Better Property Management via Strategy
For most small business owners, strategy is a mystery. Outside of MBA courses, it isn’t taught. And there are almost no articles on the web about property management strategy.
Yet with all things being equal, strategy is what will produce an advantage in execution and growth. This is why investigating property management strategy makes sense. It’s an intriguing topic which we’ll explore in further posts on marketing, expense management, staffing and much more.
Definitely bookmark this one of a kind, epic post as we’ll continue to refine it with more ideas and strategies.
The ROI of Strategy
You can improve efficiency in 2020 and grow ROI a little. You can do more with the properties you’re managing now as well as open your pathway to higher performing opportunities. Whether it’s 5% or 100% growth, the return on investment is all up to you.
Whether pricing strategies, new tech tools, operational updates, portfolio changes, etc., if it’s driven by strategy, it will lead to better performance. Cut the chaff from the whey and discover your real business strengths and opportunities. They might be far beyond what you believed.
And yes, you can use a property management platform as it’s actually designed to power up your business strategy. It’s not for saving pennies, it’s a foundation for financial and operations excellence.
7 Key Benefits of Property Management Strategy:
- cutting costs and spotting losses before they get out of control
- predicting future emergencies and losses
- gauging performance of new technology tools
- adjusting services to match tenant demands
- identify money losing properties and higher ROI opportunities
- identifying higher quality tenants
- gauging marketing performance and improving lead sources
Do Traditional Plans Still Work?
If you’re still following a plan or traditional business concept to keep your business in tip top shape, you might be doing yourself a disfavor. Making a mental switch over to strategy could help you escape mental boxes that prevent you from adapting to the market today (e.g., technology tools and demographic demand profiles).
Rather than a prescribed way of running your day to day business, you could use a more creative approach that builds strengths, learns, adapts, and generates higher returns.
So, What is Strategy?
A business strategy is a focused path to help guide you to find the right tools, staffing, tactics, KPIs, services, maintenance process and contractor selection, tenant leasing incentives, leasing models, modern digital services, properties to buy, or best property management software to use.
Strategy is about purpose combined with flexibility. It involves imagination, testing, and analysis and letting go of pride and stubbornness. It means finding the best way to reach your business goals.
We touched on growth hacking previously. This post is aimed at landlords and property managers, however using strategy better can work for Realtors, doctors, dentists, and other professionals. Please do share this post with any business owner who might need a little boost this year.
Let Go of What Doesn’t Really Work?
How many landlords have quit after a prolonged battle of winging it each day, battling tasks and expenses, and endless crises? They cut costs mercilessly in a downward spiral of poor service and tenant dissatisfaction.
For the sake of their investment and health, they need to find better ways. This is a plateau not a wall. If you’re flexible and bring focus to what really matters, being progressive to leverage opportunities, resources and tools, you can re-energize your company.
It was Mike Tyson, the professional boxer who once said, «everyone has a plan, until they get punched in the face.» Well, isn’t that classic wisdom right there? A stiff plan gets wiped out by agile competitors who find ways to win.
But strategy isn’t about imitating competitors. It’s about finding the path that’s optimal for you, your staff, and clients. Better to figure out an improved unique value proposition, know the market and the customer, and adopt a new path to profitability – the keystones of smart strategy.
After you build your new strategy, you’ll have digital analytics tools to measure performance. You can do this.
Plans Well Laid are Soon Put to Rest
Plan A, Plan B, Plan C? We have to talk about business plans. Plans might be valued by bankers and investors, but the bad psychology they generate can leave you unresponsive to the best route, best opportunities, best tools to leverage, best people, and best ways to get to the next level in your business.
Plans don’t help you master the real winning strategies with tactics which market leading companies use. Evolution only comes via strategy.
Need to set smart goals? Here’s Megan Minns to describe SMART goals.
How to Be More Strategic:
To be more strategic, the Harvard Business Review suggests to:
1). Know: Observe and Seek Trends
2). Think: Ask the Tough Questions
3). Speak: Sound Strategic
4). Act: Make Time for Thinking and Embrace Conflict.
In a nutshell, you should be mindful, inquisitive/knowledgeable, focused, and take the appropriate time to act. Now you don’t need that MBA! It’s always helpful to chat with landlords, tenants, and staff and test your assumptions about everything.
Strategy implies getting from here to there. It will help to visualize your goal and then work your way back to where your business is currently. For instance, if you need to be a tech driven landlord or property manager, what are the best property management systems in use? How much do they cost and what skills are necessary? Who teaches and implements these new systems?
Strategy is all about an endless series of questions for never ending improvement.
20 Ways to Become More Strategic
Here’s 20 great tips to help you develop a strategic outlook, where nothing is written in stone:
- read more online and think about service gaps and opportunities where you might create more revenue
- free up time to read industry publications and blogs that talk about trends and how managers are adapting
- consider how you could more virtual with your business (virtual suite showings and onboarding) and automate everything while finding ways to be personal
- read up on property management technology and the advantages it delivers
- brainstorm about alternative services, properties, and outsourcing so you can find the path
- do monthly inspections to test for usage rates and wear and tear on appliances, doors, HVAC equipment, etc.
- get feedback from tenants every 3 months to assess their comfort levels and intent to re-lease
- get market evaluations for your rental property every 6 months and assess the value of selling weak performers
- research other rental property opportunities and the merit of investing in them
- watch for new developments, other landlords activities, and local government initiatives
- read up on property management blogs and news sites
- write down a statement of the demand for your units and rent prices in 5 years
- review your property management reports for trends in usage, cash flow, and costs
- weigh the cost of outsourcing to in-house management (do you really need to outsource or hire additional staff?)
- find out what your ROI, NOI, and other financial indicators are saying on a monthly basis. Know them like your own heartbeat, and understand scenarios that would ruin them.
- think about contingencies for all areas of your business should they fail
- consider testing marketing by devoting funds to specific marketing channels
- choose between your own hosted website or a free property management website included in your management platform?
- consider building a full set of marketing channels and evaluate each one
- consider the long term value of everything you’re doing
The State of Your Property Management Business
Whether you’re a landlord or a property management company, your business statements tell you how it really is. The numbers on your balance sheet don’t lie. The numbers give you impetus to take the actions discussed above.
There is no failure, only a change in paths. With your intent to improve your property management business, you’re more likely to find what works and let go of what doesn’t. Is intent to improve the guiding principle?
After drawing up a complete report on the state of your business health, reconsider how you might grow and manage your properties. Which additional properties should you be targeting? Your business reports via ManageCasa can help you see which groups or types of properties are creating good returns. Then you can begin the process of selling or renovating properties that have a downward profit picture.
Take a good look at all features of ManageCasa. You can discover more than just streamlining tasks. ManageCasa has the power to inform your new property management strategy.
Additional resources:
https://www.ccim.com/cire-magazine/articles/smart-property-management-strategies/
https://www.irem.org/File%20Library/Education/Outlines/BDM603.pdf
https://www.forbes.com/sites/forbesagencycouncil/2016/09/07/how-new-approaches-to-property-management-marketing-are-disrupting-one-of-the-oldest-industries/
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