Top-line revenue growth is slowing, and uncontrollable costs are rising, which means businesses must stay vigilant and protect both sides of profitability to grow. However, there are many factors holding businesses back from being able to do this.
When all processes and integrations live within the same solution, teams can get work done faster so they can focus on going after new business.
Shareable data that is accessible from a central hub eliminates human error and maintains consistency and transparency.
With one place to go to get real-time insights, you can make smarter decisions and discover new opportunities for owners and investors.
Download this free guide to learn how to measure KPIs so you can understand and improve your property management business’s performance and grow.
Before you scale your business, you need to have a clear view of your financials, customers, and data.
Step 1: Calculate your business’s profit margin
To understand your growth potential, you must know what your true baseline looks like and see where you currently stand. Use these strategies from ProfitCoach to measure your profit margin and find out how to leverage KPIs to increase revenue.
Step 2: Dial in your ideal audience
Before deploying tactics to grow your portfolio by acquiring new owners and investors, you need to identify your ideal customer profile (ICP), articulating the exact type of customer or niche you want to target. Take a look at this article to get started.
Step 3: Consolidate your tech stack
Rather than using multiple, disjointed systems, move to one integrated platform that can centralize all of your data, workflows, and integrations to boost efficiency and visibility while enabling better decision-making.
Step 4: Develop an AI strategy
Assess your business’s AI readiness, ensuring your core business processes and data are digitized and standardized. Additionally, look for purpose-built AI solutions that are already integrated into your property management software that can help you activate new efficiencies.
Ready to scale your business? Try implementing these expert strategies.
Think of ways you can implement technology to create differentiated, frictionless, and personalized experiences and automate repetitive tasks so your team can focus on providing standout service.
New AI technologies can help you save time, provide a better customer experience, and get you the answers you need to make faster, more informed decisions.
See how AppFolio Property Manager can help you adapt to industry changes, uncover new insights, and achieve your growth goals.Learn More
There are several ways to grow a property management business. You can increase the number of properties under management. This can be done by acquiring new clients/owners, diversifying your portfolio to include other property types and/or locations, or by expanding services to existing clients.
Property management can be a profitable business, with gross profit margins typically ranging from 40% to 60%. However, it is important to note that these margins can vary significantly depending on the size and location of the properties under management, as well as the services offered. To maximize profitability, property managers should focus on reducing operating expenses and improving operational efficiency.
The profitability of a property management company highly depends on several factors, such as the size of the company, the types of properties it manages, the location of the properties, and the efficiency of its operations. Generally, a well-run property management company can expect to generate a net operating income of 5–10% of the gross rental income.
A property management company can be a lucrative business, especially if you are able to scale your operations and manage a large number of properties. There are several factors to consider when determining if starting a property management company is right for you, including your experience in the real estate industry, your access to capital, and your ability to manage the day-to-day operations of a business. If you have the skills and resources necessary to start a property management company, it can be a rewarding and profitable venture.
There are various exit strategies for small property management business owners to consider. Some of these include:
Selling your business directly to a larger organization, whether it be a different property management firm or a different industry altogether
Franchising your business or forming a partnership with a larger player
Taking a phased approach by gradually transferring responsibilities to a buyer, ensuring a smooth transition for your team and clients
Selling the business to your management team, allowing them to take the reins
There are several ways to acquire a property management company. You can purchase the company outright from the current owner, merge with or acquire another property management company, or start your own property management company from scratch.
Growth marketing is a marketing strategy that focuses on acquiring and retaining customers in order to achieve long-term business growth. It involves using data and analytics to identify and target specific customer segments, developing targeted marketing campaigns, and measuring the effectiveness of those campaigns.
Property management rental growth refers to the increase in rental income that a property management company receives over time. Rental growth can occur for a variety of reasons: inflation, increased demand for rental properties, or improvements made to the property.
To calculate the rental growth rate, the current median asking rent is divided by the median asking rent from the previous year. The resulting figure is then subtracted from one. The result is then multiplied by 100 to convert it to a percentage.
According to Zillow’s 2023 Rental Report, typical asking rents in the U.S. are now $2,052 on average, representing a 3.3% increase compared to the same time last year. However, monthly rent growth is slowing overall.
Workflow automation is the process of automating and streamlining various tasks and processes involved in property management. This can include tasks such as rent collection, maintenance requests, and financial reporting. Workflow automation can help property managers save time and resources, improve efficiency, and enhance the overall management of their properties.
Workflow automation helps CRM by automating repetitive tasks such as sending emails and scheduling showings. This enables property managers to focus on more strategic tasks and also ensures that communication with customers is timely and efficient.
Report automation in property management is the process of automating the generation of reports, such as financial statements, occupancy reports, and maintenance reports. There are several ways to automate reports in property management. You can use property management software with built-in reporting features that can create custom reports, schedule reports to be sent automatically, and share reports with others. Or you can use a third-party reporting tool. These tools can be integrated with your property management software or used independently. However, when the tools are seamlessly integrated with your software, you’ll have better command of your data and be able to generate more accurate and detailed reports since everything is in one place.