In the Business of Building Successful Entrepreneurs
Property Management Inc. Takes the Industry Bigger & Better
by Carole VanSickle Ellis
In 2008, there was not a household brand for property management. Steve Hart, CEO and founder of Property Management Inc. (PMI), and his team have spent the last 13 years changing that.
“When we started, there was no national name for property management that could be found in all 50 states, in multiple cities, that could serve the investor with investment properties in multiple markets,” Hart explained. “We started PMI because the property management industry is very fragmented. Most property management services are small and are creating their own systems rather than operating using a global structure and universal training.” Hart and his business partners believed that emerging technology in the mid-2000s could change the face of property management, optimizing performance for both real estate investors and individual property management companies. The result of that vision was PMI, a property management franchise that provides expert property management across four distinct “pillars” in the management industry.
“Our pillars provide owners with service options that build value and increase investors’ and property managers’ ability to build value in their portfolios and businesses,” said Randall Henderson, vice president of PMI’s Commercial and Residential Management Programs. Henderson joined PMI in 2014 and played a key role in building and running the two pillars under his supervision. Without the systems PMI has in place to keep property management predictable and reliable in unusual and unforeseen situations, 2020 and 2021 could have looked very different for many PMI franchisees.
“Very early in the timeline of the COVID-19 pandemic, we were working with our franchisees to discuss how to work with investors and residents to help them deal with the challenge. As a result, our rent collection through COVID-19 stayed above 95 percent – higher than many other property management groups,” Henderson explained. In fact, the company added more than 80 residential franchise companies and gained more than 4,000 total doors managed during the pandemic. “As of August 2021, our rent collection is nearly back to the 99 percent pre-COVID levels, and that means great returns for our investors,” he concluded.
Creating Successful Entrepreneurs & Supporting Investors
Although there are a number of companies that bill themselves as “national” property management companies, PMI distinguishes itself from the crowd in large part by its dedication to its franchisees. “We are in the business of building successful entrepreneurs,” said Danessa Itaya, who serves as president at PMI and has a long career of developing and implementing marketing programs for franchisees. “We work with many candidates that come to the United States wanting to open a business and relocate their families to the U.S. for a better way of life. We love hearing their success stories,” she added.
Because PMI focuses heavily on its franchisees’ ability to deliver top results to clients, the company does not simply release new franchise owners into the industry once they have “signed on” to run a franchise. In fact, explained Blake Sanford, director of association management at PMI, the key to PMI’s success rate lies in the extensive training every new franchise owner receives before entering the field and in the long-term support they receive while running their franchise.
“When it comes to PMI’s franchising, a lot of people join because they do not want to invent something from scratch that has already been invented,” Sanford explained. “We are able to provide them with software, management tools, training, and technology they would never be able to access [and therefore would have to cobble together] on their own.”
The ability to scale and ease of scaling become particularly important when franchisees who already have property management companies join PMI and fold their existing businesses into the new business. Many independent or “mom-and-pop” property managers opt to convert their existing companies to PMI franchises as they grow in order to access tools, software, systems, and training they might otherwise be compelled to develop on their own as part of the expansion process. Most importantly, however, no one “goes it alone” whether they have been in the industry for decades or only a few days, and new franchisees must complete the training in their specific “pillar” prior to beginning operations as a PMI franchise (see sidebar).
“Every entrepreneur in our brand is assigned a professional franchise business coach who leads them through rigorous training before they can be added into any pillar of the PMI business,” explained Marianne Heder, PMI’s director of short-term rentals. “They become fully operational when the PMiWAY systems and operations have been fully incorporated, and then the exciting part begins.”
Heder’s “exciting part” is the growth and expansion of the franchise owners in the brand as the “PMiWAY System” sinks into every aspect of the property manager’s operations. For example, one franchise owner joined PMI with the goal of expanding their current operations by offering a full-service property management for short-term rentals. Their business was thriving, but they were nearing their capacity to grow due to lack of scalable systems and tools. “We call this a ‘property manager stuck in transition,’” Heder said. The company came in under Heder’s pillar in order to expand into the “front-end” portion of short-term rentals: selling services, managing reservations, and maximizing the value and ROI for their clients’ real estate assets. The company’s client base spiraled upward as existing clients enjoyed more value offerings and the franchisee, with PMI’s guidance, began bringing in a high volume of new clients.
