The following blog post is a time-stamped, full transcript of Bob Preston’s interview of Adam Feinstein of AppFolio. The episode was recorded May 30, 2019 and published on the Property Management Brainstorm Podcast. The audio version of this podcast can be found at this link on the North County Property Group website, as Episode 16- Why You Need a Property Management Software: Property Management Brainstorm Show.
Bob Preston: 01:03 Welcome, welcome, welcome to the Property Management Brainstorm podcast. I'm Bob Preston, your host of the show, broadcasting from our studio at North County Property Group in Del Mar, California. Today we're going to talk about the importance of managing all aspects of a rental property. Notice I use the term manage and all. So even if you are an individual landlord, renting your property yourself, there's still a lot of moving parts to property aspects which need to be managed, like listing and marketing your property, leasing the property, getting that done, keeping the property while maintain dispatching vendors for repairs, handling the accounting. Well you get the idea, there's all kinds of moving parts and pieces and lots of dials to be turned and you end up be kind of an expert and a variety of areas and you may have the most beautiful property ever but unless you can manage all those disparate aspects, you're ultimately going to have a hard time keeping up and keeping your tenant happy. So, I have with me today by telephone from Santa Barbara, California. Great place to live. Adam Feinstein who is one of the Group Product Managers at a company called AppFolio, which is one of the leading players and property management software business. And uh, he's going to tell us about how some of these moving parts are managed. Hey Adam, and thanks for joining today.
Adam Feinstein: 02:16 Thanks, Bob. Great to talk to you.
Bob Preston: 02:18 So Adam, maybe you can start by telling us briefly about yourself, your background, and what you do for AppFolio. And a little bit about, you know, what AppFolio is all about.
Adam Feinstein: 02:26 Sure. So, as you mentioned, I'm a Group Product Manager here at AppFolio and I'm primarily working in our payment space, uh, working with our vendors and working on efforts in next generation AI technologies for us. But that gets to touch everything all over the app. And some of that comes from my background. I spent 10 plus years doing product management in the semiconductor device equipment manufacturing domain, which is very different. But I really enjoyed working in property management for the last several and it's just such a human element to it and that I really enjoy that day to day. Oh, who had property managers and solving these problems and pains around, you know, getting more efficient and getting renters into and making them satisfied with the experience they have when they're in and renting the property. So that's really what AppFolio is all about. At the end of the day, we're really helping property managers to deliver on that experience and make everything easier for them so that the renters can be in a residence, can be happy.
Bob Preston: 03:28 Yeah. Keeping them happy. And I gotta tell you, I've been in property management for a long time and it is a very collaborative business to be in. Right. So, it was kind of fun, like I get where you're coming from and kind of what you said about that, about helping people and being there for people who are trying to improve their businesses or improve the tenant experience. I totally get that. Hey, so I have to ask, because I think we chatted before this, started that I grew up in Santa Barbara and I'm also a Gaucho from UC Santa Barbara. So how do you like living in Santa Barbara?
Adam Feinstein: 03:56 Santa Barbara is fantastic. Uh, I came out here after college, lived here for some years and moved away to Austin, which is also a great city.
Bob Preston: 04:04 Oh Man. Yeah, that's good too.
Adam Feinstein: 04:06 Yeah. But got the opportunity to come back, save the heat and my wife, myself and my children, you know, it's hard to imagine for my five year old, my two year old that they're going to quite understand what it's like growing up here.
Bob Preston 04:20 Awesome. Well I miss it. I still get there pretty frequently. My family in the area so we get up there as often as possible and great wine country there too up in the hills, like to do some of that as well. All right, so listen, let's dive into the subject matter here and talk about managing a rental property and full disclosure here at North County Property Group, we are an AppFolio clients, so I want everybody to know that upfront and I came across your company because I wanted our property management company to be equipped with the highest level of efficiency and managing all these moving parts. And so, you know, maybe we can kind of start there. I, I described some of those moving parts as some of the key aspects and you know, what's your perspective, like what are the different areas that you see that maybe I'm fully provides or that you see, you know, rental property owners having to manage on their own if they're not using the property management software?
