Central Indiana Rental Market Tips: Property Management, Tenant Retention & Cash Flow

Bethany Shoffner (00:00)
So the biggest one I see is the investors forget to contact an experienced property manager in the area. So a lot of out-of-state investors want to come to Indiana because the entry point’s a lot less. It’s easier to get in here. But they find an agent. They see a property online. It looks like it’s completely renovated. It’s cute. It’s perfect. It’s going to rent super fast. You’re going to get top dollar rent. And then the street that it’s on is Lower Street.

Scott Bursey (01:57)
Welcome back to the Real Estate Pros podcast powered by Investor Fuel. I’m your host Scott Bursey. And today we are locked and loaded for a deep dive into mastering one of the most critical and complex regions in the country. Central Indiana. Our guest, Bethany Shoffner from CRM Properties is a true regional expert who is bringing the pure high octane fuel of hyper local strategy and operational excellence in property management. This is the blueprint.

for passive income in the Midwest. Get ready to fill your tank. Bethany, welcome to the show.

Bethany Shoffner (02:31)
Hi, Scott.

Scott Bursey (02:32)
It’s just awesome having you here and for our listeners who may not be familiar with your journey, please give us the front row seat and how your career ignited and where you’re pouring your fuel now.

Bethany Shoffner (02:33)
I’m Bethany.

Sure. So I am a director of property management for a property management company that manages roughly 800 properties, small ⁓ apartment complexes, single family homes, and some multi-unit buildings. ⁓ I’m going on nine plus years in the industry, started as a property manager and kind of worked my way up with the company as we’ve grown. So now I manage a bunch of property managers and team and all that kind of stuff. But I wanted to talk today just about some of the challenges that I see. ⁓

Two big things that I see investors miss the mark on prior to even purchasing a property. ⁓ So I just want to share my insights there. And yeah.

Scott Bursey (03:21)
Absolutely well that’s an incredible start. Bethany please tell us what would you like to to ⁓ speak of in regards to your business?

Bethany Shoffner (03:29)
Sure, so our business is, ⁓ know, a lot of our clients are out of state investors. A lot of properties, they’ve not seen any of their properties, never been to Indiana. A lot of times they’ve never met us. so through the years of growing, our company has been in business 15 years now. ⁓ And we’ve grown substantially from when I started to now continuing to grow. And we’ve just really taken a better approach on

resident experience and also setting realistic expectations for our investors on what to expect with their properties. Over the years, you see investors buy something and then they’re like, this isn’t working out the way I thought it was. This is not making me any money. And we’re on the other side like, is what you should expect. So really trying to set expectations correctly, reality checks on how their investments are going to perform, and then also kind of dive into the

resident experience and how that impacts their success of their investment.

Scott Bursey (04:26)
Walk us through how does that impact your bottom line?

Bethany Shoffner (05:17)
Yeah, so if your residents don’t feel appreciated, don’t feel like their property manager or the owner of the property cares about their experience, they’re most likely not going to take good care of the property. If you show them a little bit of respect and handle their maintenance timely, efficiently, effectively, all the things, they’re most likely going to stay longer. That’s one of the biggest things that we see in the industry. We partner with a lot of different ⁓

Companies, Property Meld is one of our ⁓ maintenance software that we use. And the biggest reason they survey, they do millions and millions of work orders ⁓ a year. And they survey a lot of the residents. And one of the top reasons residents move out is because maintenance ⁓ doesn’t get handled properly or efficiently and or lack of maintenance. So that’s one of the top reasons. And if you just take the time to make sure that it’s handled, they’re going to they’re going to appreciate that. And then they’re going to take better care of your property.

they’re gonna see that you take care of your property, so why would they not also want to take care of your property for you? So I think that that experience and care go a long way for sure. If they don’t feel valued, they’re not gonna take the time to care about your property and they’re not gonna stay.

Scott Bursey (06:28)
Bethany, thank you so much for sharing that with us. And what is the most common pitfall or friction point you see new investors encounter when they first start managing properties?

Bethany Shoffner (06:38)
So the biggest one I see is the investors forget to contact an experienced property manager in the area. So a lot of out-of-state investors want to come to Indiana because the entry point’s a lot less. It’s easier to get in here. But they find an agent. They see a property online. It looks like it’s completely renovated. It’s cute. It’s perfect. It’s going to rent super fast. You’re going to get top dollar rent. And then the street that it’s on is Lower Street.

in the area and not desirable. So the rents that they thought they were going to get on paper in their spreadsheet are nowhere near what they’re actually going to get. ⁓ So then they become frustrated. So I think that the biggest thing that investors could do is contact an experienced property manager or an experienced agent that actually does investments and understands the ⁓ market, the area, property location, ⁓ property class, area rating, all those things in the certain

wherever they’re going, regardless of Indiana or other markets, contact an experienced PM first. They can tell you what to expect. So a lot of times I’ll see them buy something and then they’re just upset and they’re never happy. And eventually they sell it because it never performs the way they thought it was going to. And it’s just a negative experience when we could prevent that before it happens. It’s too late after you purchased it, you purchased it. But we can have those conversations before then.

