Here is a simple set of five steps for you to follow to build your profit and performance in property management.
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1. Analyse your business
2. Set targets
3. Plan for success
4. Monitor results
Step 1 – What do I analyse?
1. How do I generate revenue?
- How many managements?
- At what management fee?
- With what letting fee?
- With what advertising?
- Where has, and where will new business come from?
2. What drives my expenses?
- Cost of staff – both direct and indirect
- Other costs and what causes them
3. What do my clients (landlords) and customers (tenants) want, and how satisfied are they?
- Ask them – email or phone surveys
- How many am I losing and why?
4. Is my property management 'engine' powerful enough to make my property management business go faster and how well tuned is it?
- Job descriptions and KPIs
Step 2 - Set targets
The three rules of targets:
- They must be achievable
- They must be measurable
- They must focus on the key drivers of PROFIT and CLIENT AND CUSTOMER SATISFACTION
Profit targets you must have:
- Number of new managements
- Required management fee percentage
- Required ancillary revenue
- Average weekly rent
Customer service targets:
- Days on market
- Inspections completed
- Expenses incurred
- Customer service calls per month
Step 3 – Create plans
The five secrets of planning:
- Focus ONLY on hitting your targets
- Include your team in the process
- Create projects with SPECIFIC ACTIONS
- Allocate RESPONSIBILITY to someone
- Always have a DEADLINE
Step 4 – Monitor results
The two things to monitor:
- Day-to-day activities
- Specific plans/projects
Focus on the most important drivers:
- New business appointments and conversion rates
- Leasing appointments and conversion rates
- Total losses, but mostly preventable losses
- Average weekly rent
- Average management fee
- Average letting fee
- Major expenses as a percentage of revenue
Do it regularly – weekly for activity, monthly for revenue.
Step 5 – Reward
Three keys for rewards:
- They must be linked to your targets
- They should be both monetary and non-monetary
- They must happen regularly
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