Apartment owners with small portfolios might try to do every aspect of property management themselves to save money. That strategy does not always add up.
Curtis Haines, owner of Vende Capital in Houston, started in the apartment industry with an established track record of business success. He built HireSynergy, a staffing agency, into one of INC 500’s fastest growing companies. But he knew that finding success in the apartment industry would require even greater management acumen. “The challenge in the apartment business was the magnitude of people needed to run a community,” Haines says.
To get up to speed, he took a very hands-on approach at the beginning, then he shifted his mindset.
“I recommend that anybody new to the business to stay focused during the first six to 12 months,” he says. “To succeed, you have to understand the operations before choosing to outsource any functions. Usually, an owner buys an apartment and then starts tinkering with things. They don’t wisely build the team or outsource accounting or property management to create efficiencies. If you want to grow your portfolio, make sure to add staff so that you are not the guy who has to do everything.”
John Boriack, President of Veritas Equity Management, was hesitant to let go of tasks and duties when he started his company.
“One of the biggest mistakes small owners can make is to micro-manage too much and to not trust your team and people,” he says.
It is easy to understand why owners who are just starting out will dive into the minutiae of the business.
“You just feel like everything is riding on your shoulders and you want to make sure it is all done perfectly,” Boriack says. “Since I’ve outsourced some of the work, my life has become much more peaceful and the team feels like they are much more a part of it.”
Ultimately, becoming too involved can prove to be a mistake.
Joe Bryson, Managing Partner of Stellar Equity Management in Houston, owns four apartment communities (542 total units) and nine single-family rental homes. He relies on third-parties such as CPAs and attorneys to lessen his management burden.
“You cannot know it all,” he says. “If that’s your goal, you’ll never get your business started.”
A strategic change helped Boriack evolve. He began monitoring results rather than methods.
“That has enabled my team to accomplish their goals in a way that fits their work style,” he says.
Getting out of the day-to-day grind helped Haines add 10,000 units over nine years.
“I put a strong team around me and have strong onsite managers,” he says. “I was able to grow the business faster because I could spend more time on the business side of things.”