“They took their experience managing the ‘back end’ of short-term rentals and combined it with the ‘front-end’ systems we use at PMI,” Heder said proudly. “They are now among our top producers because they took our coaching and our systems and incorporated them into their existing model to become extremely successful.” Moving forward, if the franchise elected to bring in another pillar of management they would first need to go through PMI’s “pillar-screening process,” be approved for pillar diversification, complete their training and coaching in their new pillar, and be fully incorporated into the systems and processes for the new pillar. “Then, they could ‘go live,’” Heder concluded. “Every PMI franchise owner has the ability to add pillars to their offerings, and we encourage them to do so,” she added. “The key is knowing the right time to do so. They must be financially stable, demonstrate their systems and operations are fully adopted into the existing pillar, and have a ‘champion’ or manager who will work with an assigned franchise business coach who specializes in the pillar they hope to add.”
Henderson noted that many PMI franchise owners make their way into real estate investing (and vice versa) thanks to the extensive training and smooth operations associated with the PMI franchising process. In fact, he said, the residential real estate pillar of the company has grown exponentially in 2021 as more real estate investors seek reputable, reliable property management at a national level and more would-be property managers realize the best way into the business is with a business coach, customized systems, and the full force of franchise marketing at their side.
Many of the 2020 franchisees, in particular, are experienced in business but not necessarily in real estate. “Your background doesn’t really matter,” explained Sanford. “We have the training to enable you to do what you need to do.”
Communication, Marketing & Feeling Like Family
Probably the thing that makes Hart proudest of his company is that PMI is actively contributing to both franchisees’ and clients’ lives in meaningful and far-reaching ways. He emphasized the group is far more than just a well-oiled machine of systems, tools, and training; they are a supportive population that feels like family.
“When you work with PMI, you are working with industry professionals,” Hart said. “You join as a franchisee and you are working with a staff of industry professionals and professional trainers. You get to be part of a group of 350 professional property managers around the country that are referring and helping each other build their businesses together. We feel like a family—a family that is growing toward being a household brand!”
Because one of the key components PMI offers its franchisees and, by extension, their clients, is custom marketing, Hart said PMI franchises tend to streamline the entire front-end management process to the benefit of both clients and the franchisee themselves. “We help our property managers lease properties much faster than they could on their own,” he said.
PMI helps franchisees develop customized websites, a specialized marketing plan, and strategies to keep them visible at the top of search results in major search engines. On top of that, Hart said, the PMI websites tie into property listings on multiple platforms, making it even easier to reach clients and keep them by maintaining low vacancy rates.
Regardless of the marketing strategy a franchisee prefers, Hart believes his branch of the industry is definitely the best place to work in real estate in today’s uncertain times. “I love a dependable industry: one that I know I can work hard and grow a portfolio with a residual, recurring, reliable revenue stream,” he said. “That is what I love about property management and what I love about PMI: We provide entrepreneurs with absolutely everything they need in this and any market to become professional property managers and do it right the first time.”
Sidebar 1:
Supporting Entrepreneurs & Investors: PMI’s Four Pillars
When PMI was founded in 2008, CEO Steve Hart knew that he was founding what he refers to today as a “broad company.” Because property management strategies and systems must be as diverse and varied as the real estate assets under management, Hart hoped to change the industry by creating consistency across asset classes and state lines while retaining the innovation, creativity, and flexibility he expected his entrepreneurial franchisees to bring to the table as they joined the PMI team. As an investor himself, Hart knew just how valuable it would be for future clients to have the ability to maintain a portfolio of assets in multiple cities all managed by the same brand. “It means you can expect the same service and results from that property manager in every location rather than dealing with an industry that is fragmented,” he said.
Hart and his team developed a program of courses in four distinct areas of property management, which PMI refers to as its “pillars,” paired with one-on-one business coaching and specialized tools and software designed to optimize a franchise’s performance once the training is complete. “We consolidated the best of the software and technology out there into one system and approach,” Hart said. PMI’s four pillars have stood the test of time. After more than a decade in business, the company is still experiencing rapid expansion and consistent results from experienced and new franchisees alike. When a new franchisee comes on board with PMI, they select a “pillar” that best fits their current plans for their business. Those pillars are:
1) Residential Real Estate
The residential real estate pillar involves all aspects of residential real estate management, including handling brokerage services, property inspections, leasing, and set-up fees for single- and multifamily residential properties. “One thing that makes our system unique is that PMI property managers are constantly on the lookout for opportunities to expand clients’ revenue streams,” said Randall Henderson, vice president of PMI’s Commercial and Residential Management Programs. “When those opportunities expand for clients, they expand for PMI business owners as well.”
2) Commercial Real Estate
The commercial real estate pillar works with property owners who own commercial properties. PMI commercial real estate franchises specialize in asset preservation and leases between three and seven years in length. “We focus on bringing in tenants with longer leases that represent lower risk,” Henderson explained.
