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Here is a simple set of five steps for you to follow to build your profit and performance in property management.
They are:
1. Analyse your business
2. Set targets
3. Plan for success
4. Monitor results
5. Reward
Step 1 – What do I analyse?
1. How do I generate revenue?
- How many managements?
- At what management fee?
- With what letting fee?
- With what advertising?
- Where has, and where will new business come from?
2. What drives my expenses?
- Cost of staff – both direct and indirect
- Other costs and what causes them
3. What do my clients (landlords) and customers (tenants) want, and how satisfied are they?
- Ask them – email or phone surveys
- How many am I losing and why?
4. Is my property management 'engine' powerful enough to make my property management business go faster and how well tuned is it?
- Procedures
- Policies
- Technology
- Job descriptions and KPIs
Step 2 - Set targets
The three rules of targets:
- They must be achievable
- They must be measurable
- They must focus on the key drivers of PROFIT and CLIENT AND CUSTOMER SATISFACTION
Profit targets you must have:
- Number of new managements
- Required management fee percentage
- Required ancillary revenue
- Average weekly rent
Customer service targets:
- Arrears
- Days on market
- Inspections completed
- Expenses incurred
- Customer service calls per month
Step 3 – Create plans
The five secrets of planning:
- Focus ONLY on hitting your targets
- Include your team in the process
- Create projects with SPECIFIC ACTIONS
- Allocate RESPONSIBILITY to someone
- Always have a DEADLINE
Step 4 – Monitor results
The two things to monitor:
- Day-to-day activities
- Specific plans/projects
Focus on the most important drivers:
- New business appointments and conversion rates
- Leasing appointments and conversion rates
- Total losses, but mostly preventable losses
- Average weekly rent
- Average management fee
- Average letting fee
- Major expenses as a percentage of revenue
Do it regularly – weekly for activity, monthly for revenue.
Step 5 – Reward
Three keys for rewards:
- They must be linked to your targets
- They should be both monetary and non-monetary
- They must happen regularly
Bob Walters is one of Australia’s leading authorities on residential property management.
Bob really “walks his talk” as he not only trains and consults to the industry, but also owns and operates a highly successful property management business in Sydney, managing over 500 properties.
He is also Australia’s largest selling author of property management audio/visual training products through his Company BWT (Bob Walters Team) www.bwt.com.au
Bob offers training, coaching and consulting in the following areas of property management:
Business development
Customer service
Strategic planning
Profit maximisation
Due diligence services in the purchase/sale of rent rolls
Systemisation
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