Scaling Property Management The Smart Way - with Steve Hart

We trade war stories and strategies with PMI co-founder Steve Hart on building a premier, data-driven franchise platform that helps property managers scale with five distinct pillars and community support. We explore AI’s impact, acquisitions, fee transparency, and where regulation is heading.

• how recurring revenue changes risk
• why property management fragmented and how to fix it
• five pillars that diversify and scale operations
• data advantages from 475+ locations
• acquisitions to grow beyond one door at a time
• local nuance versus national systems
• AI as table stakes for service and speed
• managing churn and raising transparency on fees
• consolidation trends and what comes next
• community, summits, and peer mentorship

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Transcript

Welcome And Guest Setup

Tony Cline 0:00

Welcome to the Property Management Success Podcast, where we interview leaders in the industry to uncover the secrets to profitability, efficiency, and achieving true freedom, whether it's your time, money, or lifestyle. I'm your host, Tony Klein, and I'm here to help you build a wildly successful property management business. Let's get to it. Welcome back to another episode of the Property Management Success Podcast. Today I have Steve Hart with Property Management Inc. on the podcast on the show with us. Steve, welcome.

SPEAKER_01 0:29

Thanks, Tony. Thanks for having me on your show.

Tony Cline 0:32

Yeah, absolutely. You and I have known each other for quite a while. I know we don't stay in constant uh contact, but we've known each other. I actually looked into at one point joining PMI years and years ago. Yeah. Yeah. And we were uh we were talking quite a bit, and I've always been fascinated by what you've built. And so I'm excited to have you on the show to talk a little bit about that, talk a little bit about what you see happening in the industry, both good and bad. There's not a lot of people that have the level of insight into the business that you have. And so I'm excited to share with the audience your perspective on all of those things.

SPEAKER_01 1:09

You know, a lot of people uh get a little misunderstanding with uh what a property management franchise is. So happy to have a chance to share a little bit today.

Tony Cline 1:20

Yeah, I always look at one of the things that we talk about on this show a lot is having people do big things. And we talk about the fact that there's$10 an hour work,$100 an hour work, and$1,000 an hour work. And you know, the way I see what you do is you are operating in that$1,000 an hour work all the time because you have so much that you influence and and impact. And so when somebody is operating at that level, they they have to have big goals, they have to have big pursuits. And so I'm curious if if you could just take us back to this whole beginning of like it's pretty gutsy to say, I'm gonna figure out how to franchise something, and then I'm gonna figure out how to do that in the property management space because it's a lot more complicated, I think, from an outsider's perspective than like trying to franchise a subway or something like that. Yeah.

2008 Pivot And Discovery

SPEAKER_01 2:19

Well, hey, you're taking me way back 18 years ago. I was in the construction industry, I was in the development industry, just residential, single family. And and uh those of you that do the math 18 years ago was 2,000. My businesses, my world took a tough change. And uh, and it was tough to manage through that uh that time of our economy. And I was I was uh looking for next steps because I couldn't do what I was doing. I had to shift. And a good friend of mine uh who was into property management said, Hey, Steve, with your real estate background, you should take a look at property management. And I literally just laughed at him out loud, embarrassingly, and uh said, No way, you know, blue collar, you know, low margin, small margins, a lot of competition. I don't want to have anything to do with that. And he he just nodded like he'd heard that before and and said, Well, hey, you should take a look at my property management business. It was a company in Las Vegas, Nevada. And uh looking at everything at the time and looking at all my options, I took him up on that deal. And uh I saw a very small, simple, really rough business, but it was making a ton of money. And it blew me away at how such a small, simple business, with I don't think anyone in his office had higher than a high school diploma, how they could make that kind of money. And uh he said something that really hit home with me. He said, Steve, you know what I love even more about this business than the amount of money that I can make, is he says it is recurring revenue. I don't have to chase these sales every month, every year. I just take care of these owners and these tenants, and this is recurring revenue. And then he said something that even hit harder with me because I just lost my business from outside influences uh that were outside of my control. He said, the economy doesn't even play much into my success. My or this property management business is literally recession proof. He says it doesn't matter the ups and downs of the real estate market, my property management business performs. And I and then all of a sudden I was really interested. And so I dug into it, dug into this whole property management thing in 2008. And I could tell you up to then, the little I knew about property management was I was frustrated with it. Like when I needed a property manager, I couldn't find a good one that was dependable. And all I ever heard was from all my real estate friends and investors were wish I could find a good property manager. I mean, Tony, is that does that sound familiar with all the people you've talked to?

