luke Westerfield and I purchased the company, we acquired a successful, growing business, but it was still owned and run by the same individual who started it. This owner had all of the corporate knowledge and no policy and procedures manual. We were careful to avoid major changes immediately after purchasing the company, but after several months of ownership we began taking steps to improve business processes. One of the most important decisions we made was to implement a property management policy and procedures manual. Since then, we have noticed increased performance in 3 key areas: scalability, customer service, and risk mitigation.
In the last 2 years our company has experienced over 50% growth and surveys show we have simultaneously improved our customer service. At the heart of this productive growth is our policy and procedures manual.
Successful business owners know that one of the keys to growth is developing systems that empower employees and replicate the owner’s efforts. In the property management industry, many workflows are repeated on a monthly basis such as rent collection, maintenance and inspection scheduling, vendor payments, and owner accounting and disbursements. By creating and maintaining a policy and procedures manual, owners and managing brokers can widely disseminate guidance on the proper way to handle common workflows.
In addition, new employees can immediately “plug-in” to the system by studying the policy and procedures manual, reducing the time and cost associated with training. Without a policy and procedures manual, new employees often rely on one-on-one instruction and word of mouth to learn the company’s way of doing business. A living policy and procedures manual serves as a repository of corporate knowledge and encourages continuity across the company.
A policy and procedures manual also empowers staff by creating a framework within which staff can operate autonomously. A properly written policy and procedures manual helps to propagate the corporate culture and gives employees confidence to make decisions on their own, rather than seeking guidance from the owner or broker for every minor issue. It trains and equips employees to leverage themselves and grow the organization.
Want world-class customer service? Consistency is the key. Customer service begins with setting expectations, and then delivering on (and exceeding) those expectations time after time. Just ask McDonald’s. One of the best ways to ensure that kind of month-after-month consistency in your property management business is by developing a policy and procedures manual.
Our policy and procedures manual serves as a quick reference guide for office staff. Many frequently asked questions can be answered by referencing the manual. If an owner wants to know what day we process distributions, it’s in the manual. If a prospective tenant wants to know what our pet policies are, our staff can quickly find the answer by referencing the appropriate section. By answering many common questions, our policy and procedures manual helps our staff in setting realistic, consistent expectations for both owners and tenants.
In addition to expectation setting, a property management policy and procedures manual also helps the company deliver on those expectations. This is the “procedures” part of the manual where “how to” guidance is provided for common workflows and company operations. A clearly written procedure allows different employees with different backgrounds to perform the same task in the same way, every time. That kind of consistency is what customers crave.
Every managing broker wants to do his or her best to avoid Fair Housing violations, real estate code violations, or a lawsuit brought by an owner or tenant. In addition to proper ongoing training, a correctly written policy and procedures manual may help in mitigating the risk of these types of actions. It might also save your company money by reducing the premium for E&O insurance.
A well-written manual makes clear from the start how the company avoids discrimination and sets consistent expectations for how staff will deal with owners, tenants, vendors, and the public. It details federal as well as state and local laws related to Fair Housing and how the company intends to follow them. Additionally, compliance with pertinent sections of the real estate code can be covered in detail.
In addition to Fair Housing and Real Estate Code-related policies, your company’s manual can detail procedures that focus on good customer service while avoiding unnecessary risks. Some examples might include not accepting cash for rent payments, or the use of hands-free devices while driving. The key is to create good policies and procedures, keep the manual updated, and then continually monitor to ensure that the policies and procedures are being followed.
We believe that the time and money spent in creating a property management policy and procedures manual is an excellent investment, especially in the areas of scalability, customer service, and risk mitigation.
There are some excellent resources available for creating your company’s policy and procedures manual such as this field guide available on the National Association of Realtors website and the manual available here at LandlordSource. We found the LandlordSource manual to be very thorough. It contains excellent sample policies for the majority of topics that a property management company will need to cover. It is also very easy to edit, allowing for easy changes and the addition of new policies and local and state laws. By following the simple instructions that come with the manual, revisions can easily be made and the Table of Contents can easily be kept up to date. We now have a living document that enhances our corporate culture and creates synergy within our organization.
Nathan Garrett is Vice President and former managing broker of Home Finders Leasing and Management, Inc., a property management firm in Tulsa, OK. He has over 15 years experience in the real estate industry in property management, investing, and sales.
Disclaimer: LandlordSource does not represent the article content in this website as legal advice. It is shared information only and up to the reader to use this information responsibly, seeking legal advice as necessary to their business.