Adam Feinstein: 05:07 Well, you know, what are the core elements that we provide is a full accounting solution. And so, you know, I think that as property managers are scaling their business, maybe moving from paper if they're still on, on paper, but whether it's Excel or QuickBooks, having a purpose-built accounting solution really helps a lot. Um, but that's really more for the property managers when we think about all the different things that that need to happen. Um, you know, it's really starting with getting visibility when a property's up. So, doing the marketing, getting those leads in, dealing with leases. Once you've got someone in, making sure that you've got a proper screening policy in place, both to make sure that you've got good qualified residents, but also that you're compliant with fair housing. So, you know, a lot of it, whether you're a sole proprietor, you know, you own one property, you may not be thinking about that, but certainly you should be. It's a big risk. And now that we got people in the ability to, to track rent and deal and accept payments, the ability to handle maintenance and then you know, going through that that whole life cycle. So those are the things that I think sometimes you know, people that are new to it, only see the upside, but there's obviously quite a lot of work there. And that's why we love our property managers.
Bob Preston: 06:20 Yeah, I mean it's daunting undertaking when you think about all the little different aspects of renting a home or being a landlord. You as an individual who doesn't have access to a property management software might have to have different systems in place. You mentioned Excel spreadsheets, you know, sticky notes, notepads, maybe you're a member of the apartment association. So, you do have a lease agreement, but you know, are you sure you're always staying within legal compliance? I mean, all that seems pretty daunting. So, give me the quick elevator pitch of what AppFolio does. I mean, I know our, some of our listeners, um, wouldn't really qualify to use AppFolio, but from a property manager perspective give me the pitch, I guess the elevator pitch on AppFolio.
Adam Feinstein: 07:01 Yeah. So, you know, we are a completely integrated property management solution that is catering to property managers with 50 units or more. Uh, we cover all of the different property types, whether they're single family homes, multifamily residences, big apartment buildings, mixed use, commercial community associations, Homeowner's association. And when I talk about a completely integrated vertical solution that, you know, what that really means is we're not asking you to go in and identify different integrations or work with different people. We've got all of these different pieces in place and, and for us, what we're really focused on is kind of what I alluded to at the beginning and allowing property managers to deliver on the experience that the residents, you know, the real customers at the end of the day expect. And that's changed quite a lot over the last 10 years and is continuing to change. You know, I think that 10 years ago an idea that you might apply for a look for an apartment and apply for a lease using your cell phone would realistically be ridiculous. But now we know 80% of people are interacting on their mobile phones and that's not just 80% of millennial's as people, that’s 45 to 55 they use their phone to shop while they're sitting on the couch and watching TV. And so, we're really there to provide that mobile first experience and as a holistic solution within the property management.
Bob Preston 08:22 Do you guys track any steps or market data on what each of these processes would take a typical landlord who doesn't have a tool, like AppFolio? You know, getting their property leased, then taking all the calls for maintenance dispatch in a vendor. I mean, these all happen seamlessly for us as a user of your product, but what would it, do you guys track any of that? Like are you, are you able to add all this up and say, yeah, the average landlord, it spends x number of times, you know, handling all of these aspects?
Adam Feinstein: 08:51 Yeah. You know, it's hard to say because people have different, different processes and they cater to different types of needs. I will say that one of the key things that we've seen from property managers is the ability for them to double and triple the number of units under management without adding any additional people in the process. And so that, that's a good example of, of where we see those efficiencies.
Bob Preston: 09:15 Well we have people come to us, what we call lease ups as well, doesn't happen a lot, but occasionally someone will live locally or we just leased a house for gentlemen of retire guy who sort of lives in the back corner of his property and he felt like he was on site and he could handle a lot of the maintenance and kind of be the landlord, but he was looking for the efficiency and just that first part, right? Getting a listed, doing the leasing, taking all the calls and mean that alone we can do that so much more efficiently with a software like yours, like, like AppFolio. Then a normal person could, who's got to go to Zillow manually put it up on the Internet, maybe manually run an ad, go put sort of a homegrown, do you know, do it yourself for rent, sign out front screen, all the applicants. I mean, yeah, you get the picture, right. Even that alone, that process alone can be hugely time consuming.