Industry Gaps And Early Struggles

Tony Cline 5:02

Yeah, it seems like there's there's a few ways that people get into this business. One is a real estate agent that starts slowing down and they're licensed, and they say, Well, I don't, I gotta make some money, I don't know what else I could do. I can just start managing properties because all you do is collect rent. So how hard could it be? So you have that path in, and then the other common path is an investor that wants to hire somebody and can't find anybody that's worth a darn to be able to do it for them. So they start their own business, and and there's some problems with both of those avenues that you need to be fixed in order for them to be successful property management companies, but those are definitely the two main flows into the business.

Building PMI’s Five Pillars

SPEAKER_01 5:44

That's what I saw 18 years ago. You know, I saw um no national brands. I mean, I I wanted to, you know, look in and buy a franchise, just like I could buy a Keller Williams or a Remax franchise. I just saw, hey, I'm just gonna buy a property management franchise. There were literally none. I mean, there was one out there at the time, and all they were really, they were so simple and basic. They were just teaching people how to be landlords. And I didn't, I didn't need that. I need processes, I needed systems, I need a brand and marketing that I could plug into so I didn't have to do it alone. And all the property managers I could see were all these small mom and pops. There were a few large guys out there, but 80% of the 350,000 property managers in the United States were literally small one, two-man shows. And so I just saw what I call just a fragmented industry, lack of professionalism, you know, just gaps between big and small companies. And I thought, man, there's got to be a better way to do property management. It's a good industry. These guys are making money when they know what they're doing and they do it right. And so I went back to my buddy Chris and he said, let's do a franchise. And he said, I'll put up the money, you do the work. And I said, But I don't know how to do property management. He said, We'll figure it out. You know, you can use my office, use my staff as the model office, and let's just build it out. And Tony, I learned really quick that, you know, having entrepreneurial instincts and stuff was a far cry away from what I needed to really open and run a franchise. It was a different language, it was a different model. And no one wanted to be, when we when we opened it up, no one wanted to be our first franchisees, and no one wanted to buy into a brand that didn't have any recognition. And so those first four or five years were just brutal. We we literally almost didn't make it. Luckily for us, there were a few entrepreneurs that saw the same vision that I did and bought in. And even though they weren't getting a lot from those early years from the brand, they really leaned in and helped us create our franchise model. And here we are, 18 years later. We have uh 475 plus franchise partners throughout the United States. I think we're open in almost uh all but three states. Um, half of these operators are now mid-sized to very large operators, uh, just doing phenomenal businesses, and we're elevating the smaller, newer franchise partners up. And it's just been a really, really fun ride for us to be on to create a platform of property management that's built for entrepreneurs that just want to be able to grow something bigger than themselves.

Tony Cline 8:42

One of the things that I've always found fascinating about the franchise model, and you touched on this, there are a lot of the property management companies across the US are that small mom and pop shop. We talked about a couple of ways that people can get into the business. They don't come into the business with an education or a degree on property management. They figure it out as they go. And there are so many things that you have to be good at in property management to be able to run a successful, smooth company that doesn't cause you to burn out. You have to know accounting and marketing and sales, and you have to keep up with all the legislation, and then you have to have people skills, and then you have to know how to do maintenance. And there's so much that when you're one or two people, or even three or four people, that's a lot to try to stay on top of.

SPEAKER_01 9:34

Yeah. I think you just identified part of the problem with our industry is you know, you get these entrepreneurs that come in and they think, oh, property management's not rocket science. You know, I always hear how hard is it to collect rents? But as you pointed out, there's so many things that go into creating a successful, profitable property management company. And you need all those things, especially nowadays. I mean, with the technology tsunami that we're seeing come into our industry, I mean, you gotta you gotta have a lot of those skill sets that you just shared to to even make it.

Tony Cline 10:12

That's sort of table stakes at this point. And one of the things we've talked a lot, we've had some guests on that that are really AI experts and leaning into AI, and it's not just in the property management space, but it's in every space. The the rate of change is is going up in a hockey stick style where everything is changing so fast that it's changing consumer expectations. So even if you get really good at what you're doing now, if you keep your head down and you're doing the way business the way that you've been doing it for the last three years, you're on your way to go out of business and you just don't know it because things are changing so fast. So tell me a little bit about you said you have 450 plus locations across the US. That must open up a ton of data and insight for you that that most people would only dream about having. What are some of the things that you've noticed about the industry or about the the what's happening across the country? I just I'm I'm super curious about what that data and those insights uh allow you to top.

