Are you achieving your property management business targets? Here’s why you might not be reaching them, and what you can do.
It’s important that you understand the market your property management business operates in. In order to build a successful business, you must know your market size, potential, averages, statistics and demographics.
Mistakes continue to be made in property management businesses because business owners focus on numbers, not income. There are many critical factors that can make or break the success and profitability of your business. But, by understanding the importance of income, rather than the number of properties under management, you are setting your business up for success.
Put simply, focusing on your number of properties under management means you are focusing on quantity only. Whereas, measuring targets based on income means you are focusing on quality. Focusing on quality is better because a quality agent attracts quality teams, which attracts quality property owners and quality properties, who in turn attract quality tenants. This is how you can build a successful and high-quality property management business.
Quantity vs quality
When it comes to focusing on your number of properties under management, you can easily achieve say 100 units under management within a few short months if that’s your target. But, how, why and where did you get that target from? Is it because you have heard that 100 is a good number to have before you start investing in more resources? Do you think this number of management will generate profit? More than likely, you don’t know why this target number is your target, which is where many business owners go wrong.
By focusing on a number and continually asking your team how many units are under management, you will see the number but probably not the profit. You will more than likely get excited that you are getting closer to your 100 properties under management target, only to find that your business seems to be going backwards and forwards all the time. This is a classic business in the front door with more business walking out the back door scenario.
However, if you focus on income, you will understand that your market achieves an average weekly rent of say $300. You will also understand, through statistical data, that on average there are 300 units leased every month in your market area. Your target will then be to add 10 new units per month to your portfolio, making a dollar target of $3000 in additional rent per month (not taking into consideration your fees and charges for service).
This ‘quality’ target must be achieved each month by the team responsible for developing new business. Anything that is achieved above that target can be paid to the team as an incentive. However, they now have a minimal target they must achieve that is both realistic and achievable.
Understand your market so you can start basing your property management business targets on actual income. This is how you can set your agency up for success. If you’d like to know more, contact us.