Scott Bursey (07:59)
Beyond conventional single-family homes, what asset class in central Indiana presents the biggest overlooked rental opportunity right now in your view?

Bethany Shoffner (08:06)
I say B-class properties, single family B-class. Yes, there’s opportunity with multi-family as well, but I think the location plays a huge role on where your success goes with multi-family. ⁓ But I think stability for people that want stable rentals, B-class in a desirable location, three bed, one bath, four bed, if you can get one of those, that’s going to be super desirable all the time. ⁓

But I think that’s the biggest impact. Those are always typically desirable rentals years after year after year. And so if you want steady income, you want it to perform continuously, retention, less turnover, try to focus on the B-class area. Single family is my favorite, but there is opportunity, like I said, in multi-family as well, or smaller multi-family. But I would say the opportunity would be the B-class neighborhoods.

Scott Bursey (08:55)
Anthony, if you could walk us through this, what local regulatory change in a major central Indiana city like Indianapolis or Carmel are you currently watching the most closely now?

Bethany Shoffner (09:41)
Yeah, I would say in Carmel and Fishers, started to HOAs, tried to put rental caps on the number of rentals they’re allowing in certain neighborhoods. I’m pretty sure it got overturned. I’m watching it. I think they have an extension to next January, I believe is when it is. But they’re only allowing 10 % of rentals. And you have to go through their process of getting approved with your HOA for the rental.

So I’ve had a lot of, I mean, we ask our investors and they bring us properties where like, can I see your HOA covenants? I, have you asked them if there’s any kind of rental cap? Can you have a rental in your HOA? But right now that’s a big focus that we’re seeing because it’s being pushed in all the different areas through Indianapolis, Carmel Fisher area. So that’s one that’s on our radar. Other than that, we really, mean, yeah.

Scott Bursey (10:27)
That’s a massive, massive injection of value

right there. And if an investor is looking to scale, you know, from five units to 50 in central Indiana, what is the one platform they must ⁓ adopt ⁓ right now in your view?

Bethany Shoffner (10:32)
Yep. Yep.

Mm-hmm. Mm-hmm.

I think the one thing that they should do is really ask themselves how much they care about the resident experience. ⁓ How, if you’re using a property manager, if you’re self-managing, how important is my resident’s experience to me as an investor? Do I want, you know, I’m not saying bending over backwards for them and doing every single little thing and being lenient on rent or anything like that. Be strict with that, but how,

What kind of experience do you want them to have? Because I know there’s all kinds of different ⁓ property managers, assistants, landlords, whatever it is that, you know, they could, some could care less on the experience that they have, the residents have, but I’ve seen it so much where if you care just a little bit, if you send your resident a Christmas gift, a card, we send a handwritten card out and we have our, we send it out to all of our clients asking, do you guys want to opt in for this?

We send them a pizza and movie tickets. It’s just something to show appreciation. It’s a little gesture that goes a long way. And if your residents feel appreciated and that experience is there, they’re going to in return take better care of your property. And at the end of the day, when you have a turnover, we all know vacancy expenses and turnover are the biggest hit to our investments when we have that. So if you can minimize as much as you can, it’s it.

going to pay dividends in the end. I really think a lot of investors should take a second and ask, how do I care? How much do I care about my residence experience? Do I want them to have a great experience? Do I want them to have an okay experience? Or I don’t really care at all. I just want my property occupied. And I’m sure all three will have a little bit different success. ⁓ And there’s not a wrong or right, but I just feel like you’ll be more successful if you care a little bit about your resident experience.

Scott Bursey (12:29)
When it comes to relationships and networking, what’s made the biggest difference for you?

Bethany Shoffner (12:34)
I think the less transactional conversations. So I think our world’s gotten very transactional. ⁓ And with AI and all the things, it can be very transactional. So bringing back in the personal interaction, the conversation. So for us, like vendor relations, taking cookies to our vendors, ⁓ saying thank you, not just, hey, you didn’t get this work order completed, or this price is too high.

we’re making it very transactional and we take that away, the human aspect away, it just makes it not so, I don’t know, just humanized. It’s less humanized. So if we can bring that back, that’s where I feel like we’ve had the biggest ⁓ success with our vendors at least. And I would say residents too, just treating them like humans. We’re not just doing a chat bot response to them. Like we pick up the phone, we answer the phone, we have conversations ⁓ and treat them like people, not so transactional.

