Bottlenecks to Profitability Part 4: Maintenance Limbo

On The Property Management Show today, we’re talking to John Bykowski, CEO at Fourandhalf as well as Matt Simons, general manager of Abodea. Our topic is maintenance for property management companies. How can maintenance be a bottleneck to profitability, and what can property management company owners do to mitigate that risk? By the way — have you caught our other episodes on Bottlenecks to Property Management Profitability? If not, be sure to check out our episodes on: Focusing on the Wrong Activities, Poor Accounting and Leaky Sales Funnels. Alright, let’s dive in! Introducing Matt and Abodea Matt is responsible for building the customer service component of what Abodea does, and if you’re not familiar with Abodea, you might have known them as SuperTenders, which was founded as NightTenders. They were the first company in their space to provide after-hours maintenance support to property managers. Now, the company coordinates maintenance support for property management companies at all hours of the day and night. If the power goes out or the bathroom is flooding or it’s 105 degrees and the air conditioning doesn’t work, you can use Abodea to respond to the tenant, diagnose the problem, and take the appropriate action. The company was created by a property management veteran who recognized that maintenance is a major pain point for property management companies. John and Matt met at a sales conference in Nashville recently and got to talking about how maintenance can really be a bottleneck for property management companies that are trying to grow. How Maintenance in Property Management Can Hold Your Company Back A company’s scale of operations can create a bottleneck when it comes to maintenance and profitability. Abodea discovered that customers who were smaller or start-up companies were dedicating a lot of time and resources to maintenance, and not getting anything back. Maintenance is unpredictable. It’s not like collecting rent or paying owners. You can go months without any maintenance needs or have three properties need something major in one month. So, it’s hard to allocate resources to efficiently manage the repair issues and dispatch vendors. Maintenance is a delicate part of your property management business. Each maintenance call is different in its importance and urgency. A repair that’s handled the wrong way can cause long-term, sustained damage to your owner’s property. It can deplete the quality of life for your tenant. So when it’s 3:00 in the morning and you have to make a quick decision, your judgment can be difficult to trust, no matter how long you’ve been in the business. This can create customer churn. There’s also the matter of finding and retaining good vendors. You have to build a vendor list that includes professionals you can trust. It’s a good idea to have three or four vendors you can call in each specialty so you have the confidence that you’ll be able to get someone on the phone immediately when necessary. Building and maintaining a vendor list takes a lot of time and resources. Doing maintenance correctly can be an overwhelming cost, even for large property management companies. PM Grow Summit Sponsorship Building Maintenance in Property Management as a Revenue Stream On the flip side, there are revenue streams associated with rental property maintenance. That revenue can offset the cost of maintenance,