Adam Feinstein: 10:00 Yeah, I mean, just think about it. It could very easily take them an additional month to close on all those processes because their life is getting in the way that their normal day to day is getting in the way. And maybe you delay posting that to Zillow, buy a couple of days and you don't return all the guests that you get in. And so now you've lost, you know, a month of rent because you didn't want to pay someone or, or use a proper tool.
Bob Preston: 10:24 One. To your point earlier, I mean, in today's kind of instant messaging era, you know, people who inquire on a rental property, they want an answer now. And so, if you're a do it yourself landlord who maybe, you know, this may be interrupting their life, you know, your typical renter isn't going to wait for someone to respond. So that initial quick response is hugely important. I mean, that's just one example, but it's an important one.
Adam Feinstein: 10:45 Yeah. You know, I think it also depends a lot on the environment in. Here in Santa Barbara, we're a little unique in that we're so supply constraint that you can be a little awkward, a little different, you're probably still going to find good renters. But we're definitely seen a turning point in those trends that um, more properties have been built and they're starting to, we're starting to see vacancies go up a little bit. So, people need to be more competitive there and have a better visibility to their leasing funnel if they're really gonna fill their units.
Bob Preston: 11:13 Okay. So, your product does a lot of things for us. But just for the purposes of today's podcast, I'm going to kind of streamline this down to three hotspots spots that I think your product and I think where we probably spend most of our time first is going to be marketing, you know, all the different aspects of marketing a property. The second is going to be maintenance, so dispatching vendors taking maintenance requests. And the third will be another topic we've kind of touched on briefly, will be accounting. So, if that's okay with you, let's dive into those areas a little bit specifically and kind of keep this on track to hopefully finish within about the typical episode length of 30 minutes. So, let's talk about marketing. We've, we've kind of touched on this a bit, there are hundreds of consumers oriented, uh, real estate sites out there where the typical person could post, right? But it's physically impossible to be on all of them. Zillow is probably the most well-known. What are the other key rental sites in your mind or from AppFolios perspective where every property should be if it's going to be listed for rent?
Adam Feinstein: 12:09 So, you know, I don't think that there's necessarily key other sites, right? We have about a hundred affiliate sites that we work with when we're helping to automatically post listings to the Internet. And so that's really the way that we look at it is not, there's a couple of the others, let's make sure that you're posting your site everywhere. And the way that we solve for that is you only have to click one button and you're posting to a hundred a hundred sites.
Bob Preston: 12:34 Got It. Right. So, I mean, we love that feature because we can put our photos on a property in the description, the rent rate, all the details on the property. And as Adam says in one click of a button, your, your home gets listed on Zillow, Trulia, Hot Pads, you know, realtor.com all, I mean hundreds of different sites. And so, for us, that's really fantastic. And like, like Adam, you were saying, I mean it gets the property out everywhere pretty much.
Adam Feinstein: 13:01 Yeah. So, you know, we're, we're affiliated with Zumper, Show Me The Rent, everyrent.com, Rad Pad, Pad Mapper is a new one that's coming up, um, Campus Cribs. Um, so that's just a handful of those that were affiliated with.
Bob Preston: 13:18 Great. And for like an individual homeowner, he'd have to list all of those manually, pretty much. I mean, there aren't many other ways around that, but you use the word guest cards, that's how they come into AppFolio. So, all of these guest cards come into us through kind of one common funnel from all these various sites, which is pretty darn convenient as well. So it kind of funnels them in through one, one process as opposed to, I don't know, I guess if you're out on a bunch of different sites and you had listed individually, he'd be getting phone calls, you'd be getting emails, there are lots of different ways where, where prospective tenant can, you know, it could be coming in and you guys also offer an autoresponder type solution as part of AppFolio, correct? Correct.
Adam Feinstein: 13:54 Yeah, absolutely. So, you can set it up to have your own personalized message that can auto respond back. And we've also got the ability to identify and schedule showing so you can drive to given showing time. It will text message, remind the perspective tenant that they're showing this being scheduled and then you can even have it, have them confirm it, you know, some period of time before and if they don't respond it will automatically cancel it. And that syncs to your calendar.
