Property managers work hard for their money. Everybody talks about increases in the cost-of-living and rents rising, but how about the people who make rentals available?
Yes, I’m referring to your clients the owners, and you, the liaisons between the residents and the “landlords”. When’s the last time your clients called and said, “You deserve a raise!”?
If you’re waiting for that to happen I have a bridge in my area I’d like to sell to you. If you’re going to earn more as a property manager there are mainly two ways to do that.
First way is to increase your revenue, aka your sales growth, and the other way is to decrease your costs. I’d like to hear from you in the comment section below on other ways that work.
To increase your revenue you’ll need to find new clients, increase the number of rental units you manage, or create a new source of revenue like hiring a real estate sales agent or becoming one yourself.
You can add to your income by improving your occupancy rate. A good target rate is 95%. Seasoned veterans know that if your rate is lower than that you’ll need to hone your skills at attracting new residents.
If your occupancy rate is higher than that your rental rates may be too low for your area. A rule of thumb is to have rates high enough that your rentals are in the top 10% for comparable units. Why, you might ask?
One answer is if you aren’t in the top 10% there’s probably something wrong with the condition of your rental properties. It may indicate the need for better, more attractive maintenance procedures.
This brings up a common mistake property managers make. In the interest of keeping costs low or cutting costs they forgo repairs or attractive yet inexpensive improvements. This may increase costs in the long run and lead to longer turnaround time for vacancies.
If your properties are top notch you’re less likely to lose residents when it’s time to raise the rent on the anniversary of their lease. Consider what some call a “nuisance increase”.
This is a $15 to $25 per month rent increase on each resident’s anniversary. Remember that increasing the rent also ups the value of the rental property, and owners love that!
The second way to make more money as a property manager is to decrease your costs of doing business. Time is money and your time should be worth more.
One of the biggest money and time savers is modern technology. Make sure you’re using your mobile devices to cut down on unnecessary traveling, communications and paperwork.
If you need more ideas to reduce costs without reducing services and the quality of your management I recommend you contact a representative from a company like Appfolio.
This organization knows the property management business and has earned my respect for their professional excellence and competence. Invest your valuable time to ask questions and learn more.
To help you save money and make money be looking for my upcoming articles, including one where I’ll share some important reasons why you should consider some timely repairs.