Property Management Blog

The Economics of Quality

The Economics of Quality

This blog post is a quick look into the importance of quality in relation to property management as an industry. Your home simply put is an investment, and like any investment it is subject to certain intangibles that may need to be addressed and repaired when they occur, but can be prevented through diligence and caution. The way you address these intangibles as they unfold can have their final cost fluctuate greatly.

So where does quality come in?

When we look at any service, the first thing that stands out to us are the numbers: what does it cost, how long will it take, what will I make. And while these tangible numbers are important they are very surface level. The real costs of management comes when something goes wrong, when turnovers aren't handled efficiently, or when future repairs aren’t realized. In management, as with anything, you get what you pay for. Premium on price translates (ideally) to a premium in service quality.

Let's look at a potential case studies:

Manager A is the budget option, he does one inspection annually at an indiscriminate time. He rushes through his inspections and only looks for surface level lease violations. Because of this he missed that the tenants are keeping a dog on the property and hid the dog at a friends after receiving their notice. At the end of tenancy this dog has damaged walls, ruined the carpet, and caused damage exceeding the deposit collected. You now need to pay for replacement of the carpet, repairing floors, paint, and treating for odor.

Manager B is the more expensive option, she does two inspections annually at strategic times. She takes her time on inspections and looks for evidence of anything going on below the surface. She notices some scratch marks on the wood floors as well as some dog poop in the backyard. Putting two and two together she sends a notice of violation, gets the dog removed from the property, and because she caught the potential problem before it became large she saved you the cost of the carpet, odor treatment, and painting of the walls (approx. $2000).

The difference in philosophy of these two managers does not begin or end at inspections, it translates to all levels of operation.

In this one move alone Manager B has already demonstrated a value greater than Manager A. In addition to this she is providing a decrease in mental stress on her clients by providing clear communication and transparency that lets them allocate their time and focus elsewhere. She is listening to tenants complaints and warnings about potential repair problems; addressing them before they materialize. Because she is actively involved in the growth of the industry she is adopting new technology that makes the entire process more efficient and enjoyable for all parties involved.

At Sleep Sound we strive to be Manager B, we realize that most companies fall somewhere in between this spectrum, but the goal for all property managers if they are serious about this industry should be to reach this standard.

Blog Home