Ep 002 - What is Digital Home Management?

Welcome to Be a Smarter Homeowner Podcast, where you'll discover strategies to save money, save time, and be better organized in managing your largest financial asset and biggest expense, your home. Your hosts, John Bodrozic and Beth Dodson, who are co-founders of HomeZada, have been supporting homeowners for over 20 years. They are here to share with you their tips and suggestions, as well as interviews with industry experts, with the goal of helping you become a smarter homeowner. Now, here's your hosts, John and Beth.

Welcome to Be a Smarter Homeowner Podcast. My name is John Bedrosian, and I'm here with my co-host, Beth Dodson. And today we're going to talk about what is home management. 2 simple words, home and management. And we're also going to introduce a phrase called digital home management. And while it's such a simple word called home, it means a lot of things to a lot of different people, especially when you think about the diversity of all the different types of homes across the United States. So Beth, why don't you take us through a little bit of your explanation over the diversity of the different types of homes there are in this country?

Yeah, so first thing that comes to mind is geography. There's so many different homes in so many different locations made up of different types of materials. That's the first thing I think of. The second thing I think of is the different types of homes or variety of homes. There are single-family homes, there are farms, there are condos, there are townhomes, row homes, very different types of homes that have different people living in them. And that's the other thing I noticed is that whenever there is a home, different people live in them with different family structures, with different decorations. So the home is very unique to the set of individuals that is living in it. That's the first thing I think of.

Yes. And what about the concept of the word property? And when you think about the size of the lot that a home may be on or may not actually be on a home, because like you said, it may be an urban condo. Think about that whole aspect of property. What does that mean to you?

Yeah, so that's another thing. So when it comes to the home, some homes have properties and some homes don't. I mean, let's face it, a condo is not necessarily having a property of its own. It may have common areas that are managed by a third-party property manager or the building manager. But when it comes to other homes, As I indicated earlier, there could be a single-family home that lives and resides on about a quarter of an acre up to several acres, or there could be farms that are hundreds or thousands of acres that they need to manage for different reasons. But then you could also have something like a small townhome or a row home that has a small front yard and a small backyard, and then you take into consideration even Some homes that are on waterways, sometimes they don't have much land at all. It's just beach access.

Yes, some even have a little dock on the edge of it where you can pull up on your boat and whatnot for those things. So essentially, that word home means so many things to so many different people because the style and the geography of the home where they live is so different. Uh, I'm going to take it a little bit further, and I'm going to actually talk about what I call the structure of the home or what I call the fixed assets of the home. So, when you think about, let's just use for an example, a single-family home in suburban America, right? There's a whole bunch of building materials that all actually come together to form that home. It's kind of like what I call a collection of assets. And, my analogy is almost like a car or an automobile, right? An automobile, I think I read the other day, has like 5 or 5,000 or 10,000 different parts associated with it, right? The steering wheel, the engine, the transmission. It's the same exact concept with a home, right? And it starts with a lot of the things that you don't see every day, which is a concrete foundation. Most homes have a framing built with wood. Then you've got a roof on top of that home. Obviously lots of different styles of roofs. You have windows, you have doors, you have siding. All of these building materials come together to essentially form The structure of the home. But the structure even goes beyond just the building materials. Another category of what I like to call is the equipment of the home. And equipment are things like your HVAC, your air conditioners, your furnace, your hot water heater, your electrical panel. All of these things are pieces of equipment that essentially cool or heat air, provide, you know, plumbing and—

Provide valuable functioning capabilities for the home to run.

Absolutely, right? And then even further, there's a category of what I call appliances. A lot of them are built-in appliances, right, which provide the common amenities of everyday life of like the refrigerator, the stove, the dishwasher, or the washer dryer. And then another category is what I call the things that you do see every day of the, of the fixed assets of the house, which is what I call the fixtures and, um, fixtures and finishes. That's the word I was looking for. And that gets into Like the flooring, right? You see hardwood floors, you see carpet, you see tile, you see the paint and the drywall, you see the electrical fixtures hanging from the ceilings or the walls, you see the plumbing fixtures in your bathrooms. All of these things come together, and there are all these fixed assets that come together that essentially make up the structure of your home. And that goes to your point, Elizabeth, which is there's so many different homes across the United States, all, you know, brand new homes versus homes that are 20, 30, 50 years old. All those components are different, and all those components need some form of maintenance.

Without a doubt. Yeah, if you want them to help your, your home function properly, if they're not maintained, then your home's not going to function properly.

