The Property Management Show
Portfolio vs. Departmental: Which One is a Better Property Management Team Structure?
Which structure works best for a property management business: Departmental or Portfolio? This is a topic that can be pretty polarizing in the industry. Welcome back to The Property Management Show, where we deep dive into the world of property management, marketing, and entrepreneurship. Today, we’re talking with two prominent property management business owners in Central Florida. Welcome to Maryann Hoffman and Andrew Dougill of Hoffman Realty and David and Stacy Wilson of Wilson Management Group. These experts are talking about the structures they’ve adopted and offering some advice to property management owners who have not yet decided on how they want to organize their businesses. td {vertical-align: top; border:1px solid #eee;} li {font-size:15px;} .clean-td {border-bottom:none;} Podcast Summary Each type of management structure has its pros and cons. For property management companies that are about to build out their own structure, they need to think about the things they like to do and don’t like to do. Deciding what works best will require flexibility. Processes and systems are often more foundational than how a property management company is organized. Guest Bios: Hoffman Realty Andrew and MaryAnn Hoffman are the founders and principals of Hoffman Realty, bringing decades of leadership and experience to the Tampa Bay property management industry. MaryAnn, a licensed real estate broker, entered the industry in 1983 and established Hoffman Realty in 1988 with a clear vision: to deliver personalized, high-quality service to small residential investors. In 2000, Andrew, then Vice President of Engineering at TECO Energy, joined the firm to lead business operations, aligning his background as a long-time real estate investor and landlord with the company’s mission. Together, they have built a 38+ year track record of supporting residential investors throughout the Tampa Bay area and currently oversee a portfolio of approximately 450 managed properties. Hoffman Realty’s continued success is rooted in a disciplined operational approach and a strong commitment to client service, with MaryAnn remaining actively involved in day-to-day oversight to ensure every client receives personal attention, and no property owner is overlooked. Both Andrew and MaryAnn are deeply engaged in the professional community. Andrew is an active member of Suncoast Tampa Area Realtors (STAR), the Bay Area Apartment Association, and the Tampa Bay Chapter of NARPM. He has served as Property Management Chair for Greater Tampa REALTORS®, is a member of the STAR Government Affairs and Property Management Committees, a former Tampa Bay NARPM Board member, and currently serves as Tampa Bay NARPM Legislative Chair—advocating for landlord-tenant policy at both the state and national levels. Wilson Management Group Wilson Management Group was founded in Orlando in 1986 and has been family-owned and operated ever since. David Wilson obtained his Real Estate Salesperson’s license in 1993 and began working for WMG as a property manager. In 2005, he obtained his Real Estate Broker’s license and gradually transitioned into overseeing all day-to-day business operations. David, and his wife, Stacy, purchased the business from his parents in 2014, and they run it together with their fantastic team. They are active members of NARPM (National Association of Residential Property Managers). David has been a member since the Orlando/Central Florida chapter was formed in 1995. They are passionate about keeping Florida a landlord-friendly state, for the benefit of their current and future clients. They participate every year with NARPM in annual legislative summits both in Tallahassee, FL and Washington, DC, advocating for the rights of landlords here in Florida. What Do Successful Central Florida Property Management Companies Look Like? Let’s take a look at who we’re talking to today: Hoffman Realty is based in the Tampa Bay Area. They serve communities as far north as State Route 54 and as far south as Apollo Beach and Wimauma. They’re a departmental structure and have about 450 companies under management. Wilson Management Group is in Orlando. They’re a portfolio style management company and serve all of Orange and Seminole Counties, with part of Lake County, Volusia County, and Osceola County within their scope. They also manage about 450 doors. How Do These Structures Differ? At the NARPM Broker/Owner Conference this year, Matthew Tringali of BetterWho presented a framework called The Team Structure Checklist, which highlighted the fundamental differences between each business structure. Here’s what Maryann reported from that event: Departmental Structure. Most people are in the office and available for phone calls, answering questions, and serving more specialized areas of expertise. There’s one person managing inspections for all properties and another person managing the accounting or the leasing. One point of contact takes care of customer service. There are property management departments. Portfolio structures would have one professional with a portfolio of 75 to 125 properties and they handle everything. The entire experience of that property is under their purview, whether we’re talking about maintenance or leasing or tenant management. The primary point of contact is the property manager overseeing the portfolio. Does the Company Structure Impact Quality of Service? When we talk about departmental vs. portfolio structures, is it merely an internal operational decision that owners don’t notice, or are there differences in how service is delivered and perceived? It depends. When we talk about portfolio models, we’re often talking about companies that cover a larger geographic area, and to expand the business portfolio is necessary. Departmental structures work better for smaller service areas. Both structures can provide excellent client experiences. This depends on policies and procedures and how effectively and consistently the company can apply those. It also depends on staff. A leasing agent having a bad day in a departmental structure will not affect an owner who calls to talk about accounting. But in a portfolio structure, the property manager may be having a bad day, and that can affect any owner who calls for help. The answer to high-quality service delivery in either structure? Having strong systems. Which Model is More Scalable for Property Management Companies? Property management companies may want to know if one type of company can support growth better than the other, but the answer comes down to company goals and vision. Portfolio property management companies are geographically based. Each property manager has a portfolio that they manage, and the properties assigned are based on maintaining boundaries geographically. There’s always a bit of overlap, but it’s not going to work to have property managers crossing counties while trying to provide great service. David and Stacy want their property managers to concentrate on their portfolios to the best of their ability. So from an expansion perspective, portfolio works for management companies that want to grow geographically. It’s possible to add another property manager when new doors are added in different neighborhoods or cities. Departmental management companies grow best within a tight service area. Maryann and Andrew note that their employees go home at night without being on call for owners or tenants who might need them (Maryann hands out her cell phone for that purpose). The point is to have good property managers who communicate well with existing clients before growing. A new client joined Hoffman Realty because he had not heard from his previous property manager for three months. It turned out his assigned manager had left the company, but no one there had told him. In each business structure, growth is only possible with good systems, clear assignment of duties, and smart staff. What Are Some of the Weaknesses in Portfolio and Departmental Property Management Structures? What if a tenant doesn’t pay rent? What if there are complaints that repairs are taking too much time? What if a key property manager leaves the company? Portfolio The main challenge for portfolio companies is the loss of that knowledge and expertise when a property anger leaves. And it’s also important to be clear about who owns the client. In a portfolio system, you would not want a property manager to leave your company and take your clients with them. Property management is a relationship business. Internal controls are needed no matter what your structure. You will need: Management agreements Independent contractor agreements (this is how Wilson hires) Policies and procedures David and Stacy have done a great job of mitigating risk and establishing that clients belong to the company, not the property manager. Most of the professionals working for them have been with the company for over 15 years. Departmental For departmental companies, it can be a challenge to juggle all the repairs. It requires a lot of time management to negotiate every single lease renewal. Things come up and Maryann and Andrew must decide when the limits of their system have been reached and it’s time to hire another person. Another weakness in departmental businesses is that sometimes owners and landlords can feel passed around from one person to another. They’re talking to someone different about maintenance and accounting, for example. As the Business Development Mana...
