Best Company Structure for Asset Management

This content was originally published in our residential property management newsletter, Pillow Talk. Sign up here.

Asset management is a growing trend in the residential property management community for its promises of lower churn, cheaper growth, and better clients.

As lovely as that sounds, it doesn’t come without some serious decisions to consider. One being, how your business is structured.

If you didn’t know, there are three common property management company models:

• Departmental. Teams handle specific functions. Leasing team, maintenance team, accounting team, etc.
  
  • PROS: Efficiency and consistency. Employees are specialists in one task, so they get really good at it. This also makes it easier to hire and train. And because one department handles one function, processes are simpler, making quality control easier to maintain.
    
  • CONS: Can lead to a poor owner experience. The owner’s point of contact changes depending on their current needs. If you’ve ever been on with customer service and had to explain your problem 3-4 times to 3-4 people, then you know the struggle.
    
• Portfolio. In this model, one PM owns pretty much every function for a portfolio of accounts. They dispatch maintenance, handle leases and renewals, as well as owner communications.
  
  • PROS: Portfolio creates a simple, unified, and highly-personal experience for the owner. One point of contact for all functions means context is rarely lost and a very strong relationship is formed.
    
  • CONS: It can be risky. It puts a lot on one person’s shoulders, which can lead to high turnover. And because such strong relationships are formed, if the PM leaves, they may take their accounts with them.
    
• POD. A hybrid model. The typical POD has 3 employees, sometimes four; One handles owners, one handles residents, one handles maintenance, but they’re able to cover for each other during vacations and such.
  
  • PROS: POD offers the allure of one point of contact for owners while keeping some of the efficiency benefits of Departmental because each employee is specialized to a degree.
  • CONS: Overhead is expensive until you reach scale. Although to a lesser extent, it still has the same single-point-of-failure risk that comes with Portfolio.

👉 Check out this live debate between Todd Ortscheid and Sam Eddinger for more on the pros and cons of each model. Todd runs Departmental, and Sam runs a POD variation he describes as “single-person departmental.”

Which is the best fit for asset management? 

It depends on the details.

At its core, asset management is a partnership, not a transaction. The whole point is to help owners plan, manage, grow, and optimize over the long-term. For that to happen, the context (goals, property history, financial performance over the years, life events, etc) must be preserved and compounded.

It’s possible to achieve that in all three. A single point of contact makes it pretty easy in POD and Portfolio. But you can also do it in Departmental by incorporating positions like Customer Success Manager or Owner Relations Manager (Like Todd does).

Which is best for you depends on the balance between efficiency and personalized service you’re looking to strike, as determined by your asset management goals.

About Blanket

Blanket is transforming the property management industry with its innovative platform that helps property managers grow their portfolios and retain owners. By combining AI-powered insights, automated lead generation, and seamless integration with existing property management software, Blanket provides property managers with the tools they need to succeed. Blanket is backed by leading Venture Capital Funds like Foundation Capital, Symbol, Operator Partners, RE Angels, and industry-leading Angel investors. Together, we’re shaping the future of property management.