Reasons Your Property Management Company Isn’t Profitable

What is the key to running a profitable property management company? Obviously, as the name suggests: profitability

Unfortunately, many property management businesses are left scratching their heads. They expected to see financial rewards, but that has not been the case.

As a property management professional, I have seen many property management companies struggle to maintain profitability. It’s a common problem that many companies face, especially those managing investment properties for real estate investors.

Let’s explore some of the reasons why your property management company may not be profitable and how you can turn things around.

Percentage-Based Fees Versus Flat Fees

One of the biggest mistakes that property management companies make is charging a percentage of the rent collected as management fees. While this may seem like a good idea in theory, it can quickly eat into your bottom line.

If you charge 10% of the rental income for managing properties, then the rent collected must be taken into account. For example, if the rent collected is $1,500 per month, you’ll only earn $150 per month in management fees. This may not seem like a lot, but when you consider the long-term impact, it can really add up.

Another issue is that some property management companies charge a flat fee for managing rental properties. While this may be a more attractive option for property owners, it can also be detrimental to your business.

For instance, if you charge a flat fee of $100 per month to manage a property, and the rent collected is $1,500 per month, then your management fees would be just 6.67%.

While this may seem like a good deal for the property owner, it can be difficult to maintain profitability when you’re not earning enough revenue from each property.

One solution to these problems is to charge a flat fee that’s based on the kind of property you’re managing. For example, you might charge a higher flat fee for managing commercial properties compared to residential properties. This can help ensure that you’re earning enough revenue to maintain profitability while still providing a fair price to your clients.

Ultimately, the key to profitability is finding a pricing strategy that works for your business while still providing a fair price to your clients.

Not Specializing

Another problem is that many property management companies don’t specialize in any particular kind of property. This can lead to a lack of expertise and knowledge when it comes to managing certain types of properties.

For example, if you’re managing a commercial property, you need to have a thorough understanding of the local market, zoning laws, and other relevant factors.

If you don’t have this expertise, you may not be able to provide the best possible service to your clients.

Poor Communication

Another issue that can hurt your bottom line is poor communication with property owners.

If you’re not keeping your clients informed about what’s happening with their properties, they may start to lose trust in your property management business. This can lead to them looking elsewhere for their property management needs, which can hurt your long-term profitability.

Focus on providing excellent customer service and communication with your clients.

Make sure that you’re regularly updating them on what’s happening with their properties and addressing any concerns or questions they may have. This can help build trust and loyalty, which can lead to more business in the long run.

It’s important to remember that real estate investing is a long-term game.

While it’s important to maintain profitability in the short term, you also need to focus on building a strong reputation and client base that will sustain your business for years to come.

This means investing in your staff, training them to provide excellent service, and staying up-to-date with the latest trends and technologies in property management.

Finally, it’s worth noting that different property management companies charge different kinds of fees. Some companies charge a percentage of the rent collected, while others charge a flat fee. Some may specialize in certain types of properties, while others may provide a more general service.

Final Thoughts

There are many possible reasons why your property management company may not be profitable.

Whether it’s charging the wrong kind of fees, lacking expertise in certain types of properties, or failing to communicate effectively with property owners, it’s important to identify the root causes and take action to address them.

By charging a fair and appropriate fee based on the kind of property you’re managing, providing excellent customer service and communication, and investing in your staff and business, you can turn your property management company into a profitable and sustainable enterprise.

Remember, real estate investing is a long-term game, and building a successful property management business takes time and effort. But with the right strategies and mindset, you can overcome the challenges and achieve success in this competitive and rewarding industry.

Ready to take your business to the next level? Schedule a free strategy call with Anequim today. We can help you grow faster and smarter than ever before!

To get even more amazing tips, tricks, and techniques for scaling up your business, check out The Bootstrappers Podcast! Get the free advice you need to turn your vision into reality.

How To Hold Remote Employees Accountable

Handling remote employees comes with its own set of challenges, such as how to hold them accountable and keep engagement going.

Remote work has become more common lately, especially during the COVID-19 pandemic. Many companies now use it to keep productivity up and make sure employees stay safe. 

But, guiding remote employees has its own hurdles, one of them being how to make sure they’re responsible.

In the following sections, we’ll offer some advice on how to keep an eye on the progress of your remote team.

Set Clear Expectations for Remote Employees

The first step to holding remote employees accountable is to set clear expectations.

Here are some key aspects to consider when setting clear expectations for remote employees:

• Deadlines: Set realistic and achievable deadlines for each task. Communicate the deadline clearly and ensure everyone understands when the work needs to be completed.
• Goals: Communicate the goals of each project or task and how they align with the overall objectives of the company. This will help employees understand how their work contributes to the success of the organization.
• Quality: Communicate the level of quality expected for each project or task. Be specific about what constitutes acceptable work and provide examples if necessary. This will help employees understand the level of effort and attention to detail required.
• Communication: Clearly communicate how you expect employees to communicate with you and with each other. Specify which communication tools to use, such as email, messaging apps, or video conferencing, and how frequently you expect updates.
• Work hours: Clarify work hours and expectations around availability. Make sure everyone knows when they are expected to be online and available for work-related communication.
• Consequences: Finally, communicate the consequences of not meeting expectations. Be clear about the potential impact on the project, the team, and the company as a whole. This will help employees understand the importance of meeting expectations and the consequences of failing to do so.

