I became a property management professional in 2005 after leaving the mortgage industry which had become reckless, and I didn’t want to be associated with it. Then the crash came in 2009. The real estate company that I was licensed under filed for bankruptcy, so I went out on my own, excited, and scared. Looking back, what did I learn and how does it apply today?
- Fear is a Motivator
My business boomed. It was very eye opening. Clients were coming to me scared of getting bad tenants. Foreclosures were on the rise and landlords didn’t want to get caught up in cash for keys or evictions. So, they turned to professional property managers to provide reassurance. At the time I offered rent guarantees and eviction protection packages and all my owners participated.
Today we are in another period of fear. We have just come out of 3 years of the pandemic and eviction moratoriums. Keep in mind 75% of property owners still manage themselves so there is plenty of room to grow your business and provide service and value to clients who are just too scared to be landlords nowadays.
- Know Your Value/Don’t Compromise
Property managers provide a valuable service but when it is scary in the marketplace, they tend to compromise out of desperation or fear. The best preparation for growth is having a clearly defined vision for the type of business and client you take into your portfolio of properties. This gives you the confidence to say “yeah or nay” to prospective clients without second guessing yourself when you pass on them.
Property management businesses that get into trouble with lawsuits, audits, and high staff turnover have compromised and or made exceptions. They don’t take time to hire properly, and they don’t say, “no” to clients who are not a fit. They take everything that comes their way, rationalizing they can’t afford to turn away business. The truth is you can’t afford to take on bad business.
Newbies to property management don’t recognize their value and tend to undermine it by coming into the marketplace as the lowest priced option out there. Education, experience, and perspective along with a real estate or broker’s license, classes, conferences, and the choice to work in property management is what makes you a professional. Don’t cheapen yourself by discounting what you bring to the table.
- Streamline Operations
Consistency and exceptional customer service is achieved through processes that are simple and easy to use along with tech tools to support you. Ask for help. You don’t have to have all the answers, you just need to know where to get the answers. You can do it alone, but you will never grow beyond a certain size and that is ok, if that is what you want. Intentional business growth means intentional business operations.
Treat your business like a business not a side hustle. Bankers are conservative and love consistent progress and growth. They lend on upward trends. The businesses that grow uber quickly without systems and operations in place can disappear just as fast. Let me share a story. I was brought in as the 3rd consultant to a rapidly growing PM company in Cleveland. Operations were stretched beyond breaking. The founder tasked the Office Manager with hiring to keep up with the rapid growth, but it became a revolving door since there were no systems in place.
I suggested to the founder to put the brakes on growth to get a foundation established to be able to absorb more business. He didn’t like that option and kept growing. I later found out that the company imploded within the month and investors took their portfolios and the Office Manager and started their own property management business. Just like a house, a business, must be built on a strong foundation. I know operations aren’t sexy, but they are essential.
Ask any successful business owner how they became successful, and they will say, years of hard work, a commitment to their craft and a clear understanding of their target market. Just like you would prepare for a marathon by doing the work prior to the race; the same holds true for your property management business. Prepare prior and be ready for the growth. Be intentional, not reactive. Professional, not scattered. Provide reassurance to your clients, get clear about your value, and don’t compromise on it. Lastly, get your operations in place and continue to build your solid foundation so that you can meet the coming growth. Here’s to a profitable and growing business in 2023!
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