Absolutely. And so we're peeling back that onion over the word home and how it means so many different things coming together. But I'm going to take it even one step further, or ask you to take our audience to the next level, Elizabeth. Is there's a whole category of things inside your home, which is your personal property or your contents, which is different than the fixed assets of your home. When I use those terms about personal property and contents, what does that mean to you?

That means so many things. So it could be the furnishings in my home, it could be the electronics. For people who have, you know, great televisions or surround sound systems, maybe they prefer to watch a lot of sporting events.

That's a big deal.

My man cave. Man cave, yeah. And then also, um, maybe they have a lot of electronics in the frame of technology products, so computers and laptops and printers and what have you. And with a lot of people working from home nowadays, maybe there's a different setup. Um, so that's really important. And then also I take a look at household items, and what I mean by that is any type of decor, any type of dishes or pots or pans, any of those gadgets that you have in your kitchen, which unfortunately I have a lot because I love to cook, but that's a whole nother story. And then also I take a look at even clothes. Clothes for ladies out there, if you've got shoes, it's a great thing. Um, you want to track all your jewelry. The contents continue to grow even if you maybe run a business out of your home. So maybe it's more than just working from home, but it's also running a business out of your home. And for instance, maybe you're a contractor of some sort and you have a lot of tools. If you have a lot of tools, then you want to understand exactly what you own. So one, you don't have to buy duplicate type items, but also because just if in case you lose something or something gets stolen, you just understand what you own so that you can make sure that you are performing your job properly.

So let me ask you a question, Elizabeth, because I know that both with our customers at Homesada and, and you speaking with a lot of insurance professionals across the country, there's also another category that insurance industry likes to call collectibles or collections. It tends to be sort of things that we as homeowners find passion around and have a lot of in our house. But can you talk about what are the different types of collections that you've seen as it relates to personal property in people's homes?

Yeah, it's been a lot. So collections are a very personal thing, exactly what you said, John. And it could be anything from coins, stamps, sports memorabilia. In fact, we know a lot of our own personal customers at HomeZada have a ton of sports memorabilia that's really important to them. It could be designer bags or clothes. A lot of our customers also have that. When it comes to maybe a particular artwork, of some sort. That's also very important to a lot of people. Or maybe it's something that's not necessarily hugely valuable in the sense of monetary gain, but it's hugely personal. So maybe it's a particular type of trinkets, maybe it's family heirlooms that have been passed on, or antique furniture that could or could not be extremely valuable. These items are also very, very important. To the individual, and they can fit in the category of collectibles.

Absolutely. So again, if we start from the beginning, when we use the word home, we're trying to paint this picture that it's a hierarchy of lots of different things that come together, no matter what kind of home you own, from the property and the landscaping to the physical structure to the equipment to the assets to all your personal property. It's this huge hierarchy of assets that also sort of come together and make up essentially that word called home. Now I'm going to shift gears a little bit and talk about the second key phrase, which was management, right? Home management. What does management mean, right? And maybe I'll even be more specific in the fact that we always get asked the question about management. There's what I call the physical aspect of managing a home, right? You actually have to do things to your home. When I use that term home management or predicated with physical, what does that mean to you as a homeowner, Elizabeth?

First thing that comes to mind is my maintenance. I have to manage all the equipment and the appliances and all the tasks around my house, whether it's cleaning something so that it doesn't get dirty and it doesn't have some sort of buildup for whatever reason, or it is just pure maintenance. And a good example of that is, um, I'm a firm believer— I love to get my HVAC equipment or Heating and air conditioning equipment checked regularly. And what I mean by that is 2 times a year by a professional so that when summer comes and it's 115 here sometimes, that my air conditioning unit is actually working. I also wanna make sure that I am changing those air filters on a regular basis because I wanna make sure I have healthy, clean air inside my house. Especially now, over the last several years, I— we live in California and we experience a lot of wildfires, and that soot and smoke and ash get into the air filters that I just need to get rid of them. Yes.

So it's basically getting up and going to do something to maintain all those fixed assets inside the house. It's cleaning the gutters, it's pruning the trees. There's both. There's a management that needs to get done with the outside of the house and stuff that needs to get done on the inside.

Yes.

Right.

And it's seasonal. Like, I have different things during different times.

You bring up a huge point, right? Because going back to that geography, you're like, what does it take to do the management of a home in Minnesota versus in San Diego, given the climate differences of snow and freezing conditions? Also has a huge impact over what management and maintenance you need to do and what frequency and what time of year you need to do it.

Correct.

Right. And that gets into, uh, the, the uniqueness of all these different aspects of, of, um, management. Um, maybe a quiz for you, Elizabeth. Um, I don't know if I'm going to answer this one.

