Three Ways to Organize a Property Management Company

Here are the 3 common ways to organize a property management company as it grows beyond a few employees. I’ve listed the pros and cons of each. I run my company with a Departmental style.

1. Portfolio Style

The company hires property managers. Each property manager has a set of client accounts. They do everything for those clients and their properties. Leasing, rent collection, maintenance coordination, accounting, etc.

Pros

• Clients and tenants have a single point-of-contact.

• The property manager knows everything that is happening with their clients, properties and tenants. This provides a great customer experience.

• Very little wasted communication. Able to move & make decisions very quickly.

• Hiring a new property manager doesn’t disrupt anything with existing operations.

Cons

• Single point of failure for an entire set of clients. If the property manager leaves or goes on vacation, nobody is up to speed on what is happening.

• Very little consistency in handling operational details. Each property manager will handle things differently.

• Requires the property manager to have a diverse set of skills. Must be good or great at multiple things.

2. Departmental Style

The company is organized into departments. Each department or employee has a specific set of tasks they do for all properties under management. For example, the maintenance coordinator takes all incoming maintenance calls and handles them, for every single property. Same for the leasing agent, etc.

Pros

• Allows hiring of specialists instead of generalists. Employees can excel at what they do & go deep.

• Service delivery becomes very consistent from property to property and client to client.

• Allows documentation of SOPs.

• New employees can be up to speed quickly (narrow set of responsibilities).

Cons

• Duties are constantly changing as the company grows and tasks are redistributed among employees.

• Clients may not have a single point of contact (bounced from dept to dept for answers).

• There can be a lot of time wasted communicating between departments.

• No single person is watching out for a client’s overall portfolio / performance.

3. Squad Style (AKA “Pods”)

“Squads” of 3 people are assigned a large set of accounts (~300 units). Each squad is made up of a property manager lead who deals primarily with clients, a property manager assistant who deals primarily with tenants, and a maintenance coordinator. The squad will share a large office or neighboring cubes to facilitate quick and easy communication. There is a natural progression whereby new employees in training start with maintenance coordination and move up from there with experience.

Pros

• Clients have a single point of contact, with a backup too.

• No single employee departure or vacation is too disruptive. The remaining squad members can cover while a new employee is moved into that squad and brought up to speed.

• Operational and client benefits from some specialization within the squad, with minimal wasted communication.

Cons

• Spinning up a new squad can be expensive and wasteful until they are fully utilized, which depends on future growth

• May be difficult to enforce a set of SOPs (each squad may do things a bit differently)

Shoutout to “BZ” on Twitter for his great Twitter thread about customer service with squads.

4. (Bonus) Hybrid Style

Hybrid style is a mixture between departmental and portfolio. Some core back-office functions are retained at the departmental level, while some or most activities remain with the individual Property Manager.

Looking for more information about the property management industry? Read this.