Calendar icon November 27, 2023

10 Property Management Goals to Set for the Year (with examples)

Goal-setting is critical to planning for a changing industry. Before we dive into specific property management goals we recommend for the coming year, let's take a minute to define how to approach goal setting in property management. 

Think long-term

Dr. Stephen Covey’s 2nd habit is “Begin with The End in Mind,” the principles of which should be applied to your property management strategies as a single-family rental property manager. This is especially true now as we enter 2024 with an industry that continues to evolve.

Goal-setting should start with an understanding of where you want to be in several years, not just at the end of this year. It forces you to consider industry trends that you may not feel the impact of immediately but will definitely affect the viability of your business in the future. 

Short-term goals should ladder up to long-term goals. They should serve as pieces to the long-term puzzle. It’s important not to lose sight of what that puzzle is supposed to look like when it’s finished.

 

download rental inspection checklist template

 

Identify opportunities to improve resident experience and retention

The most important property management industry trend continues to be the evolution of demand from a simple service to a more complex experience. Thus, you should be identifying opportunities to improve resident experience and setting goals based on how you want to achieve said improvement.

What can you do this coming year to improve the living experience for your residents? This could include new programs to be developed and implemented, new roles on the team specifically focused on experience, or a number of things, depending on your answer.

The best way to identify opportunities is to listen to your residents. It sounds simple, but they’ll tell you what they perceive as a great living experience, and that becomes data you can act on.

Consider a list of services you think a resident may like, some of which could be rental rewards, home-buying assistance, credit reporting, holiday gift certificates to local businesses, etc. You can survey your residents on these ideas pretty easily, or you can simply roll them out and gauge resident response. 

Identify opportunities to improve investor experience 

We talk a lot about the triple win here at Second Nature. The third branch of the triple win is a win for your clients. Typically, this is laddered up to by a resident win, which minimizes vacancy to the benefit of the client.

There is more you can do, though, to really deliver something irreplaceable to your clients. 

A popular takeaway from PMLX was the value of communication with clients. Scheduling quarterly meetings with your clients has proven valuable to the companies that pioneered this concept. Launching these quickly became a popular short-term 2024 goal for many attendees. 

Clients leave with an extensive understanding of what is happening with their investments. That’s an additional win for them and for you, as investors are not only more involved, but they tend to appreciate the time you take to communicate with them and can gain deeper insight into the full value that your company provides. 

Plan sustainable growth initiatives

Like thinking longterm, creating sustainable growth initiatives involves expanding your business in a manner that's not only profitable but also manageable and responsible. This means considering how growth will impact all facets of your business, from your operational capacity to the quality of service you provide to residents and investors.

Start by analyzing market trends and potential areas for expansion, whether it's by increasing the number of properties you manage or venturing into new geographical regions. Balance ambition with practicality. Ensure that any expansion doesn't stretch your resources too thin or compromise the high standards of service that have contributed to your current success.

Automate and streamline operations to build efficiency

James Clear says in his book Atomic Habits, "You don't rise to the level of your goals, you fall to the level of your systems." In some ways, setting goals is secondary to ensuring you have the right processes and procedures in place. Mark Cunningham shares that he has a KPI to achieve 6 percent quarter-over-quarter net income growth. It's not about setting new goals for a number of new doors each year; it's about focusing every quarter on that consistency. 

If you aren't confident in your processes yet, that should be an area to focus on when you are goal-setting.

For example: Identify areas where manual processes are slowing down operations. This could be anything from rent collection and lease renewals to maintenance requests and property inspections. Or, look into streamlining communication channels. Efficient communication tools not only facilitate better interaction among team members but also improve the way you engage with residents and investors. Data management and reporting can also be significantly enhanced through automation. 

Think about who you want in the room with you

Who are the most strategic thinkers in your company? What personalities will be at the table? Set the rules of engagement for the meeting to help your team be successful when you are actually setting goals.

You should also decide your approach: Do you want to be deeply collaborative and get everyone's opinions or if you want to hear from your team and then make the executive decisions on your own. (Our recommendation!) Goal-setting isn't a time to give everyone an equal voice.

Know your "who" and make sure they're the ones in the room. 

Ask: What should we stop doing? 

For you as the leader of your company, ask, "What should I stop doing and delegate away?" But, just as importantly, you should also be asking a broader question: "What does my company need to stop focusing on?" This may be about refocusing your niche, the types of properties you want to handle, the clients you want to focus on, etc.