We'll find out.

How many, how many management tasks on the maintenance side do you think an average home needs to do every year?

Oh, that's a hard question. So I think it depends on the home, first of all. The size, the location, the seasons, etc. But I'd say anywhere between 20 and maybe 40 minimum for an average home. I mean, no historical home, no super, super old home. I mean, just an average home, kind of median age, median size, with, let's just say, maybe 4 slightly traditional seasons that are not super extreme.

Yeah, yeah, absolutely. I mean, it's, uh, it goes back again to that diversity of how old is your home, how big is the home, what are all the ages of those assets, where is that home, lots of different sort of things. And, and in our experiences is that most homeowners go through that journey of kind of learning what are those assets and what, what needs to get done from preventative maintenance. I go back to my analogy of a car, right? At least the car has the owner's manual in the glove box and it blinks at you when it's time to do stuff. But unfortunately, in our homes, we have no one single owner's manual for the home.

Nope.

And we don't have anything blinking at us telling us when it's time to do these things. Right. So I think that's a great opportunity for a future podcast to focus in on just the home maintenance piece. But back to the physical management piece, right? Homeowners in America love to spend money on home improvement projects.

Yes.

There's a, is there a physical aspect to managing your home improvement projects?

There is, it's a big aspect. I mean, there's different components you need for your remodel project, meaning different items, whether it's finishes, whether it's changing out things, buying things. I mean, I envision a remodel project to be either or. It either involves construction or it doesn't, and it just involves changing out furnishings. And either way, you're still having to go through a process of managing a budget, managing actual cost as you go through this process, managing potentially contractors if you're going to use them, and then also managing all the different items and when they get installed. Because we all know that when you have a major remodel, If you don't walk through the process, you could be doing things redundantly. And a good example of that is a kitchen remodel. If you have a kitchen remodel and you install your appliances before you change your flooring, well, then you gotta take your appliances back out and put your flooring back in. And that's just excess labor that you don't need to pay for.

Yeah, absolutely. And so, the whole home improvement piece, it usually falls also into, am I gonna DIY this myself or am I gonna hire a contractor or even a mix? Maybe you do some of the stuff And you hire a contractor forever for something else. But it's, it's definitely the physical, like I've got to demo something and then I need to install something. And even if you're hiring a contractor, you as the homeowner need to tell the contractor what you want both taken out and what new products you want put in. So there's that physical aspect of all of that. Now, if I kind of bring it back to a whole picture here of you've got a property, you've got all these assets, There's a lot of document and information about your home, right? There's the mortgage, there's the insurance policy, there's all these maintenance tasks. In your experience, when you've talked to homeowners, both our Homesatta customers and others, where do you see homeowners storing and tracking all that information?

Oh, the documents. So I hear this from a lot of different people. The first thing I hear is that they don't have any of their documents. They've either thrown them out or they have them stored in some box somewhere where they just can't find it.

And those, those are the people that at the cocktail parties are always complaining that their home is a money pit because they have no idea.

For the most part, yes. For the most part, because they don't know what's going on. And then, um, then there's a group of people I think, uh, we talked about in the last episode. I was one of those individuals. I had paper about my house in somewhere between 7 to 10 different locations. And that was crazy. It's just a lot of paper. And let's face it, if John needed to find anything, he wouldn't know where to look. I'd have to go find it for him. So, I mean, it's just a pain in the neck. Not to mention—

I don't even know where the kitchen gadgets go when I have to empty the dishwasher.

That's true. That's true. You don't. But when it comes to all this paper, it was in a variety of locations. And I think I'm not alone in that. I think there's a lot of other people that are doing the same thing and they don't even know whether documentation is current. So do I have my current insurance policy on a file folder? Do I have my current appraisal or my whatever it is? Oh, and not to mention receipts, the type of paper that receipts have. Data wears off.

Oh yeah, the ink wears off on the receipt. Totally wears off.

So I don't even know what it is. It's like wasted paper in a drawer. So that happens. And I think the third area that some people may track information is in some maybe digital components. It's not a physical type of activity, but maybe they have some combination of paper and physical and digital type of platforms that they still have in broken up places. I know I also did some of that in that I had paper in 7 to 10 different locations, but I also had some project data or some photographs on various digital sites as well.

Yeah. So you bring up the key phrase there, which is the other part of what we wanted to do in this podcast, which is Take the word home management, but put the word digital in front of it. Digital home management, right? It's not the act of physically going in and cleaning the gutters. It's the act of when do you know when to clean your gutters? When do you know when to change your air filters?

You mean without keeping it up here?