Bob Preston: 14:23 Well that's really helpful information and show some of the power of AppFolio and also just for helping people like us who were trying to get the product or the property marketed well. Okay. Let's shift into maintenance a bit. So, we happen to be a licensed general contractor in addition to a broker and property management company. And so, we have a very robust list of vendors. However, for the typical homeowner, they might have, you know, one guy who does kind of all the plumbing and one, you know, various people that they work with on a regular basis. But finding those vendors can be pretty challenging. Then keeping track of them. Also and some kind of a database, but maybe, you know, starting with the tenants, maybe you can help us understand how through your system they would request a repair, uh, with a typical, do yourself homeowner who's renting their property. I'm assuming that call would come in, it could be at all hours of the night, it would be in the morning, could be when you're out to dinner with your family. How does it work in AppFolio?
Adam Feinstein: 15:16 Yeah, I mean I think that’s an excellent point. You know especially as we compare the value of an individual owner to someone who's using a professional property manager with the proper property management solution. So again, in terms of that experience management, we meet the, the resident, the way that they expect to be met so they can log in on their phone, we've got a mobile APP, with your face ID or thumb unlock and you can submit a maintenance request. And then immediately that will go off. We've got an Alexa integration. You can say, Hey Alexa, tell my property manager that the toilets flooded and that will send off a service request and as a value-added service. In order for us to help support property manager scaling, we have a maintenance contact center that will take 24/7 can take those maintenance requests whether they'd come from the mobile or we can answer the phone and properly dispatch a, you know, a plumber in that case that the toilet was overflowing.
Bob Preston: 16:12 Yeah, that's the smart phone app is a terrific addition. You guys are brought on how, how long has that been with the company now are part of the company I think what about a year?
Adam Feinstein: 16:20 Yeah. We announced it at our annual customer conference back in September of last year and now we've got hundreds of thousands of tenants that are using that on a monthly basis to pay their rent and submit a maintenance request.
Bob Preston: 16:33 We've made a big push for that because it's so great. Once tenants know about it and use the APP, they can actually not only open up the APP to submit a maintenance request, but they can also take a snapshot of the problem that might be occurring. There's, you know, they can include that along with the description of what's going on. And then my property management team gets an alert and we have it such that all of the property managers get it. So, if someone happens to be on call at night, uh, that alert obviously notifies them that hey, somebody's having an issue. They can quickly determine, hey, is this an emergency or can this wait until the morning? And then they kind of do the triage from there and go to the next step, which is then sort of, um, putting that maintenance requests out to a vendor who can take care of it from there. So yeah, the, the APP has been hugely helpful for us.
Adam Feinstein: 17:19 Yeah. I think the other thing you mentioned is having a property management software that's super mobile friendly means that even if they're out to dinner, they can get all the functionality of AppFolio they want right on their phone.
Bob Preston: 17:31 One of the other things we've enjoyed too or has been very helpful is there's even a satisfaction survey once a, it's called a work order, when a maintenance request is made and then it's completed by one of our workers or the vendors. And then immediately a satisfaction survey goes out to the tenant. The tenant can rank and rate that particular vendor who you sent out that super helpful in terms of managing or vendor or vendor pool.
Adam Feinstein: 17:55 Yeah, we've definitely heard a lot about that in terms of making sure that vendors are doing a good job in doing the job. They said they did.
Bob Preston: 18:03 Okay. So, let's talk touch on the biggie and that’s accounting and you brought it up earlier. Um, I mean even if you're a landlord who's doing the rental aspects yourself, you've got to keep your accounting records and you've got to keep good financials, uh, in hand. And as a broker in California, it's a bit different because we're required to handle all rent and property maintenance items from what's called a broker's trust. I know you, you're familiar with the term, maybe our listeners are too. And for the average owner, this seems kind of challenging because you know and incoming rent and vendor payments might be commingled for example with their own personal account. So that's I think one thing that's important to understand. How has the process automated on AppFolio? So, if you are doing your own accounting versus maybe how it's handled in AppFolio, can you kind of walk us through that a bit?
Adam Feinstein: 18:50 Yeah, so let's start with where the money comes from. So, the rent comes in and those residents are easily able to pay rent online in any way that they want, whether it's with an e-check, whether it's with a credit or debit card. So, when the funds come in online and basically, you know, for property managers that are getting into 80 and 90% of their rent coming in online, it's like a miracle that automatically gets entered.
