A Property Managers’ Solution, Part One: Leasing

Property managers and operators of multi -family housing properties face many obstacles in today’s challenging economy. From finding qualified tenants, to coordination of maintenance projects, to accounting for rental transactions, there are so many moving parts and pieces to successfully manage a property. To make sure all of the pieces fit together (or just to manage the chaos), companies have to put in place processes to accomplish specific tasks. Ineffective processes can further complicate matters by creating bottlenecks, eliminating accountability, or just creating extra work. Conversely, effective processes can provide a competitive advantage and boost the bottom line.

In a three-part series we address three challenges that the multi-family housing industry faces in markets with large student populations, and propose why those that have decided to apply Lean Six Sigma methodologies have solved each challenge.

BACKGROUND
A property manager’s leasing department generally begins recruiting prospective student tenants six month prior to the start of the fall semester. These tenants wait until the last minute to sign a lease, which leads to a high volume of work in a short time period, typically with the highest volumes occurring the month before classes begin.

THE CHALLENGE
Attracting qualified tenants and executing lease agreements during high volume turn periods.

PROBLEMS WITH THE PROCESS
A significant amount of resources are wasted up front as employee time and money are spent in printing and mailing invitations for property showings while using databases that are not up to date. Kinks in the screening process result in time wasted on unqualified prospects, while having untimely responses for qualified prospects that are ready to buy. Compression periods, caused by turn, lead to unnecessary employee stress and burnout, additional costs are incurred for employee overtime, and the chance of having mistakes on the lease documents increases. A lack of accountability results in a loss of prospective tenants caused by a lack of follow-up by leasing agents, poor measurement systems regarding closings, and uncertainty of current/prospective tenant satisfaction.

THE SOLUTION
Through applying Lean Six Sigma methodologies we learn which resources (e.g., time and money) can be redirected to more meaningful methods of recruiting tenants in the months leading up to busy turn periods. Offering early signing and move-in incentives for tenants would reduce volume during busy turn periods.

We also learn that by shifting responsibilities and evening out the workload between employees (commonly known as level loading), we alleviate pressure on employees. Leasing agents can focus their time qualifying prospective tenants and performing quality control review over lease documents to reduce the amount of mistakes made. Lastly, developing training and accountability programs are crucial to set the tone from the start and hold employees accountable for following the revised processes.

Are you ready to learn more about how Lean Six Sigma can improve your processes?