In this environment, growth isn’t a given. Inflation is putting the squeeze on renters and property managers alike, just as labor shortages and supply chain slowdowns make it difficult to build new and repair existing properties.
Chart of Accounts
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For companies that have already scaled to a large enough level, you still have a team to look out for and internal operations that demand as much attention as the properties you manage. It’s a challenge we call the second-stage growth hurdle.
Yet, nearly all third-party property managers still expect their revenue to grow over the next two years.
Read on to learn why those projections are founded on more than just blind optimism. We will cover four different ways to level up your business without increasing your workload, and share some secrets from property managers that have achieved new levels of growth.
Hear it from property managers: how to engineer your next growth phase
Property management is a deeply personal profession, and there’s always the pressure to manage every aspect of your business directly. After all, it’s part of what defines your brand and the quality of your service.
That personal attention can become unsustainable quickly, however, as your company scales and small—or not so small—responsibilities start to fall through the cracks. The right business structure lets you take a step back and trust the day-to-day to your team and tool while still providing the same quality service to residents and owners. Here are some processes to keep air-tight and the components of a tech stack that can do the heavy lifting:
You probably already have a strong understanding of your biggest pain points—the work you do every day that sucks up the most time and energy just to keep up with the status quo. If not, conduct a quick audit of your operations, bringing in the rest of your team to determine those problem spots.
One common area is accounting. To make things run more smoothly, set up a chart of accounts that’s specifically designed for property management, then explore software options that make recordkeeping and reconciling your books easy, or even automatic.
Refining your bookkeeping process alone can free up a lot of time, but don’t stop there. You can apply the same structure to almost any part of the leasing lifecycle, depending on where your needs lie. Audit the system you already have in place, create templates wherever possible, then introduce tools that help you add in and automatically store and share details on a particular lease easily.
Leasing tools can shave down the time it takes to draft and sign lease agreements, collect security deposits and rents, and file vital information on your properties and residents. It starts with software that lets you syndicate rental listings on several listing sites like Zillow, Zumper, Apartments.com, and Apartment List with just a few clicks. From there, features like virtual showings can bring in more applicants while saving you time. Tools like Showings Coordinator make offering these digital options easy.
Make sure that all the tools you use over the course of a lease are well-integrated or combined in a broader software solution. This makes it easy to keep everything you need in one place. When residents leave, or owners or auditors come knocking, you’ll be ready with the details you need, right where you need them.
All these tools reduce the time you’ll need to devote to day-to-day operations, which ultimately means more resources freed up to find new growth opportunities and add more doors to your portfolio. A flexible solution with capabilities like Open API can help you focus on your particular needs, automate processes where it makes the most sense, and address growing pains as they emerge.
2#: Be a Team Player
You’ve got your regular processes down to a science, but experienced property managers know that in a given day, you’re doing more than checking boxes on a well-defined to-do list. This job’s not your typical 9-to-5. There’s always an unexpected challenge or a new fire to put out.
Here, an empowered team is your best advantage. Don’t be afraid to give them more responsibility over day-to-day management, but also be sure to support them with the tools they need to get the job done. If you haven’t already, consider introducing specific roles for team members, whether that’s resident communications, owner and vendor relations, or overall management of a specific set of properties.
For certain jobs like administrative tasks, team event and meeting scheduling, managing payments, invoicing, and IT, virtual staffing services can help you reduce your team’s workload. The variety of services and collaboration tools have only grown with the widespread remote work shift that began in 2020, which makes finding one that works easier than ever.
Communication can be a big time commitment for your staff, and it’s one of the areas where technology offers the clearest benefits. Resident portals make it easy for property managers to find the information they need quickly, communicate with residents on their terms and even update entire resident communities.
Property maintenance is another area that requires constant attention and can become a drain on your team’s resources. Concierge services such as contact centers can act as stand-ins for your staff, providing the same high-quality service, whenever your residents need it. Doing your research pays off here. Choose a service that’s committed to a high level of quality and is able to represent your brand properly.
A contact center becomes essential as you take on more doors across multiple locations. Instead of having to split team members’ time between neighborhoods, regions, and even time zones, you’ll have a central command center to handle requests wherever they arise. This reliable, scalable way to field maintenance and repair requests makes it easier to expand to new areas as your business grows, without having to hire new staff specifically for those roles.
You’ll also have to consider the vendors that actually make the repairs. An in-house maintenance team—or multiple teams, if your business has a strong presence in different locations—can keep response times fast, repairs reliable, and becomes increasingly profitable as you scale, granted you’re able to make the upfront investment.
Hear it from property managers: finding the right tools for growth:
3#: Reflect and Refine
Every business is different, so every business growth plan needs its own combination of strategies. Monitoring your performance with data and analytics tools will give you a clearer idea of which parts of your plan are working and where you need to make adjustments.
Keep any new process and team responsibilities in mind when digging into data. Give team members access to the information that’s relevant to their role, without overwhelming them with too many extra details. You’ll also want to have a more comprehensive view for yourself, so you can check on operations at times that work with your schedule.
The right technology can make sharing this kind of access easy. Look for software that includes data visualization tools that make overall portfolio management easier for your team, and a platform that stores resident communication, their leasing information and any requests they make in one place for easy access. Your team members can use these tools to nurture relationships with residents and strengthen your company’s reputation for excellent service.
The same goes for sharing your analytics with clients. Invest in tools that collect everything you need to report back to owners—and even their own portals to access what they need anytime—so you can clearly justify your management decisions and highlight your value. You can even use that data and the improvements you’ve made to your business to attract new owners, too.
4#: Give a Little, Get a Lot
Given conditions in the market, adding new doors might not be an option. That doesn’t mean you can’t generate new revenue. Certain services can bring in more profit while giving your residents added value. Which are the most profitable? It often depends on the type of properties you manage and your business model, but here are some of the best options:
- Rent and fee collection (67% of third-party property managers turn a profit)
- Leasing properties and marketing vacancies (60%)
- Purchasing, selling, and brokering property sales (43%)
- Maintenance and repairs (24%)
- Construction and renovation (19%)
Adding value is also a key to resident retention. Often, this comes down to choosing the right amenities to invest in. In the current market, renters highly value amenities like common areas, outdoor spaces, laundry rooms, and storage areas. You can bundle amenities and add-on services into resident benefits packages that give residents a reason to get excited about renting your property and your business a new source of reliable, recurring revenue.
New services and benefits packages can be a powerful marketing tool. Highlight them in your listings and initial conversations with applicants. Combined with a screening process that includes all the right steps, you’ll wind up with units that are vacant less frequently and for less time.
Leveling up starts with a plan that pairs each responsibility with the right tools and team members, unlocking the most value out of your technology and your staff. The right insights into the way you operate can also help you plan creatively and justify the investments you make.
Expanding in a tough market isn’t always about big risks or sweeping overhauls. Instead, small changes here and there are the key to making your next growth stage the biggest one yet.Read more on Scaling