At my store, we pay bonuses every month based on move-ins, gross revenue and declining delinquency. Those things change the bottom line every month. When I write a bonus check for $500 or $1,000 at the end of the month, I’m happy and my salesperson is happy.
I’ll go ahead and step on some toes with my view on resident managers. I used to be on the fence about this when I had very little industry experience. It sounds OK, right? I mean, people like knowing someone is watching their stuff, right? Well, that’s a myth.
Resident management is an archaic practice, and non-resident managers are better. I don’t want someone whose highest aspiration in life is living at my concrete compound with an open/closed/private sign on his door. I want a salesperson. I want a personality who strives to make himself better, not someone who mixes laundry time with collection calls. Cash is usually the best motivator. An upstairs apartment with a comfy sofa motivates nobody worth paying.
What about site maintenance? Sweeping and cleaning bathrooms is why you hire a high-school kid. Pay him $8 an hour for 10 hours per week and you’ll have clean floors and toilets.
It Really Is Top Down
Installing the correct management protocol begins at the top of the food chain. Your management philosophy will guide your employees. If you value them at $10 an hour and nothing more, that’s what you’ll get. If you’re complacent, they’ll be complacent. If you try to find ways for them to make more money with you, the right employees will get it done.
If anything I’ve written rings in your ears, see it as an opportunity to make your business better. I can bet that sooner or later, the competing owner down the street will either tighten up or relax, creating an opportunity for you to strengthen your operation. Perhaps that time for you to grab additional market share is now. Better management practices will win.
I’ve learned with failures and successes that I don’t get lucky. I don’t improve without effort. It takes hard work, being able to learn from mistakes, intellectual rigor and overcoming challenges to install the best management practices. Better management yields higher rental rates and occupancy and stronger profit. But if I don’t work hard at it, if I don’t keep my management style healthy, the cancer I’m striving to overcome will win.
Benjamin Burkhart is owner of BKB Properties and StorageStudy.com. He provides professional consultation to real estate owners and developers throughout North America. To reach him, call 804.598.8742; e-mail email@example.com.