Without keeping it up there. Because again, we've kind of gone through this hierarchy of there's so many things going on of these collection of assets that it's hard for any one single human brain to actually keep That all in track of that. And then the other aspect, like you said, is it's the paper piece, right? Paper is scattered everywhere. And so people are now embarking on these concepts of basically, how do I convert all that paper and turn it into a digital format? And like you said, even the digital format, going back to our own personal experiences, it's scattered even digitally, right? You may have a cloud drive where you're storing some photos. Maybe you're using a spreadsheet somewhere. You know, you have a phone, I've got a phone, we've got different photos of, you know, the house on each one of our phones. So it's even not centrally located from a digital aspect. And yeah, so I think that there's a new category of technology is specifically designed apps that help you manage all of these aspects of your home, right? Which is what we're referring to as digital home management. Mm-hmm. And frankly, that's candidly how we started the Homes Auto business, which was our goal to basically try to bring all this data and information together in one place. And that's essentially what digital home management are. And there's a lot of other different options. But going back to you, Beth, is how would you suggest our audience take that next step of going to the process of creating their own digital home management system?

I think it just starts with the basics. I think people overthink what it takes to manage a home because it's very complex to manage a home. And taking something very simple like taking photographs, digital photographs of items that you value in your home, whether it's these collections that are high-end value, literally they, they have a value that is significant, or they have value that is significant to them personally, that you take photos of them and you store them in a safe, secure place so that you know how to access them in case you need them. Because maybe something went missing, or maybe unfortunately something transpired with your house, like a fire or hurricane, tornado, and/or just natural flooding that may have occurred because you forgot to change out a toilet part in the upstairs flooring. I don't know, these things do happen. And so that's the first basic I would do is just go about either taking photographs of some valuable items or room by room, or even establishing a maintenance calendar. Let's face it, the value of our homes is predicated if we actually take care of them.

Yeah, it'll go down in value if you forget those maintenance tasks. And not only will it go down in value, but you'll end up spending more money on fix-it and repair costs costing you more money than it did if you just took that half hour to go do that task once or twice a year.

You know, to that point, I even know somebody, their house didn't sell because it appeared that they didn't maintain it. So people were so desperate to have it and then they saw the inspection and saw that a lot of it just wasn't maintained properly, that the homeowners or potential buyers walked away. from that opportunity and, and to purchase that house.

So we've talked a bit about turning paper records into digital records, whether that's for a home inventory of inventorying your things and, and maintenance. And we've talked a little even about projects in terms of tracking budgets and costs. But let's talk about another category of what I call home finances. Yeah, right. And is there a digital home management component to that word home finances? And what does that mean to you?

Oh yes. So that was one of my biggest complaints. If anyone saw the previous episode of why we started the, the platform that we started, which is called Home Azada, one of the things I was really frustrated with was not only was I wasting time, but I was also wasting a lot of money, or I just couldn't figure out where my money was going. And how much does my maintenance cost on an annual basis? What is my house actually worth? And then how do I compare it against When my mortgage is going to pay off, and if I compare it against my mortgage, therefore I will know how much equity in my house I have if I want to use it for something else. The other thing that I look at is not only those financial aspects, but what am I spending annually? You know I have this proclivity to really analyze my energy bills every month because I'm just. So irritated about energy bills.

When it gets hot, your energy bill goes up. When it gets cold, your energy bill goes up.

Does it ever? And so it's just a matter of understanding all those nuances and how I can actually track it all together in one central system, because it all relates to what I refer to as the total cost of homeownership. How much does my house truly cost me In its entirety.

Yep. What about, um, the value of your home and your equity? How do you look at that when you look at financially managing your whole life, but in particular the, the home, uh, as it relates to the home values?

So I think I, I look at my home as a twofold entity, and I don't know how many other people are out there doing this. Maybe they are. I look at it, one, as The home where I'm going to enjoy my life in. I'm going to spend time with friends. I am going to host parties because prior to the pandemic I did a lot of that. So we're going to get back to that soon. And then I also look at it as a financial asset. So with me, my home to me is this enjoyment aspect, but also part of my retirement package. that I can use because the equity provides me value long-term.

Right. And equity, for those people who may not even know what that word means, right, it's really kind of a simple calculation, but it's always changing, which is the dynamics of what is your house worth, right? And that's changing based on real estate conditions and your local geography and the age of your house. And hopefully your house is appreciating. The other bit is what's your mortgage balance, right? How much do you still own on that? And the difference between the current value of your home and your mortgage balance is what you— the portion that you own until you fully pay off that mortgage. So one other question I want to address to you, Beth, is what I call the value of once a consumer has gone through the process of creating a digital home management system for themselves, what value can they get as a result of having all that information digitally located in one place?

