The 5 Questions Podcast
Join us as we unlock real estate and business insights, one question at a time.
The 5 Questions Podcast
Navigating the World of Property Management with Jozsef Petroczi
With 24+ years of experience, Jozsef shares key insights on managing tenants, navigating challenges, and building trust through transparency. Whether you're a landlord or just starting, his tips are a game-changer!
#RealEstateInsights #PropertyManagement #Podcast
And it's always a good thing to reinvest some of your rental income into the property. You know tax optimization as well. You know appreciation of the property right, that's a big thing.
Speaker 2:Welcome to the 5 Questions Podcast, where we unlock real estate and business insights, one question at a time. And business insights, one question at a time. Welcome to the 5 Questions Podcast. I am your host, mario Lamar, our guest on today's show. He has been a property manager for over 24 years, loves to build lasting relationships with both sides of tenants and landlords. Welcome, joseph Petrowski. Joseph, welcome to the Five Questions podcast. Thank you, mario, for having me. Joseph, the concept of the podcast is really simple. I ask you five questions, either about business or real estate, and we get straight to the point you ready. Sounds good.
Speaker 1:Let's go.
Speaker 2:Joseph, your journey in property management began at a young age. Can you tell us about your initial experiences to property management and how it shaped your approach to today's property management?
Speaker 1:I mean, I started pretty early. I've always been a brick and mortar guy, so I like to buy things that I can touch and feel right. So it's always been like this since I was little, and I always had the dream to own a property at one day, right. So it was more than 20 years ago when I brought my first property. It was a piece of land which I still own for today. I haven't built a house on it or haven't developed it, but you never know, maybe in the future.
Speaker 1:So that was pretty straightforward and simple and that when I find the listing with a realtor and then I find the listing with an owner, so I went with the owner, I saved on the realtor fees, so that was a smart move on that one. And then a couple of years later I bought my first apartment, which teach me a lot. Uh, I bought it from someone I know from before and then I made a really good deal, made a lease back, right. So I bought the property. I leased it back for right away for a year. But after, when the leaseback was over, then the problem started to happen because the property was not cared for and then I had to do the renovations and then he was not paying rent for a couple of months, right. So I right away get into the more challenging part of property ownership, right. So I learned pretty early not to deal with Graham family or anybody you know, right, because then you have technically less leverage to moving forward. And after I rented the property out, my mom, my mother and my family was helping at the time, and father and my sister with the renovations and day-to-day operations. Of course we did not have much experience. I did not have experience at the time, but it was a good learning curve to figure it out what you're not supposed to do versus what you're supposed to do.
Speaker 1:And I had a couple of tenants in the property. Some of them were really successful. Some of them were running into some other problems. In case you don't have a system, that's what we have in Canada over here with the credit reports and background checks and all those things. They're not really crystallized 20 something years ago in hungary. So I learned my way and then I'm, you know, fast forward to today. I try to make everybody say stay away and stay safe from those early pitfalls and early challenges, what I went through. So that's my philosophy to make sure both sides are happy. The tenants are happy in the places and the owners are renting out their places are happy so I can guide them. Both sides and everybody have a pleasant experience in the rental market.
Speaker 2:So you really learned from a young age by practicing property management. So you bought some properties first, you experienced tenants and that really shaped your way into today's property management. You know ways you do things.
Speaker 1:Absolutely. I mean, you have to get your own experience into the game right, If you don't have your own experience, you don't have your own skin in the game.
Speaker 2:Yeah, it brings us to our second question and, in your view, what are the most maybe common misconception about property management and how do you address them in your work?
Speaker 1:I mean property management. In my experience it's a broad subject. Everybody does it in different ways. What most misunderstanding comes in my way, that's people are thinking property management is property maintenance on one end. Other end, people are thinking property management is asset management right, and all those three things are very different things. Asset management, property management, property maintenance right, and all those three things are very different things. Asset management, property management, property maintenance right, it's interconnected but not interchangeable, right, right? So that's the main thing.
Speaker 1:So my way of handling situations like this I always ask my clients or future clients, what's their experience with the real estate market? Have they rented a place out before? It's the first experience. Second experience but is their level of knowledge of the market or of the situation? And then we can level from there and can explain to them.
