Since the Great Recession of 2008, the landscape of homeownership has changed drastically — namely, the number of households headed by homeowners remained mostly stagnant, whereas the number of households headed by renters is at its highest level ever, according to an article from the Pew Research Center in 2017.
Reasons why people choose to rent vary. For some, it’s a matter of finances, while others simply don’t want to be tied down to one place or have to deal with the other responsibilities of homeownership. Regardless of the reasons, renters are on the rise, which means the number of rental properties and the demand for rental properties is rising as well, which is one of the reasons why Utah County resident Steve Hart co-founded Property Management Inc. in 2008. He currently serves as the CEO.
Along with the demand for rental properties, Hart said, came a growing demand for property management, especially better-trained property management professionals. The goal of Property Management Inc. is to create those professionals.
“We’re just creating a family of true property management professionals that have access to the best technology, training, systems and services out there,” Hart said.
To better create that “family,” three years after the company’s founding, it became a franchise. Franchisees buy a set territory, and then Property Management Inc. trains them on how to manage residential properties, commercial properties, vacation properties and even “association” properties, i.e., a homeowner’s association.
“Most people think that if they’re going to get into property management that they kind of just have to figure it out on their own, and we’re trying to change that perception,” Hart said. “Our trainers are the best in the country, they’re some of the top property managers in the U.S. that work for us and ultimately train and mentor our franchisees.”
Randall Henderson currently works as the executive director of training for the company. The training can be intense — Henderson said it starts with providing virtual training to franchisees for the first couple of months, and then they come to Utah — the company’s headquarters are in Lehi — to attend a week long workshop. The support doesn’t stop there, either.
“We train them how to do the property management and provide them with all the software and resources that they need to be a successful property manager,” Hart said. “And then we actually help them to do the marketing and advertising so they can get properties to manage. And we help them every step of the way ... that’s why we do it through a franchise.”
Having an established business model, Henderson explained, allows franchisees to hit the ground running with their business.
“Most of the people that buy with us have that entrepreneurial spirit ... a lot of them are looking for a business related to real estate,” Henderson said. “A lot of them are looking for a system and program that’s already been established, where they don’t have to reinvent the wheel and make all the mistakes that a new entrepreneur might make.”
Property management itself has also become much more complicated, Hart said.
“Ten, 20 years ago ... we were called ‘landlords’ back then, not necessarily property managers, and our job was to basically collect the rents every month,” Hart said. “But nowadays, it’s not that easy. People are very litigation-heavy and they’re happy to sue a property manager or an owner if they slip on the stairs outside their rental unit or if something goes wrong with the rental unit.”
Property Management Inc. looks to not only offer rental property owners more protections by providing professionally trained property managers, they also do the work to ensure a space will be occupied by good tenants. For long-term residential rentals, the company trains franchisees and provides them with the tools necessary to do background and criminal history checks, as well as a credit check. The company then also provides programs to tenants, such as credit enhancement and renters insurance.
“We went about creating a model where people, tenants, can actually have a very positive experience with a property manager,” Henderson said. “If it’s done the right way, it can be a great experience. And you can work together to make sure that rent comes in on time, that the property is taken care of, that the tenant feels like they have a manager who listens to them and who will fix things that are broken and take good care of the property.”
Henderson said in this way, the company is also trying to change the stigma of a landlord and “recreate” the relationship between tenants and their landlord.
Training property managers to manage a variety of properties also gives them more options, Hart said. If, for example, a property manager is managing a long-term residential property and someone asks them to manage their commercial property — property managers have the tools and resources to be able to say “yes.”
“What we’ve been able to create is unmatched. There is no such thing as a property management franchisor that allows you to do multiple types or sectors of property management like ours,” Hart said. “That’s really what’s attributed to our massive growth.”
Property Management Inc. has been ranked as the No. 1 property management brand and franchise for the last three years running by Entrepreneur Magazine, Hart said. There are currently 260 franchises, and Hart said they plan to have 80 more open by the end of the year. Three of those franchises are located in Utah County, in Saratoga Springs, Lehi and Pleasant Grove. Henderson said they hope to become a recognizable brand name in the future.
“What we try to do is create a Property Management Inc. experience that is consistent across the brand, so if someone did rent in Provo (for example), and then they moved out of state, they’d be able to find us and have that same tenant experience somewhere else,” Henderson said. “We’re really pushing to try to create a very tech heavy experience so that the end user really feels taken care of and they’ll walk away saying, ‘Hey, if you’re looking for a place to rent, you should use Property Management Inc.’”
Another benefit for franchisees, Hart said, is it’s actually a pretty stable industry, or “recession-resistant.”
“We call it recession-resistant because typically it doesn’t matter whether the real estate industry is hot or it’s in a downturn phase, people need property managers. People are still renting their properties and need property management,” Hart said. “So one thing we love about the property management industry is it’s not affected as much by the ups and downs of the real estate market, or the mortgage or the U.S. dollar market, and we love that. It’s a very stable industry to be in.”
Hart said the company is always looking for new franchisees across the country. Interested parties don’t need to have any prior property management or real estate experience.
“We can take anyone that wants to be an entrepreneur and own their own business ... and train them on what they need to be successful in property management,” Hart said.
Henderson said the cost to start a franchise can vary between $35,000-$60,000. People interested can learn more information and start the vetting process by visiting the company website. He originally joined Property Management Inc. because he liked the leadership style.
“(The company) is extremely dedicated to the individual success of the entrepreneurs. Everything that we build is around supporting and growing and helping these entrepreneurs succeed,” Henderson said. “It’s been awesome to be able to help grow their businesses ... I’m just really enjoying working with entrepreneurs every day.”