Oh my gosh, that's so exciting. Like, I just get excited.

So It's the simple things.

It is the simple things. So the first thing that I can attest to is that people save time. There's no more hunting for documents. There's no more running around keeping all this paper. You can reserve your house for other things that you don't have to buy more file cabinets just to store paper. It's so silly. And then the second thing that it does for me is it helps me understand exactly where my money is going? Am I gonna buy too many kitchen gadgets?

Yes.

Now I, now I know I don't buy anymore. Do I, um, understand where my maintenance is going? And then if I've got to hire out for it, do I see increases in maintenance or don't I? Do I see increases in my insurance coverages or don't I? And when do I see my mortgage getting paid off? I mean, Having that visibility is also extremely valuable to me because I can make the best decisions for my specific home, as everyone else can if they use a digital home management system. They can make the specific decisions for their personal home, family, and finances that may be different than mine. And it's just, I don't even know how to describe it any more than that, that it just saves you so much time and money and it brings you so much awareness make the best decisions possible for your lifestyle.

Absolutely. And to add 2 other components of what I think the value that you get from having a digital home management system is: one is the system, depending on which one you choose and how you do it, it can be proactive with you.

Yes.

It does the thinking for you.

It's like Einstein said, if you've got a system to man— if you can put it on paper— he didn't have systems back then.

Yeah.

But if you can put it on paper, don't keep it in your head.

Yeah, you free up your brain for other good stuff.

For really great Things to happen, right?

Which goes back to the— let's face it, we as homeowners, management is not a fun task, right? We'd all rather be entertaining, hanging out with our family, watching movies, cooking, whatever, travel, whatever. But how do you remember when's the last time you, you know, change your air filter, change the air filters, or drain the hot water heater, all these other things? So having it digital and being proactive with you helps. And the other aspect is just the story that I share that was my frustration is I think our house has maybe 2 or 3 different air filters and they're all different sizes.

That's John's job.

And so I get tasked like, go to the home improvement store and get the air filters, right? So I'm driving to the home improvement store and you get to the aisle there and there's just a gazillion different sizes. And how do I remember which size is for our house, right? If I've got that all in a digital system that I can access via my phone, Easy, I could pull it up. If not, what do I have to do? I got to call Beth or drive home or whatever, and it just becomes a frustrating piece. So just having access to all that information in one place is a massive improvement, I think, in terms of people who go down that process. So maybe to summarize, you know, our episode here, home management and digital home management, right? The home is a component that lots of different components come together. You need to do preventative maintenance, you need to do remodeling, and then there's obviously the state of where most homeowners are.

Yep.

You're either in the, I have no records about my house, or I have incomplete records that are in paper, or—

Some combination.

I've got some combination of digital, but even the digital is scattered. And then maybe there are even some people that have found a dedicated home management, digital home management application. What advice would you give consumers as an action item for them to be able to take on this process if they're in one of those first 2 categories of Either A, they don't have anything, or B, they've just got a lot of paper.

Yeah. First thing, do not stress and take a breath. You take baby steps. And then I would start by taking photographs of these items that you have in your house, or starting off with a maintenance calendar, setting up your schedule for the next 6 months just to start. And then you can add the next 6 months or the next year. And starting that way is a simple way to do it, or even taking photographs of some of the pertinent documents that you have in your house to make sure that they are uploaded in a safe, secure system.

Yeah, and just to add to that, it's kind of like, you know, a lot of people, some people have bought digital scanners to try and scan paper documents into digital format, but candidly, your phone can be its own digital scanner, right? You can take photos now of your receipts, of your owner's manuals, of your documents, and it's another way to quickly digitize that information quickly. And it goes back to that value of You always have that and can use that to make better and smarter decisions about what you need to do moving forward. Right. So I think that that was a great episode. And why don't you close this out, Elizabeth, and tell us what we're going to talk about on our next episode? Yeah.

So thank you all for joining us on this episode of What Is Home Management? We wanted to define that for you, but also come back. We're going to be talking about home inventory and why it's valuable for you. So that's gonna be our next episode. By all means, please invite and share with all your friends and family who are in the need of being a smarter homeowner. But also, please rate and subscribe to our podcast at all the various podcast platforms— Apple Podcasts, Google Podcasts, Stitcher, Spotify, etc. You'll find that on many platforms. But thank you so much for joining us, and we hope you are excited to be on our journey to become— A smarter homeowner. A Smarter Homeowner.

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