This article relates to owner controlled professional property management companies with between five and twenty employees. Professional property management companies with over twenty employees would have a different model.
A professional property management business is more complicated than most people realize. To even open the doors you need to provide excellent customer service, know your state and local tenant/ landlord laws, understand the maintenance needs of your unique portfolio and be an expert in the lease-up and leasing process. To remain in business you must live and practice the Five principles for the successful landlord everyday. These things will make you a successful professional landlord, not necessarily a successful professional property management business. The following are steps the owner can take to grow a vital and profitable business.
1. KISS your accountant.
You are the decision maker and the company profits affect you and your family’s financial security. Understanding cash in, and cash out is vital to running a successful business. In professional property management company there is a positive correlation between total revenues, total expenses and the number of properties managed. Know your gross and net profit margins and your average rental fee per home. Take all your revenues, not only management fees and subtract all your expenses, including the owners salary, and divide by the homes in the portfolio to come up with a net profit per house. Use this number as a guide when evaluating revenue sources, payroll and operating expense decisions.
2. Train and manage employees and contractors closely
One of the most common complaints in property management is often directed toward a specific employee or contractor. Professional property management employees are often in the field and away from direct contact with the company’s top management. Contractors follow their own schedules and business objectives. It is up to your employees to manage their own field time as well as the work being preformed on the homes in the portfolio. It is vital that employees have specific training on how your property management company manages the properties in the portfolio and contractor expectations. An updated employee handbook, a procedure manual and on going training schedule is essential. It is equally important that your contractors know your desired expectations. When bringing a new employee or new vendor into a relationship with you and your company, make this conversation part of the interview process.
3.Pay your vendors and employees what they are worth and on time
In property management there will be some true emergencies and you will need all hands on deck: For example a whole house fire or natural disaster. It is common sense that when you pay people fairly and on time the contractors and employees will be there for you when you really need them to go the extra mile.
4. Stay close to the business
Never delegate ownership oversight. If the company has a general manager who is not the owner, owner involvement is critical for quality control. It is your responsibility to know how the homes in your company’s portfolios are being managed. Being on the premises regularly and talking to employees, contractors, residents and owners will keep you aware of how well your company policies and procedures are being followed. Take the time to send out and read surveys that ask for feedback. You will learn how well your company is meeting expectations. Use the feedback for employee appreciation, training, and constant improvement. Share your company knowledge of the marketplace and professional property management expertise with your owners and residents. Concentrate on what is happening in the local apartment rental and single-family home investment environment. When the information is relative to their investment, owners and residents appreciate newsletters, blogs, etc. Be sure they can contact you for comments and suggestions.
5. Be fair, Be consistent and follow-through
When this practice is part of the business culture, owners, residents, employees, and contractors know that they can expect this level of treatment in a relationship with you and your company. When people feel treated fairly they reciprocate in kind. It is your job as the leader, to mentor and teach your company values. When a company culture promotes fairness, consistency and following through on tasks, there are fewer problems, less stress and higher retention of stakeholders: owners, residents, employees, contractors and vendors.
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For any question pertaining to this topic or any other other topi c that pertains to the Albuquerque, Bernalillo, Rio Rancho, Placitas or Corrales Metro Real Estate Market let us know in the comments down below or email us at firstname.lastname@example.org.
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