Given the saturation of the property management industry, it’s critical to stay on top of how your company is performing in comparison to your peers. The most effective way to do this is by tracking your key performance indicators (KPIs). But with so much data to weigh how can you know which factors are most important to keep track of? To make it easier, we’ve done a bit of legwork on your behalf. To follow are five essential metrics that will help you measure your property management company’s success.
Properties Acquired vs. Properties Lost
Keeping track of the number of new properties your company has acquired over a specified time frame (i.e. the last year) is a good measure of business performance. On the other side of the coin, you also need to account for those properties that are no longer in your book of business. The balance between the two is the first important metric to measure.
Having too much outstanding debt on your accounting books can negatively impact your property management organization’s cash flow. The goal is to minimize this number as much as possible. Another benefit from measuring this KPI is it allows you to identify which individual property managers may be contributing to the problem. If some are struggling, you may want to invest in a bit of coaching.
Most property managers keep close tabs on the net revenue they are generating from property leases, but it’s important to remember that there are a number of other income sources to consider as well. For instance, leasing of parking spaces, storage fees, revenue from coin operated machines and more. Obviously rent is the most important stream of income, but if you’re missing the others you could be undervaluing your cash flow.
How much money are you dishing out to pay for repairs and maintenance of your properties? Do you have existing relationships with contractors you know, trust and always call upon or do you have to shop around every time something goes wrong? Could you be saving money by investing in preventative maintenance instead of waiting until things break down? Taking a good, hard look at your R & M costs can help you identify areas where you could be saving and others that might need some attention.
Measuring the growth of your company’s revenue is a great way to measure overall performance year over year. This will tell you whether the organization is doing well or if there are areas that could use some improvement. If this number is lower than you’d like it to be, you may consider going back through the other KPIs you’ve measured above to see if you can identify what might be causing the issue. In any case, revenue growth should be one of the most important metrics you measure.
The bottom line is this, you can’t fix what you don’t know is broken. Keeping close tabs on your key metrics will help you position your property management company for better success in the future. And with property management software, tracking and measuring your company’s performance has never been easier. Click here to request a free demo of InfoTracker and learn just how easy it can be!