Speaker 1:You know, as a property manager, we take care of everything what your day-to-day operations needed for your property, but we don't do any physical work, right, right, that's the big differentiator. Like property maintenance, they're going to do everything physical. Property management is going to do everything that's not physical. Asset management is going to be. Look at the three years plans, five years plans, 10 years plans plus 20 years, either or right. So we need to have a good understanding of the three different parts of the business asset management, property management and property maintenance. Once we level the field, then we can move forward, and that's usually really helpful for both parties. Or younger investors or not-so-seasoned investors, somebody who's in the business for 15, 20 years or 10 years. They will know exactly the differences, what's happening and what instruction they need to give to all different people.
Speaker 2:So, by understanding your clients and where they came from, their journey if they're starting up or if they're an experienced investor helps you set the expectations afterwards of your clients, so that's really good.
Speaker 1:Absolutely. I mean you need to be able to understand each other on a very granular level. Right, because property management, you know the goal is to make everything smooth. But sometimes you need to go into, you know, not so pleasant conversations or certain differences where they have one understanding of a problem and then you have to apply a different solution right, or it's coming to an emergency. It's how you handle emergencies right. Solution right or it's coming to an emergency. It's how you handle emergencies right. And that's coming to the point where some people they think, okay, if something is wrong, you're going to go there and you're going to fix it.
Speaker 1:As a property manager, I don't have the expertise or the liability insurance for that to do it. Let's put it that way, right? So there's different property management companies, different philosophies. There is different property management companies, different philosophies. Our approach is very professional. We try to do everything by the book and that's our standard. Right, we only use licensed tradesmen for plumbing, electrical appliance repairs. Right, we only work with the right people. We're not going to be going with somebody who maybe can maybe have the idea how to fix something and maybe going to do it right or maybe going to do it wrong. We're going to go with the professional who knows exactly what he's doing, and the results are there.
Speaker 2:It brings us to our third question and your philosophy. You emphasize the importance of building trusting relationships with tenants. Can you share a story where building such a relationship has maybe impacted the outcome of a property management situation?
Speaker 1:I can give you one big example. A few years ago we had a development site under our management. It was around 20 units and big-size development is a 200-plus unit development site under our management. It was around 20 units. Big-sized developments is a 200-plus unit development. Actually, the development is just finishing up now. They started the lease up. It's one of institutional investors. They had that lot parked with us and we had about 12 tenants to buy out and finish up the site before the construction can take place demolitions and all those things. So it was back in 2021. And we worked with those tenants for two years before so they knew exactly what's going to happen. This development is going to come in at one point. They will get these terminations and they will get bought out right. So we had a really good connections with them. We pretty much know everybody on a day-to-day basis and you know name basis. So by the time came that we need to terminate all the leases and buy everybody out.
Speaker 1:We managed to finish up all the contracts, all the leases, in two months right, oh, that's really good Without any you know intervention from lawyers, paralegals, ltb, court, case, news or newspaper or whatsoever. So it was a very smooth transition to close up the site, give the site back to the developers and they could build a 200 plus rental building on it. So that's one of our biggest win. We could not have done it if we don't put effort into developing connections with the tenants on site. That's why we are doing two inspections a year and we do a monthly drive-by where you know you always can catch up with the tenants, say how are you, what's going on, take care of the request if they have any repairs or anything happening, and once you build the bridge, it's easier to go to the next side when you have to exit that connection.
Speaker 2:So eliminating surprises for the tenants in that particular situation and preparing them in advance for what was to come was a big game changer of the outcome, whether it was going to go good or bad. And you did exactly, uh, the right thing by, you know, pre-warning them and and working with the tenants.
Speaker 1:So good on you for that yeah, I mean, you know transparency is big for us and uh, you know, if you hide the from the tenants and you tell them, hey, there's nothing gonna happen, you're gonna hear for another five, ten years and you know they set their life and expectation according to that. And next week you're gonna hear for another five, ten years and you know they set their life and expectation according to that. And next week you're gonna send them or call them to the office and tell them it's your termination. That's a big disconnect, right, and that's you just having a gap built which is very difficult to connect that brings us to our fourth question.
Speaker 2:Uh, now let's look at it on the other side. As a seasoned property manager, what strategies do you employ to maintain and enhance the value of the properties under your management?
Speaker 1:So, properties are maintained. You know standard maintenance for us we do it automatically furnace maintenance, air condition maintenance, gutter cleaning those ones are done on every property automatically and then depend on the goal of the owner, what they're looking for, right. We adjust our approach according to their wishes and needs, right, and then we do the updates and uh renovations according to their wish. Like, I took over one property today, it's gonna be probably with us for three years and we have like items of six items. Okay, I want to get this one done, right, why? Why is going to be doing it when the property is rented? Of course, because it's tax benefits. You can expense all the upkeep what you are doing on a property when it is rented out. So it's a really win-win situation. And it's always a good thing to reinvest some of your rental income into the property. You know tax optimization as well.
