[Editor’s Note: Originally published on Wreno.io.]
For the last few years, multifamily property managers have been pinched by surging interest rates, rising resident expectations, and falling revenue margins — trends that have left some industry leaders gloomy. In the latest 20for20 survey of multifamily leaders, only 3 in 10 said they expected 2024 to be better than 2023 for their companies. The mood is perhaps best summed up by a refrain that has been common in commercial real estate lately: “Survive until 2025.” For multifamily leaders, a path forward is centralization — the task of consolidating operational functions and processes into unified platforms. It’s a buzzword nowadays, but for good reason: Centralization cuts costs, improves efficiency, and reduces risks of regulatory noncompliance. But progress toward centralization has been uneven, not only across the industry but across functions within a company. For multifamily leaders, operational functions tend to fall into three buckets: leasing, administration, and maintenance. As far as centralization goes, property administration and leasing are low(er)-hanging fruit — processes like rent collection and bookkeeping are easier to consolidate, automate, and manage online. But for most operators, centralizing maintenance remains daunting. Of the multifamily leaders interviewed by 20for20, most had not started centralizing maintenance.
The maintenance challenge
Maintenance is inherently on-site, local, and variable — you can’t install a garbage disposal from an online portal. The diversity of tasks also complicates the equation. There’s repair and maintenance — routine upkeep like fixing leaks or inspecting HVAC units. There are turns or make-ready projects, which prepare units for new tenants. And then there are capital expenditures (CapEx) — large-scale investments, like replacing roofs or adding amenities. Across all three, property managers need to cut costs and move fast. Delayed repairs make for unhappy residents. Slow, expensive unit turns and CapEx projects impede new occupancy, cutting into earnings. And nobody knows the stakes better than the operators themselves: In a 2023 survey by the National Apartment Association, 76% of property management professionals identified “operational inefficiencies” as a concern, more than any other. While effective maintenance is a necessity, not all companies take the same path to get there. We’ve observed that most multifamily leaders tend toward one of two models of property maintenance — and both depend on centralized management of skilled trade workers. Here are the two big models of property maintenance and what’s needed for each.
Model #1: Rely mostly on in-house technicians
What we hear from multifamily leaders: “To reduce costs, I want most of my maintenance team to be in-house.” For many, this is the most cost-effective of the two paths. Companies gain control over costs and technician scheduling, without having to compete with other clients for technicians’ time. But success depends on getting a few things right. Here’s what property managers need to do to make this model successful:
Optimize scheduling of technicians’ time
The need: If your technician team is large and working across properties, plan their schedules to a tee to cut operational expenses. The challenge: Without the right software, honing schedule management becomes logistically impossible as you scale. Tracking one or two technicians is no problem. Tracking five, ten, or twenty gets messy and risky, especially when you’re scrambling to hire new technicians to replace departing ones — and poor utilization of technician time takes a bite out of NOI.
Retain technicians
The need: To avoid the expensive task of replacing technicians, invest in the technicians you have. The challenge: In-house technicians who face demanding work, unexpected calls, and limited career growth don’t stick around — an expensive problem for multifamily leaders. The turnover rate for onsite maintenance staff was nearly 40% in 2021, and labor shortages mean the market is extremely competitive. As a result, the industry’s “1 technician per 100 units” standard is out of reach for many companies.
Fill technician gaps easily and quickly
The need: When an in-house technician leaves or lacks the expertise for a specialty project, find a vendor to fill the slot without breaking the bank. The challenge: Even if you lower your technician churn rate, some technicians will still leave or be poached — and you’ll always have jobs that can’t be done in-house, like CapEx renovations. Third-party vendors fill the gaps, but searching for vendors last-minute, when you need them immediately, sets you up for uncompetitive quotes and delayed jobs. Company NOI takes a beating.
Model #2: Rely mostly on third-party vendors
What we hear from multifamily leaders: “I’ve given up on in-house maintenance. I’m going all in on third-party vendors.” When hiring and retaining in-house technicians becomes too operationally challenging, some property managers decide it’s not worth the trouble and lean into third-party vendors instead. Here’s what property managers need to do to make this model successful:
Know vendors’ skills, gaps, and compliance
The need: To find qualified vendors, you need detailed data, including specialties, credentials, and — to avoid liability risk — compliance. The challenge: With no centralized system to collect, curate, and assess vendor information and verify vendor credentials, staff at large property management companies can spend hundreds of hours doing this work manually each month — and still overlook noncompliance that comes with enormous liability, like tens of millions of dollars in uninsured risk.
