Bill Nye, CEO of Caviness & Cates, shares his secrets to growing his portfolio to 2000 units without adding staff
Tell me a little about Caviness and Cates and how it has grown over the last few years?
The portfolio has more than doubled in the last few years. Just 2 years ago we were only around 400 units and now we have eight properties, we’ve built and own each one. We are almost finished with our ninth property and with this one we’ll be at 1290 units total. In the next two years we’ll be closer to 2000 units.
We have kept our corporate staff at a total of 4 employees (including myself). Including on-site managers, the Caviness and Cates Property Management division has a total of 26 employees.
Tell me a little about your role with Caviness and Cates?
I am the CEO and I’m responsible for overseeing leasing, marketing and day-to-day operations for all of the properties. I’m also a member of the Apartment All Stars and operate Bill Nye Training. I have about 30 speaking engagements a year and my training covers all aspects of property management – team building training and consulting is my niche. I also do some financial management and maintenance best practices.
What are they keys to profitability in your business?
Manage people costs by investing in technology.
The biggest cost to your profitability is the number of people you need to manage your portfolio. Originally when we thought about growth we thought we would have to grow the corporate staff. But now with our technology investments we can grow our portfolio without adding people and costs!
We started with changing our property management software to AppFolio and we immediately saw a great impact because we could do so much more with our corporate staff. One of our future goals is to grow outside our local market (North Carolina) and it would be impossible to manage out-of-market properties without a solution like AppFolio.
Our goal is to use every feature offered by AppFolio – it just makes more sense to me. We offer online rental applications to all – we are planning to set up kiosks to allow our prospects to apply online from our leasing offices and pay rent online too. We do like having that personal touch with the residents.
Track important metrics closely.
Now, it is so much easier for us to see and measure performance by property. We can watch our metrics in detail and keep close tabs on expenses and income. I can access these reports from wherever I am and this keeps me very connected to our performance.
Specialize and maximize roles.
Now that we’re as efficient as we are, our support staff in the corporate office can do even more. I believe our on-site managers #1 job is to deliver a great experience for our residents. I’m not worried about giving them access to too much information – we hire great people and trust them.
What profitability mistakes do Property Managers often make?
I think there are a few common mistakes in our business:
Not measuring often enough.
I like to take a weekly (and sometimes daily) look at our important metrics so I can see early if something is not on track.
Not measuring the right things.
I compare it to how we raise our children. We’re always listening to report cards, the doctor, etc. Companies don’t always take the time to analyze how profitable they could be. For instance, I pay very close attention to our operating expense ratio. Everyone knows about NOI, but to me measuring your operating expense ratio to NOI really tells you what your NOI means. We look at ratios and percentages much more than raw numbers.
Not valuing the people investments.
Our team of people (payroll burden) is the number one operating expense. We can honestly say that through the changes with AppFolio we will be able to build out our next three properties and not add anyone to our corporate staff. When companies ignore the opportunity cost of becoming more productive, they miss out on huge benefits.