Bob Preston: 19:15 We do, we have that, we have about 95% buy online payments, which is amazing, you know, um, older folks who are kind of old school and still like writing the check. But everyone else pretty much. Yeah. Has adopted that.
Adam Feinstein: 19:27 Exactly. And so that automatically brings the rent in, it brings it in and applies it to the right place. You know, from there you can create bills. Those bills can be associated to the work order. Maybe the maintenance request went out so now we know exactly the right GL we can track did it go to repairs, was it for plumbing, carpentry, etc. We can automatically pay those vendors via e-check or a bill paycheck if we want. Um, and then if we're managing the property on somebody else's behalf, we've got processes to automatically pull out the management fees and pay the company and then distribute back to the owners with the automated owner statement as well.
Bob Preston: 20:09 I think that's what owners like from us is that we're able to generate from your system and owner statement, every month usually comes out during the first week of the month, shows all the rent that's been collected, maybe any other deposits the owner has made for maybe larger improvements at the home, any other items that the tenant has paid, all that syndicated any expenses. So, if a plumber was there that's captured and then you know, we pay ourselves our management fees, all of this is captured. And then the owner distribution final amount. So that stayed in the process we have on our side, and I'm sure this is typical with your other property management companies, is the statement goes out and then followed by basically a direct deposit, which we also do through AppFolio and the owner gets notified, uh, both, hey you're, you know, you're, you've, you've got an e-check on its way to your bank account and hey, you've got this statement that's available for download. And owners love that. It's so, so automated and so efficient. Okay. What else Adam? I'm, I know we're just kind of scratching the surface here and there are probably tons of other aspects. Landlords should be aware of. Any other closing remarks or any other things you'd like to tell us about AppFolio that you know, you see commonly used by, by a property managers or that maybe homeowners who are renting the property should be aware of?
Adam Feinstein: 21:20 Yeah, I mean there are a couple of things that I alluded to but would be remiss not to mention. So one is having a good screening policy and so we have integrated screening decisions is part of our workflow and this allows you to get the credit and criminal history evictions, bad tendency, all those things and not just have it, but you can potentially have been a formula so that you're applying the same standard to any everyone and you remain compliant.
Bob Preston: 21:46 That's a really good point. We use it and we love it because the rental application is also online, which is amazing. So, you don't have somebody, you know, filling out with their pen, a handwritten document. It's all done online. And there, they provide the perspective tenants will provide all of their information and upload their bank statements, their W-2, their copy of their paycheck. And then, uh, once it's submitted by the prospective rent or we get it in an alert, and we can literally screen them instantly. Okay. What else, Adam? Anything else you can think of?
Adam Feinstein: 22:18 Yeah, that leads me to the next thing in terms of you kind of just managing risks, whether it's landlord liability insurance for actual renter's insurance. Those are both offerings that we have fully integrated in. You know, you'd be surprised how many writers don't really understand the value of renter’s insurance in terms of protecting their stuff, but also protecting the property. And I think that that's something that, you know, some individual property owners maybe sometimes don't consider.
Bob Preston: 22:43 Yeah, no, that's a good point too because sometimes the owners themselves don't even realize, oh gosh, you know, I should be requiring this and they can require it. But it has to be kind of built into the process. I mean, checking all the right boxes as you go through the full leasing cycle. All right, well listen, we, you and I can talk about this for you know, until the end of the day probably because we know so much about it. And you know our business so well, but unfortunately, we don't have time for that. I think we've hit on the top kind of areas that we were hoping to. If someone listening out there does have a bunch of properties and could potentially utilize that AppFolio, what's the best way to get in touch with you guys?
Adam Feinstein: 23:17 Yeah, if you just go to that appfolio.com you can chat with a representative right there and they will help direct you anywhere you want to go.
Bob Preston: 23:24 Okay, so it’s appfolio.com. Okay, fantastic. Hey Adam, thanks for joining us today. This has been a great episode and we're so glad you joined us, and I think it's been great knowledge you’ve passed along about managing rental property to our listeners and so much appreciate your being here. That concludes today's episode. Thank you all for joining the property management brainstorm podcast. Until next time, we will be in the field working hard for our clients to maximize their property value and income and maintain top in relations and we will see you next time.