As a property manager, you might not get to see the light of day very often. Every day is a new challenge as you dive into maintenance procedures, tenant relations, and accounting. If you’re managing properties for the first time, it can be overwhelming. However, with the right KPIs for property management in place and an effective strategy, things will become easier sooner than later. Therefore, in this article, we’ll cover some of the most important KPIs that every property manager should track. Let’s take a look!
Understanding KPIs: A brief introduction and why they’re important
The term key performance indicators (KPIs) was coined in the 1970s by Everett M. Rogers, an American sociologist who also proposed the adoption of the term “social technologies” to describe the use of scientific methods in solving human and social problems. In other words, the KPIs are the metrics that managers use to measure the success of the organization, departments, or projects.
They’re crucial to the decision-making process, as they help you understand where your company stands. For example, if your company’s top KPI is increasing revenue by 20%, but you’re only generating 16%, you’ll know it needs improvement.
Top KPIs for Property Management Tips
When your properties require a lot of repairs, it’s an indication of poor maintenance. To avoid a situation where you have to hire an emergency plumber, make sure you’re proactive with your repairs. Your first step should be to create a checklist of common repairs. You can either use online property management software or create a simple spreadsheet to keep track of things. For example, you can create a checklist that includes plumbing, roof, HVAC, and electrical repairs.
Next, create a calendar and mark the date when each item should be repaired. In addition to being proactive with repairs, make sure to have a contingency fund. An emergency fund should include things like roof repairs, plumbing repairs, and any other repairs that might come up unexpectedly.
Cloud-Based Property Management Software
There’s no denying that cloud-based software will make your job much easier. In fact, a study by the Property Management Research Council shows that most property managers believe that cloud-based software has made their job easier. However, the same study shows that only 35% of property managers use cloud-based software. Why is that? Most property managers who’ve never used cloud-based software don’t understand its benefits.
Let’s try to change that! –
- Easy setup: You can sign up and have your property management software up and running in a matter of minutes.
- Accessibility: You can access your property management system from anywhere in the world.
- Integration with other tools: Many cloud-based property management systems have integrations with other tools.
- Security: You won’t have to worry about data breaches.
- Backup: You can ensure that your data is always secure thanks to the backup feature.
- Better customer service: You can respond to tenant issues and requests faster due to the automation of the workflows.
- Better relationships: You’ll be able to keep track of tenant relationships thanks to the various communication features provided by the software.
Solid Treament of Repossession
There will always be tenants who fall behind on payments. You can’t avoid it, but you can control how you manage it. The best thing to do is to work with the tenant and try to get them to pay the money they owe. If they don’t, you’ll have to repossess the property. When repossessing a property, there are a few things you should keep in mind. First, you should be present when the sheriff comes and repossesses the property.
While the deputies will be there to serve you, you should make sure they know who you are. For example, you should have your ID on you at all times. This will help you stay safe while ensuring that no mistakes are made. Finally, make sure to document your repossession. This will help you monitor how your repossession process works.
Monthly Marketing Budget
The best way to increase the number of tenants in your properties is to promote them. You can do that by hiring a marketing team, but that’s expensive. Alternatively, you can do it yourself at a fraction of the cost thanks to online marketing. You should have a marketing budget, especially if you’re managing multiple properties. Allocating a monthly marketing budget can help you promote your properties and get more tenants in them.
To know how much you should spend on marketing, you need to know your rental demand. This will help you understand how many tenants you need to fill your properties. Given that the average rental rate is $1,409, you’ll need around 21 tenants to fill your properties. This means that you’ll need to spend around $35,000 on marketing to fill all of your properties.
Stable Occupancy Rates and Retention
Although some people believe that occupancy rates are the same as retention rates, they’re different. Occupancy rates measure the percentage of total rooms that are occupied in your properties. Retention rates, on the other hand, measure the percentage of tenants who stay in the property for more than a year.
That’s why you should pay close attention to these two KPIs. By keeping occupancy rates and retention rates high, you’ll be able to minimize vacancies and maximize revenue. Keep in mind that increasing occupancy and retention rates can be challenging. You’ll need to stay on top of tenant relations, have competitive prices, and provide excellent customer service.
As you can see, there are many KPIs that every property manager needs to track. If you don’t track these KPIs, you won’t know where your company stands, and it will be very difficult to make adjustments. By tracking the KPIs listed above, you’ll be able to make better decisions and have a better understanding of where your company stands. Additionally, by tracking these KPIs, you’ll be able to identify problem areas and correct them before they become too big of an issue.