We’ve often said that the real estate business is actually an operations business (to the surprise of many). As an owner and operator of more than 20,000 residential units and millions of square feet of property, we spend thousands of hours coordinating with hundreds of different contractors across the country on everything from large scale, multi-year construction projects to the daily small repairs and maintenance issues that inevitably pop-up. And increasingly we are finding that contractors who use ServiceTitan deliver higher quality, more reliable work than those that do not.
From a real estate owner's perspective, finding reliable contractors that can consistently deliver high-quality work at a reasonable cost is arguably as important as any other part of the business. In fact, we have teams of individuals both internally and as part of our external property management relationships that spend nearly all their time doing just that. A good contractor is an incredible value-add that leads to better operations and, in the long-run, better potential returns, whereas a problem contractor can mean weeks or months of delays along with mistakes and cost overruns that can quickly eat away at the operating profits from even the best located real estate. For this reason, we are on an almost never ending quest to find and retain the best contractors for our assets.
Recently, we are seeing that working with contractors who utilize the ServiceTitan software is an increasingly reliable predictor of quality.
Why? We suspect it’s probably both correlation and causal.
A great contractor knows that being diligent, reliable, communicating clearly, and completing work as promised are all essentials to successfully growing their business. As a result, they are likely to invest up front in tools that help them to do that better, even if the short term cost is higher. ServiceTitan is just that, it helps contractors with everything from collecting inbound client leads, creating proposals, scheduling service, tracking and managing employees, billing, and customer support.
It’s perhaps not a surprise then that smart contractors tend to choose ServiceTitan and doing so makes them more efficient and better at doing their job.
As a case in point, here’s one recent example of this dynamic from our portfolio:
- We had a property in Los Angeles that required some basic plumbing upgrade work, so we reached out to a handful of plumbers to provide quotes.
- One was prompt in scheduling a site visit, sent a reminder in advance of the visit, provided an accurate ETA for their technician, and followed up with a detailed quote.
- The other provided a wide arrival window, arrived at the tail end of it, had to be prompted to provide a quote two days after he left, and eventually sent an unorganized quote a few days later.
- Unsurprisingly to us, the first group utilized ServiceTitan while the other did not. While the quotes came in relatively similar in price, we (of course) ended up going with the first group because we had significantly greater confidence that they would complete their work on time, on budget, and with the appropriate quality. In short, they would be “on top of it” and even if they had quoted a price 5-10% higher, we likely still would have chosen them for these very same reasons.
This is the trend that we are seeing across the country, contractors using ServiceTitan communicate more consistently, provide clearer updates, and win more business. A report out today from ServiceTitan provides some specific numbers on this - while only 29% of commercial contractors across the industry saw an increase in revenue last year, over 70% of ServiceTitan commercial customers saw an increase in 2023, with over 50% increasing revenue by 10%+ (see the full report here). So a contractor using ServiceTitan is more than twice as likely to be growing their business as a contractor not using it. It’s the reason why we are bullish on ServiceTitan both as a real estate operator that works with many of their customers…and as an investor in the company itself (via the Innovation Fund). We expect this clear market fit for providing a product that makes their customers better at what they do is likely to drive continued success for the company going forward.
Whether you’re in the real estate industry or a trades business, we’d strongly encourage you to check out ServiceTitan for yourself — or send it to your favorite contractor or trades vendor.
To help facilitate this, we’ve partnered with ServiceTitan to offer a discount to our Fundrise network where you or any of your contractors and vendors can receive the first three months of ServiceTitan for free.
