Property management can be a very lucrative field. According to the Bureau of Labor Statistics, individuals in the property, real estate and community association management professions earn an average annual salary of just under $60k, with potential to make far more. If you’re considering a career in this industry, the best way to set yourself up for success is to plan ahead. Here are a few tips from our experienced team.
Keeping your rental properties is tip-top shape is the key to running a successful and profitable property management business. Not only does ongoing maintenance keep your tenants happy, but it can also help to prevent costly repair bills. As the old adage goes, “an ounce of prevention is worth a pound of cure.” In terms of rental property management, a few dollars in preventative maintenance can save you hundreds or even thousands down the road. It’ll also help you maintain a stellar reputation.
Rental property ownership can be a very lucrative investment, but as your business expands, finding additional properties that fit with your long-term goals can become increasingly challenging. To improve your odds of landing the best properties before your competitors do, here are five resources you can leverage.
Internal business goals are dynamic. Strategy, time, data, and labor are poured into establishing achievable goals for an organization, whether it’s company-wide, departmental, or individual. Sometimes even with all the data on their side, companies don’t reach their goal within the projected timeframe. When this happens, it can be disappointing for everyone involved, but it should not be less motivating. In fact, missed goals are an opportunity for teams to leverage retrospective failures, shaping new goals and outlook.
According to Pew Research, approximately 10,000 baby boomers will retire from the workforce by 2030. This means there will be thousands of projected vacancies to prepare for within the decade, however research finds that only 35% of organizations have formal succession plans in place.
Your business exists for two main purposes: to fill a customer need and to be profitable. As it turns out, these two goals can be attained collectively by investing into customer experience. Research confirms, time and time again, that organizations that have better customer service are profitable. A study conducted by Temkin Group found a moderate increase in customer experience warranted an average revenue increase of $823 million over 3 years for a company with an average $1 billion annual revenue.
The capitalization rate, sometimes referred to simply as the “cap rate,” is a concept that’s fundamental for anyone buying into real estate for commercial purposes. The cap rate is used in real estate investing to provide a clear ROI of properties. It’s typically depicted as a percentage and its value can vary over time.
Maintenance is inevitable in the property management industry and every company takes a different approach to managing areas that fall within the maintenance realm. All these elements that demand attention, require different skill sets to be managed effectively, which often results in partnering with contractors to do the job. However, contractors can be expensive and run up costs.
There are many key factors to a well-performing business and high profitability, what you may not know is your team is one of those key factors. A highly engaged team can help to keep customers loyal and profitability up, which is one reason it’s important to keep a focus on your employee experience as well as your customers. Training, opportunity for growth, and regular feedback (both positive or negative) are key investments in your team, that when executed effectively build trust, create respect, and grow your bottom line.
Research shows that pricing is the element of the marketing mix with the greatest impact on profitability, in one study a 5% price increase led to an average 22% increase in earnings. While it might seem obvious, your profitability depends heavily on your service fees and product pricing. If prices are not optimized, organizations often end up selling themselves short, cutting out the opportunity for profits. On the other hand, if prices are set too high, profits can be put in jeopardy due to overselling your value. Pricing is a delicate balance, so here are a few considerations for companies reviewing their rates.