Crossing Markets And Local Nuance

SPEAKER_01 11:22

We have a massive organization now. I mean, these 475 franchise partners, you know, they contribute uh to uh uh they contribute a lot of data. And before I really answer that question, I need to give a little bit more detail to the listeners so they they kind of understand our model. You know, we started out just offering residential, commercial property management solutions to our franchise partners, but that that grew uh over the years to what we call a five-pillar platform. And what I mean by pillars, these are just the sectors of property management that we support. And we don't just support them, we have full training, coaching, tech deck, all of the processes and the systems built out for our franchise partners to plug into all things. Residential is one pillar, commercial property management is the second, HOA is the third. We do multifamily, which is similar to residential, but it's the bigger apartment communities. It's much different than single family residential. It requires different technology, different marketing, and so we break that out as its own pillar. And then the last pillar that we provide support to is short-term rental. And so our franchise partners can come in and they they just start with one typically. Uh, we want them to become real professional and proficient at just one pillar at first, and then they have that ability to add on and grow. And so we currently manage with these 475 franchise partners over uh$110 billion in assets under management. And so we have the data from short-term rentals, commercial, multifamily, HOA, and uh it's it's massive. And we really have a really cool perspective of what works, what doesn't work, and we can pass that down to our franchise partners, these entrepreneurs that are just wanting to grow their business faster than what they were doing on their own. And it our franchise starts, and I think this is the general, I think, assumption that a lot of property managers and people that look at a franchise have is that the PMI guys are all these small startup guys. Well, that's because a lot of our franchise partners are startup when we first open a uh a partnership with them, but they're growing so fast and they're adding these pillars that they're really becoming, you know, big players in their in their areas. And it's a growth engine that we've created for these property managers that want to accelerate their growth and not just be on their own anymore. And so now we're not just working with startup franchise partners, but we're getting what we call conversions, people that have been doing it on their own. They have that hundred doors, they just can't get past the hundred door mark. And so we bring them into the brand and help them accelerate through training and processes and better marketing and and and and systems and grow their brand that way.

Tony Cline 16:07

And so with is each one of the companies, are they networked? Do they share information across when you're telling me you have the five platforms? I'm thinking, well, those from my experience with everything that I've learned in the business, those are really five separate businesses. If you were to try to launch each one of those on its own, and so to be able to tie all those together, but also if I start with one pillar and I want to now I've I've perfected that or perfected it as close as you can get in property management, yeah, then lean into the next pillar, it seems like it's pretty easy to expand into that because you already have that support system built in for the other people that are already contributing to the knowledge base of what it takes to run that other pillar.

SPEAKER_01 16:54

Absolutely. I'm I'm glad you pointed that out because I want to make it clear our franchise partners they start with one discipline, one pillar at a time. And a lot of our operators, uh, 50% of our franchise partners only operate in one pillar currently. But uh the other 50% have two or more. And what typically happens, and you probably saw this when you were running your business, is you get asked, hey, hey, Tony, you know, you do you're doing property management. Do you do short-term rentals? Because I've got a couple of short-term rental properties that I need better management for. Or, hey, you know, my home uh is in an HOA, and we have the worst Jimmy-rigged HOA board that's kind of doing it on our own. Do you do HOA management? Can you manage my association? And so you get asked all the time as a property manager to take on these different projects. And our franchise partners have that ability when they're ready to, and if they want to take on these other sectors, uh, they have that ability to plug in and then expand. And it really offers a lot of diversification because some of the timing of these different pillars, you know, if you're in short-term rental in Breckenridge, for example, you know, you have hot seasons, you have cold seasons, and you know, those cycles, those residential and str cycles differently. And so it's kind of nice to have the stability of a multi-pillared business if you're in a position to do that. You know, and uh it just our franchise partners really love that and it provides scale and uh diversification for them.

