How Property Managers Choose Vendors: Insights from the Field
Finding the right vendor is critical for property managers. The right choice directly impacts tenant satisfaction, property maintenance, and profitability. Here's a quick breakdown of what property managers prioritize when selecting vendors:
- Cost vs. Quality: Balancing competitive pricing with reliable, high-quality service.
- Reliability: Consistent performance and dependable results.
- Communication: 24/7 availability and clear updates.
- Local Expertise: Knowledge of market trends, regulations, and tenant preferences.
- Scalability: Ability to grow with property portfolios.
Key Trends:
- Digital tools like bid comparison software and risk assessment systems are transforming vendor selection.
- Vendors must adapt to rising costs, labor shortages, and post-COVID safety standards.
Quick Tip: Property managers value transparency, measurable performance, and strong partnerships. If you're a vendor, focus on delivering consistent quality, clear communication, and digital capabilities to stand out.
For a deeper dive into these strategies, read on.
5 Best Practices for Optimal Vendor Performance
Getting Started: Entering the Large Property Market
Breaking into the large multifamily property market requires a well-thought-out strategy and a deep understanding of what property managers need. With multifamily properties making up 32.4% of the investment sales market in 2023 [3], there’s plenty of opportunity - but also plenty of obstacles.
Common Entry Challenges
Vendors entering this space face several hurdles. Material costs have jumped by 50% since the pandemic, and the construction industry is dealing with a significant labor shortage - 60% fewer workers than projected for 2024 [5].
Tracy Wyrick, Vice President of Sales at Engineered Floors, explains: "Interest rates slowed starts of new projects [in 2024] and will make 2025 challenging in multifamily new construction" [4].
Here’s a look at the key challenges vendors face and some potential strategies to overcome them:
| Challenge | Strategic Solution |
|---|---|
| Rising Costs | Offer transparent pricing with clear value propositions |
| Labor Shortages | Invest in workforce training and maintain a reliable team |
| Market Competition | Focus on unique service offerings and quality guarantees |
| Property Access | Build strong relationships with regional managers and decision-makers |
These challenges demand quick thinking and a strategic approach to stay competitive.
Success Story: New Vendor Integration
Doug Roginson, Head of Supplier Relationship Management at JPMorgan Chase, highlights a shift in how vendors are chosen: "Changing the narrative from lowest cost to best value during supplier selection is a paradigm shift" [2].
Take North Carolina as an example. By the end of 2024, the state is expected to add 4,507 new housing units, with properties averaging 215 units each [3]. This shift toward value over cost is becoming increasingly evident.
Successful vendors are adapting by focusing on the following:
-
Establishing Clear Performance Metrics
Property managers now expect contracts to include measurable deliverables like response times, quality benchmarks, and project completion rates [2]. -
Leveraging Technology
Many vendors are turning to digital tools to improve efficiency. For example, SMART Apartment Data’s mobile app helps supplier sales teams optimize their routes and streamline follow-ups [3]. -
Building Strategic Partnerships
Dan Butterfield, Vice President of Sales at Dal-Tile, notes: "Rising land development cost, material cost, labor cost and mortgage rates are all critical components to ensuring the affordability of new homes and properties" [4]. To address these challenges, successful vendors:- Communicate openly about cost factors
- Offer flexible pricing models when possible
- Provide regular updates on market trends
- Prove their long-term value with cost-effective solutions
"Without a solid foundation in cost control, performance standards and risk management, you can't really build effective supplier relationships." – Doug Roginson [2]
Ultimately, property managers are looking for partners who can consistently deliver quality while keeping costs in check. Vendors who focus on these priorities can establish themselves as trusted allies in the large property market.
Key Decision Factors for Property Managers
When property managers evaluate vendors in the multifamily sector, they focus on factors that ensure reliability and long-term value. Let’s break down the key areas they consider.
Cost and Budget Analysis
Balancing cost with quality is always a priority. Property managers examine both direct and indirect expenses to ensure they’re getting the best value for their investment.
| Cost Component | Typical Range | Considerations |
|---|---|---|
| Monthly Service Fees | $100-$200 per unit | Base rate for standard services |
| Management Fee | 6-12% of rent collected | Depends on property size and scope |
| Maintenance Fees | Percentage or fixed rate | Tied to the complexity of services |
| Emergency Services | Additional charges | Should be clearly outlined upfront |
"While budget is crucial when choosing a vendor, ensuring the services are worth the cost is also essential. Be cautious of extremely low rates, which may signify poor quality or reliability. Additionally, inquire about potential hidden fees." - Keyrenter St. George Property Management [1]
Beyond standard pricing, property managers also look for volume discounts, emergency fee structures, flexible payment terms, and the availability of contingency funds.
