Many real estate businesses tend to focus heavily on sales, prioritizing sales over everything else. Sales bring large commissions, are a lot of fun, and generally are the sexiest part of the real estate business. Yet growing a property management business will be the most beneficial thing you do in your lifetime to grow your wealth. Property management results in consistent recurring revenues over a long period. If handled properly, a property management business also will grow over time, with those consistent monthly revenues growing, too.
Growing your property management business isn’t without challenges, however. Property managers often get caught up in mundane tasks and deal with conflict and problems most of the time. About 90 percent of the calls property managers take are about problems, such as tenants reporting leaky faucets or saying that they can’t pay their rent on time. Property managers spending this much time on issues is unfruitful. It contributes to job dissatisfaction for the property manager. No one wants to constantly deal with issues! Job dissatisfaction leads to turnover; historically, property manager turnover is about 33 percent annually. Turnover at this high rate is costly to your business.
Also, because it takes time away from business development and client relations, this time spent on mundane issues negatively affects your bottom line and your wealth. The best way to grow your property management business is to pave the way for your team to focus on high-value tasks rather than lower-volume ones.
Three Simple Steps to Grow Property Management Business
So, I suggest that you can grow your property management business by following these three simple steps.
Step 1: Automating the Process
Understand that the Property Management Business basically goes round and round. You recruit tenants who pay their rent every month. When tenants leave, you recruit new tenants who pay their rent every month. Repairs and maintenance also tend to be somewhat cyclical. You’ll do air conditioning maintenance at the same time every year, for example. Repairs also are repetitive. The tenant calls, and the repair request goes out to the maintenance department. Because the business goes round and round, the processing is easy. You can use software and other tactics to automate the process. Automating the process will save money and will also improve job satisfaction for your property managers. They have to deal with fewer routine tasks, and their time opens up for more exciting and profitable ones.
Step 2: Plug in low-cost labour
To make serious money in property management, you want your property managers to do the dollar-producing tasks, not the mundane ones. Automation helps eliminate some “grunt work,” but not all of it. Plug in low-cost labour to do the low-value tasks so that your property managers can focus on the high-value tasks. Not only will this strategy allow property managers to generate more value for your agency, but it also will improve their job satisfaction and help you avoid rapid turnover.
Step 3: Build a Solid Lead Funnel
A business requires solid leads to grow and generate more revenue. The leads must be from your target market, or they won’t lead to successful sales. A lead funnel can help you determine your target market and find more specific targets. It also can help build awareness of your property management services and how they improve value for the owner.
The funnel also qualifies lead prospects, moving those that potentially hold the most significant promise further down into the funnel. If you have a solid funnel and nurture your prospects through the funnel, you’ll have a much better chance of negotiating a deal to manage their property in the end. Your sales will increase because you’re having conversations with people who are seeking property management services and can benefit from them. Your property managers will be happier as well because they will have a sense of having accomplished something each day, rather than just collecting rent or ensuring a faucet is fixed.
Growth is Up to You
So, there you have it. A three-step formula to grow your property management business. You can grow your business by automating, finding low-cost labour to handle the menial tasks, and building a solid lead funnel.
Remember, the glamour of real estate sales often lulls us into spending all our time on the sales process. We perceive that process as fun and property management as routine. But, property management is dependable income, and growing the property management aspect of your Real Estate Business will grow your personal wealth over the long term.
We’ll cover the steps of growing your property management business in more detail in another article. For right now, however, just remember that property management growth is essential and that you can achieve it with three simple steps.