Consolidation And Acquisitions Strategy

Tony Cline 18:30

So let's let's take that. So we've got all these people across the country that are contributing to the knowledge base that you guys have built in how to operate these five pillars in different parts of the country. I'm curious, and and the reason I'm asking this is you know, we tried to do this at Home Vault on a smaller scale. We wound up doing a merger and we wound up bringing in and expanding and buying some management companies, and we were operating in multiple states. But what we found was there's the core essential how you do property management, and then there's the market-specific things that work. For example, in North Carolina, you might have termite inspections, and in Colorado, uh it would be silly to do termite inspections, we just don't do that. And so to have a process that you would work through that is similar across the board, it it just didn't make sense. And so I'm impressed with how you've been able to scale that up to operate in so many different markets where you've been able to be successful in these different markets. How much of it is when somebody is coming into the system is this is what you this is what you're getting with your franchise package, you're getting the software, you're getting the support, you're getting training, you're getting documented policies or processes. Like how do you how do you roll that out? But then also how do you take these people that are entrepreneurial in spirit and get them to say, I'm gonna do it your way versus, well, I've only been in this business for eight weeks or I've been doing it for eight years and I'm gonna do it my way instead. I'm just curious, like, how do you pull that together? I'm really curious about the people piece of it.

SPEAKER_01 20:15

Because it's one of the things that not just PMI, but uh, I think many franchisors in the service world deal with. You know, we do work with entrepreneurs and we love it. We're entrepreneurs ourselves. We've created something that no one else has, and we're always evolving. It's it's one of our core values is entrepreneurship and where we find a better way to do things. And that means, Tony, we listen to our franchise partners. I mean, they're out in different parts of the country doing our processes and systems, but sometimes it just can be done better and/or they have different ideas that sometimes really work. And so we have this mentality of, you know, we are we're working with our entrepreneurial franchise partners. And even though we do have a set process, we do have set tech that we use. It doesn't mean that we don't listen or evolve and allow our franchise partners to try and beta different things to see how they work. And it really has been a team thing. You know, we didn't start out 18 years ago with this big vision of building out five five-pillar property management platform brand. Um, it just started with with you know the residential and commercial markets, but you know, we listened to our franchise partners and we had a new franchisee in in Maui. And he said, Hey, Steve, he called me up one day and said, Hey, this the single family thing is great. You know, I'm just picking up one door at a time, but there's this new thing called uh Airbnb or VRBO. And I hadn't even heard at it, this heard of it. This is like 14, 15 years ago. And he says, I'd really like to try the short-term rental stuff. And I said, Well, we don't do that. And he says, but you know, it's a big opportunity here. You know, do you mind if I try it out? I said, sure, but we're not gonna be able to provide you much support. You're gonna have to just keep me posted and share with me how things are working. Well, he quickly became one of our top 10 revenue-producing franchisees, and we rolled out a short-term rental pillar based on his success. And so this community of entrepreneurs working together, sharing the same brand, all of us working together to elevate the business and the processes and procedures has really made our job a lot easier because we we just plug in and grow with what works.

Tony Cline 22:37

What are you seeing as the changes that are happening across the country? What are you seeing as like what what keeps you up at night that is worrying you about the industry and what we might be facing?

Churn, Growth, And Diversification

Tech Tsunami And AI Adoption

SPEAKER_01 22:52

Well, this is probably no new news to a lot of your listeners, but there is a movement happening over the last few years to with a lot of this big money from private equity companies. Uh, a lot of the big um property management companies are doing a lot of acquisitions and consolidating the market where they're just going out and buying up property management companies. And they're they're really focused on the bigger guys. And so there's a big movement there, which isn't good or bad, in my opinion. I think it's it's great that some of these guys are really, you know, going out there, but they're they're buying and assembling these companies that have all these different backgrounds. They're not they're not having them operate in on any set processes or software in a lot of cases. And I think it's it's kind of sloppy. You know, I talked to a lot. Of them and it seems kind of messy in what they're they're doing. There, you know, I think their hope is that they just acquire all these profitable and property management businesses and and assemble them under one brand, but it's very different than what we're doing at PMI, where we all have a set brand, a set marketing program. We all share our data and are able to really work together to achieve our vision. And I haven't shared our vision. Our vision is to become the world's premier property management brand. And we use that word premier intentionally because we feel like we can elevate by having all of our partners operating at a premier level with best practices and they're uh they're doing things to just really stand out and be better than what's already out there. And so it's working for us. We we have uh our own version of, we don't call it consolidation, we call it an acquisitions department. In fact, uh you might have seen some of our ads where we have you value your business and share with you that we're interested in acquiring your business. And and uh that's not PMI corporate that's buying these businesses. We have an acquisitions team here at Corporate that helps find these property management companies that are open to selling, and we introduce them to our franchise partners in their areas, and our franchise partners are the ones that actually buy and acquire these businesses. And we love to say that we are the largest buyer of property management businesses in the world. We do, you know, a lot. Let me give you some numbers. In 24, we did$7 million in acquisitions, and these are mostly small. Our average deal was only$250,000. So we're probably buying small businesses with 100 doors, you know, in them. And uh those are being acquired by our franchise partners. Um 7 million we did in 24. Last year in 25, we did$18 million in acquisitions, but the average deal size was$660,000, which almost triple the size of the deal that we're we're doing. This year, our target is to do$38 million in acquisitions. And it's been such a big part of the way our franchise partners are growing. And uh, I think most property managers grow one door at a time. And our our franchise partners have the marketing and the tools to do that. But now it's elevated that our franchise partners are growing through this corporate-led portfolio acquisition program. And we're really just throwing fuel on their businesses. Keep in mind, these franchise partners own these. We're we're helping them. We don't charge for this. We're just helping them grow faster and more efficiently. And because we do so many of these acquisitions, we become really good at valuing them and helping our franchise partners steer clear of issues and problems and things like that.

