In a Q&A, real estate pro Steve Rozenberg says success in the industry comes down to a lot of hard work and dedication.
Vice President of Investor Education, Mynd Property Management
What steps have you taken to balance a career in property management and as a commercial airline pilot?
I don’t feel that balance is something that truly exists for people who want to be successful. Instead, you need the ability to apply yourself wholeheartedly to each and every task that demands your attention. This requires focus and clear intent on what you hope to achieve. For me, I focus on one role at a time in order to be the best I can in that vertical, and as soon as I have achieved what I set out to achieve, I will pivot to the next task and give it my full attention.
As an airline pilot, I fly international routes that are considered ultra-long haul, mainly Houston, TX to Sydney, Australia. However, as these flights are so long, I only have to fly one or two trips per month. The benefit of being an airline pilot is the amazing flexibility of my schedule, and with the advances in technology over the past few years, there really is no difference between being in Sydney working from a hotel, to my home office working virtually. The only challenge I find is adjusting to time zone changes. My Houston work hours suddenly become ridiculously early Sydney work hours, but since I’m up early at the gym most days, this doesn’t bother me too much.
There are definitely times that it can be challenging to operate in two completely different professions such as mine. But after the devastating terrorist attacks of 9/11 and the uncertainty surrounding the stability of my career, I realized that it would be necessary to secure a more stable job.
Initially, I had an interest in real estate and so I applied myself to this new vocation with the same tenacity and drive that earned me a position as the second-youngest employee at my first airline job. The inner drive to secure a life for myself and my family is what drives me to be the best I can be.
What is the number one challenge facing the residential rental industry today?
The perceived low barrier to entry is the most challenging thing facing the rental industry today. In general, real estate is considered an easy way to make money for investors. With all the trendy television reality shows and social media, there’s an illusion of how easy it is to own a rental property.
In reality, being a successful investor requires focus, commitment, and knowledge of all things real estate. Owners need to educate themselves and make sure that they are running their rental property like a business. If an investor doesn’t have time to manage their rental property like a business, they should hire a professional property management firm to manage resident relations and to ensure their investment yields healthy returns.
As the popularity of house flipping, wholesaling, Airbnb, and house hacking continue to soar, people are getting caught up in the illusion that it is not only easy, but that everyone who invests in real estate has success.
In reality, quite a few people end up losing money and some become insolvent due to the illusion that real estate investing is all sunshine and rainbows. But as a matter of fact, it takes money, serious planning, determination, and grit. More importantly, residents rely on the owner of their property to provide them with a safe and secure environment for them and their loved ones, which should be the main goal of every property manager. The residential real estate industry is one of the most highly regulated and monitored sectors in the United States. There are many laws and government agencies that rightfully protect the rights of these residents. It is incumbent upon the owner of the rental business to be educated in these laws before they buy their first rental property. Unfortunately, that is not always the case.
What is the most common mistake that property managers and investors make when it comes to renting out their properties?
The most common mistakes property owners and managers make is that they do not have policies and procedures in place on screening, qualifying, and selecting residents. Many times, I have seen investors allow the fear of a vacant property creep into their business model and drive their selection process. That’s very dangerous because of the Fair Housing Act, which clearly instructs that property owners treat all residents and applicants the same, and they are a protected class by law. For example, not accepting a certain resident in the beginning phase of your vacancy period and then if that property is vacant for much longer than anticipated and due to financial reasons you select a resident that had the same qualifications as one prior that was turned down could possibly be construed as discrimination and hold possible legal ramifications in doing this.
The way to avoid this is simple: Stick to the rules, policies and procedures in your state and local community. Treat all people fairly and by the same set of rules.
How has technology helped empower the modern property manager to more effectively find, validate, and keep long-term, reliable residents?
Technology has become a major game changer in an industry that has been lagging behind the technology curve for quite some time. Technology has enabled many advancements in our industry, including providing residents and prospective residents with a completely digital leasing experience.
For example, the older, more “traditional” way of renting a property was by coordinating calendars between yourself and a real estate agent to find a mutual day and time to view the property. The next barrier was getting a hard copy of the application sheet, filling it out by hand, and faxing it into an unknown void. Once someone on the other end processed the application, you had to physically go to the bank, get certified funds for the security deposit to hold the property for yourself, and then get it to the Realtor’s before they closed. This was a time-consuming process.
Now, residents have the ability to view properties online, conduct self-showings without a real estate agent present, and apply for a rental online, which saves residents hours of time and shortens vacancy times for property owners. A potential resident can take a 360-degree virtual tour of the property using Inside Maps, a multi-lens camera. This innovative camera stitches together all the pictures of the property’s interior to give you a full, unencumbered view. If you physically go see the property, you can schedule a self-showing that uses a smart lock. This is a lockbox that is placed on the door of the property, and once you have provided your details online, including a driver’s license or state-issued ID, you receive access to the property at a time of your choosing, without having to wait for a real estate agent.
If a potential resident wants to fill out an
application, they can quickly and easily do this via an online link. Once
complete, they can go online and view the status of their application. Once
accepted, they can safely and securely transfer money from your bank account
safely and securely. To further simplify the process, they can use a utility
concierge company to take care of turning on all of their utilities so that the
day they move in, all of their utilities are turned on.
To me these are perfect examples of how technology has benefited real estate, and is changing the way resident selection is handled.
What is one trend that every property manager should be getting behind in the coming year?
I would like to see property managers create a more frictionless environment for owners, residents, vendors, and their employees. At the end of the day, these are all moving parts of a business model and the more smoothly it runs as a whole can only mean a more harmonious relationship between all parties. I would like to see more transparency in this industry because it has been plagued by the perception that property management companies are not being completely transparent. One trend I see gaining more momentum is the use of VAs (virtual assistants), which Mynd Property Management utilizes to increase our efficiency. This provides more leverage by using team members out of area, and in some cases, outside of the U.S. This frees up staff time for more client interaction and results in dramatically lower payroll costs.
Property management can be stressful for all parties involved, and this can cause frustration and ultimately the loss of the client to another operator, not to mention high employee turnover due to stress.
Technology can be used as a tool to stay relevant in this ever-changing industry. It can also be something that can cost property managers clients and ultimately their business if they do not embrace the tools that currently exist, as well as new technology to improve the rental living and real estate investing experience.