One of the most common mistakes made by those who are newer to the property management industry is thinking that the number of properties managed equates to certain success. It’s easy to fall into this trap, because it seems logical that the more properties you’ve got in your book of business, the higher your revenue and the stronger your brand reputation. However, while the ultimate goal should always be growth, when you experience this too quickly, it can have the opposite effect on your bottom line and even risk damaging your reputation.
Let’s delve into a few important factors to consider before taking on additional properties for your portfolio. Doing so can help you avoid increasing volume just for the sake of it and instead focus on quality over quantity, which will ultimately net you better results over time.
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It may seem tempting to expand your area of service, especially when you know you can close a deal easily, but it’s important to consider all the extra work and expense involved in managing properties that are further away. Remember too that it’ll get increasingly difficult to juggle once you’ve grown your property management business even more. You may end up having to hire additional personnel, which will cost you more money and may negate the extra revenue you’re aiming for.
Type of Property
Expanding your sector can be an excellent tool for increasing profits, but this should done carefully and only when your property management firm is established enough to handle it. Even still, there are very few organizations that can manage every type of property. Most will focus on two or three. This will help your company to become experts at what you do by not spreading yourself too thin.
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How much work will the property need? The reason why it may be up for grabs at such an attractive rate is because it’s a nightmare to keep up. Be sure to always do your due diligence in having the entire property inspected by a professional so you’ll know what you’re getting into ahead of time and won’t end up with any costly surprises a few months down the road.
This is perhaps one of the most important factors to consider before taking on a new property, yet it remains one of the most often overlooked. While there’s certainly no way to know for sure whether you’ll get along well with a potential client, you can usually get a good feel for how things might pan out by simply sitting down and having a few conversations. If the person seems overbearing, unfriendly or difficult, you might save yourself a lot of headaches down the road by not taking the deal.
These are the fundamental things that should be considered prior to adding any new properties to your portfolio. Doing so may slow your growth a bit, but over time, you’ll end up with a book of business that will help your property management organization to thrive.
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