But cost alone isn’t enough - performance history is just as important.
Track Record and References
A vendor's credibility can make or break a partnership. Property managers assess this by digging into:
- Case Studies: Success stories from similar properties.
- Industry Recognition: Awards, certifications, or affiliations that highlight expertise.
- Performance Metrics: Key indicators like response times, completion rates, and quality scores.
- Financial Stability: Evidence of long-term viability and sound financial health.
This thorough review helps ensure vendors can deliver consistent, high-quality service.
Local Market Knowledge
Understanding the local market is often the deciding factor. Candice Blair from Niguel Point Properties explains:
"Smart investors know that local property management is the best way to be sure you're earning as much as you can on your rentals" [6]
Local expertise ensures vendors can navigate area-specific challenges and opportunities. Key areas of evaluation include:
- Regulatory Compliance: Familiarity with local building codes and zoning laws.
- Market Dynamics: Awareness of rental trends and vacancy rates.
- Vendor Networks: Strong relationships with local contractors and suppliers.
- Community Understanding: Insight into tenant demographics and preferences.
Property managers often assess local expertise through specific indicators:
| Assessment Area | Key Indicators |
|---|---|
| Market Awareness | Knowledge of rental rates, vacancy trends |
| Local Connections | Established contractor and supplier networks |
| Community Knowledge | HOA regulations, tenant demographics |
| Response Capability | Quick response times, availability of local teams |
Must-Have Vendor Qualities
When property managers evaluate potential vendors, they focus on specific traits that ensure dependable, high-quality service. These qualities are key to building lasting partnerships with vendors who can consistently meet their needs.
24/7 Communication Standards
Round-the-clock communication is a non-negotiable for property managers. Vendors must be accessible at all times and provide seamless communication across multiple channels.
- Emergency response available 24/7
- Regular updates on service progress
- Accessible via email, phone, and tenant portals
- Efficient invoicing and work order processing
"Our clients trust and expect us to deliver the very best. That's why we are extremely selective in reviewing the qualifications of the companies that serve the communities we manage. We seek business partners that share our commitment to on-time, on-target, and on-the-money customer service" [8].
Beyond communication, maintaining consistent quality is equally critical to building trust and reliability.
Quality Control Methods
Property managers expect vendors to have rigorous quality control systems in place. These systems should ensure reliable service, high tenant satisfaction, and quick resolution of any issues. Additionally, compliance with industry standards is a must. Interestingly, research reveals that only 16% of companies thoroughly assess their suppliers' business continuity plans [9].
Growth Capacity
A vendor’s ability to scale operations is just as important as their service quality and communication. As property portfolios expand and market demands rise, vendors must be equipped to grow alongside them.
For example, Real-Time Consulting Services successfully restructured operations for a 1,000-home portfolio, reducing administrative workloads by 40% while improving tenant retention [11].
"I don't think there is anything more important than having good quality employees. You can get all the new business you want, but if you don't have good employees managing the new property, you're going to lose it as quickly as you gained it" [10].
Property managers value vendors who can demonstrate strong staffing capabilities, efficient task management systems, and clear strategies for scaling their services to meet growing demands. These factors are crucial for sustaining long-term success in an ever-evolving market.
Changes Since COVID-19
The pandemic has reshaped how vendors are evaluated, placing a stronger emphasis on safety measures, digital tools, and supply chain reliability.
Supply Chain and Safety Updates
COVID-19 brought vendor reliability into sharp focus, with 87% of research heads now prioritizing contactless designs in buildings [12]. This shift has introduced new expectations for vendors, such as:
- Enhanced cleaning protocols that go beyond CDC recommendations
- Upgraded HVAC systems featuring MERV-13 filters
- Contactless service options to reduce physical interactions
"Workplace change was inevitable. However, what we expected to evolve over time transformed almost overnight in response to the pandemic. These exceptional circumstances are akin to an elastic band being stretched to its limit; it will go back but not completely." - Katrina Kostic Samen, Head of Savills KKS Workplace Strategy & Design [12]
A great example of this shift is Larken Associates. In January 2021, they rolled out a three-part cleaning strategy across their commercial properties. This included CDC-approved cleaning products, additional cleaning staff, and nightly deep-cleaning procedures. These measures were specifically designed to address pandemic-related safety concerns and protect tenants [13].