Scott Bursey (13:28)
You just gave our listeners the blueprint for some serious horsepower right there. Any challenges you’re watching closely, market risk, competition, access to deals or capital, you know, that sort of thing.

Bethany Shoffner (13:40)
I would say right now one of the biggest challenges that we’re kind of facing is maybe maintenance costs. ⁓ Just in general, obviously, inflation across the board, prices are increasing. ⁓ But that’s kind of obviously when you go and purchase property, you got a budget for maintenance. And as prices have increased so much over the years, it’s trying to do what we can on our end to reduce those costs. our vendor relations, having those conversations, treating them like

the people, you know, kind helps us get better vendor relations, better discounting, better pricing for our investors. So I would say that’s the one thing we’re always on the lookout for is just how can we make sure we’re, you know, getting the best prices for our investors in general, because we maintenance costs and everything else in life is going up. So what can we do on our end to kind of keep that down?

Scott Bursey (14:31)
100 % if you can walk us through some short term strategy and then some long term strategy.

Bethany Shoffner (14:38)
Yeah, I think short-term strategy could be just, I guess, with maintenance or just in general. Is that what you’re?

Scott Bursey (14:45)
Yes, as far as your business as a whole, some of your strategy that you’re employing, ⁓ you know, let’s say the next 12 to 18 months and then maybe some of your long-term vision as well, Bethany.

Bethany Shoffner (14:45)
maintenance.

Sure. So ⁓ for ours, right now, we’re just really putting a focus on education for investors, a platform for education ⁓ that we can kind of help set and realign those expectations. just, we see that so much that investors come to us and they’re like, hey, I got this property. It’s not performing as it should. And then I go and look and I’m like, it’s probably not performing as it should because it’s performing as it’s supposed to. You just were expecting different.

because you didn’t know the area or whatnot. So we’re putting a lot of ⁓ education right now in our everyday. We have social media, TikToks, all the things that we do, just educating our clients, educating investors in general, ⁓ all through platforms, just to kind of, you know, reassess, ⁓ reset the expectations for their investment and what to expect. I would say that’s honestly probably our long-term goal too, is to become that resource for them.

Scott Bursey (16:26)
Are you a part of any investment groups?

the resource for, yes, absolutely. And on that note, and thank you for that. That was a really a good detailed explanation. And let me ask you this, are you a part of any ⁓ peer groups, investment groups, networking groups, anything of that variety?

Bethany Shoffner (16:50)
Yeah, so we’re part of NARPM, which is the National Property Management Association. And we partner with a lot of different vendor property management software companies. So we’re doing a lot within the industry there. We go to conferences, a PM systems conference is just dedicated to your PM business and building better processes for your success for your clients and your residents. Property Mel is our meet and software. We go to conferences with them.

Brent Vine is who we use for our software. Just got back from their conference last week, I believe. So we’re always trying to just stay in the know, stay in the top. What we need to do to be proactive. AI is a big thing right now. And so what can we do to help our investors with AI? What things can we implement inside of our business that brings value to investors?

Scott Bursey (17:41)
This has been pure gold, we can’t let you leave quite yet. Is there any additional advice that you’d to leave with our listeners?

Bethany Shoffner (17:49)
I would just reiterate, just contact a PM. Whether you’re in Indiana, you can always call us. But if anywhere else, just always try to contact a professional, experienced property manager before you buy. Because I hate seeing it. I hate seeing people buy things and being stuck with something that never is going to perform as they expected. You can have great success. I believe all properties can be successful. It just depends on what your strategy is and what you expect to get out of it.

Just call a PM first. Work with the agent and the PM. Get a second opinion before buying, and you’ll be more successful.

Scott Bursey (18:25)
That was some pure high octane feel right there, Bethany. And for our listeners that want to follow your journey or collaborate with you, what’s the best way for them to reach you?

Bethany Shoffner (18:33)
So say my CRM properties ⁓ is our website, crmproperties.net. And then I did just recently do a rental reality check on TikTok, ⁓ where it’s a little bit of me talking about just rental reality checks, what to expect, ⁓ tips and tricks, but then also a little, I’m a mom of two. there’s some fun mom stuff in there as well, but I share on that. And then ⁓ we have a lot of Facebook pages as well for our company.

Scott Bursey (18:59)
Bethany thank you for joining us today.

Bethany Shoffner (19:01)
Yeah, thank you, Scott. Appreciate it.

Scott Bursey (19:03)
and

appreciate you. And to our listeners, we appreciate you. If you got value from today’s episode, please subscribe. We’ll be filling your tanks with exceptional guests, just like Bethany, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you on the next episode,