Property management is a difficult job that can be rewarding both financially and spiritually if the right processes are built. Attack some of the most critical challenges of property management early on and you’ll be thanking yourself for years.
Time Management
The most common challenge faced by property managers is poor time management. Handling maintenance requests, communicating with tenants, and conducting inspections can fill up a property manager's day leaving no time for the twenty other things that need to get done.
To fix this, property managers often create long to-do lists and attempt to maximize the amount of work they can get done in a day. But what if there was a better way? Instead of trying to clean up as many messes as possible, put the right processes in place so that those messes are never made in the first place.
This begins with utilizing technology to maximize your leverage as a property manager over these manual daily tasks. Property management software can now streamline the entire maintenance request process, send mass communication to tenants packed with all the details they need, and automatically send inspection reports to tenants when an inspection is completed.
With these time-consuming processes automated with software, property managers can focus their attention on the things that matter most, like scaling their business.
Scaling the Business
Property managers list scaling their business and increasing revenue as one of their top focuses each year. However, many managers are not equipped to sustainably scale their businesses. What is barely working when you have 250 units will not magically fix itself when you have 500.
Processes must be established to tackle the three workflows of property management before any scaling can occur (unless you want to scale to a 100-hour work week as well).
Pre-Tenant
Establish your process for finding tenants for your properties and recognize where the bottlenecks are occurring and where you are spending the majority of your time. Is it in finding the right tenant, drawing up leases, or conducting move-in inspections?
Tenant
How do you create an exceptional tenant experience once a tenant has moved in? Does your maintenance request process quickly address requests while keeping the tenant in the loop? How long does it take you at the beginning of the month to receive all your properties’ rent for the upcoming month?
Post-Tenant
How quickly can you conduct a move-out inspection and correlate that information with the move-in inspection? After an inspection how quickly can you turn the unit around? Is communicating with cleaning crews and operators a hassle that requires 3 days of back and forth to find a day that works for everyone?
When asking yourself these questions keep a list of how long each process takes and whether the level of service is currently acceptable. Which ones are your time-drainers? Is it the back and forth during a maintenance request with the tenant and operator to find a time that works for everyone? Or is it checking 17 excel sheets to figure out whether someone paid their rent this month?
Establish a process that can effectively reduce these time-consumers before you scale.
Reducing Operational Costs & Controlling Unexpected Costs
More cost-conscious property managers list reducing operational costs as one of their greatest challenges. The first step to reducing costs is identifying where your money is currently going.
Make a list of your current cash flow with the total money coming in on the left and money going out on the right. We’ve already touched on how improving your processes enables you to scale and increase the money coming in but what are your largest cash outflows?
A common tool for identifying which processes are dragging your business down is The Pareto Principle.
The Pareto Principle states that, “80% of consequences come from 20% of the causes” or for property managers, “80% of your costs come from 20% of your processes” and “80% of your costs come from 20% of the properties you manage”.
Identify which are these 20% processes / properties that are causing 80% of your costs and eliminate or streamline them.
Of note, the reverse is also true.
80% of your revenue as a property manager will come from 20% of the properties you manage. How can you increase the number of properties which share the same characteristics as these 20%? Are they higher-end properties? Or is there a certain type of tenant who pays on time, stays for a long time, and has minimal maintenance requests? Get more of those properties or tenants while cutting the 20% that drive your costs and watch your profitability soar.
Retaining Quality Tenants
Tenant retention is crucial for remaining profitable as a property manager (if you’re paid the same bonus for keeping a tenant as finding a new one of course). For every tenant who leaves a property, the cost is estimated to be 2-3x of monthly rent with lost revenue plus leasing, administrative, and marketing costs. Move-out inspections must be conducted, searches and screenings for new tenants must be started, and new leases must be drawn up and signed.
To improve tenant retention the best strategy is a three-pronged approach centered around finding the best tenants, consistently communicating with them to build trust, and fulfilling maintenance requests within an appropriate timeline.
To learn more check out our post: The #1 Strategy for Tenant Retention
Managing Mental Health
Being a property manager is hard. You’ll be the middleman between owners and tenants and get the brunt of anger over unfortunate circ*mstances from both sides.
Property managers are also often at the forefront of sensitive, emotionally draining situations including having to evict families, dealing with tenants with mental health considerations of their own, and managing a company and all the financial worries that come along with that.
The Saskatchewan Landlord Association compiled a list of resources for property managers and some actions they can take to manage their mental health and recommended these steps to manage your mental health.
- Find a connection. Meet and talk with somebody face-to-face.
- Do something active. Go for a walk, whether that be outside or just around your office.
- Find something you enjoy doing and make time for it. Maybe this evening you will read a book, listen to music or a podcast, work out, or take a bath. Do something to take your mind off the stresses of the day.
- Don’t forget to sleep. Try and let your brain and body rest and reset.
- It is ok to feel stressed and overwhelmed. Learn how you can cope with these feelings and do not be afraid to reach out.
What is the Most Challenging Part of Property Management?
The most challenging part of property management is time management, sustainably scaling, reducing costs, retaining quality tenants, and managing your mental health throughout it all.
To learn more about how Propra can help solve these challenges for you, book a consultation with our team here: https://meetings.hubspot.com/al-karim/book-a-demo-inspections
This article discusses various facets of property management, outlining the challenges and offering solutions. Let's break down the concepts and provide related information:
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Time Management:
- Property managers often struggle with time allocation due to multiple responsibilities like maintenance, tenant communication, and inspections.
- Automation via property management software optimizes these tasks, freeing up time for crucial business aspects.
- Utilizing technology streamlines maintenance requests, tenant communications, and inspection reports.
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Scaling the Business:
- Property managers aim to scale their businesses for increased revenue, but sustainable growth requires established processes.
- Three key workflows need addressing: Pre-Tenant, Tenant, and Post-Tenant, each demanding efficient processes for tasks like finding tenants, maintaining tenant experience, and managing move-in/move-out procedures.
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Reducing Operational Costs & Controlling Unexpected Costs:
- Identifying cash flow patterns helps understand where money is going.
- The Pareto Principle applies, indicating that a significant portion of costs (80%) comes from specific processes or properties (20%).
- Focus on optimizing or eliminating these costly processes/properties while expanding on profitable ones to enhance overall profitability.
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Retaining Quality Tenants:
- Retaining tenants is crucial for sustained profitability. The cost of losing tenants and acquiring new ones can be high.
- Strategies involve finding the best tenants, maintaining consistent communication, and promptly addressing maintenance requests to build trust and loyalty.
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Managing Mental Health:
- Property management involves emotionally taxing situations, from managing sensitive tenant issues to dealing with financial and operational stress.
- Recommended strategies for managing mental health include finding connections, engaging in physical activity, pursuing hobbies, ensuring adequate sleep, acknowledging stress, and seeking help when needed.
The most challenging aspects of property management, as highlighted, revolve around time management, sustainable scaling, cost reduction, tenant retention, and maintaining mental well-being throughout the process. The article suggests leveraging technology and efficient processes to address these challenges effectively.
To further assist in addressing these challenges, Propra offers consultations and solutions tailored to property managers' needs, focusing on optimizing workflows and leveraging technology. Their consultation link provides an opportunity to explore how their services align with resolving these property management challenges.
