The changing role of the property manager today requires more and more knowledge of ever-changing local city ordinances, state laws and federal rules.
By John Triplett
When Enrique Jevons started as a property manager years ago, he often acted as both a property manager and a handyman. But the changing role of the property manager today is different, especially in his hometown of Seattle.
As the former head of Jevons Property Management, recently acquired by Mynd Property Management, he sees the role of the property manager in Seattle changing these days. Jevons says the environment makes him feel like he also has to take on some of the responsibilities typically handled by an attorney (he is not an attorney only an advisor), given the constantly shifting government regulatory environment at the city, state and national levels.
Going forward, Jevons’ company will be known as Mynd Property Management, which “brings a best-in-class service to the Washington market in partnership with the Jevons team,” said Doug Brien, (pictured above right) CEO and co-founder of Mynd with Colin Wiel above, in an interview with Rental Housing Journal. Mynd focuses on the “small residential” sector, which includes single-family rentals and multifamily properties with up to 50 units.
“Seattle has been very noteworthy lately in terms of rent growth, investment and new construction of multifamily residences,” said Brien. “We are excited to have a presence there and to be working with Enrique.
“At Mynd, we’re all real estate investors at heart, and Enrique is an investor who knows the Seattle market really well,” Brien said.
How to bring more value to the changing role of the property manager
To address inefficiencies in an industry that has existed for a long time, Mynd co-founders Brien and Colin Wiel, applied technology to property management. Seattle property owners and residents will now benefit from this technology deployed by Mynd, Brien said.
“One of the things that we’re fanatical about, and that’s different about us, is we try to expose as much useful data as possible to our owners, so they can access real-time data, not a statement from 30 days ago, for instance.
“If you have a vacant unit, you can see in real-time how many leads, how many applicants, how many showings it’s had. That tells the story of how your unit’s doing,” Brian said. Plus, owners can pull out their phone and use their mobile app to find out what’s going on with their property.
Property management done the traditional way can be described as a “black box,” said Brien. There’s typically been minimal insight into each property’s performance. An investor receives a financial statement, but has minimal insight into why their property performed in a certain way over the past 30 days.
“What events unfolded that led to this financial outcome that I’m seeing 30 days later? And what can we do to avoid it in the future?”
Typically, an owner has to pick up the phone and track down information, perhaps from multiple sources, Brien continued. It’s especially complicated when a company is managing single-family homes or several small multi-unit buildings spread out across a geographic region, with no onsite staff. “That’s where this black box thing comes from,” Brien said, in explaining how Mynd is different.
Roots as real estate investors led to better property management
“We founded Mynd about three years ago as a kind of offshoot of Waypoint Homes. My partner and I, Colin), founded Waypoint Homes back in 2009 and we were one of the first companies to start buying single-family homes, and ended up buying 17,000 around the U.S. in 13 markets. So, we developed some technology that made the way that we manage really efficient. We were very happy with how that company went and its success on Wall Street.”
According to Brien, one of the keys to success at Waypoint was building systems internally to measure performance. “We have a saying that’s one of our core values, ‘If you don’t measure something, it’s impossible to improve it.’ So, we believe in creating systems and tracking everything we do and measuring it fanatically, and then trying to improve it.
As individual investors, Brien noted, he and Colin wanted to add value to individual investors. “We believe in real estate as an asset class. To me, it’s the best, most attractive asset class there is to invest in.”
Many prospective real estate investors have a hard time taking the first step when it comes to investing, Brien said, because they don’t know how to take care of their property themselves, and they don’t have confidence in property managers. “Traditionally, a lot of property managers are mediocre at best.”
“It doesn’t mean that there aren’t great ones out there. It’s just I’ve been generally unsuccessful finding good property managers, and so we said, ‘You know what? We learned how to do this. And, we believe there’s a need. Plus, we can add value. Let’s do it.’ So, it’s been three years, and we’re up to 4,000 units in various West Coast markets.”
Property management is a people business
Over the years, there’s been a limited amount of innovation in the property management sector, and Mynd has set out to change that. “We are going out and trying to find the best, the brightest and the most talented. That’s a big reason why we partnered with Enrique.
