Peter Lohmann's Mailing List - Issue #41

Are PM Maintenance Divisions Profitable?

I’d like to highlight some excellent research by ProfitCoach & NARPM around the topic of in-house maintenance departments for property management companies.

Daniel Craig gave an excellent presentation on this topic in January that I’ve been meaning to share with you. Catch the recording on Youtube here (maintenance-specific stuff starts at the 54:43 mark, but the entire presentation is well worth watching).

Key takeaways for me:

1. Maintenance can be extremely profitable. The top quartile of property management companies are seeing 34% profitability!

2. Setting your billing rate correctly is absolutely critical. Daniel provides this guidance:

And here are some of my own thoughts on this topic:

• Utilization rate (% of tech time that is billable on average) needs to be carefully tracked and kept extremely high. This should be THE key metric/KPI for the manager of the maintenance technicians/department.

• Carefully define how you will charge clients, make this transparent, and be consistent. Do you include time spent shopping? Traveling to/from properties? Will you mark up materials? Is there a trip charge? No right or wrong answers, but consider the admin overhead of various arrangements. More importantly: someone has to pay for the above items in the end, so just be aware that anything you’re not charging owners for, you will be paying for as the business owner. Maybe you are OK with subsidizing your property owner’s repair costs (I’m not).

• Don’t be afraid to push billing rates per the above chart. We increase our billing rate almost every year and experience ~0 pushback from owners (we provide 60+ days notice). We’re seeing W-2 base wages around $22-26/hr here in Columbus OH for skilled handypeople (we also provide a full set of benefits).

• In-house maintenance provides massive value to property owners, in my opinion. Clients (and residents too) benefit from having a stable of highly-qualified, professional techs who are familiar with the properties and able to deploy instantly to resolve issues at properties.

I’m Live at the LeadSimple Product Launch

Our friends at LeadSimple have been busy! They’re announcing and launching a bunch of new features shortly, including auto-starting processes. I’ll be doing a short interview-style talk at the event. Register here (free). Wednesday March 15th.

To paint a picture of this (I’m on the beta) - our Lease Renewal process now AUTOMATICALLY kicks off 90 days prior to any lease expiration. That data is synced from our property management software automatically and so LeadSimple “knows” exactly when to start the process. And because it has access to all the property and tenant data, it knows exactly who to contact, what their email is, etc. It all happens without any input from us! This is huge.

Industry News & Events

• AppFolio has announced new CEO, Shane Trigg. Read more.

• The NARPM Broker/Owner conference is in April. You can register here. I’ll see you there! If you are a consulting client of mine (or affiliate) - I’ll be doing an exclusive meetup.

• Registration for SMBash is now open (starts April 27th in Austin). Going? See you there. This event was SO fun last year.

Automation Tip of the Week

Any process you develop or maintain should be documented such that the person who’s actually doing the work has instructions right in front of them. Don’t maintain a separate document or knowledgebase for your core processes. Integrate it directly into the work.

Owner Occupied Podcast - Update

• Did you know I have a podcast? If you enjoy this newsletter, I guarantee you’ll love the show. Search “owner occupied” in your favorite podcast player. I suggest starting with Season 2, Episode 1 where I interview the one and only Moses Kagan.

• I’ve started thinking about Season 3 - recording will start in the summer. Any guests you’d love to hear me interview?

Closing Thought

That’s all this week! Enjoy your weekend. -Peter

Coaching: If you manage between 50 and 500 doors and want to work with me one-on-one, let’s chat. Three-month minimum engagement.

Looking for a longer-term partnership, private community, my full Notion package and more? You may be a good candidate for our Property Management Business-in-a-Box program. Apply here.