While safety protocols evolved, digital tools also stepped in to streamline vendor evaluation and selection processes.
Digital Bidding Systems
The rise of digital operations has transformed how vendors are evaluated, with remote tools now driving bidding, management, and overall selection. Here’s how things have changed:
Digital Transformation Metrics:
| Area | Before COVID | After COVID |
|---|---|---|
| Video Conferencing Use | Limited | Over 50% increase [12] |
| Remote Work Adoption | Occasional | 84% increase [12] |
| Contactless Services | Minimal | 87% implementation [12] |
In April 2025, VendorPM introduced a comprehensive vendor lifecycle management platform. This system integrates credentialing, eTendering, and contract management, simplifying the vendor selection process for the $600B industry [14][15].
Property managers now look for vendors with strong digital capabilities, including:
- Virtual property inspections for remote evaluation and bidding
- Digital documentation to streamline contracts and compliance tracking
- Real-time reporting for performance analytics
- Cloud-based communication tools for better coordination and faster responses
These advancements highlight how digital tools and updated standards are meeting the rising expectations of property managers.
Digital Tools in Vendor Selection
Property managers are increasingly relying on digital tools to simplify and improve the vendor selection process. A recent study highlights that 48% of property managers now use technology to enhance efficiency [17]. This shift reflects broader changes in vendor practices, especially in the wake of the COVID-19 pandemic.
Bid Comparison Software
Bid comparison tools have revolutionized how proposals are evaluated, offering features like real-time cost analysis, timeline reviews, and performance tracking. These tools streamline the decision-making process by automating key evaluations.
| Evaluation Criteria | Software Capabilities |
|---|---|
| Cost Analysis | Real-time benchmarking against current market rates |
| Timeline Assessment | Automated checks on project timelines and vendor availability |
| Performance Metrics | Insights into vendors' past performance and completion rates |
| Compliance Checks | Automatic verification of licenses and insurance |
For example, Spinoso Real Estate Group reported a 90% reduction in the time spent processing proposals after adopting automated systems for RFPs and bid evaluations [20].
Document Management Systems
Centralized document management platforms are now a cornerstone of vendor operations. These systems help ensure compliance and streamline processes, aligning with the preferences of 99% of rental property owners who now prefer conducting business online [17].
"Integrations can significantly improve vendor management by increasing efficiency, improving data accuracy, enhancing communication and collaboration, and providing better visibility into vendor performance and risks."
– Rosanna Fischer, Vice President of KDM Management Inc. [22]
A standout example is JLL's AI-powered document system, which has dramatically reduced drafting times from 4–6 weeks to under five hours [20]. When combined with bid comparison and risk assessment tools, these systems provide a unified platform for evaluating vendors.
Risk Assessment Tools
Risk assessment tools offer property managers a comprehensive way to evaluate vendor reliability and mitigate potential risks. Key features include:
- Automated Compliance Monitoring: Real-time alerts for expiring licenses or insurance [21].
- Performance Tracking: Monitoring key metrics like bid win rates and job completion times [19].
- Financial Stability Analysis: Ongoing evaluations of a vendor's financial health.
- Security Verification: Tailored checks on vendors' security protocols [16].
NS Management, for instance, achieved an 83% reduction in the time required to process quote requests by implementing automated workflows [20].
These tools also integrate seamlessly into dashboards, allowing property managers to track important metrics from multiple sources. Many platforms now incorporate predictive analytics to help forecast maintenance costs and vendor pricing trends [18], giving managers the insights they need to adapt to market shifts effectively.
Maintaining Vendor Relationships
In today’s world, shaped by digital advancements and shifts in how we work post-pandemic, building and maintaining strong vendor relationships is more important than ever. Once you’ve chosen the right vendors, the next step is to nurture those connections to ensure reliable and consistent service.
Partnership Guidelines
Start by setting clear expectations and maintaining open communication. Property managers should define service requirements, establish response time expectations, and outline protocols for handling various work orders.
| Partnership Element | Implementation Strategy | Expected Outcome |
|---|---|---|
| Communication Protocol | Dedicated contact points | Faster response times |
| Performance Metrics | Quarterly KPI reviews | Improved service delivery |
| Contract Management | Annual review meetings | Updated terms and clarity |
Think of vendors as strategic partners, not just service providers. Building mutual success means going beyond formal agreements - acknowledging and rewarding their contributions can strengthen these partnerships even further.