Speaker 1:You know appreciation of the property right, that's a big thing. Well, you know appreciation of the property right, that's, that's a big thing. Uh, when you are, once you start to reinvest in a property, your appreciation is higher and then you can force the appreciation. You can do a refinance if you want to. So there's really lots of options, uh, what we can do with enhancing properties. We're always looking for, you know, above grade uh possibilities for, uh for upkeep, right. So we don't want to go with the lower end of the market solutions. We like to go with the medium or up, where you get your best return on your investments, right, it could be, you know, the changing roof could be, changing appliances could be, I think, a new bathroom. That's the you know wide range of projects, what we do for our clients you know wide range of projects, what we do for our clients.
Speaker 2:What I like about your strategy is you're not just a you know a doer where you execute what the property, the owner, tells you to do and that's it. You actually go forward and you bring solutions, potential solutions and options and say to the owners these are the options that we see it coming for that property and what do you want us to do? And this is going to be the different outcomes. So you actually are proactive in the management and not just reactive.
Speaker 1:Absolutely. I mean, I like to be always proactive, right, I like to have the ropes in my hands and I know the outcome better, right? And just give you an example, since we do the proactive management style. You know, this year we had one AC breakdown, right, because we do very diligently check them every single year and if the AC is end of life or something, most of the time we're catching it before it's going to. You know, just finish up working and then you're over there. Okay, no air conditioning. So we had one dcr out of 100 units. That's a pretty good number.
Speaker 1:Same thing I can tell you from furnaces, right, we don't really have fullness breakdowns middle of the winter because we do the preventative maintenance program and we can catch those problems coming up, right, yeah, uh, if you do it diligently, a 15-year-old who is going to show you in the summertime something is wrong, and then we can intervene earlier than you know, rather than Christmas night, somebody is calling you, I don't have a heat, and then you have to put them in a hotel and it's going to cost X amount of money. Plus, there is no elect, no age, work is working for three days because it's a holiday season, right? So there's a lot the list is long, long, long why you're going to do property, property maintenance proactively versus reactively. Right, so it's. The benefits are way, way higher than than a winning of saving a hundred dollars on a hundred fifty dollars in an inspection.
Speaker 2:Absolutely. That brings us to our last question, our fifth question. Joseph, we're not getting younger. The younger people are pushing under us and they want to start, maybe in property management, to take over your place. So what advice would you give to someone who is looking to start property management? Maybe give a few different advice. What would you give to someone who is looking to start property management? Maybe give a few different advice. What would you give them for somebody who's looking to start into property management?
Speaker 1:I mean otherwise, I always would say start with your values, right. What are your values right? That's number one thing for me. Property management comes with integrity, comes with transparency, comes with honesty, right? So those are the three big things for me, right? What? What you can bring to the table, of course, experience. What you can bring to the experience. Are you able to pivot, are you able to find solutions, and how is your problem solving skills right?
Speaker 1:Problem solving is big in property management. It's very wide. I mean many different houses, many different buildings, different operational systems Just a wide variety of issues can come up that you haven't dealt with before. Even I am five years in property management, or I have properties over 20 years. Still, every day something can come up I haven't come across just yet, right, and then I need to learn, or I need to do the research. I need to find the person who can talk to that right. So you have to be really resourceful, good problem solver and, as well, very detail oriented, right, that's. That's will be the main thing as well. Customer service skills uh, coming into, coming into play interpersonal skills, people, people skills, right, lots of soft skills in this business. I would compare our position most of the time like a private banker. Right, a good private banker is really difficult to come by, but if you find a good one, you're sure you're going to stick around with right, yeah, you want to make yourself indispensable for your clients.
Speaker 1:Yeah.
Speaker 2:Well, joseph, thank you so much for spending the time today with us. Uh, you brought lots of insights, lots of value to our listeners and, uh, I hope that we will be able to talk to each other soon again likewise thank you for the interview have a good day, bye-bye, thanks.
Speaker 2:Thanks for tuning into the 5 Questions Podcast. If you enjoyed today's episode, don't forget to subscribe, like and hit the notification bell on our YouTube channel so you never miss an episode. Stay tuned for more insights and tips to transform your real estate and business game. See you next time.