Automate processes across properties
The need: To reduce inefficiency, use consistent tools and standards to find, vet, and manage onboard maintenance personnel, no matter where they are. The challenges: Tradework is local, and vendors often use outdated and inconsistent tools — meaning property managers find, onboard, and manage vendors manually, often getting routed through vendors’ unmonitored email or voicemail inboxes.
Get competitive bids
The need: Reach and get bids from as many qualified vendors as you can, with an eye on the local pricing landscape. The challenge: If you aren’t connecting with many vendors, you won’t get many bids. Fewer bids mean costlier, less competitive bids — especially if you’re in a rush. Also, if you’re managing from afar, it’s difficult to know what bids are competitive. A price that’s fair in Miami may not be in Kansas City.
To centralize maintenance, centralize vendor management
The models outlined above are simplified, and in our experience, most property management companies fall somewhere in the middle. But as the challenges make clear, property managers are burned by low-tech, decentralized management of vendors, no matter their mix of in-house and third-party tradespeople. So how do property managers achieve their needs while bypassing the challenges? By centralizing management of skilled trade workers, including third-party vendors. Here’s what this looks like in practice.
#1: Know your tradespeople
Whether vendors complete 10% or 90% of your maintenance work, you need vendor details so that when a need arises (and it will), you have the right data, like services and specialties, credentials, insurance coverage, geographic area, availability, and past client reviews. Wreno collects and curates this data for you, all in one place — no spreadsheets involved. When it’s time to onboard a vendor for a contract job, Wreno makes it easy to find the personnel you need.
#2: Get competitive bids quickly and efficiently
The search for qualified, compliant vendors for jobs shouldn’t happen across spreadsheets, emails, and sticky notes. To solicit competitive bids, create and post listings in a centralized marketplace that lets you give vendors the right information — and ensure vendors provide the right information. With Wreno, you can make your job listing visible to the vendors you specify, like those in a certain area, or explore our database of 400,000 vendors, searchable by dozens of criteria. If you spot the right vendor, invite them to apply.
#3: Automate and standardize processes across all your projects and properties
Property management professionals still spend enormous amounts of time on tasks that could be easily automated, like emailing W-9s, tracking down trade licenses, and googling cost estimates. Hand the paperwork over to software solutions, including those that harness AI. Wreno takes on the administrative burden of vendor management, making vendor onboarding fully customizable — including by market, trade, building, and risk level. Wreno’s AI technology, VendorIQ, offers instant quotes customized for your projects and informed by your key variables, which lets you standardize the cost-estimation process for all your properties anywhere in the world.
#4: Manage vendors in one place
“Solutions” that send property managers to siloed platforms hurt, not help, property managers on the path to centralization. Use effective, highly integrated tools for all your properties and projects, from minor repairs to extensive renovations and CapEx projects. You can manage vendors in one place on Wreno’s easy-to-use platform — or you can use Wreno as a plugin feature through HappyCo, a leading solution for multifamily maintenance centralization and a key partner. Wreno’s open API also enables easy integration with popular project management tools or an operator’s in-house software. No matter your platform, Wreno has you covered.
#5: Retain technicians by using third-party vendors strategically
Since unpredictable or specialized maintenance requests can lead to technician burnout, analyze which tasks are best kept in-house and which call for third-party help. By recruiting third-party vendors for specialized maintenance, like renovations, or unusual maintenance requests, like middle-of-the-night leaks, you can give your in-house technicians a more predictable schedule that caters to their existing skills. Wreno gives you visibility into your technicians and vendors so you know the skills you have and the gaps you need to fill. And since Wreno lets you quickly and easily find, vet, and onboard new vendors risk-free, you won’t get burned hunting down bids or playing paperwork tag. When you centralize vendor management, you improve technician retention, too.
Wrap-Up
Vendor management doesn’t have to be a costly uphill battle. With smart technology, property managers can plan, start, and finish maintenance projects — from minor repairs to extensive renovations and CapEx projects — with more speed, more efficiency, and zero risk.