“At the end of the day, no matter how much data or technology you apply to the business, this is a people business. It’s very operationally intensive, and we want to use technology to make great people even more effective in terms of the service we provide. Building a great team and having high-quality people is a huge part of what we do,” Brien said.
Changing role of property management especially in Seattle
Jevons said his background in the hotel industry as a hotel general manager led him to Seattle and the property management business 11 years ago. He also personally owns 71 rental housing units.
In Seattle, Jevons manages nearly 800 units in Washington state. As a result, he is well-equipped to handle the needs of property owners and residents, since he gets to “experience it from both sides,” he said.
“I know, being an owner, exactly what I’m looking for. Then, being a property manager, I get to see the other side of things, where you’re the middleman between the tenant and the owner. It’s a very unique position to be in, and one I enjoy very much,” Jevons said.
What is the biggest stressor for owners and property managers in Seattle now?
“Keeping up with all the different changing legislation,” Jevons said. “And it’s happening really fast, which makes it difficult for the small property owner.”
According to Jevons, most owners of rental properties own one single-family home. Another large segment of investors owns less than four units in Washington State. Small residential owners struggle to keep up with every new city ordinance that passes, every new county ordinance and new state laws. Unfortunately, he remarked, there’s no one single repository where owners can go to for assistance.
“If you go online and do a Google search for City of Seattle rental laws, you’re going to come up with several different sites, none of which has all the city, county, and state laws.
Since each city has its own local ordinances, it’s hard to keep up with which city has what ordinance and how it applies to property owners. There’s no registry for property owners to receive all the information that they need on changes to laws, Jevons said.
Hard for property owners to find information
In my experience, owners don’t intuitively know that they are required to register with the city once they start operating rentals. They also don’t know that they have to procure a business license if they’re renting out a home, even one they inherited.
This uncertain climate makes it difficult for investors to acquire rental properties in the city of Seattle. For instance, there might be an opportunity for an investor to purchase a duplex in Seattle, but if rent-control laws make you question the viability of your investment, then you may decide to pass and purchase property in Texas instead, Jevons said.
Rental housing is a demand-and-supply business
If the City of Seattle becomes too restrictive for property owners, then investors have the choice to sell their property to an owner-occupant. As a result, the rental pool becomes depleted, and investors opt to buy investment properties elsewhere throughout the United States in rental markets that are less restrictive.
“You have this supply-and-demand equation. Trying to artificially regulate the supply of housing doesn’t lessen the demand. The demand is always going to be there,” Jevons said
“What we need to try to do, in my opinion, is make it easier for people to build and purchase rental properties so that we can increase the supply, and therefore make it less expensive for people to rent,” Jevons said.
Brien said Mynd wants to be a trusted partner for real estate investors.
Property manager’s job is to stay on top of regulations
It’s a property manager’s job to stay up-to-date on all of the changes to rent-control laws and city regulations, Brien explained. Mynd’s goal as a company is to “make it simple for investors to invest, and frankly, to also give them choices. We ultimately want be a national property management company.”
Somewhere between 80 and 85 percent of investors invest within a 60-mile radius of where they live because they don’t trust their property manager, Brien said. They don’t trust that things are going to get done, so they drive by and want to see it all the time and check on the condition of their investment. But it’s rare that within 60 miles of where you live happens to be the best place in the U.S. to invest.
To solve this problem, Mynd wants to provide investors with more data so they can make better investment decisions. This gives investors flexibility with respect to their investment decisions. At the same time, we are staying on top of all the changes and regulations in each city, so that owners have an “investment experience that’s pleasant and simple,” Brien said.
At the end of the day, everyone agrees that there’s a housing affordability problem in many cities, Brien said. However, he doesn’t believe the problem should be fully shouldered by property owners. He questions whether it’s fair for a resident who earns $250,000 a year to pay $800 a month in rent, which sometimes occurs in the city of San Francisco.
Changing role of the property manager from handyman to attorney
When asked how the role of property manager has changed over the years, Jevons said it’s evolved from being a handyman and customer service expert to becoming more of “an attorney function.”
Originally, he noted, the role of property manager was to provide great customer service. And, to determine what needed to be fixed at a resident’s property.
Now, it’s more about ensuring that property owners are compliant. Also that the rental agreement adheres to local, state and federal fair-housing laws.
“From a handyman to (almost like) an attorney. That’s how the job has changed.”