2017 is the year to grow a property management company: In 2016, the property management industry—which consists of nearly 250,000 businesses that collectively employ 779,000 people—generated $73 billion in revenue.
Despite the fact that there is so much money at stake, more than 90% of the companies in the space have fewer than five employees—which means that even the smaller property management operators can grow into big players by making the right moves.
How exactly can you grow a property management company? Here are five ideas.
5 Ways to Grow a Property Management Company
Amplify your company’s digital presence
When a property owner or landlord is looking for a property management company to start overseeing their real estate, there’s a good chance they’ll start with a quick Google search. If someone were to search for “property areas in [your town],” would your company appear near the top of search results?
If not, you probably need to update your company’s digital presence. Start off by giving your website a facelift. Make sure the web copy and other content posted on your site is SEO-friendly, including the terms that property owners in your area are likely to search for. Populate it with industry-specific terminology and appropriate geographic locations.
To increase the chances a potential client finds your company online, start blogging and share your posts on social media. Try to add as much value as you can to their lives with each piece you publish. What are your customers’ pain points? What information would make their jobs easier?
If you haven’t yet created a business profile on Google, get that done right away. Your business will pop up on Google Maps after you’ve created a profile, which should draw additional traffic your way.
Make your company stand out even more by providing an owner portal on your website that allows landlords to view the status of their properties and check pertinent statements and documentation easily. Adding that extra value can be a key differentiator.
Direct your focus more narrowly
While you may be tempted to say yes to every opportunity that comes your way, you’ll be spread out all over the place—which can substantially slow down your business. The last thing you want is to have your portfolio consist solely of two buildings thousands of miles away from each other.
Instead of agreeing to every deal that pops up, consider zeroing in on a specific geographical area, property type, or client type. For example, maybe you want to focus exclusively on managing apartment complexes or maybe you’re going to stick to any building in the New York City area. Build a brand that very clearly defines your company and showcases your specialty. That way, landlords needing your services will have an easier time finding you.
Manage your finances as best as you can
In order to grow a property management company, like all other businesses, you need access to cash. Unfortunately, these companies aren’t immune from cash flow problems, which can arise from various reasons, such as the following:
- Tenants don’t pay their rent on time
- There are several vacancies at properties in your portfolio
- Unexpected repairs and routine maintenance expenses accrue
- Money can get tied up in utilities, insurance, and wage expenses
- A tenant files a lawsuit against your company
To successfully grow a property management company, it is imperative that business owners manage their finances masterfully.
If you’re forced to deal with a number of late tenant payments, you need to be aware of the various third-party financing options that are at your disposal. For example, you can use an invoice financing service like Fundbox to advance payments on outstanding rent invoices. After a simple approval process, you can simply choose which outstanding invoices you want to advance when your bills are due or you need money to grow your business. Money is then sent to your bank account in as soon as one business day. You then have 12 or 24 weeks to repay the advance, plus a small fee.
With the right approach, you can prevent cash flow problems before they occur—giving you the money you need to grow your property management company. That sure beats spending all your time figuring out how cover your expenses.
Document every interaction to safeguard against legal actions
In an ideal world, every tenant would pay their rent in full and on time for the duration of their lease. Once they moved out, you’d reclaim an immaculately spotless apartment, home, or office. There wouldn’t be any arguments or disagreements.
If only it were that easy.
Over a long enough period of time in the property management business, disputes are almost inevitable. Make sure to thoroughly document every interaction with each tenant from the moment they sign a lease to the time it’s finally terminated. In doing so, you should be able to reduce any legal costs you may incur. Develop a documentation system that works for you. That way, you won’t have to waste a ton of time finding the materials you need in the event litigation is imminent—which means you’ll have more time to focus on growing your business.
Use technology to become more efficient
If you’re relying on old technology, it’s impossible for your property management company to reach its full potential.
That’s because modern tools and technologies can make property management companies exceptionally more efficient. For example, you can give your maintenance employees mobile devices that enable you to communicate with them easily regardless of which property they’re working at or where they are on the road. You can also use a web-based property management solution that streamlines billing, filing, and other paperwork.
Modern platforms give your tenants the ability to pay their rent online—which saves you from having to deal with paper checks. As a result, you’ll spend less time shuffling papers and licking envelopes and more time marketing and maintaining properties and otherwise growing your business.
As the homeowner rate continues to drop in the U.S.—in 2016, it hit a five-decade low—property management companies are primed to capitalize on the shift in consumer behavior. With a combination of the right tools, the right mindset, the right approach, and enough determination, you can increase the chances your property management company reaps its share of the upside.