What are the things you're doing that don't qualify as "absolutely killing it." It might be time to cut those out. If you're contemplating stopping, you probably should.

Follow the opportunity

Another way of saying this is to pay attention to the market.

For example, five years ago, focusing on accidental owners would have been a bad strategy because the market was being flooded with investors. But, going into 2024, the market has changed. Now accidental landlords are the majority of new opportunities. Homeowners are hesitant to sell because of high interest rates and have found themselves needing property management for a property they hadn't intend to keep. 

In short, be ready to pivot to follow the biggest market opportunities. 

 

Happier residents

 

Get your KPIs organized before you set goals

It becomes a very expensive goal-setting meeting if you don't have all your metrics and year-in-review numbers prepared beforehand. Have your SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) ready, as well. 

Review all of your numbers before you sit down to set your next year's goals. It's critical to measure against last year's goals, see where you succeeded, where you hit below the mark, and how that might affect your coming year. Review your financials, dashboards, KPIs, etc., before setting goals. This could include anything from average management fee, to number of google reviews, open work orders, average rental rate, profit margin, number of employees, etc.

This pre-review will help you assess where you actually are and where you want to go. Are you ready to take bigger risks? Do you need to double-down on some goals from last year? Your team should come to a goal-setting meeting prepared with all of these numbers ahead of time so you don't waste time.

Be specific

Your goals should have specificity or they set you up for failure. Get really clear on what is possible and what you really want to accomplish. Be clear and concise about your goals and what would constitute success. That may mean setting different levels that you target: things that must be accomplished, things that are a stretch, etc. If anyone on your team could read one of their goals and ask, "What does that mean?" you need to keep digging into more specificity.

Example goals for property management companies

Here are some examples of smart goals to set for a property management company. For your company, you should find ways to make these extremely specific and time-bound in a way that make sense for your team, your niche, and your focus. Our examples are more general so they apply to most SFR property managers who are in our audience. But remember that these can be made more specific for your own business.

1. Grow property portfolios

Increasing your portfolio signifies not just an increase in business scale but also an enhancement of market presence and revenue potential. To achieve this, focus on networking with property investors, leveraging marketing strategies to attract new clients, and providing exceptional service to encourage word-of-mouth referrals. It’s also essential to identify emerging markets or areas with high rental demand.

Careful market analysis and strategic partnerships can be instrumental in uncovering opportunities for portfolio growth, ensuring that each new addition aligns with your company’s strengths and long-term vision.

2. Increase resident satisfaction KPIs

Great property management success is all about improving resident experience and satisfaction. Focus on understanding and addressing the needs and concerns of your residents. Implement regular feedback mechanisms like surveys to gather insights into their living experience.

Prioritize swift and effective responses to maintenance requests, and explore ways to add valuable services that residents want, like those offered in a Resident Benefits Package. Training your staff in customer service excellence can also play a significant role.

3. Improve ROI

To enhance ROI, focus on optimizing rental rates without compromising occupancy rates. Conduct market research to ensure your pricing is competitive yet profitable. Explore ways to reduce operational costs, such as negotiating better deals with vendors, implementing energy-saving measures in properties, or implementing new services that can increase your ancillary revenue. Regularly reviewing financial performance and identifying areas for cost savings or revenue enhancement can lead to significant improvements in your overall ROI.

4. Increase occupancy rates

It's just math: Higher occupancy directly correlates to more stable revenue streams. To achieve this, focus on making your properties more attractive to potential tenants. This can involve the obvious like ensuring your properties are well maintained. But it also means providing services that residents are excited to pay for and stay for.

Boosting occupancy rates and increasing retention are two major benefits of a resident benefits package. Understanding the needs and preferences of your target market is crucial. Tailor your services and communication to meet these needs, thereby making your properties more appealing.

5. Improve maintenance quality and speed

Implementing a streamlined process and/or software for receiving and responding to maintenance requests can significantly reduce response times. Consider adopting technology solutions like maintenance management software to track, prioritize, and dispatch maintenance tasks promptly.

Regularly sourcing feedback from residents post-maintenance can also help in continually assessing and improving the quality of your services. High-quality, quick maintenance responses not only keep residents happy but also contribute to the long-term upkeep of your property.

6. Enhance digital marketing efforts

A strong online presence can significantly increase your property management company's visibility and appeal. Focus on building a user-friendly website, optimizing it for search engines (SEO) to improve your ranking in search results.