Although the COVID-19 pandemic has been harder on commercial property owners than it has been, for the most part, on residential property owners, Henderson said that PMI got ahead of the problem in early 2020 by educating its property managers on how to work with clients and tenants to facilitate clear communication about how the global pandemic was affecting their businesses. As a result, PMI-managed properties’ vacancy rates remained much lower, on average, than the national rates for commercial buildings—and this held true across all four pillars.
3) Association Management
Because PMI operates across all sectors of the property-management industry, the company is able to serve associations and developments as well as investors with individual portfolios. Blake Sanford, PMI’s executive director of association management, explains the pillar in this way: “Every day, developers and builders are creating associations that need professional management. The problem with this ‘hockey stick’ growth of community associations, however, is that there has not been a similar proliferation of community-association management services. PMI’s association management pillar fills that gap for condominium associations, commercial property associations, planned-unit and planned-urban-development projects, and mixed-use developments.”
4) Vacation Management
When most people hear the words “short-term rental,” their thoughts automatically turn to Airbnb vacation properties. However, said Marianne Heder, PMI’s director of short-term rentals, this pillar of property management encompasses far more than that. “Everyone knows Airbnb and VRBO,” she said, “but there are also B-and-B’s [bed-and-breakfasts], mini hotels, corporate rentals, the list is nearly endless.” This pillar, she went on, encompasses every type of short-term rental fitting the broad definition of “a short-term, rental property that is fully furnished and rented nightly or all the way up to month-to-month.”
Learn more about PMI’s 4 Pillars at
PropertyManagementIncFranchise.com.
Sidebar 2:
Bringing a Strong Track Record to Bear on the Changing Face of Property Management
When the novel coronavirus COVID-19 emerged in the United States in early 2020, the most effective and successful property managers were on the front lines working hand-in-hand with investors, landlords, and residents of both residential and commercial assets in an effort to keep lockdowns, public health policy, and economic shutdowns from sinking the entire rental real estate sector. With its national presence and broad scope of services, PMI had a more comprehensive view than most of the potential chaos that might ensue in the event that landlords could no longer make their mortgage payments or residents were evicted en masse during the months-long shelter-in-place orders. Then, as the orders began to lift and the first rumblings of the end of eviction moratoriums and mortgage forbearance were heard, PMI experts grasped, far sooner than most, just what had to be done in order to keep clients’ portfolios performing.
“We started out early—as soon as the pandemic hit and before there were even nationwide shutdowns—talking to PMI business owners about how they needed to handle the coming challenges,” Randall Henderson, vice president of residential and commercial property at PMI, recalled. “Our advice to landlords and their property managers was simple: Get on the same team as your residents. We urged them to be proactive in communicating with clients and residents not just in terms of what would happen if they missed their payments, but in terms of helping them find the help they needed.”
PMI did not just give advice from the sidelines about good communication; the company followed up with clear, actionable information on a city-by-city basis for every real estate asset under management in each one of PMI’s four pillars of property management. The results were compelling: PMI franchises had far better collections rates than national average and new entrepreneurs poured into the space, particularly in the residential and short-term rental pillars. “These sectors are hot,” Marianne Heder, PMI’s director of short-term rentals explained. “However, in today’s short-term rental market, the primary barrier blocking successful growth for owners and property managers is a lack of sustainable, scalable, professional, automated property management systems. When our new franchise owners realized what kind of firepower they could bring to short- and long-term rental property management in 2021, they swung into action and not only expanded their own businesses but kept many, many landlords and tenants in operation as well.”
While some other analysts offer bleak forecasts for non-single-family-residential (non-SFR) assets and multifamily properties as the pandemic drags on, PMI is positioned to get a clear, birds-eye view of the real estate market and offer insights accordingly. The team presents a surprisingly optimistic outlook for the pillars of commercial and association management. “Of course, we are going to continue to see home values and equity increase [in residential real estate] at least in the short-term,” said Blake Sanford, director of association management at PMI, “but we are also going to see a huge trend of developers and builders creating large community associations that need management. That is not going to stop any time soon, and these communities need experienced property managers. PMI franchise owners are among the few professional, systematized, national service providers available. We do not see anything coming down the line that would likely prevent the formation of many more community associations and the need for a more substantial population of association management experts.”
“We envision the housing market continuing to be a sellers’ market through 2021 due to the effects of COVID-19 and people’s hesitancy about moving,” concluded Danessa Itaya, PMI’s corporate president. “However, as COVID lifts and people become more and more comfortable with the idea of moving, however, we do expect to see a shift,” she said.