Once expectations are set, make sure they are documented and easily accessible to everyone on the team.

Use written communication, such as email or project management software, to ensure everyone has access to the expectations and can refer to them as needed.

Regularly check in with employees to ensure they understand the expectations and are making progress toward meeting them.

Use Communication Tools Effectively

Effective communication is crucial for managing remote employees. When employees are working in different locations, communication tools become the primary means of staying in touch and monitoring progress.

Here are some tips for using communication tools effectively:

• Choose the Right Tools: There are many communication tools available, such as email, messaging apps, video conferencing, and project management software. Choose the tools that work best for your team and the specific tasks you are working on.
• Establish Communication Protocols: Establish clear communication protocols for your team. For example, specify which communication tool to use for different types of communication, when to use them, and how frequently to check-in.
• Schedule Regular Check-Ins: Schedule regular check-ins with team members to monitor progress and address any questions or concerns. Use video conferencing whenever possible to promote face-to-face communication.
• Encourage Open Communication: Encourage team members to reach out if they have any questions or concerns. Make it clear that you are available to support them and provide guidance as needed.
• Provide Feedback: Use communication tools to provide regular feedback to team members. This could include comments on completed work, updates on project status, or general performance feedback.
• Foster Team Collaboration: Use communication tools to foster collaboration among team members. For example, use messaging apps or project management software to facilitate discussion and idea sharing.
• Be Flexible: Be flexible in your communication approach. Different team members may prefer different communication tools or methods, so be open to trying new approaches.

Track Remote Employees Progress

Tracking progress is a critical part of holding remote employees accountable. When working remotely, it can be challenging to know how much progress is being made on a project or task. Here are some tips for tracking progress effectively:

• Use project management software: Project management software can be a powerful tool for tracking progress. It allows you to create tasks, assign them to team members, and monitor their progress in real-time.
• Set deadlines: When setting deadlines, make sure they are realistic and achievable. Communicate the deadline clearly and ensure everyone understands when the work needs to be completed.
• Monitor progress regularly: Check in with team members regularly to monitor their progress. Use project management software or other tracking tools to monitor progress and identify any potential issues.
• Use milestones: Break projects down into milestones to track progress more effectively. This allows you to celebrate progress along the way and identify any potential issues before they become bigger problems.
• Communicate progress: Communicate progress regularly to team members and stakeholders. Use project management software or other tools to provide regular updates on progress and address any questions or concerns.
• Provide feedback: Use progress tracking tools to provide feedback to team members. For example, you can use project management software to provide comments on completed work or identify areas where improvements can be made.
• Celebrate success: Celebrate team successes along the way. This can help to boost morale and motivate team members to continue working hard towards achieving their goals.

Set Clear Goals and Objectives

Setting clear goals and objectives is critical for holding remote employees accountable. When team members understand what they are working towards, they are more likely to stay focused and motivated. Here are some tips for setting clear goals and objectives:

Align goals with company objectives: Make sure that the goals you set for your team align with the overall objectives of the company. This helps to ensure that everyone is working towards the same end goal.

Be specific: Be as specific as possible when setting goals. This makes it easier for team members to understand what is expected of them and how they can work towards achieving the goal.

Make goals measurable: Set goals that are measurable so that progress can be tracked and success can be celebrated. This also helps team members to stay motivated and focused.

Set deadlines: When setting goals, set realistic deadlines for achieving them. This helps to create a sense of urgency and can motivate team members to work harder to achieve the goal.

Provide support: Provide team members with the support they need to achieve their goals. This might include providing access to training or resources or connecting them with other team members who can help them.

Encourage Collaboration

Encouraging collaboration is essential for holding remote employees accountable. Collaboration can help to promote teamwork, improve communication, and ensure that everyone is working towards the same goal. Here are some tips for encouraging collaboration:

• Use collaboration tools: There are many collaboration tools available, such as shared workspaces, video conferencing, and messaging apps. Use these tools to promote collaboration and idea-sharing among team members.
• Encourage brainstorming: Encourage team members to share their ideas and opinions. This can help to spark new ideas and promote creative thinking.
• Assign tasks collaboratively: When assigning tasks, consider assigning them collaboratively. This can help to promote teamwork and ensure that everyone has a stake in the success of the project.
• Hold team meetings: Hold regular team meetings to discuss progress, address any concerns, and brainstorm new ideas. Use video conferencing whenever possible to promote face-to-face communication.
• Celebrate team successes: Celebrate team successes along the way. This can help to boost morale and motivate team members to continue working hard towards achieving their goals.

Final Thoughts

Holding remote employees accountable requires a different approach than in-person accountability.

To ensure work is completed on time and to the expected standard, managers must set clear expectations. They must also use communication tools effectively, track progress, set clear goals and objectives, and encourage collaboration.

To get even more amazing tips, tricks, and techniques for scaling up your business, check out The Bootstrappers Podcast! Get the free advice you need to turn your vision into reality.

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