Use social media platforms to engage with your audience, showcase properties, and share valuable content. Consider leveraging email marketing to keep clients and residents informed and engaged. Additionally, exploring online advertising options such as Google Ads or social media ads can help target potential clients more effectively. 

7. Improve client satisfaction KPIs

Enhancing the satisfaction levels of your clients – the property owners – is as crucial as focusing on tenant happiness. To improve client satisfaction KPIs, start with transparent and regular communication. Keep your clients updated with comprehensive reports on their property's status, including occupancy rates, financial performance, and any maintenance issues.

Implement client feedback mechanisms to understand their expectations and areas of concern. Tailor your services to meet these specific needs, whether it’s providing more detailed financial analysis, offering advice on property upgrades, or improving tenant screening processes.

Demonstrating proactive problem-solving and value addition can significantly boost your clients' trust and satisfaction. Remember, a satisfied client is more likely to retain your services and refer you to others, enhancing your business growth.

8. Adopt automation

Automation can streamline various aspects of your operations, from tenant screening and lease management to rent collection and maintenance scheduling. Investing in property management software can significantly reduce manual tasks, minimize errors, and provide real-time data analysis. This not only frees up time for your team to focus on more complex tasks but also improves the overall tenant and client experience.

Automated communication tools can keep tenants and property owners updated, while automated reporting can provide insightful analytics for better decision-making. Embracing automation is about staying ahead in a competitive market and offering a more responsive, efficient service.

9. Increase convenience

Convenience has become one of the most significant deciding factors for clients and residents. Start by evaluating your current processes from their perspective – how easy is it to pay rent, report maintenance issues, or get updates about their property? Implementing online platforms for rent payments and maintenance requests can greatly enhance convenience for tenants.

For property owners, providing easy access to property performance reports and financial statements through a client portal can make a significant difference. Additionally, consider adopting mobile solutions that allow both tenants and owners to access services and information on-the-go. The goal is to make every interaction as seamless and hassle-free as possible.

A little twist? Implementing a Resident Benefits Package can make life more convenient for them and for your team. We're all about making things easier. You can learn more about how we do it on our benefits page.

10. Reduce rent arrears

To achieve this, start by implementing proactive rent collection strategies. Set up automated reminders for rent payments and offer multiple, convenient payment options to make the process as easy as possible for residents. Implementing a strict but fair rent collection policy can also help in minimizing delays.
Educating residents about the importance of timely rent payments and the potential consequences of falling behind can foster a sense of responsibility. In cases where residents are consistently late, consider personalized communication to understand their situation and, if possible, work out a payment plan.
A great strategy to hit this goal is to increase incentives for on-time payments. Credit reporting is a great way to incentivize on-time monthly rent, as are resident rewards

The importance of goal setting in property management

Setting clear and strategic goals is essential for steering your company towards success and growth. Goals act as a roadmap, guiding your decisions and actions, ensuring that every effort is aligned with your broader vision.

Effective goal setting in property management also allows for measurable progress. It enables property managers to track performance against specific benchmarks, making it easier to identify areas that need improvement or adjustment. This process of continual assessment and adaptation is key in an industry that is constantly influenced by market trends, regulatory changes, and evolving tenant expectations.

Moreover, well-defined goals can motivate and unite your team. They provide a sense of direction and purpose, fostering a proactive work culture where every team member understands their role in achieving the company's objectives. This collective effort not only drives the company forward but also contributes to a more rewarding and engaging work environment.

In essence, goal setting is not just about envisioning a successful future for your property management business; it's about creating a structured approach to make that vision a reality. It's a vital tool for navigating the complexities of the industry and securing a competitive edge in the market.

Keep learning

Property Management Pest Control Gone Wrong: Resident Horror Stories & Nightmares

