Scaling Up Your Property Management Business
You’ve worked hard to create your property management business, but perhaps you’ve hit a plateau, and it’s giving you doubts? Is it wise to grow your business, and how do you do it?
These doubts can take hold and stop you from making the right decisions going forward, especially if you’re starting out in property management.
Fear isn’t a good guide for successful business though. Instead, it’s your ability to find opportunities to scale up via new clients, better properties, cost efficiencies, and better operations that actually paves the way to success.
Success is Never on a Straight Line
Although it might not be stated in business plans and strategies, success is often a spin off of your planned activities. You might not be planning directly for that phone call from a major real estate investment firm, but somehow, one day it happened.
Sometimes we need experience with new businesses, new property types (such as multifamily), and new business models, and out of these, we stumble upon a better way. That path doesn’t appear unless you try different things (meandering forward). It’s almost like success finds you.
For most property managers, big financial successes (and survival) depend more on scaling up your clientele and quality of properties, along with adopting the best software. We’ve covered this in a previous post on increasing rental yields, however this time, we’d like to focus on helping you visualize where you are and how you can get your property management business to the next phase.
Making the Transition
Are you considering managing a large new portfolio of properties and it’s scaring you? Consultants will warn you about growing too quickly, cash flow disruptions, staff turnover, workloads, etc.
In fact the big dangers are:
1. not charging enough for your services
2. insufficient staff to manage the new portfolio
3. properties spread all over the place
4. no business automation in place
To scale up properly then, you need to charge enough, hire the right staff, have properties contained in a manageable geographic zone, bring maintenance services in-house, and automate everything from accounting, to tenant rental payment, to managing maintenance tickets.
If you do this, there are no limits to how much your business can grow and handle. One company we worked with has thousands of rental properties. If they can do it, so can you.
Here’s 5 Ways to Break Through
Automate Your Business
As you grow, you may be overwhelmed by how much you have to respond to. Quickly, you’ll see that being proactive will prevent these time eating events. And by automating all repeatable processes (leases, payment, etc.) you free up time and resources.
These upgrades such as property management software, online tenant screening, online rent payment, and property management apps make you more relevant and compatible to today’s mobile/digital renters. Manual property management is a dead end.
From marketing to leasing to tenant management to accounting and banking, inspections, maintenance, make everything as easy as a mouse click. Part of this process is to ensure the business can go on smoothly, even if your key employee ups and leaves.
Adjust your Pricing Model
If you’ve priced by contract and perceived value, and then became overwhelmed with documentation and service calls, you may have found you’re losing money and the job keeps getting more stressful. You may want a hybrid solution. You could could price on a percentage of rent (10%), and add on charges for service calls and extra hours worked. This protects you from all dangers especially if you have a lot of staff. Getting creative helps you mitigate risk.
$200,000 monthly rent x .1 = $20,000 plus $30 for each in person service call and $10 for each phone call handled.
And if you’ve automated, owners may believe there won’t be many service calls and that transactions are streamlined via banks and other service providers. They’ll like that. Experiment and examine your reports.
Hire Better Staff
Good property management staff are valuable, especially if you’ve automated and they can focus on tasks that return the best ROI. Hiring the wrong people, or pushing them into a high micromanagement environment guarantees accumulating problems with tenants, HOA managers, and owners. Stressed out staff leave and you have to start all over again. That could put you out of business. Without high quality staff, any growth plans are suspect.
Keep Your Portfolio in a Manageable Geographic Area
Do you have houses, apartments, condos spread throughout your city where you need separate service people to service those units? It’s an obvious waste of time, money and people resources that’s likely doing you more damage than you think. All that time trapped in traffic adds up.
By keeping your properties within 15 city blocks, you and your service techs can reach them easily and work quickly. You can make service a repeatable process where you get more done in less time.
Hopefully, your software will be giving you meaningful reports on where you’re making or losing money. Those are your key performance indicators (KPIs). The report might open your eyes to niches and apartment block opportunities.
Do Better Marketing
Potential new clients and tenants won’t know about your company or its value if you aren’t actively marketing. By marketing, property owners and landlords hear about you, your expertise, market knowledge, management system, and they may have a great portfolio of properties for you to manage.
Making your business findable on search engines, industry portals or social media should be a priority if you want to grow. Letting everyone find you is easier, and if you create your marketing content well, you might get the very best new client leads. Once every month, an excellent new lead might appear. It could well double your business and grow your profit by 200% to 300%.
When it comes to scaling up rental yields and revenue or growing the number of properties managed, having an online property management system has to be the key to maximizing profit and minimizing workload.
The Best Property Management Software is Simple and Powerful
Take a good look at the benefits of using ManageCasa property management software for instance, and you’ll see how it’s your best business asset. Get automated and tenant friendly, and new clients will believe you’re ready for growth. They’ll be willing to pay you well.
See also: Las Vegas Housing Market | California Housing Market | Toronto Housing Market | Toronto Condo Prices | Australia Housing Market | UK Rental Market | San Jose Housing Market | San Francisco Housing Market | San Francisco Rental Market | Florida Housing Market | Apartments for Rent | Renters Insurance| 2018 Rental Housing Market | Property Manager Training | Cloud Property Management Solution | Tenant Screening | Property Management for Realtors | Improve Property Revenue | Improve Property Cash Flow | Starting a Property Management Business | ManageCasa Property Software