Whether the economy is struggling or doing well, learning how to grow a property management business can ensure it’s around for years to come. Small businesses often fail because of growth strategies that go overboard or don’t ramp up enough. Only 25% of small businesses last longer than 15 years, highlighting the need for a proper growth strategy. Here are some property management growth strategies you can implement to build your business.
Starting a Property Management Business
Learning how to build a property management business starts with location. In real estate, this is often the magic bullet. It determines how much you’ll pay to acquire properties, what you can sell them for, and how much rent you can get. If you’re managing properties for other owners, location will determine your share of the profits.
Perform a market assessment on properties in markets your business wants to build its base in. You can apply methods like a cost-benefit analysis to determine if these properties will generate enough revenue to meet your personal goals. Forecast out one year, three years, and five years to start. Keep in mind that you may break even in the first few years, but not turn a profit.
Considering neighboring or even long-distance markets can open up your possibilities and revenue streams. While it’s easier to start with certain types of properties, such as townhomes or single-family homes, you can expand your portfolio once you gain ground. You might consider expanding into small commercial properties or look into managing entire neighborhoods for homeowners’ associations.
As you learn how to start a property management company, you’ll want to check into ways to keep costs down while acquiring more properties.
Tips to Manage More Properties and Cut Costs
A home management business can be influenced by seasonal demand. Although demands for showings, inspections, and listings might surge in the spring and summer, the volume could go down in the fall and winter. This will depend on the local market and will probably vary if you manage properties in different areas. Local tourism, property types, weather patterns, and overall market conditions can influence seasonality.
To keep costs down, don’t hire more employees than necessary. See if outsourcing some of the extra work from seasonal demand makes sense. It’s possible to hire licensed inspectors on-demand or look for inspectors who are willing to work on contract instead of as a full-time employee. There might also be professionals who are willing to show properties on a freelance or contract basis.
Other property management ideas for businesses that can lower costs and increase your portfolio is to take over other property management companies. You can keep these employees on or streamline their roles once you take over. You’ll get the expertise of these staff members without having to hire additional people or spend money on training for existing employees. Implementing a mentoring program can help smooth the transition and get all employees on the same level.
Marketing and Promotion for Property Management
Marketing and promotion begin with property management prospecting ideas. If you’re unsure how to promote a property management business, here are some ideas to get you started.
Look for investors. You can try networking at in-person or virtual events where property investors are likely to attend. Your business can also host its own event to provide information on the local market and what your management company does. You can build a list of prospects and potential contacts that can help grow your business - either immediately or down the line.
Create a referral and reward program. This can work in your favor in two ways. First, you can offer residents who rent your properties an incentive to refer other tenants to you. You can do this for both short-term and long-term rental properties. Some property management companies take on timeshares or vacation rentals, while others focus on tenants that stay for a year or longer.
For short-term or vacation properties, you can offer renters a discount on their next stay if they refer a friend. If you decide to concentrate on residences with long-term leases, you can offer tenants a reduced monthly rate, waived fees, or a one-time credit for referrals.
Other marketing and promotion strategies include a social media presence and producing online content through blogs. You can attend industry events in your markets. Interact with landlords and other management companies to get a better sense of market conditions and partnership opportunities. They may know of people who are looking for rentals with criteria that didn’t match their properties. Other landlords and management companies may be willing to provide referrals if you do the same.
Investing in Your Brand Reputation
Creating a solid brand reputation means offering the services and amenities tenants are looking for. It also means embracing ethical business practices and going above and beyond tenant expectations. Choose a target tenant persona or profile based on demographics and lifestyle behaviors. Align your brand with a purpose that resonates with your target population’s identity, interests, and values.
For instance, adding or improving amenities like onsite gyms and recreational facilities can make your properties more attractive. Keeping up with maintenance and sending care packages to tenants when they renew or move in can add a personal touch.
How You Can Obtain More Property Management Listings
Here are some useful ideas on how to obtain property management listings.
Leverage technology. Make sure you devote a section on your website to capture potential listings. This can be as simple as a link to a Google form where people can fill out the information on available properties. Or it can be a landing page with videos that show the process of listing an apartment or home with your company.
You can also use social media to advertise you’re looking for new listings. Join forum conversations and look at discussions on apps like NextDoor and other social media pages that pertain to your markets.
About the Author, Madison Taylor
Madison Taylor is the Brand Ambassador at ROK Financial. She is responsible for raising brand awareness and business relationships with business owners across the country. Madison loves that she plays a small role in getting Business Back To Business Through Simple Business Financing and looks forward to hearing what you think about the blogs she creates! Madison has been working in the financial space for six years, and loves it! When she is not at work, you will find her at home learning a new recipe to test out on her family or going on new adventures with her friends.