Business is all about relationships. The most important relationship is between Provider and Consumer – without a positive relationship, the Consumer will not engage the Provider and there will be no transaction. Without the transaction, the Provider cannot stay in business and it all falls apart. No one disputes the value of the Provider – Consumer relationship. It is commonly accepted that this is the critical link that drives the entire economy. However, the additional relationships are not to be ignored!
Business relationships are fragile things. Good Business relationships (including partnerships, vendor relations or supporting relationships) take time and effort to nurture and grow; yet it typically doesn’t take much to damage them (often beyond repair). A good Provider will recognize those potential partners (both official and informal) who are valuable to the enterprise and seek to maintain a positive relationship accordingly.
All relationships are based on trust. This includes business relationships. If a partner executes what is expected promptly and accurately, that benefits all involved in the ultimate transaction. Trust is built and all entities (providers and consumers) benefit from a strong relationship. Whether the Provider is producing a good for sale, a service or information, there are partner relationships to be maintained.
Property Management is no different. The Rental transaction is the critical component of the business, but there are several partner relationships involved in the process. If a property owner does not want to be “hands on” with all their properties, they will contract a management company to handle the day-to-day operations. A good management company will have positive existing relationships with a variety of vendors (maintenance, service, utility, financial, etc.) that will enhance the overall experience for both the Owner and the Tenant.
The benefit of a well-equipped management company to an Owner is large. Once contracted, depending on the terms of the management agreement, the Owner does not need to worry about anything related to the property. Rent is collected, minor repairs can be completed, interaction with the Tenant can be handled (up to a designated threshold of categories) and vacant properties can be marketed without requiring the direct involvement of the Owner. In a strong relationship, the Owner is largely un-involved in the property.
This does not mean that interaction between the Owner and Management company is non-existent, however. As previously mentioned, good relationships require effort to build. This is where any Management Agreement should include specified points of contact and communication for each party to meet the needs and expectations of the other, while partnering together to preserve a positive Provider – Consumer relationship (to drive profitability – which is the unspoken (and literal) bottom line!).
The “take away” for Owners and Management companies is this: good relationships start with good, clear communication of expectations; good relationships are maintained by good execution of required actions. The net result is success for all parties involved as they work toward a common goal. Prudent providers recognize the value of good partner relationships and work at building trust with those partners.