It can be a little bit difficult when looking across a property management business and working out where you can reduce some expenses. Outsourcing your lease renewals is one of the ways to cut down on costs. There are so many tools involved in managing 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. By outsourcing your lease renewals, you can increase productivity and lower expenses, leaving you with more money plus more time to grow the business.
What was interesting today was that I was talking with a client about wages in general and how the average salary in Australia has not increased by a considerable margin over the past years. We both agreed on this; however, we found that Real Estate was an anomaly and even more particularly in the Property Management department. The client mentioned that he lost his senior property manager to another company, as they 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 rising, 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 we suggest here is to take your lease renewals offshore by Outsourcing Your Lease Renewals. This can help streamline the process, use online tools, and train low-cost staff to increase productivity and lower expenses.
Traditionally there are a lot of conversations around lease renewals that are unnecessary. 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 could 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 could 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 the workflow below.
The only area where the client needed to be involved was the renewed price of the rental agreement, as he had a better understanding of the market conditions and trends than his Filipino staff member. By outsourcing your lease renewals, you can free up valuable time, reduce expenses and improve overall efficiency in your property management business.
Renewing a lease with no property manager can be achieved as there are limited variables with a lease renewal. We added a feature where the owner could indicate their intent to sell within 12 months during the streamlined, low-cost lease renewal process, resulting in potential 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, it is tough to stay ahead of the game if you are not growing by learning.
I hope the information in this article has some value. If you like it, please share it with others. If you want to chat with me, feel free to reach out on LinkedIn. I am always happy to talk about all things Real Estate.
