In the ever-evolving landscape of property management, there are some valuable lessons to be learned from the single-family rental (SFR) market by multifamily (MF) owners and operators. This blog dives into the realm of maintenance processes and technology, shedding light on how MF operators can benefit from some of the practices employed by their SFR counterparts.
Maintenance Is Integral to Operations
A critical touch point between operators and residents is maintenance. A high quality maintenance experience can drive satisfaction scores higher and conversely, a poor maintenance experience can be frustrating to residents, drive scores lower and increase resident churn. Staff can also become frustrated if they are required to execute mundane tasks, fill out endless paperwork or have to visit a unit multiple times for the same problem because of poor communication and preparation. This can result in costly staff turnover. Finally, overall maintenance costs directly impact a property’s NOI. Ultimately an equation needs to be solved: how to deliver a great maintenance experience for residents and staff while simultaneously increasing efficiencies and lowering costs.
Maintenance costs directly impact a property’s NOI while maintenance execution impacts resident and staff satisfaction and retention.
Existing Maintenance Processes
SFR: In the SFR market, maintenance is inherently distributed and driving from home to home is required. These drives can be as short as under a mile to as long as 30 miles or more. Because of this, SFR operators typically take the approach of sharing staff with particular skills across all of the properties in a market. To manage this intelligently, most SFR operators of any scale have deployed or are looking to deploy maintenance software that allows them to centralize the management of this inherently distributed maintenance process. The goal is to ensure the maintenance problem is well diagnosed up front, that a technician or vendor with the right skills is assigned, and that their vehicle is equipped with the right tools and parts to solve the problem on the first visit. This case study describes how one of the SFR industry’s largest and most innovative owner-operators has centralized and automated their maintenance process. The case study is particularly useful because it examines the requirements and criteria utilized to select the software that was ultimately deployed.
Multifamily: In contrast, MF operators most often have a “jack-of-all trades” maintenance team on site at each property in a portfolio. This can work well from a simplicity perspective because team members can claim service request tickets when they are created at the property. There is typically no driving involved, except heading to the hardware store or warehouse to purchase parts. However, expenses can mount when staff members are idle or spend excessive time on a problem they ultimately cannot resolve due to a lack of skills. In both cases time and money are wasted which impacts NOI.
Changes in Multifamily Maintenance Strategies
Many multifamily operators are now starting to adopt the SFR practice of sharing a smaller team of skilled resources across properties in a market and centrally managing the triaging, scheduling, and management of the work. This works particularly well if a MF owner has multiple properties in a market within a few miles of each other. With the proper software, these skilled resources, whether they are staff or service provider partners, can be assigned work and intelligently routed to ensure that:
- The right skilled resource with the right tools and parts is assigned to a service request so there is a high likelihood the problem is resolved on the first visit.
- Resource utilization is increased so overall staffing levels can be optimized and more work can be shifted to internal staff versus more expensive external resources.
How Does a Supplier and Service Provider Marketplace Fit In?
Another dimension of maintenance centralization that is starting to deliver cost savings is leveraging a marketplace to ensure fair prices from service providers, and MRO suppliers ranging from small parts to large appliances. Some software solutions make this extremely easy by including in-app access to a marketplace that provides a punch out catalog where pre-approved products and services can be purchased from MRO suppliers or service providers. Bid requests can also be sent to service providers to bid on more complex jobs. Ideally the software solution also enables the rating of vendors by both staff and residents, ensuring high quality experiences.
How does Centralized Maintenance Software Integrate Into the Property Management System?
MF operators moving in this direction are also looking to centralize and automate the maintenance process with software solutions. Property maintenance software makes life easier by assigning work orders to the right resources and intelligently routing those resources for an optimal path throughout the day. Tracking communication between staff, vendors, and residents, and reporting performance and flagging issues via dashboards is also a benefit. Having a maintenance software solution creates efficiencies if there is a mobile application that allows staff or vendors to provide status updates, request an NTE increase, or complete work orders from the unit electronically. This allows staff to move directly to the next work order, minimize paperwork, and utilize photos to minimize inaccuracies. Ideally the mobile application is designed so it can work whether fully connected, poorly connected or not connected at all to the internet.
Almost all property maintenance software solutions will integrate with at least one property management system (PMS). Sometimes the maintenance software solution will be focused on integrating with smaller PMS solutions and others will focus on larger PMS solutions, depending on the target market for the maintenance software provider. Similarly, if the accounting system is separate, an integration is needed as well. A well designed maintenance software solution will enable an operator to have multiple PMSs and accounting systems that integrate seamlessly and function concurrently with the maintenance solution. In a scenario where an operator is managing a diverse portfolio, this design can be useful.
Challenges and Considerations
Of course, there are challenges and nuances to consider:
Software Costs: Centralized maintenance software comes with some upfront and ongoing costs, which need to be budgeted for and factored into a payback period.
Deployment and Training: For a centralized solution to succeed, deployment and training need to occur within all levels of the organization. This typically requires a coordinated push from leadership and often there is some onboarding cost from the maintenance solution provider.
Customization: MF properties often need tailored maintenance approaches due to their diverse tenant base, property layouts, and existing processes. Depending on the rigidity of the maintenance solution, varying degrees of difficulty can occur.
The trend towards centralization and the growing embrace of property maintenance software underscore the industry’s recognition of the importance of efficient maintenance practices for resident happiness, staff satisfaction, operational excellence, and improved NOI. As the rental industry grows, keeping an eye on these evolving practices is a must for both SFR and MF operators.