MANAGINGMANAGERS AND KPIS Eventually you will have to hire people to do some of the work you cannot do yourself. And if you keep growing (or better yet, scaling), you will need to hire managers. Having someone between you and a front-line employee can make it difficult to evaluate employee perfor - mance. This is where KPIs or Key Per- formance Indicators come into play. KPIs are simple numbers that measure how employees are doing. So, for example, with a maintenance technician the number of call backs that tech receives could be one mea- surement. The number of work orders completed per day could be another. No measurement is perfect, of course. For example, if a tech gets the hardest work orders, they won’t be able to finish as many per day so that KPI by itself wouldn’t be very helpful. But if you can create a handful of such numbers, you can track employee performance without having to micromanage or just close your eyes and trust. And while you might not know what a good num- ber is (for example, how many work orders a maintenance tech should do a day), you do know which direction is better so you can judge improve - ment over time. And you can also compare employees to each other. Systems and policies allow you to keep a complicated business consis- tent and straightforward while KPIs allow you to manage the manager and evaluate employee performance even from afar. They are critical tools if you want to scale your real estate business. •
in terms of growing your business and start thinking in terms of scaling your business.
The first thing you need to do is to start creating systems and policies everywhere you go. I know “systems” and “policies” are just buzzwords that get thrown around all the time these days, but they are, nonethe- less, very important. Every time you run into a new challenge or problem and have to figure out what to do about it, don’t just stop there, make a policy out of it or create a system. So, for exam- ple, let’s say a tenant requests allow- ing an exotic pet like a snake. Do you allow those? Don’t just decide on this one instance, make a policy out of it. This should be something consis- tent across all of your properties. This kind of thing will make your life much easier (and with tenants, it will keep you on the right side of Fair Housing as well).
SYSTEMSAND POLICIES The difference between scaling and growth is summed up well by Investopedia, “Scalability is a characteristic of an organization, system, model, or function that describes its capa- bility to cope and perform well under an increased or expanding workload or scope. A system that scales well will be able to main- tain or even increase its level of performance or efficiency even as it is tested by larger and larger operational demands.” In other words, scaling creates a bigger foundation to build upon. Growth on top of a wobbly foundation is doomed to fall.
Andrew Syrios has been investing in real estate for over a decade and is a partner with Stewardship Investments, LLC along with his brother Phillip and father Bill. Stewardship
Investments focuses on buy and hold and particularly the BRRRR strategy—buying, rehabbing, and renting out houses and apartments throughout the Kansas City area. Today, Stewardship Investments has over 300 properties and 500 units. He writes for Think Realty, BiggerPockets and The Data Driven Investor.
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