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🤼 Managing Your Employees

Basics

  • Rent out with employee discounts
  • Mileage allowance for utilities
  • Better to go for salaries
  • Managers need the ability to hire and fire people
  • Employees need only one boss, limit managers to 7 employees

Incentives

  • No bonus
  • Only short term goals
  • Open on warm holidays and Sundays

Property Management

Roles and Staffing

Site Manager. Front line operator that handles the Day to Day

Property Manager. Operating officer or administrative head that connect day to day to fiscal, marketing, and planning.

Executive Property Manager. Oversees property managers. Long range policies and fiscal plans

Asset Manager. Focus is on long-term planning, analysis and financial tracking

Weekends are the most important days to have your staff in.

Sundays need your top tier leasing staff. Manager should be there, staff them Sun-Thurs. Give them 2 hours quiet at the beginning of each day.

Saturdays are the day to get maintenance chief on staff. Most tenants prefer to be there for the work.

Shift maintenance to end at 7, looks better to tenants and can mix with when they’re home.

PM must be humble, not socialize with tenants.

💡 Don’t exchange discounted rent for services such as police officer or contractor. It’s always better to pay the professional and doesn’t make it better in the long run

Compensation

For the company

Structure agreements that are incentives. For example,

  • 89/unit for < 80% rent paying units
  • 94/unit for 80 to 90% rent paying units
  • 99/unit for stabilized 90%+ rent paying units

For individual Employees

Free rent is not free rent. IRS will tax it.

Discounts are better, 15% is generally acceptable to the IRS

Free Utilities are fine as well

Mileage allowance. Don’t pay for gas

Ideally just pay a normal salary. It’ll beat commission who leave when times are too good to go back into selling homes. This is better for retention when times are bad as well.

Overtime shouldn’t be consistent. Improve your systems more instead.

Bonuses should follow goals, not be consistent holidays

Insurance is hard for small firms.

Tuition should have capped number of classes and reimbursed after getting a passing grade and 6 months of employment.

Breaks and Holidays

Set standard times when breaks and lunch can be taken

Vacation days to be accrued, start the cycle in Spring to prevent back to back holiday breaks

Consider PTO banks

  • Calendar for days to get breaks. Seniority breaks tie
  • Vacation time doesn’t accrue and shouldn’t be compensated
  • All accrued time is lost if resigned with out notice or has less than 1 year employment
  • Fired employees get vacation day in severance. Heirs inherit dead employee severance

Deaths. 3-5 paid days off for immediate family. Not paid for others such as friends.

💡 McMaster Carr. Combined sick and vacation days into a PTO bank that increases every year. Doesn’t carry over, but is paid at the end of the period/capped at a specific amount of time.

Money

Purchase orders are required to avoid them adding personal items into the mix.

Policy prevention of any kickbacks from vendors or gifts from tenants

To prevent theft
  • supplies to a minimum.
  • locked cabinets
  • bulk quantities and larger containters
  • bank money daily
  • log vending machine collections
  • no personnel can sign checks

Hiring and Firing

Turn over is expensive. Tenants will notice. Management is key.

Slow down on hiring. Probationary period of 6 weeks to test fit.

Give a warning if employee publicly comments about quitting, document in case you need to fire.

Don’t give the final check until return of all keys, vehicles, tools, etc

Take possession of the space before handing final check.

Terminate immediately, 2 weeks notice is wasteful.

💡 Don’t dump on the person being fired on the way out. Keep it discretionary and let them know as well.

Morale

💡 Avoid hiring of any family members, partners, or friends for management roles. Nepotism and breakups have a larger effect on morale.

Small process improvements are key

Faster unit turns are problematic

Promote managers by increasing the number of buildings they manage.

Ownership meeting

  • Chat with your PM once a week and hit APIs
  • Check local rents quarterly (secretly shop with your assistants for information on)
    • Captured information as a lead
    • Attitude from leasing agent
    • Amenities from competitors
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