If You Could Reinvent Your Business
A huge number of entrepreneurs plan to launch a property management startup in the next year. Not surprising given that rental property management is an exciting sector full of revenue possibilities.
In fact, it is possible to be ineffective and still eke out a good living in rental property. However, those days are ending. Competition, taxation, inflation, and slowly rising vacancy rates are changing the outlook. In this post, we discuss topics which may give you some direction to re-envision, plan and execute a winning property management business for the decade ahead.
With new digital business tools property managers are able to innovate and build a substantial business advantage. They can offer more to owners/tenants. They can head upstream and cut off the water supply for traditional rental businesses. You may lose clients to them.
Simplify with a Professional Platform
If you can’t comprehend what’s going on behind the scenes in this industry, you’re not alone. The next generation of management platforms hosted on the cloud creates infinite business possibilities and improves how properties are managed today. Landlords and property managers are making the switch to these powerful platforms.
From double entry accounting with smart automation, to online payment and digital only tax filing and pay for use revenue streams, landlords and property managers can adopt new business models. See more on the next generation management tools they’re using. The pricing is more than affordable too.
Why do Property Management Companies See Erosion?
The Usual Suspects:
- current managed rental properties have poor ROI profiles and landlords ailments are passed on
- low quality tenant acquisition sources and poor screening means the revenue side is always under pressure
- costs are rising while your revenue isn’t
- financing costs are rising faster
- staffing costs are rising and talent hard to find
- pandemic created debt as well as increased maintenance and repair costs
- rent prices charged are too high or too low
- manual work processes simply can’t keep up
Costs are rising from all sources and a rent only revenue source provides a hard ceiling. Too many factors will keep a lid on rents, and even if rent price increases were 14% in the spring, they’re now trending downward. With costs rising faster (inflation at 9%), property managers may find themselves sinking into the red.
When a business spirals downward, it falls prey to a host of dangers including:
- landlords don’t want to work with them because they don’t look professional (avoiding risk)
- assets aren’t maintained and repair visits and cost rise quickly
- tenant friction — raising churn, turnover costs and killing re-leases
- lack of time to learn new approaches then scale up and grow revenues
- profitability is lagging, and cost management is too challenging
- big corporate rental investors are running their business effectively and are threatening to take accounts
- a lack of preventative, forward looking practices leaves them vulnerable to negative events (such as an economic downturn)
- they fail to manage their tax burden well
- they run into compliance issues and law suits
What Are You Reinventing?
We’re basically talking about delivering services in new ways, choosing only rental assets that perform well, and maximizing performance in everything from operations, to marketing, tenant acquisition, tenant experiences, to tenant and owner communications.
If you conduct some research on property management business models and business modernization, you’ll realize there is growing interest in reinventing property management companies. Smart new Managers are interested in new profitable business models and creating an edge.
We’ve lagged behind other sectors, but PropTech is seeing huge investment now. PropTech is actually why these new business models, service models and pricing models are possible. Reinventing to a modern company is more than just adopting PropTech tools however.
Your value proposition has to be marketed, delivered and communicated in new ways.
9 Improvements a Reinvention Might Include:
- revising services to support digital delivery and self-service help features
- using professional grade accounting software such as ManageCasa to visualize, control, streamline and enjoy powerful insights into how well you manage your income and expenses
- using digital marketing to present a powerful new brand image that owners see as a must have for their properties
- developing customize, improved pricing tactics to encourage landlords to choose your “deluxe package“
- choosing or upgrading rental assets to make digital service amenities make sense
- crafting a powerful brand image and supporting it with improved digital marketing
- adopting a completely virtual, digital service model leveraging a SaaS cloud-based platform
- discovering new Proptech software such as an all in one platform
- streamlining workflows using scheduling and other automation features
Take a look at your current business processes and services and ask if there might be a way to add value and increase revenue? Is specialization a better choice? Do you need better trained staff? Property management consultants might be a good choice for guiding a large management company to ensure you’re seeing and capitalizing on the right opportunities.
Do you need a preventative maintenance plan to show owners you can reduce costs and stay on budget during inflationary times? Obviously, marketing plays a bigger role in any modernization project. Your message needs to be communicated clearly, concisely to everyone including current and soon to be owner clients.
Modern Property Management Software
A modern, property management software platform will ease your workloads and make accounting an asset. Efficient workflows are the foundation of a successful property management company. If you enjoy our blog further, you’ll begin to realize how many areas of your business this cloud-based platform will help you improve.
Half the battle is being educated and building a spirit of what you could be and what the market wants.
Why not speak with ManageCasa’s sales reps who can help you see the advantages? Get some insight and guidance on how to make your evolution safely, including migrating data, setting up bank accounts, online rent payment system and engineer workflow improvements.
ManageCasa should be at the core of any business redesign — it’s designed for property managers by property managers, completely oriented to the new cloud-based, SaaS business models.
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