Tony Cline 26:50

So, other than this movement to assemble or acquire, and whether we call it roll-ups or we call it just companies coming together to provide better service and have economies of scale, that's one thing that you see in the marketplace. What else are you seeing happening in the marketplace? Again, maybe something that's keeping you up at night as far as something to keep your eye on, the radar, or something that is an opportunity that you get really excited about what's what's coming down the path?

Community, Summits, And Culture

SPEAKER_01 27:22

Well, some of the concerns, you know, over the past couple of years, everyone in our industry, because of the economy and where we're at, we're dealing with a lot of churn issues. Uh, meaning we're just losing, losing doors. And uh, we didn't know what we were doing wrong. We thought, well, well, maybe it was just us, but we talked to other property managers in the industry and everyone was dealing with it. And so that was a big concern. And we've really flattened that out. If, you know, we actually uh have really curved that and uh we're we're growing pretty well now as a whole. Our our franchise uh same store sales for 2025 grew at a rate of 19%, which is well above the property management industry average. So we're really excited about our growth. But that was one thing that was keeping us up at night was what's going on with this churn. But uh, you know another area that I just see a lot of property managers looking at differently than the way they used to is I remember, and you probably remember this too, 10, 15 years ago, it was 15 years ago, we were at Narpham and we introduced this concept that, hey, through our franchise, you can do not just residential property management, but you can also do homeowner association management. And the property managers at the time thought we were crazy because our industry was so segment segmented that if you were an HOA manager, you were not a residential property manager, and you surely weren't a commercial property manager. And so we were introducing that concept of this is good, and they they actually really cross-pollinate really well. And what we were seeing with our franchise partners that were participating in both. And we had such a weird reception. Literally, one, two years later, Narpham is doing breakout sessions of how to add association management to your business. And so my point is nowadays, I think property managers are much more open to maybe doing different types of property management, whether it's multifamily and residential. Uh if they're in a ski town, maybe they're open to doing short-term rental along with their residential property management. It's not so foreign anymore. And that's cool. I love I love seeing that our industry is evolving and uh and growing.

Tony Cline 29:55

I think that as consumer expectations shift, we we need to keep our head up and look at what other opportunities are out there. Because as we mentioned earlier, you know, I think that if you if you continue to do business the way you're doing business today and you don't look at what changes you can make to capture more market share, capture more mind share, to add additional services in order to provide more value so you can be appropriately compensated for that value, I think you're you're on your way out of business. And you know, I know a lot of people will like to use Uber for like an example of how it's made the taxi industry irrelevant or whatever. But I I think you know, DoorDash has done a similar thing where they're changing client expectations. And so the expectations of our consumers are being changed from outside influence because everything in their life becomes easier with Amazon. You know, the last time I needed to make a return on Amazon, I just put it in the box and took it over to the local UPS store and that was it. There was no communication back and forth. It was just easy and streamlined. And I think that the technology that's entering our space is going to make a lot of things possible if you keep your head up and look for those opportunities versus well, I run a good single family business or I run a good HOA business, and I'm just gonna stay focused on that. You do need to keep your focus on that, but you also need to focus on what other revenue opportunities are out there because legislation is really they're they've they're tightening their grip on what's possible as far as what we can charge, who we can charge, and pretty soon they're gonna choke off a lot of those profit centers, and we're going to have to either figure out how to become profitable in different ways, or we're gonna have to say, maybe it's time to sell this portfolio and move on to something else.

