How best to work with the manager when selling your apartments.
COURTESTY OF ROBYN WONNELL, SOCAL APARTMENT BROKERS, KW COMMERCIAL
Having been in large scale apartment property supervision and management all over Texas and Southern California, for 18 years prior to brokering, I’ve learned ‘a thing or two’ about how to treat your onsite manager, and the team that led you to the degree of success you’ve experienced. Train, reward and hold accountable. That’s my motto. Train them, expect them to absorb the training, reward the positive outcome of the new skills, and keep doing this until they’ve maximized their performance in that role. Then train them for a more responsible role and do it all over again. It’s that simple, and yet extremely important.
Team players, regardless of their position, want to be part of something important and much greater than themselves. You’ve seen employees stay at a company for decades and even generations, because they feel connected and rewarded on some level. Those people can be trained to grow with the company and be its biggest fans, or, be neglected, and become their biggest detriment.
Their success and the success of that company, and in this case, the apartment community, is largely based on how much they are trained, rewarded and held accountable. The other main factor is how much they feel connected with the goals and vision of the company or owner. If an owner neglects to connect with each manager and employee on some level, that employee does not feel his or her performance matters much. That disconnect is responsible for more turnover and failure than any other aspect of the employment, in my opinion. If team workers are made aware of and can understand what’s happening, and feel connected to the company, they will give their best efforts to make the company a success, through all its ups and downs and related cycles. The smartest owner is the one who goes out into the field and listens to the ideas and words of wisdom from the people doing the onsite day to day work. Their sometimes-simple solutions and creativity can make a huge difference in your bottom line through maintenance reduction costs, better unit turnover times, higher quality curb and interior appeal, and much more.
In our modern times of company takeovers, mergers and private companies going public, I’ve seen some serious mistakes that mirror the disasters of decades of discrimination. Companies get sold for a profit, the new company must add value to contribute to shareholder and growth expectations, and the company begins to forget that the reason for the success has been its employees that are on the ground doing the work. They’re treated like pawns in a game of chess. The company expects more, pays less, reduces staff to make room for investor profits and offers huge bonuses to senior management upon a new sale at an inflated value. The new owner does the same thing, and so on and so on.
That dilemma and debate can be left for another time.
As an apartment building owner of 1 to 5 buildings, let’s look at ways to make the sale of the property run smoothly and at maximum benefit to the owner, and those who helped her or him get there.
Question: Do I tell my onsite manager that I’m selling?
Answer: YES Why?
- The answer is simple. They’re going to find out any way!
- You’ll need them to assist with the sale in several ways.
- They can show the property to vendors such as roofers, appraisers, painters, plumbers, inspection companies, etc.…
- Estoppel Certificates may need completion and they’re best followed up on with the manager who knows the status of each resident better than anyone else.
- They can sometimes answer property questions better than the owner can.
- They’ve put their best efforts toward your goals and deserve the respect of knowing. (some more than others of course)
Question: When should I tell them I’m selling the building?
Answer: As soon as you list it. Why?
- Because they’ll find out as soon as people start driving by or walking the property more often than usual.
- They can help you sell it for more by enhancing the curb appeal, raising the rents on vacant units and renewals, etc.… (see below)
- When selling a full building, the owner usually has sacrificed appreciation for cash flow. In other words, they’ve kept the rents low to keep it full. What is now needed is to maximize the value to get top dollar for the property. In hindsight, the owner should have started this appreciation schedule a year or more before selling.
Question: I’m afraid that my property manager will start to slack off, look for another job, or worse. How do I stop that from happening?
- Make them a part of the sale. Yes, you heard it right. Give them the responsibility of helping you maximize the value, show the property to all the service providers, cooperate with the listing broker, and help make it as smooth as possible with the residents.
- Help them with their job search.
- Give a substantial bonus upon a successful closing. Afterall, they deserve extra compensation for helping you get the highest return possible, being put out of a job possibly, having to move themselves and their family, etc.…. Property Management is not a stable business for onsite employees. Recognize that and show some compassion for their dilemma.
- (This is not geared for those employees who may be part of the reason you’re selling. However, these suggestions may help reduce a chaotic or unreasonable response from the onsite manager and team.)
When you buy an apartment property, many new tasks and responsibilities arise. Some cannot be anticipated in advance, while others are routine. Here are some helpful thoughts to consider in the transition, and to live by:
- Put effort into building a team.
- You want to hire people that you can communicate well with, be honest with, and feel willing to invest time and training into.
- Once you find this type of employee(s) tell them that one day you will be selling, and at that time, approximately 2-5 years from now, you will want them to help with the sale, grow with you to the next property, or move on… with your help.
- The moving on may happen regardless of how you handle it, but why not hedge your bets and work towards a mutually positive outcome?
- The apartment management business is an ever-changing and unstable type of employment for onsite team members. As ownership changes, so does the management and so goes the onsite team. Be aware of how they may be feeling when you tell them you’re ready to sell. They’ve invested more time, effort and energy than anyone else to get it to where it is today. It is not just a job to most onsite team members. It’s a culture and way of life for them.
- Treat them well, hold them accountable for what you’ve trained them in, and bring them with you to the next investment if possible. You’ll be way ahead of your first property, upon day one of the new takeover.
- Although this information is primarily written for the individual owner who plays a management role of some kind, the principles discussed apply to larger ownership holdings as well. Make communication, compassion, and accountability part of your relationship with each of your team members and should your company be of the institutional variety, (whom I worked with for most of my career), create key practices to allow and require your senior management to do the same.
- In all manners of working together, the Golden Rule still applies, and is forever relevant. Large and small companies can have more success when they treat employees as they would like to be treated. It builds loyalty and that sense of connection that makes a person and a company the most happy, successful, and ready for the next one.
For a free consultation regarding the sale of your property, contact Robyn Wonnell at
951) 501-6567, 951) 304-1200 ext. 3351. Email us at Socalapartments@kwcommercial.com
BUY RIGHT, SELL RIGHT! WE’RE PASSIONATE ABOUT APARTMENTS!!!