Mobile Home Park Mastery: Episode 233

The Evolving Role of Community Managers

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In the old days, the typical mobile home park manager was tasked with a wide range of roles – and with these came considerable risk to the property owner. In this Mobile Home Park Mastery podcast we’re going to review the ever-changing role of the community manager and how it’s a win/win/win for the residents, the employee and the owner.

Episode 233: The Evolving Role of Community Managers Transcript

Just as the mobile home park industry continues to change and mature, so does that have the community manager This is Frank Croft, the Mobile Home Park Mastery podcast series, we're going to talk about the evolving role of the mobile home park manager. Now, way back in the early origins back in the 1950s, through the 1970s, mobile home park managers did everything. If you talk to moms and pops, or if you do do due diligence on a park, that still with the original mom and pop, you'll often find that they interested the manager in every possible management function. That manager signed up all the original leases, they collected all of the rent, they dispatched all repair issues dealt with the city on any problems, supervised homes coming in, supervised home hookups and skirting, showed homes, rented homes, sold homes, interacted in all tenant disputes. And then after collecting all of the revenue for the mobile home park, they would then pay all the bills, and then send the owner a check for the difference. And that was the classic system. And I've done diligence on many, many parks, side by side with the owner going over things and how they work and independently of the owner who might live out of state. And that was just the way parks always were done. But then you had a problem with that system. And we all know what it is. It's a terrible one. When you have the manager collecting the rent, and paying the bills and sending the owner a check for what's left, you just invite problems. Embezzlement is obviously rampant in that system. But so is just bad management practices, who's overseeing who they dispatch for the contractor who's watching utility bills, who actually cares what they show, who's even minding the store on profitability, the manager doesn't get any of it, at least they're not supposed to. So what you had is you had a system where all the cards were stacked against maximizing that income. However, for some reason, Moms and Pops were just fine with that. They just didn't mind the fact that they were entrusting their destiny to a third party. But then what happened was you had professionalism come to the mobile home park industry. And I would pick that probably starting back in about the 90s. Not that period, because that's when Dave and I got into it. But also Sam Zell got into it and many others. And people started looking at these old mobile home parks, they started bringing them back to life. And they started to question everything Mom and Pop had been doing. And they thought, You know what, this is a terrible management structure, we've got to change this. So then the new role came basically that the manager would do many of the same functions, they would collect the red, they'd even deposit the rent, they'd show and they'd sell homes, they'd rent lots, they're all they'd solve any residential issues, and, and all of that kind of thing. But they no longer were allowed to pay bills, and no longer allowed to subtract the bills from the revenue and to cut the owner a check because they no longer had power over the checkbook. So professional owners, they moved the money out of the mobile home park in the mobile home parks bank account, and into somewhere where it was more secured. They brought in software to go ahead and make sure that what was going on was correct. There was a good paper trail to it. So that era, which began in the 90s, and really took shape, really in the 2000s. That was a huge change in the evolution of the mobile home park manager and it was all for the good. I don't know anyone who looks at that system and says, Gosh, I really missed the good old days any more than I know anyone who honestly would say, Yeah, I'd really lived back in the roaring 20s Despite the fact that they had almost no medical care.

So anyone who tries to glamorize the 1950s through the 70s and say, Well, that was the glory days of the industry. Well, demographically. It's true. Elvis lived in a trailer park and two movies and Lucy and Ricky and one, but from a management perspective, it wasn't any good. That wasn't any good. So that big shift that occurred in the 90s and 2000. That was, that was smart. It was correct for the industry. That's what started to sow the seeds of people from other real estate sectors like apartments, lodging, retail and office to say, Yeah, I think I could get in the mobile home park business. It's not that Mickey Mouse is not that goofy anymore, because it really had been really goofy up until that time. But now, we're about to see another evolution in the mobile home park manager, it's happening right now. And this is a technology revolution shift. Now after that second shift, the biggest job the manager had remained, collecting in rent. That's how they spent most of their time. That's what most owners focus was, that's what they normally were pounding on the manager, how are we doing on collections, because the rent still came in through checks and money orders, and even sometimes cash, although you shouldn't allow it unless your state mandates it. And it was all entrusted to the manager. And so the owner was still very reliant on the manager, collecting that money and getting that deposited. However, now the industry has a new huge shift, and that is online rent payment. Now, to give you an example, only about three or so years ago, our portfolio had roughly 0% online payments. Today, we are probably around 90 to 92% of all of our payments coming in online. Now, how is that possible? You might say, How did you go that fast? That far? Well, it was a big priority for us. We had the managers really go out and educate customers, and try and have them change to the benefits of online payment. And if you could get that level of bias in our communities, there's no reason any community listening to this couldn't probably achieve about the same result. But now what happens if the industry has is the new norm, online rent payment? Well, it has a huge impact on managers. Because now if you take collections out, now, the manager still would have a little bit of collections work communities that don't get the money in on time. So then they might have to go knock on a door, put out a notice, although in many communities today, even despite COVID collections are nearly perfect. But when you take what had been the biggest piece of their job, out of the job description, where they're no longer the repository of checks and money orders and making those deposits and all of that things change dramatically. Now think of all the time that your manager will have on their hands to go out and do other things. So what will the new role be once the industry changes to mostly online rent collection? Well, again, good things. Now the manager can spend more time interacting with customers, solving disputes with customers, selling and renting homes, rules enforcement, creating paper trails, with residents on any resident issues, basically better management practices. And in many cases, those managers are going to see up to 50% of their own whole time that was sped up their entire management time cycle each month, suddenly come back to them as far as free time. And now they can really get down to business and really maximizing the customer experience and running the office in a much more professional management style. Now who will benefit from this? Is it just the owners will sure the owners will definitely benefit by online rent collections? No doubt about it. Having no longer any exposure to the actions of the manager on collecting rent is a huge bonus. However, other folks will benefit this are the manager obviously,

I don't think any manager ever enjoyed the physical act of collecting money. But the other are the residents. Because now that the manager is going to spend the bulk of their time making sure customers are happy, they will probably end up far, far happier. How will it change as far as the job itself? Well, the manager of the future will be much more about people skills, not so much about accounting skills. That's a good thing. Because we need already managers to what our customers want, or what our customers typically want is somebody there in that office, if you have an office that's staffed, who is there, to help them to get what they want addressed. So many times, if you get complaints on a manager that the complaints don't come back to their job, and how well they're doing it, it goes back to how they treat customers, you get complaints that people just aren't friendly enough. Now, you will be able to hire people who fit that role. People who really are people, people. Now, maybe even the titles will change. Because as the managers can devote more time to making sure the customer is happy. Maybe the Name Manager isn't even appropriate anymore. Maybe instead, it's Goodwill Ambassadors, customer satisfaction experts, I leave it up to the industry, what the title should be, maybe in this final evolution, we need to rename it. But the bottom line would all regardless of the name, it's still going to be a positive for absolutely everyone. And I'm not really sure after we go through this next evolution of online payment, if it can really ever get any better. I think instead, with a narrow focus of duties, and the fact that we are then all allied residents, manager and owners for customer satisfaction, the industry can really go up a notch and create a greater value, which means we'll have greater retention, greater satisfaction. Everything will finally get more in line with what we'd all dreamed of. And that was a more professional industry. This is Frank Rolfe Mobile Home Park Mastery podcast. Hope you enjoyed this. Talk to you again soon.