Without question, the goal of every property management organization is consistent, sustainable growth. Of course, knowing this and actually achieving it are two entirely different things. In such a competitive industry, many firms fail at adequately increasing their business and ultimately end up closing their doors. So, how can you beat the odds and stay afloat in such a tumultuous field? Simple: by increasing the number of properties you manage. That said; let’s take a look at some tips for developing and implementing a successful property portfolio strategy.
Identify a Growth Target
The first step is understanding precisely what you’re working toward and the timeframe you’re working with. Napoleon Hill once said, “A goal is a dream with a deadline.” You cannot achieve successful growth until you’ve identified that goal. Start by determining the number of new properties you’d like to add to your portfolio over the next 12 months. Let’s say you’d like to add 100 new properties over the next year. Divide that by 12 and you’ll have your monthly target (9) to work toward.
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Create Positive Cash Flow
You can’t adequately pursue growth if you’re not turning enough of a profit. Make sure that you’re taking every measure to drive a highly productive, extremely efficient operation so that expenses are kept as low as possible. Identify areas where savings could be leveraged to create more revenue that can be used to invest in your property portfolio.
Conduct a Market Assessment
What areas can you penetrate that would produce the highest return? What types of properties are best suited for your portfolio? If your firm is large enough, you may want to diversify and include a broad range of properties, but if you’re just starting out or are running a smaller operation, it may make more sense to stick with one type of property.
Hone Your Operation
In the property management industry, it’s all about establishing competitive advantage. How can your organization stand out? What will make prospective clients choose you over the firm down the street? Make sure you’ve invested in the overall operation of your company to make it an attractive option for prospects. If you need some direction on this, check out these 4 tips for improving your competitive advantage.
Assess Your Present Portfolio
Before aggressively pursuing growth, make sure you’re not wasting money and other resources on your current property portfolio. Identify areas that are not profitable and cut your losses. Remember that any money currently tied up managing unprofitable properties is money that could be earning you a return elsewhere.
Draw Up a Strategy
Once you’ve identified your growth goal and have further narrowed down the areas that would best help you achieve that target, it’s time to draw up your official growth strategy. This will outline what steps need to be taken along what time line in order to effectively reach your goal and, more importantly, sustain that growth over time.
Growing your property portfolio is an essential part of driving your business forward and maintaining success in the future. These simple tips should help you develop the best strategy for achieving a greater profit and enjoying a lucrative investment plan over time.
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