Reduce Internal Overheads by Outsourcing Your Lease Renewals!
When looking across a property management business and working out where you can reduce some expenses, it can be a little bit difficult. There are so many tools involved to manage a property these days, most of these being online. When you look back to ten years ago, there were far lower expenses, particularly in the software space as there is now a new shiny thing coming along every six months.
What was interesting today, I was having a conversation with a client about wages in general and talking about how the average salary in Australia has not increased by a considerable margin over the past years. We both agreed on this, however, found that Real Estate was an anomaly and even more particularly in the Property Management department. The particular client mentioned that he lost his senior property manager to another company as they had offered her $95,000/year plus a car. We both understood why she left for that money as it is a ridiculous amount for a Property Manager in our opinion. So, the point I am getting to here is that property management expenses are on the rise and you must look for ways to reduce some.
One of the easy ways to reduce some expenses is to start looking at things that you can quickly move offshore and outsource to a Real Estate Virtual Assistant. By taking routine, mundane tasks off your PM, you can increase their capacity, thus making a more profitable business. One of the functions that we are suggesting here is to take your lease renewals offshore.
Traditionally there are a lot of conversations around lease renewals that are not needed. The conversations can be reduced by using some online tools to bypass the conversation. Building your leases in a way that can be signed off on online is also a significant improvement you can make. A client of mine, who was very time poor, was struggling to get his head around it all. He asked if I can help him get set up and help build out his offshore lease renewal process, for an extra fee of course. I took it on at this point as a challenge to see if I can get a lease fully negotiated, signed and returned with no property manager needing to be involved. I started by building out the ideal workflow based on the software tools he was using. See workflow below.
With a combination of online tools, great process and training of the offshore team member, we were able to achieve the goal, to both my amazement and our clients. The only place the client got involved was around the renewed price of the rental agreement as he knew the market better than anyone and more than his Filipino staff member.
Renewing a lease with no property manager can be achieved as there are limited variables with a lease renewal. The cool thing we added into our process was when the email went to the owner; they could tick a box letting the client know that they were thinking of selling in the next 12 months. Our client now not only had a lease renewal process that was streamlined and ran by a low-cost offshore staff member, it also produced sales listings.
When you combine online tools, automation and low-cost staff, you can 10X your productivity and dramatically lower your expenses, leaving you with more money plus more time to grow the business. If you are new to putting a process in place, whether it be to hire offshore staff or to streamline your business, I have a book for you. You must read “E-myth why small business fails”, if you have not already. Once I read this book, it was a big lightbulb moment. With any business, if you are not growing by learning, it is tough to stay ahead of the game.
I hope the information in this article has some value. If you like it, please share it with others. If you would like to chat with me, feel free to reach out on LinkedIn. I am always happy to talk about all things Real Estate.