Next 24 Months: Regulation And Opportunity

SPEAKER_01 31:55

I saw it on my local news last night. They had a big thing on garbage fees from landlords. You know, it was on primetime news. And so it, you're right, it's it's happening right now. Um I think I think technology has really helped uh the property management industry. I mean, I love what advancements are happening with technology and like what you were just talking about with communication. Um, I mean, podcasts like this, you know, this helps property management. This helps property managers. It commit it creates this community. And uh, you know, used, you know, 18 years ago, you had to go to like an ARPAM conference to really learn about the industry or conferences like that. Now you have these mastermind groups and communities that are property managers, you have podcasts like this and ways to learn best practices from other people. And I think that really benefits our industry in a big way.

Tony Cline 32:53

Yeah, absolutely. I think that having access to that provides additional sparks for what you could do with your business. One of the things we've been talking about lately is the reverse of that. There's so much information and so much technology, and things are changing so fast, and you can throw anything into one of the AI tools and it will spit out everything. We were talking the other day about at some point we're gonna have to have somebody in our company that is the person that says no, because there's so much opportunity to go in so many different directions that somebody has to say what is our vision, what's the mission, and how do we stay true to that? How does everything that we implement lead us further down the path to that one year, that three year vision? Because it is exciting. There's so many things. I was playing around with a new AI tool a couple of days ago and I got all excited about the possibilities, and then I'm like, well, yeah, but wait a minute, how does that actually move the needle in my business? It's a cool tool slash toy to play around with, but how does it very specifically lead me to the end result that I'm trying to accomplish? And I think yes, there's a ton of information. I think it's gonna get harder and harder to filter out what is good, legitimate information versus what is just noise. Yeah, absolutely. So so tell me a little bit about the the insides. Let's like look behind the curtain on on PMI. You've got these 450 plus franchise locations. Do you guys do you have a retreat? Do you have a like do you get together? Like, how do you build? Because I'm I'm super fascinated with building teams. It's one of my favorite things to study is how do we not just create a team, how do we not create a high performing team, but how do we create a championship level team that that performs at the very best? And you got a lot of people you're trying to do that with.

Transparent Fees And Profit Models

SPEAKER_01 34:56

Yeah, I love that question because one of the biggest advantages of being part of a franchise system like PMI is the community uh that it creates and it plugs you into. We have these operators, and they're all at different levels. They're all across the country, but they all are working under the same brand. The strategic bigger franchise partners are mentors, and they they help the smaller, newer franchise partners. Because remember, we're all using the same name. It's not like all the property managers out there that are that are just sharing secrets with each other to you know to help each other out. And in our case, we're building a brand. We're building name and uh name recognition that helps everyone. And so you have this community that's really connected and tied together. We get together once a year at our annual conference. We call it the PMI Summit. It changes locations every year. Um, this last year it was in Amelia Island. Uh, in 2026, in September, we'll be in Nashville. But all of our franchise partners get together. We have trainings, we have parties, we have celebrations, we recognize and award top producers, and it's really fun. And then we have a present circle that gets together. Um, this is for top performers that do big acquisitions and things like that, and to celebrate that. It's an all-expense paid trip for these top producers to go to an exotic uh tropical location once a year. And again, uh, we go there not just to relax and play together, but it's to bond and share and do masterminding together to help elevate our performance. And it's this community that uh has this mindset of where we we only win together. And uh, it's my favorite part about being part of this brand is seeing not just the corporate team coaching and training and helping, it's all the franchise partners working together. Because remember, this isn't like a a Pure that is corporate owned. These are all independently owned and operated franchises. As a business grows, as a franchisee grows, their value is all theirs. They can sell that business when they want to exit. That asset's theirs and they keep and retain all the value of that. But they get a tag along and and and be part of this national brand that's doing this marketing and advertising and uh you know acquisition and conversion programs to help them accelerate and grow faster than they could on their own.

Tony Cline 37:36

What do you think the next 12 to 24 months looks like in the property management space?

Invitation To Join Or Exit With PMI

SPEAKER_01 37:46

Yeah, great question. I think it's it's only gonna get stronger. I think you're gonna still see this consolidation happening. So, you know, a lot of these companies are gonna be getting bought and sold out there, but uh it it is getting more legislation involved. You know, there's some government people that are trying to control the way property management uh makes money. I think we're gonna see more of that in the next 24 months. But I I also think you're gonna see even better technology with AI helping make our job easier, which is awesome news. Management's tough as it is, just the nature of the business and what we do. So it's so incredibly welcome to see this technology come in to really help us be able to do a better job, perform more efficiently, and more profitably. So you're gonna see property managers, I feel, plugging into that and being more profitable.

