5 Rules of Engagement for Property Management - Never Assume (Part 2)

It’s been a bit since I posted on our blog, and I wanted to complete my posts on our 5 Rules of Engagement.  To review our 5 rules of engagement are as follows:

1. Be Accurate.

2. Never Assume.

3. Communication is key. Never want to hear “I didn’t know…”

4. When in Doubt, consider what is reasonable?

5. No Loose Ends

We already covered Rule #1 here.  Over the following few weeks I will complete my thoughts on the remaining rules above starting with Rule #2. It forms the core of how we operate and I learned the hard way proving these rules work only when you deal with the fall out of not following them. 

RULE #2 – NEVER ASSUME

As the owner of Pacific Gateway Properties, I can say that never making assumptions is an important part of how our property management business works.

As Mark Twain famously said, “What gets us into trouble is not what we don’t know, it’s what we know for sure that just ain’t so.”  That’s why we must verify information before making decisions that impact our properties, clients and tenants. We understand that mistakes can be costly, and we strive to avoid them by never assuming.   

Trust is essential in property management, and we work hard to build trust with our property owners and tenants.  It takes a many correct actions to build trust and only one mistake to lose it.  Our service is built upon trust and credibility, and making assumptions without checking can make us look careless and incompetent.  Knowing that keeps us committed to not taking short cuts.

Other benefits we realize for our our clients and tenants:

1)      Efficiency: By not assuming and taking the time to check material up front, we can avoid mistakes, cut down on the amount of work that needs to be redone, and make our operations run more smoothly. This makes it easier for us to take care of our properties and give our clients the best service possible.

2)      Risk management: Identifying and mitigating potential risks is critical to protecting our properties and clients.  Trust but verify.  This would go for double checking completed work by a vendor and ensure it was done per scope of work, or site inspection to be pro-active about identifying preventative maintenance, tripping hazards and such. 

3)      Professionalism: professionalism is a fundamental principle at Pacific Gateway Properties. We believe that making assumptions without verifying them can make us appear unprofessional and negligent. By always verifying information, we demonstrate an industry-leading commitment to precision, attention to detail, and professionalism.

It all boils down to this old saying: "Assuming makes an 'a**' out of 'u' and 'me'  These anecdotes are precious reminders to avoid making mistakes you can control and allows us to become better in so many ways.

 We think that our success as a property management business depends on accuracy, trust, efficiency, risk management, and professionalism. We always check information to make sure we meet these standards and give our clients the best service we can.

5 Rules of Engagement for Property Management (Pt. 1) - Be Accurate

I have zero experience as a fighter pilot, and my only experience in the subject is limited to the Top Gun movie above.

With that said, I have no doubt there are certain principles a fighter pilot follows to ensure they avoid FATAL mistakes that gets them killed. While the stakes are different my mentor ingrained a set of principles that would help me avoid FATAL mistakes in our business.

When we engage with our tenants, vendors and clients TRUST and CREDIBILITY are essential. By following these 5 Rules of Engagement you can eliminate the mistakes that hamper your ability to form these critical relationships built on these foundations.

Without further adieu, here are the rules:

1. Be Accurate.

2. Never Assume.

3. Communication is key. Never want to hear “I didn’t know…”

4. When in Doubt, what is reasonable?

5. Not loose ends

For this blog post, I will detail Rule #1, and then expound on each of the other rules in subsequent posts.

BE ACCURATE.

Seems simple right? However, details matter, and can get you in trouble when you don’t get all of them right. For instance, when filling out a lease incorrect DATES and NUMBERS can kill you. What if a number gets transposed and instead of $4,300 per month you put down $3,400 per month? Lease is signed and then you realize what happened when the first month’s rent comes in. Hopefully you can talk your way out of that, but you have a potential mess on your hands. Dates are the same - you enter a wrong date and the the term of the lease could be shorter or longer than you actual want.

For important documents such as a lease, double and triple checking the important dates and numbers is essential. Taking your time to check these important terms by slowly reading each entry rather than scan through it is an important distinction.

It’s not only the important obvious details but also the small little ones as well. Type-o’s and poor grammar in emails and letters can imply you’re careless or disorganized. It may also call into question the message your are trying to convey and possibly even your competence.