Reward Programs
Recognizing and incentivizing vendor performance is a great way to motivate excellence and build loyalty. Consider implementing tiered reward programs that offer benefits like:
- Priority consideration for future projects
- Flexible or faster payment terms for top-performing vendors
- Access to larger, high-value assignments
- Public acknowledgment or formal recognition for outstanding service
These rewards not only encourage vendors to go above and beyond but also help create a sense of partnership and trust.
Staff Coordination
Smooth collaboration between property staff and vendors is essential to ensure quality service. Here’s how to make that happen:
- Onboarding and Integration: Provide vendors with everything they need to succeed, including property maps, access protocols, emergency contact lists, and resident communication guidelines. Regular coordination meetings, joint training sessions, and shared digital tools can further streamline operations.
- Performance Monitoring: Keep a close eye on vendor performance through regular assessments. Track service quality, monitor response times, collect feedback from residents, and analyze cost efficiency to ensure standards are met and improvements are made where necessary.
Conclusion: Steps for Success
Building strong vendor partnerships starts with clear strategies, dependable service, and open communication. To succeed, vendors should focus on excelling in communication, maintaining quality, embracing digital tools, and effectively managing risks.
| Success Factor | Implementation Strategy | Expected Outcome |
|---|---|---|
| Communication Excellence | 24/7 availability, proactive updates | Faster issue resolution, increased trust |
| Quality Assurance | Regular training and documented processes | Consistent service delivery |
| Digital Integration | Project management tools and automated scheduling | Streamlined operations |
| Risk Management | Updated insurance and compliance monitoring | Protected partnerships |
Property managers often stress the value of reliability and professionalism in their vendor relationships. Lisa Trosien, an Award-Winning Multifamily Educator, highlights the importance of treating these relationships as partnerships:
"Their job is to help you succeed and make money along the way. Viewing your relationship as a partnership begins the value creation of the affiliation you have. Be honest. Be clear. Always put everything in writing so there are NO misunderstandings. Be fair. Pay your bills on time. Let them know your expectations upfront and find out what their expectations are." [24]
To stay competitive, vendors should prioritize three key areas:
- Service Excellence: Uphold high-quality standards and maintain transparent documentation to encourage continuous improvement [7].
- Technology Adoption: Use digital tools and automated systems for more efficient operations [23].
-
Partnership Development: Jake Schmitt, CPM Candidate and Business Manager at Mesa Management, Inc., underscores this point:
"Establishing good relationships with your vendors is so important! Take time out of your day to talk with your vendors and create a plan that helps both of you succeed. If your vendors like you and trust you, they will help you out when you need it most!" [24]
Transparency, dependability, and consistent quality form the foundation of successful vendor relationships. By applying these strategies, vendors can build and sustain partnerships that deliver long-term success.
FAQs
How can vendors provide the right balance of cost and quality to meet property managers' needs?
To find the right balance between cost and quality, vendors should start by understanding what matters most to property managers. Research the going rates in your area to make sure your pricing is competitive, but don’t compromise on the quality of your services. Transparent pricing combined with clear value can go a long way in building trust.
Consistency is another major factor. Ensuring high-quality service and quick responsiveness every time is crucial. This might mean investing in staff training or implementing strict quality control measures. Over time, proving your reliability can lead to stronger, long-term relationships with property managers. Often, being dependable and consistent trumps simply offering the lowest price.
At the end of the day, it’s about showing that you can provide reliable, top-notch services at a fair price - helping property managers meet their goals without cutting corners.
What digital tools can vendors use to stand out and work more effectively with property managers?
To stay competitive and work more effectively, vendors should embrace digital tools that simplify their workflows and improve collaboration with property managers. For example, property management software can handle tasks like maintenance requests and tenant communications, helping vendors respond more quickly and deliver better service.
Tools that streamline vendor registration and ensure compliance are also crucial. These platforms not only make the process smoother but also help vendors establish trust and reliability with property managers. On top of that, communication and project management tools - like messaging apps or task tracking software - can enhance coordination and ensure everyone stays on the same page.
By adopting these technologies, vendors can work more efficiently, strengthen their professional relationships, and meet the expectations of property managers more effectively.
How can vendors build strong, lasting partnerships with property managers?
Vendors can establish enduring partnerships with property managers by prioritizing open communication, dependability, and trust. Being clear and transparent helps ensure everyone is on the same page, while promptly addressing any concerns keeps the relationship productive and cooperative.
Delivering consistent, high-quality service and meeting deadlines reliably builds the credibility needed for long-term collaboration. Leveraging technology to simplify processes and improve communication can also boost efficiency and reinforce the partnership. By focusing on these key elements, vendors can create meaningful connections and provide lasting value to property managers.