KPIs are defined as quantifiable measurements, agreed to beforehand, that reflect the critical success factors (of the company, department or project).
The most successful and best-run departments utilise KPIs, ensuring regular growth within the department. Not only do KPIs demonstrate strengths, they expose weaknesses.
Look at the results. Where could you improve? What aspects have received little to no growth? These are the areas requiring your attention.
The main reason that KPIs are not utilised in most property management departments is because people are unaware of what to measure.
Here are some ideas that are operated frequently across property management departments:
This is without a doubt the most significant indicator. The revenue growth is your bottom line. It is irrelevant how many appraisals you do if you do not convert them. Make sure there is growth, whether it be monthly, quarterly or annually – this is a must to ensure that your department is running the best it can be.
This again is a performance valuation. While properties are vacant, they are not earning any income for the business. The idea is to have as little vacancy rate as possible to ensure that you are not only abetting your owners, but also generating a greater income for the business.
Another important factor is rental arrears. This has been found to be the leading indicator of a property manager that is burning out. A large amount of arrears suggests you need to have a meeting with your property manager.
Routine inspections are an indication that all properties have been inspected as per their management agreements. If there are low numbers of inspections in relation to the number of managements it is an indication that inspections are not being completed as often as they should be.
For the growth of the business, we all need new properties listed. Ensuring that you have steady growth within the department will allow for planning into the future and a greater bottom line.
If you are losing a large number of properties, there is a clear issue within the department. You will always lose properties, this is uncontrollable; however, find out why you are losing them. Is it mismanagement? If so find the issue, and deal with it accordingly.
Looking at the average rents within your portfolio/s will enable you to ascertain if the property managers have been completing rental reviews. The more rental reviews completed, the greater the cash flow.
If you want to watch your department flourish over the next 12 months, then use KPIs. It has been proven to work. Increase your productivity and cash flow.