Last thought on this rule is to make sure you are accurate on the facts. If there is an issue with a tenant makes sure you have the facts. Nothing will anger anyone more than being accused of something they didn’t do. Gather the information from all sides and make sure all the facts are accurate.

The purpose of this rule and all of these rules is to not shoot yourself in the foot. It makes it a lot easier to manage your property when you only deal with the problems created by your tenants and/or property and not have to also deal with problems created by you because you didn’t cross t’s and dot i’s. Take your time.

Landlords asked to Carry More of the Water this November

While the mainstream media sensationalizes the presidential reality show, there are 2 important measures on the November ballot you should be paying attention to. Both will have a material impact to your property rights as an investor and potentially impairs the long term value of your investment.

1. Proposition 21: This is the latest attempt to eliminate any further rent control protections to real estate investors. According to Noonprop21 passage of this proposal would introduce extreme forms of rent control on ALL housing types, not just multi-family. If your property does fall under rent control, the current laws allow you to raise the rent to market rent, once a tenant vacates, however if Prop 21 passes you would be limited to the increase you could seek on a new tenancy! In addition to the hyperlinks above, I encourage you to listen to this podcast provided by CAA to learn more. Vote NO this November on these draconian measures!

2. AB 1436: According to the CAA, AB 1436 is a proposal to force landlords to defer unpaid rent until April 1, 2022, if a tenant is unable -- or UNWILLING -- to pay rent that was owed during the COVID-19 pandemic.  CAA characterizes this bill as a government sanctioned rent strike. While I’m sure all of us empathize with those hit hard from the COVID shutdown, that needs to be a balanced against individual property rights, and the rule of law.

   CAA is asking all landlords to contact their state senators to oppose this assembly bill. CAA has provided a form which you can send to your state senator very easily with the clear message that you oppose this bill.

I am a political atheist meaning I do not cast my vote based on party affiliation. I do my very best to vote on the issues before me based on its merits in improving society as a whole. I’m sure everyone can agree we should be creating laws to do that. The question is HOW.

In my opinion, it would be a step in the right direction to bring all parties affected by such a proposal together to build consensus and try to address each sides main concerns. Prop 21 and AB 1436 is too one sided and will create winners and losers. There’s a housing crisis to be sure, but creating more laws that restrict housing is not the answer. I would rather see more measures that incentive the creation of housing. More housing supply that meets the demands will put a lid on prices rising ever higher and give all residents the chance to get the housing they need.

Benefits of Doing the Little Things Add Value in Property Management

Knowing that small things adds up to the bigger goals for our clients is top of mind for our team.

We had an issue that was finally resolved whereby the trash hauler was not providing the consistent push/pull service. In layman’s terms, they’re supposed to pull the dumpsters out and push them back into the trash enclosure. After countless phone calls and emails. Notifying City Environmental department and escalating this issue to managers we finally got them to acknowledge service for push/pull service was not provided as agreed and we got credits back totaling $100.70.

If you did a return on investment analysis for our time and resources spent, it would be a BIG loser considering this represents a negiligble cost savings at this property. But is it?

I would argue we served our clients and added value in 2 main ways:

1. Intangible Value: Responding to their concerns and maintaining a safe, welcoming center is paramount. While the actually hard costs of the push/pull service are negligible compared to total expenses, what are the potential costs of liability to tenant and landlord should someone run into the dumpsters? What is the intangible cost to tenants for the smell and the presence of the unsightly dumpsters to their customer experience? And lastly what is the added cost for illegal dumpers adding their garbage to the dumpsters when they are left out?

2. Improved Tenant Relations: Under NNN leases the tenants pay our management fees.

   Both our clients and their tenants should get what they pay for. Not only from us but also from our vendors. We need to hold them accountable for the services we pay for. In addition, looking out for their interest builds good will and a stronger partnership with the tenants, especially when the inevitable CAM increase is passed on to for ever rising costs from utilities, and property taxes.

Doing the little things not only ensures a safe and welcoming environment for tenants and their customers but can also add a lot of intangible value such as improving tenant relations. It’s important to keep in mind small incremental improvements start to add up, and play a significant role in realizing the full potential of your investment.

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