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 on the lease-up and leasing process. To remain in business you must live and practice these steps.
1. KISS your accounting. Understanding cash in, cash out is vital in running a successful business.
In property management there is a positive correlation between total revenues, total expenses and the number of homes managed. Know your gross and net profit margins and your average rental fee per home. Take all you 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. Have your account teach you how to do this for yourself if this does not come easily. You are the decision maker and the company profits affect you and your family’s financial security.
2. Train and manage employees and contractors closely
Property management employees are often in the field and away from direct contact with management. Contractors follow their own schedules and business objectives. It is up to your employees to manage their field time and the work being preformed on the homes in your portfolio. It is vital that your employees have specific training on how your property management company manages the properties in your 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 that conversation is part of the interview process. One of the most common complaints in property management is often directed toward a specific employee or contractor.
3.Pay your vendors and employees what they are worth and on time
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. In property management there will be some emergencies. Think house fire for example.
4. Stay close to the business
It is your responsibility to know how the homes in your portfolio are being managed. Being on the premises regularly and talking to employees, contractors, residents and owners keep you aware of how well your policy and procedures are being followed. An informed business owner is critical to quality control. Check that your managers are communicating regularly with the property owners about their properties. Not just when something is happening with their properties but also to touch base and confirm that everything is on track.
5.Be fair, 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 employees to be fair, consistent and follow through. There will be fewer problems and a more stress free environment. This business environment translates to more profits and higher retention of owners, residents and employees.