In the world of property management and real estate investing, maintaining a clean and pest-free environment is central to the well-being of the residents who live in your properties. That being said, effective pest control is not only a best practice, but also a strategic move that enhances your properties’ living experience, making your life as a property manager easier and your residents happier. Pest control is crucial for several reasons: Investing in pest control saves significant potential costs by avoiding large-scale infestations and property damage, enhancing resident satisfaction with a healthier, pest-free environment, and preserving property value. This approach reduces health risks, protects against liability, and maintains a good reputation by demonstrating the property management company’s dedication to providing safe, comfortable living spaces for great tenants. Ultimately, pest control sets professional property management companies apart from DIY and amateur real estate investors by safeguarding both residents' well-being and property assets. By addressing these points, you can foster a positive living environment that benefits both you and your residents. It’s important to note that our goal is not to call out “good tenants” vs. “bad tenants.” Instead, we always aim to foster a constructive dialogue focused on addressing problems and finding solutions. By emphasizing respect and fairness, we can help create a positive environment that benefits all residents, ensuring their rights and dignity are always respected. Also note that even though we here at Second Nature prefer the term "resident" over "tenant" to foster the human element, the word "tenant" may still be used occasionally due to its long-standing legal and real estate context. "House of Horror" Stories Most property managers have encountered their share of resident horror stories – and many, not for the first time. These tales often involve unexpected and severe pest infestations, made worse by residents' behaviors. Indeed, from bedbugs and roaches (the truly bad tenants any property manager is looking to be rid of) to animal issues, the range of pest problems is vast and daunting. Our "House of Horror Stories" video provides a vivid account of these situations, including some landlord horror stories that are too distressing to include here. Maggots falling from the ceiling: A tenant reported maggots falling from the ceiling onto their bed. The pest company discovered that these maggots were larvae of beetles infesting the air ducts in the neighborhood. Pets and extensive damage: Animals in one property caused extensive damage by covering all floors with feces and chewing through doors, door frames, flooring, HVAC systems, and appliances, with clean-up costs exceeding $15,000. Flushable wipes backup: A tenant flushing baby wipes caused a major sewage backup, leading to water damage throughout multiple rooms (including the living room and master bedroom), with clean-up costs close to $5,000. Donkey in the basement: During the purchase inspection, a donkey was found tied to the deck and later moved to the basement to hide it from animal control, calling for its quick removal. Rodents damaging appliances: Rats infested a property, chewing through a new dishwasher, insulation, and electrical wires, requiring repeated pest control visits and extensive repairs. These stories from a range of contributors highlight the unpredictable and often extreme challenges property managers face in maintaining their properties and ensuring the safety and well-being of their residents. How to Control Resident Pest Issues A robust pest control program is often the property manager’s best friend. After all, infestations can be difficult to proactively defend against, given that background checks, references, and tenant screening go only so far in uncovering the pest issues that can befall even the best tenants. Regardless of the challenges residents may present, a comprehensive pest control plan can mitigate potential infestations before they escalate into true horror stories. This includes timely intervention, and educating residents about maintaining cleanliness. Providing residents with clear guidelines on waste disposal and food storage can also significantly mitigate pest problems. Additionally, offering pest control services as part of a Resident Benefits Package can encourage residents to report issues early, allowing for swift action. Planning Ahead When dealing with problematic residents, it's essential to have a clear action plan. Issuing notices to clean the property promptly (e.g., with a 7-day notice period) is a critical first step. Leveraging a notice-to-clean template can streamline the process and ensure that you comply with tenant laws and legal standards. If worst things come to worst, an eviction notice may become necessary. However, this process is governed by various rules and regulations that can differ significantly across federal and state lines. It's important to be well-versed in these laws to avoid legal pitfalls. A detailed “notice to vacate” template can be incredibly helpful for property managers looking to take care of these complex situations. Nipping Things in the Bud In conclusion, maintaining a pest-free environment is integral to property management success. On-Demand Pest Control is a service in Second Nature’s fully managed Resident Benefits Package (RBP). It offers predictable, cost-effective, and fast solutions when a pest issue arises. Instead of expensive scheduled preventive treatments, residents can request service as needed. This approach ensures fast response times, directly addressing the problem at hand and saving costs over recurring treatments Property managers simply select the best pest plan from four tiers of service levels to include in their RBP. When an issue arises, the resident reports it in the On-Demand Pest Control portal, and the pest issue will be resolved. Learn more about On-Demand Pest Control by getting in touch, or read our latest study on the impact of our RBP on the resident experience.

