Set Your Performance Benchmarks
It’s one of the most important matters of your property management business, that you set quantifiable standards for performance. Having benchmarks for each aspect of your services can help your company stay on course and grow more profitable.
Our own property manager expert Gordon Leung offers some helpful tips on how you can set everything from average turnover rate to vacancy rates to work order completion rate. Having some certain numbers to shoot for creates sharper organization and better management results for your client.
To assure your property maximizes revenue, minimizes expenses, is loss and accident free, and generates the highest possible cash flow, the property manager should set performance goals and monitor them in these areas:
|Family Apartments||Optimal||Acceptable||Red Flag|
|Vacancy Rate||<=3%||>3% and <5%||>5%|
|Collection Rate||=>98%||>95% and <98%||<96%|
|Turnover Rate||<=8%||>8% and <20%||>20%|
|Vacancy Turn Time||<14 Days||14-30 Days||>30 Days|
|Work Order Completion||100% Completion Ratio||98% Completion Ratio||<98% Completion Ratio|
|Average Work Order Completion Time (Days)||<=2 Days||>2 Days and <=4 Days||>4 Days|
|Unit Turnover – Maintenance||Studio: <=2 Days 1-bedroom: <=4 Days 2-bedroom: <=5 Days 3-bedroom: <=5 Days||Studio: 3 Days 1-bedroom: 5 Days 2-bedroom: 6 Days 3-bedroom: 6 Days||Studio: >4 Days 1-bedroom: >5 Days 2-bedroom: >6 Days 3-bedroom: >6 Days|
|Inspections||100% Annual||100% Annual||100% Annual|
|Preventative Maintenance Plan||In Place & Implemented||In Place & Implemented||No preventative maintenance carried out|
Adjust the Benchmark Rates for Your Location
The vacancy rate could be impacted by the property location and economy. For instance, rental properties located in metropolitan cities have relatively lower vacancies due to strong housing demand and higher number of employment opportunities. The low vacancy rate may also benefit from the strong local economy and higher wage earners.
Follow the Process to Ensure High Quality Tenants
To optimize your collection rate, it’s important for a property manager to implement a thorough application screening process and eligibility criteria. For instance, you may require applicant’s minimum income equals 2 or 3 times the monthly rent. They would be required to provide pay stubs, income tax returns, bank statements as proof of income.
Additionally, the property manager can request verifiable rental history from current and prior landlord for at least the past three years to ensure applicant did not default any rent payment.
To minimize vacancy losses, property manager should start to process applications upon the existing resident delivers a 30-Day Notice to vacate unit. Once the resident moves out and returns keys to management, maintenance team should proceed with repairs, painting, and/or flooring replacement so that management can establish tenancy with new household in a timely fashion.
Last but not least, practicing preventative maintenance and performing annual unit inspection are key to reduce repair and maintenance expenses. Perform daily building walkthroughs and focus on any fire, tripping or slipping hazard as a risk management approach.
It’s our hope that as a landlord or property manager that you achieve the highest degree of success in managing your property and tenants possible. We know it takes time to be excellent, and to scale up your business, which is why using ManageCasa is a wise choice. You’ll be able to automate your daily tasks including leases, rent payments, accounting, and tenant communications. This will free up time to plan your business strategy and deliver more personalized service.
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