Tony Cline 38:45

I agree with the technology. I think it's it's amazing of what's possible out there. I've seen a lot of the the AI tools, I've seen a lot of the tools that are now adding AI to it, and just the just what's possible, I think, is is if you're staying on top of your business and you're continuing to improve your craft, I think there's a lot of tools out there. But you touched on something else that I want to circle back to, which is the legislation that's coming down across the country. And if you've never really given any thought to why legislation is changing so rapidly in the direction that is in favor of the tenants, well, prices have gone up quite a bit. The price of owning a home is way exceeds on the graph what what our annual incomes are. So there's a there's a bigger gap. But the other thing is if you really think about it, the people in office, the people in power, from the local city councils to the the government and the counties, all the way to state and and federal, the people that vote aren't the landlords. The people that vote in that district aren't the landlords, it's the people that live in the district, and it's the tenants. So they're listening to the tenant voice, not to the landlord voice. So you can show up and talk about how we're providing housing for people. It doesn't matter. What they hear is this dirty landlord did this bad thing, and therefore we have to protect all of the residents. And yes, there are some bad actors in every industry, right? But the rest of the industry is being punished or over-regulated because they're listening to the voice of the resident. And I really don't think there's anything we can do about that other than lean into it and figure out how to play by the new rules.

SPEAKER_01 40:37

Yeah, you could you could get really nervous and worried about it and focus on that. I I choose to lean in and look at the positives that this will do. I don't think over-regulation is really going to be the problem. I think as property managers, we're gonna have to be a lot more transparent. We're gonna have to be a lot more upfront in disclosing any extra fees and how we set up the pet rents and the parking fees and the this and that. We're gonna have to be a lot more transparent with that than maybe what's happened in the past. But I don't think that's bad for us property managers either. And we still can, you know, utilize a lot of those additional revenue stream channels. We're just gonna have to be a little bit more open with how we do it.

Tony Cline 41:20

Steve, I know we're we're coming up on uh on time here, but I've really enjoyed chatting with you and hearing a little bit about the insides of what happens in a company. Again, most people will never get the insights that you have because of the amount of data, the amount of people, the amount of teams, markets, locations that you're operating in. And so uh I appreciate you sharing that with us. I want to give you the last couple of minutes here to just share if there's anything that you want to share that we haven't talked about, and uh and then we'll wrap up.

Closing Notes And Listener Ask

SPEAKER_01 41:54

No, I know you have a lot of property managers or people that are interested in property management or investors that are listening in on this. You know, just my kind of sales pitch would be hey, if you're if you're small, the mid-sized property manager, if you're looking at getting into property management, uh, you don't have to create this wheel all by yourself. There are vehicles like PMI that can help you scale so much faster than doing it on your own. You don't have to be alone in that process. We uh we are 475 strong, but we are not sold out in almost every one of our territories has growth opportunities. We're looking to expand. We're looking for entrepreneurs that uh really want to be part of a global national brand and plug into something big. Um, our costs are really, really low for existing property managers to come in and plug in your business to what we're doing. And I would just say, hey, if if anything that I've shared with you is resonating with you, we'd love to talk to you uh and uh take a look at your business. If you're looking at selling and looking at exit strategies, you know, definitely give us a ring and uh we'll give you a really solid valuation. We pay more for your business than any other company that I see out there buying property management companies because we know we can buy your business and in most cases scale it up with uh a lot uh different revenue streams that our franchisees have access to. So if you're looking to expand or if you're looking to exit and take a look at PMI, you can find us at property managementinc.com or PMI Corp.com. We'd love to chat with you and just uh, you know, see uh where your business is at and see if uh there are opportunities to help you out.

Tony Cline 43:41

All right, very good. Steve, thanks for hopping on and look forward to connecting again soon. Thanks, Tony. Thanks for tuning in to the Property Management Success Podcast. We'll be back with another value-packed episode to help you level up your property management game. If you've got something valuable out of today's episode, please share it with a friend or colleague. And don't forget to subscribe and leave a review so you never miss out on future insights and strategies and tactics. Until next time, it's your success.