3 Strategies That Decrease Owner Churn

Owner churn haunts all property managers, and unfortunately, there isn’t a straightforward solution. Rather, solving owner churn requires time, hard work, and good strategy.

Whether you’re up against accidental landlords who want to sell because they don’t see the long-term value in owning properties, or investors who leave at the first whiff of a bad experience, the three strategies below can help keep your owners at home.

1. Make it Easy to Join

According to consultant and professor Michael Watkins, your first quarter with a new client is the most important. In their initial 90 days with your company, a client’s first impression is formed. And customers who develop a negative initial impression of your business are much more likely to churn than clients with a positive one.

As a property manager, your first impression is made during onboarding. Here are a few tips for developing an enrollment process that makes you look organized, trustworthy, professional, and competent.

Set Realistic Expectations

Accurate expectations are better than high expectations that go unmet, so make sure yours are crystal clear.

When owners finish onboarding, they should know:

• The immediate next step
• Who they can go to with questions/problems and how they should reach out
  • The handoff between the business development manager and leasing agent will make or break the relationship
• How much they’re paying you
• What services you’re providing, and when

Keep it Simple

Humans have limited bandwidth at times, and the more effort needed to figure out how to do something, the less likely we are to do it.

Here are a few suggestions to make your onboarding process simple and user-friendly so owners are more likely to complete it:

• Design a streamlined flow. Don’t make owners jump between multiple web pages to complete your onboarding. A good rule of thumb is, the fewer times they have to click, the better. Any integrations should be seamless and automatic, if possible. For example, the Blanket platform takes only 30 minutes to integrate into your Rent Manager system and requires no manual data entry by you or your owners.
• Provide a reference guide. This should be a straightforward overview document that links to all the sites and forms owners may need to access at a later date.
• Don’t overdo it. Tell owners only what they need to know. Too much information at once can lead to confusion.
• Make agreements transparent. A growing number of property managers are collaborating with their legal teams to translate agreements into layman’s terms. This not only makes agreements easier for clients to understand, but it also makes you more trustworthy by removing the perception that you’re hiding something behind the legalese.

2. Make it Easy to Stay

The most fundamental reason an owner chooses to work with your property management company (PMC) is your ability to help their property perform better. The numbers need to show that you’re worth the price.

The most important metric to owners—financially and psychologically—is occupancy rate. Vacancy issues are the reason owners are more likely to churn during a vacancy period. It’s difficult to see a unit sit empty, and when it sits empty for too long, switching PMCs becomes an easy decision. But a high occupancy rate makes it easy to stay.

How to Increase Occupancy Rate

• Reduce time to turn and days on the market. These two metrics have an outsized impact on your vacancy rate and, therefore, your occupancy rate. By investigating your processes and tightening up these two metrics, you’ll see your occupancy rate go up.
• Improve current tenant relations. It’s easier to keep a current renter than to find a new one. Identify and remove tenants’ pain points and incentivize them to renew their leases.
• Monitor the market. The going rate ebbs and flows. Keep a close eye on local market rates to ensure your rents are always competitive. Also, closely monitor which incentive programs are working. Don’t assume what you’ve always done will always work.

3. Make it Hard to Leave

There are four types of switching costs: monetary, effort-based, time-based, and psychological. Your PMC can leverage each one.

Monetary

Lowering prices is an outdated approach, especially in property management. How much can you realistically cut your prices before it negatively impacts your business?

What’s more effective is helping owners earn more rather than paying you less. Use your network and expertise to help them buy more properties and grow their portfolios, which in turn grows your door count. Using Blanket’s Owner Marketplace makes this a lot easier. The Owner Marketplace is a white-labeled website—with your brand at the center—built on top of your existing property network that uses AI and behavioral signals to connect investors with their next purchase. It’s also exclusive to your owners. Properties are sourced from a national network of wholesalers, homebuilders, turn-key providers, as well as properties your owners are selling.

Effort and Time-Based

Serious investors routinely monitor portfolio performance. However, metrics such as total portfolio value, total equity, cap rate, and net cash flow are easy to miscalculate, and gathering the data needed for the calculations is arduous and time-consuming, especially for owners of several properties.

Your PMC can take this sizeable task off their plate by analyzing the data and conducting periodic performance review sessions. This not only saves owners time and headaches, but it also shows them you care about their success and that you have the skills needed to track and manage their investments.

One glaring problem: How do you conduct individual performance review sessions at scale?

One option is a resource like Blanket’s Investor Dashboard. This set-it-and-forget-it dashboard automatically gathers data from your Rent Manager system, public records, and national data providers to calculate real-time financial performance metrics and display them in one place. It also generates insights such as the best and worst-performing properties and unusual expenses.

Psychological

One psychological switching cost you can build is a strong relationship with your owners.

In property management, lasting customer connections are formed by going above and beyond, time and time again. It’s possible to keep owners around for more than 30 years, but to do so, you need to do more than collect rent and fix toilets. You need to help owners achieve their life goals.

Long term, all owners want one or both of these:

• To build financial stability
• To leave a legacy for their loved ones

Use your experience and expertise to mold your owners’ portfolios into lucrative assets that can achieve these goals. Doing so will take your relationship with your clients to the next level. You’ll be more than a property manager; you’ll become a trusted advisor.

Conclusion

In summary, by making a good first impression, keeping units filled, and leveraging switching costs, you’ll make huge strides in decreasing your owner churn rate.

Blanket’s platform can help. It’s easy to integrate with your onboarding, effortlessly gives owners the metrics that matter, and it’s a huge value-add that will increase switching costs.

Set up a quick 15-minute call with Blanket to learn more.