According to recent data, over 44 million households in the United States are occupied by renters – that’s nearly 40% of the population. This number has been growing steadily over the past 50 years and is at the highest it’s ever been, creating a strong market for investors looking to capitalize on this sector of the real estate market. And these investors need property management services.
While 2020 has changed the rental market drastically and we are still waiting to learn the full impact of the COVID-19 pandemic, property managers and landlords across the country have collected more than $512 billion in rent payments in recent years.
It’s clear that the property management industry is a strong one, providing highly profitable opportunities for investors who understand the unique challenges of this industry. Despite the turmoil presented by the pandemic, it’s safe to assume property management will continue to be a strong investment opportunity in the future.
Property managers must focus on efficiency and growth in order to positively impact the bottom line of their business. Attracting a variety of property owners who need help managing their rental properties is the most sustainable way to grow a property management business. Here are our best tips to help accomplish your property management business goals.
Understand the different types of rental property owners and their unique needs
In order to build your property management portfolio, you need to understand the different kinds of clients you’ll be working with and each of their target audiences. Common types of property owners include:
- Investors: Individual investors typically purchase properties with the intention to primarily use the residence as a rental property. Generally speaking, investors are not relying on monthly rent payments for immediate income, and understand the benefit of financing property maintenance and upgrades to increase value over time. Investors are usually looking for a professional property manager who will handle all of the small details and make sure the rent is paid on time.
- Landlords: Landlords usually enter the rental housing market in hopes of capitalizing on passive income opportunities. At some point in time, landlords have probably managed their properties themselves, taking care of all of the responsibilities including marketing vacancies, screening tenants, collecting rent, property maintenance and tenant turnover. When landlords reach a threshold level from the time-commitment that goes along with self-managing rental properties (especially if they own more than one property), they may start seeking out property management services.
- Other: Sometimes property owners enter the market “accidentally” through circumstances like inheritance or other major life events. Because they may not have intended to ever manage a rental property and likely don’t have the time to learn the ins and outs of property management, a simpler solution is to find a trustworthy property manager. You may also come across clients who have utilized property management companies in the past but are not satisfied with the results based on vacancy rates, management fees, business practices, etc.
Understanding the different types of clients who own rental properties will help you create profiles of their target audiences and establish the demands of each owner, which will help you attract new business and retain current clients.
Be able to answer the important questions
Owners in the market for a property manager will typically ask similar questions related to their investment and your ability to protect it. Frequently asked questions from property owners include:
- Will my investment be maintained and protected?
- Does this property management company prioritize tenant relations and low vacancy rates?
- Am I partnering with a trustworthy and reputable company?
- What is this company’s experience in the industry? Do they understand the constantly evolving real estate market?
- How much access will I have to information about my rental property?
By providing informed answers to common questions from property owners, you will provide the foundation necessary to establish relationships and create a sense of value. Demonstrate your expertise in the industry and show why your company is the best choice.
Build a strong referral network
Don’t just assume your network will recommend your business – you might find yourself coming up short on leads. Clearly market yourself and your property management services, and make sure everyone in your network knows how to easily contact you with new referrals. Your network should include a mix of:
- Clients: Your current client base is one of the best resources for discovering new property owners looking for property management services. Tap into this list and don’t be afraid to remind them of the great services you offer and ask for referrals if they know others who own rental properties.
- Friends and family: The people who know you best are highly qualified to refer others to your property management business – just make sure they know what they’re talking about. Talk about your business with your social network and make sure they clearly understand what you do, what you offer and how your services can benefit property owners.
- Realtors: Establishing relationships with local realtors can help you get your foot in the door with buyers specifically looking for investment properties. Many realtors are not specialized in property management and will be grateful to have a trusted referral when it comes to clients purchasing rental properties. Reach out to local real estate offices and realtors and introduce your business – offer to help answer questions or provide your services to interested clients.
- Property managers: Your business will benefit from building relationships with other property managers in your community. Many property management businesses do not work with all types of properties or in all areas of your market and might be willing to recommend your business to potential clients they aren’t able to serve. Be sure to return the favor and send leads to other businesses that don’t fit your model.
Research professional organizations in your area that might lead to additional networking opportunities, like a Chamber of Commerce or Small Business Owner Association. Consider offering incentives, discounts or referral fees to your referral network to help sweeten the deal.
Step up your marketing game
Spreading the word about your property management business is one of the key steps to attracting new clients. Make sure you have a professional website set up that is easy to access and easy to use so potential clients can readily find information about your services. Email marketing is an incredibly effective tool for reaching new clients, communicating with existing ones and promoting your business.
Utilizing social media is almost a necessity these days, and doing so consistently can put you ahead of your competitors – just be sure to monitor and respond to any reviews or feedback in order to effectively manage your social reputation. A property management blog is a great way to showcase your expertise in the industry and is highly beneficial for SEO purposes.
Growing your property management business means finding new clients and adding more doors to your management portfolio. Consistently developing your industry knowledge and highlighting how your business stands out from the competition can help you meet your business goals.