In a property management business, whether it is student housing, coliving, single or multi-family housing, there are 2 simple ways to grow your rental portfolio and business –
- Increase the revenue per property from your existing portfolio of properties under management
- Increase the number of properties under your management
This article aims to educate the readers on a few options you have to increase and grow your rental portfolio.
1. Start with your base – Focus on referrals
The greatest asset any property management company has is its relationship with landlords. When looking to scale, the easiest way would be to count on your existing landlords to refer their friends and family to your business.
These are (hopefully) happy customers who have a good relationship with your business. It’s likely that the social circle of these landlords will be filled with more people who have rental properties that need management.
Most managers are aware that referrals are a great way to grow their business, but fail to implement an effective strategy that works.
Here are a couple of tips around successfully implementing a good referral program –
- There has to be a clear financial incentive to your existing landlords for referring more people to their business. It can either be a cash reward (‘$300 for every successful landlord referral’), or other financial rewards (‘Property management fee waived off for 3 months if you refer a new landlord to us’).
Other creative ways could include free value-added services to landlords (‘Free home insurance for 1 year’, or ‘Free annual painting of your property’, etc.)
- Getting referrals is a continuous process, and not a 1-time scheme. Ensure that you are constantly asking your landlords to refer their friends. If you send a monthly financial statement to them, ensure it has a link to share their referral leads. We’d recommend 1 post on your monthly social media, and 1 email to your database per month to be focussed exclusively on getting referrals.
- Use software to track and manage referrals – It becomes tricky managing referrals after a while, so we’d recommend using a clear system to manage the same. Here is a great list of referral marketing tools.
2. Social media – Focus content on landlords, and not tenants
Social media is an obvious channel to acquire customers, but most property managers end up creating content that is hyper-focused on tenants and completely ignore landlords, or simply don’t focus enough on landlords. It is very obvious that landlords and tenants have completely different content preferences and needs, so you have to keep that in mind.
Put thought into what matters most to landlords, and build content around that topic. Landlords care about increasing the rental yield from their assets, refinancing their loans, and getting cheaper interest rates, maintenance and upkeep of the property, about the quality of their tenants and the experience tenants, have in their property. Have you posted on your social media about any of these topics recently?
If you have, great! Do re-evaluate your social media strategy if you have not.
An interesting approach would be to have a separate social media account for landlords and use that account to build content and community of landlords, whilst using your primary social media handles to focus on the overall brand and tenants.
3. Strategic partnerships to grow your Rental Portfolio
A recent story that got media coverage was when one of India’s leading property portals tied up with a property management company to offer rental services for its user base (Read the story here). It is a great partnership as tech platforms are looking for new ways to monetize their user base without doing services themselves, and service-focused companies are always looking for opportunities to expand their customer base.
Would a partnership of a similar nature be possible in your country/region? If yes, we strongly recommend spending a lot of time focussing on partnering with online rental marketplaces.
Even if you don’t want to work with property portals, you can definitely try pitching a partnership with other large organizations which offer products/services to property owners. Possible targets can include real estate developers, home interiors marketplaces (or services companies), real estate brokers, etc.
4. Going B2B and managing properties for institutional investors
While getting an entry into the B2B property management industry can be challenging at first, it offers great scope for long-term expansion. Real estate funds, family offices, and institutional landlords are always looking for property management companies that they can trust to manage their property.
Winning business in the B2B property management market can be a little challenging – Large companies want to do business with other large companies.
Here are a few things you can do to win the confidence of your B2B clients –
- Build a strong presence in one region. Either one city, or a few neighbourhoods/regions within a city. If that is your niche and you are very strong in it, your chance of winning these deals increases.
- Show that you are not just a mom-and-pop outfit. Showcase the technology you have implemented, reports you send periodically to your existing customers, and share the process documents your organization may be following. You may be small today, but you are built for scale.
- Nothing inspires confidence than results. Show the performance of your portfolio over the past 1-3 years with KPIs including portfolio size, occupancy levels, NOI to landlords, etc.
5. Managing other asset classes within Real Estate
This might be a tricky jump, but you should consider expanding your management portfolio to include other asset classes as well. Admittedly, this is not an easy transition, but we would highly recommend this if you operate in a smaller city with a limited scope of expansion in your existing asset class within your city.
Yes, managing an office space is very different from managing a multi-family residential dwelling, but they have more in common than one might think. The core need for identifying tenants, managing documentation, collecting payments and crediting to landlords, maintenance and upkeep of the property, etc. are all the same in all asset classes – Just the context can be a little different.
If you are considering this jump to other asset classes, we would recommend keeping a few points in mind –
- Identifying demand generation channels: Finding tenants for residential dwellings is very different from offices. Find out what works for the new asset class, and build a plan for it
- Upskilling your team: Working with residential tenants is different from office go-ers. Make sure your team is trained for this transition
- Contracts and legal: Documentation happens differently for residential vs retail vs commercial, so do have a lawyer look through the same
- Rethinking your processes: SOPs for various scenarios across the value chain need to be re-done for newer asset classes, as the needs of these assets are different
6. Growing your rental portfolios across geographies
Another great way to grow your business would be to expand into multiple cities or regions. This offers a great opportunity to learn about new markets, whilst letting your business grow as well.
Some pointers about geographical expansion to keep in mind –
- Hire locally: It would be tempting to relocate some of the existing staff you trust to lead operations in new cities, but it’s almost always a better idea to hire great talent from the new region itself. They will immediately bring some customers to you and will be better at building relationships with new customers too.
- Micromanage the 1-time set up: When launching in a new city, a lot of things need to be done from scratch. This includes identifying demand generation channels, partnerships with local brokers, setting up a home maintenance network for various tasks, etc. We always recommend that the founders/business owners oversee this themselves instead of delegating it to someone else, especially if you are on a smaller scale.
- Start with a blast: We have seen many property managers enter into a market in stealth mode, and slowly grow their business over time. While that is appreciable, we would encourage operators to be a little aggressive in the expansion into a new city. Getting coverage in the local news, doing coordinated marketing campaigns online, reaching out to the local community through offline marketing strategies help announce your entry to the region, and helps win the confidence of customers there.
Managing your expanding rental portfolio with efficiency
Growing your rental portfolio requires vigilance from your end at all times.
Preparing your team for what is yet to come will keep them agile when the need arises. With good property management software, you can make the process smoother, especially if you are transitioning from a small to mid-size, or especially to a slightly bigger portfolio.
Delegate tasks and set up teams for managing accounts and finances, customer support and ticketing, and any and all other tasks of your facility.
Keep a strong system of checks and balances in places as per which you review important tasks timely, and whenever needed may allocate resources to wherever needed.
Building a community at your properties enables you to get a reputation with the tenants, and more importantly, make it easier for you to keep them engaged and entertained. Learn how to build a community at your facilities and reap the benefits.
With TheHouseMonk as your tech partner growing your rental property business can be made smoother and easier. Get your 14-day free trial now to know more!