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Property Management Business Models

January 31, 2020

Improve Your Property Management Business

For most landlords and property managers, the question of their business model isn’t a frequent preoccupation. Yet the pandemic has exposed weaknesses in how rental property businesses are structured and whether their operations and revenue generation are all they could be.

Certainly next generation property management technology is central to business improvement. In fact, one vacation rental tech company in California just raised funding to buy 30 property management companies. They believe their technology can make their business more successful. Time will tell whether they in fact, do have the ultimate property management business model and whether property management technology is the only requirement.

Scaling is great, but expensive in this way, and costs can escalate even faster. Even for execs with exceptional management skills, a property management business is a challenge.

Your tech stack is vital, no doubt, but what property management company exec’s are focused on right now, is whether their business model is competitive. Business models are a complex topic, however we thought an introduction to what might be the key business matter being explored right now in the property management community.

Many landlords and property managers are wondering how profitable they’ll be in 2022.  They’re wondering if there are other avenues to avoid profit erosion, rising taxes and costs, labor, equipment and material supply shortage, and even what demographic and technology changes will bring this year. Successful property management hasn’t been easy, and it looks like that’s going to get kicked up a notch in 2022.


See our other posts on property management software, revenue growth, vital business goals, best startups, top property management goals survey, and accent on profitability.


Weak Models are Being Exposed

Demo ManageCasa to help you optimize revenues, control expenses, stay informed, automate management, and deliver better tenant services.

What the Covid 19 recession has done is to expose the weakness and non-competitiveness of some company’s business models.

That weakness was more than just weak operations and pricing models. Their whole orientation of serving the market has to be rethought.

Yes, it is about digital management techniques, serving a changing demographic, and re-engineering for new revenue models.  Because the good old days are passing, and a brave new world is here, driven by PropTech.

On the flip side of the pandemic recession, we could possibly (no promises yet) see the reverse of declining revenues. Yet costs could be a frightening factor in 2022. There’s reason for optimism as people will be out and about spending, selling their home, looking for rentals, moving, traveling, paying more rent, buying at retail stores, and working again.

Optimize Services for the Years Ahead

For rental owners and property management companies who have built their business on a digital platform (property management software) and who actively maximize their service/revenue opportunities, the outlook is better.

There are lots of tips and secrets to explore with business models. However, let’s keep it simple in this post with some essential insights regarding services.

What is a Business Model?

There’s not much talk about landlord or property management business models online. Only MBA’s and enterprise level property managers have been interested, yet this topic is more accessible now and there are digital tools to help small business property managers plan better.

The Strategyzer defines business models this way:

“A business model describes the rationale of how an organization creates, delivers and captures value. It can be described through 9 building blocks: Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships & Cost Structure.”

Capturing more value is a nice way to look at it.

To discover whether your new business model and strategy is working, and capturing value, you can use your property management reporting tools to watch KPIs and identify improvements or losses.

And there are heavy-duty analytics tools you can use too, after you’ve understood your 9 business model building blocks.

We’ve talked about upscaling your business, improving ROI, adding value, increasing earnings, accelerating growth, and adopting a growth strategy. These help you get into the mood for improvement and know that it’s possible.

You’ll find some very interesting business model resources at the end of the post.

How Will Property Managers Thrive in 2022?

Entrepreneurs are aware of how business models affect their prospective investment business or property management company. As they plan how they’re going to compete with you, they need to know they can charge the maximum rent price, offer value-added services, cut costs, scale up, stay sustainable, and keep everyone happy.

You and them will thrive by segmenting tenants and offering customized solutions for them. This improves their satisfaction and opens up more revenue growth for you.

Business Class vs Coach

Let’s use a very relevant comparison to the airline industry.  Airlines have frequently gone out of business, after battling cut-throat pricing.  Such tiny margins happened because they treated their product/service and customers as a commodity. Passengers were packed in like sardines.

They were in a classic race to the bottom (lowest price) spiral.

Airlines sold the same product — a flight ticket, and they offered it at the same price for everyone. Then through trial and error (experience) they discovered they could segment travelers and charge the highest price that each group would pay.

They created a class system that allowed them to charge a different price for business people, vacationers, seniors, students, and sports teams. Each segment was given a unique service model. The jet that physically moved travelers was the same, seats were the same, food was similar, as was in-flight entertainment, washrooms, and transport.  The experience was a commodity making price increases difficult.

Your Product Can’t be a Commodity!

Commodities have the same price (almost always too low). So clearly, creating a different service package for each flyer group was the road to higher revenues and better customer loyalty. It’s worked well for all the major airlines. And airlines are hurting during the pandemic with the loss of the “business class” flyer.

A recession is a good test of business models.

If business travel is reduced, the airlines will need to reinvent business travel services in 2021. It’s the same in the rental property management business.

A Segmented Tenant Business Model

Many small to medium-sized rental property owners and property managers look at their tenants as being all the same.  They have no data that says anything different.  The service is “monthly accommodation of an empty unit” which is a commodity.

A commodity framework makes tenant relations a one message fits all scenario. These general messages have been disastrous during the pandemic drawing all tenants into a fearful, high friction, and desperate mindset.

A Unique Service Mix for Each Tenant

Landlords and property managers are evolving their business models to offer their rental accommodation product as an enhanced, unique and customized service. It’s a mix of valued benefits being offered to tenants which might include extra storage, wifi, appliance upgrades, digital amenities such as home electronics, keyless entry, online leases and document storage.

Segmenting services manually via paper documents is too complicated. This is where software and automation come in and gets those details right.

Delivering Maximum Benefits and Receiving Maximum Value

This isn’t devious. It’s offering the maximum value tenants desire. By satisfying their lifestyle needs, they’re willing to pay what the unit is worth to them.

You are better able to carry out this new business model with online property management software. It lets you group tenants, charge them for service packages, and communicate expertly.

And your pricing and marketing strategy will communicate the unique value to each and every one of your tenants. Even your communications can be segmented. You can tailor the correct value/revenue building message to each tenant.

This year, tenant communications became one of the top 4 priorities of landlords and property management company managers.  And since communicating with your growing volume of tenants is vital, it’s your property management software that optimizes this task.

ManageCasa at the Core of Your New Business Model

ManageCasa is a simple, professional level, people-friendly property management solution offering all the right qualities to support your enhanced service business model.

Check out ManageCasa’s unique and ideal business management platform.  It was designed and built with successful business models in mind. Using the reporting tools you can determine which units, tenants, and service offerings produce better outcomes.

The tenant portal allows tenants to pay rent and fees online, view their leases and payment history, and communicate directly with you.  Today’s tenants love the new digital service model and the property management software makes you look more consistent and professional and even helps you with your property management marketing.

When landlords and property managers look at property management software as a great aid to planning, testing, and financial management, as well as service provision, they’re going to welcome in profitable new business models.

Value Proposition Design. Screenshot courtesy of the Strategyzer.

Business Model Guides






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