Which Metrics do the Best Property Managers Focus on?
The best property managers or landlords pay sharp attention to the profitability and health of their companies. And they know certain metrics generate more revenue, improve cash flow, and make owners happy.
Keeping an eye on the financial and business health of your company won’t be a pain if you set it up using your rental property software. With your software, you’ll be gauging 11 kpis or metrics to help you earn more and stay healthy.
The insight from your key performance indicators can be your biggest source of future revenue.
Where is The Best Performance?
Finding where your profit is leaking away, how costs are eating away at your bottom line, and what issues are eating away at your top line, can have big dollar value. Your business varies in number of properties, tenant turnover, and type of property. You may have your key factors already, so use the data and software to make better decisions.
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You’ll discover property management software makes these calculations much quicker. Those who adopt software are more aware of what’s working and what isn’t and are more likely to make their business more successful.
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Your KPI’s or business metrics as they’re called aren’t just an empty number. They can help you make better decisions and help educate owners. You definitely need an owners report that conveys how valuable your efforts are.
Property Managers Top 11 Metrics or Key Performance Indicators
- Revenue Generation – Look at revenue as one whole number, a number you need to think about growing. Are you charging enough rent and what is the amount you need to achieve to make your property management business viable? Are you calculating income from parking spaces, storage units, wifi, etc? Which types of properties generate the most revenue?
- Net Income – This number comes from Revenue minus costs. Do you earn enough to stay viable? Are your costs too high compared to other property management companies?
- Revenue Growth – On a monthly and yearly basis, is your revenue growing sufficiently? You’ll need to match the cost of living at least. Have you discovered where your best revenue gains happened? Can you replicate those wins?
- Cash Flow and Arrears – How regular is your rental income? Are there times when you’re in the red and vulnerable financially? What are your payment in arrears totals for the year? Your net income statement will help you see the details and stay on top of it.
- Tenant Acquisition Costs – advertising, time, tenant screening software, etc. When you tally up all your yearly costs, are they much too high? Are you spending your hourly time effectively and efficiently? What is your yearly spend on tenant acquisition?
- Tenant Satsfaction – Can you do tenant satisfaction surveys every 6 months and get some feedback on how they feel about their rental experience and your service? How long do tenant maintenance tickets take to resolve on average? Are they commenting that the issue was resolved? What are tenant re-lease rates?
- Vacancy Rates and Tenant Turnover Rates – How many months of rent were lost due to vacancy? How often on average are tenants leaving? What are total costs associated with tenant turnover and vacancy?
- Costs, Repairs and Maintenance – What is the average cost per month for repairs and maintenance? What is your cost of repair compared to quotes from other service providers/vendors? Are you paying too much?
- Rent Ready Cost – how much does cleaning, new appliances, and unit repair cost on average?
- Site Visits – How often do you visit your rental units and what is the total cost of your time and travel expenses?
- Property Management Fees – Are your fees too low or too high compared to other property management companies? Have you been charging too low for too long? Can you add value to increase fees such as adopting property management software to optimize your work?
Software could help you better communicate to property owners and convey how well you manage their property and tenants. Do you have the financial data available to help you make a decision on which properties are performing better and why?
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