Calendar icon July 3, 2024

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Your Guide to Property Management Laws, Regulations, & Rules

Property management activities involve overseeing rental properties, ensuring they’re maintained, residents are managed, and finances are handled effectively. While a real estate license is not always necessary to manage rental properties, licensing requirements can vary significantly by state. Typically, states may require property managers to hold a real estate license or work under a licensed broker. Property managers should familiarize themselves with the specific regulations in their state to ensure compliance. What Are Some Important Property Management Rules and Regulations? Property management laws encompass various areas, ensuring the safety, rights, and responsibilities of both property managers and tenants. Key areas include: Anti-discriminatory laws: Fair housing laws such as the Federal Fair Housing Amendments Act (FHAA) prevent discrimination based on race, color, national origin, religion, sex, familial status, or disability. Lease paperwork: Legally binding lease agreements must include specific terms and comply with local regulations. Safety, maintenance, and repairs: Property managers must ensure properties meet habitability standards, including weatherproofing, heating, water, and electricity. Financial management: Proper handling of security deposits, monthly rent collection, and financial records is essential to comply with regulations and avoid disputes. Property management laws by state Each state has specific property management laws that property managers must adhere to. For instance, in many (but not all) jurisdictions, property managers must obtain a real estate broker license to operate. These laws are typically drafted and enforced by various regulatory bodies such as the state's Department of Real Estate or similar agencies. For instance, the California Department of Real Estate is responsible for regulating real estate activities, brokers, and salespersons, including those who work in property management, while the Texas Real Estate Commission handles these responsibilities in Texas. These agencies ensure compliance with state licensing laws and often provide resources and guidelines for property managers of both residential properties and commercial properties. Below is a table linking to the respective government sites for state-specific regulations: State State Body Alabama Alabama Real Estate Commission Alaska Alaska Real Estate Commission Arizona Arizona Department of Real Estate Arkansas Arkansas Real Estate Commission California California Department of Real Estate Colorado Colorado Division of Real Estate Connecticut Connecticut Department of Consumer Protection Delaware Delaware Real Estate Commission Florida Florida Department of Business & Professional Regulation Georgia Georgia Real Estate Commission and Appraisers Board Hawaii Department of Commerce and Consumer Affairs' Real Estate Branch Illinois Illinois Department of Financial and Professional Regulation Indiana Indiana Professional Licensing Agency Iowa Iowa Department of Inspections, Appeals, & Licensing Kansas Kansas Real Estate Commission (for commercial real estate property management only) Kentucky Kentucky Real Estate Commission Louisiana Louisiana Real Estate Commission Michigan Michigan Department of Licensing and Regulatory Affairs Minnesota Minnesota Department of Commerce Mississippi Mississippi Real Estate Commission Missouri Missouri Division of Professional Registration Montana Montana Department of Labor and Industry Nebraska Nebraska Real Estate Commission Nevada Nevada Real Estate Division New Hampshire New Hampshire Real Estate Commission New Jersey New Jersey Real Estate Commission New Mexico New Mexico Real Estate Commission New York New York State Division of Licensing Services North Carolina North Carolina Real Estate Commission North Dakota North Dakota Real Estate Commission Ohio Ohio Division of Real Estate & Professional Licensing Oklahoma Oklahoma Real Estate Commission Oregon Oregon Real Estate Agency Pennsylvania Pennsylvania Real Estate Commission Rhode Island Rhode Island Department of Business Regulation South Carolina South Carolina Real Estate Commission South Dakota South Dakota Real Estate Commission Tennessee Tennessee Real Estate Commission Texas Texas Real Estate Commission Utah Utah Division of Real Estate Virginia Virginia Department of Professional and Occupational Regulation Washington Washington State Department of Licensing West Virginia West Virginia Real Estate Commission Wisconsin Wisconsin Department of Safety and Professional Services Wyoming Wyoming Real Estate Commission Note: This list excludes resources from Idaho, Maine, Maryland, Massachusetts, and Vermont. Tenant screenings Tenant screenings are a critical step in property management, involving background checks, credit checks, income verification, employment verification, rental history, and proof of ID to assess prospective tenants. This process helps ensure that potential renters are reliable and financially responsible. It's important to obtain signed consent before running credit checks, as required by the Fair Credit Reporting Act (FCRA), to comply with legal standards and protect tenant privacy. Another important guidance is provided by the Fair Housing Act, which prohibits discrimination in housing-related activities based on race, color, national origin, religion, sex, familial status, and disability, ensuring equal access to housing for all individuals. Learn more about Tenant Screening Tips for PMs Lease agreements A lease agreement is a legally binding contract between the landlord and tenant, outlining the terms of the tenancy. Key components of rental agreements include lease terms, rent amount, security deposit regulations, and common clauses such as maintenance responsibilities and lease renewal terms. Regulations governing lease agreements can vary by state, so it's essential to ensure that leases comply with local laws. For instance, state laws often contain security deposit limits, provisions for the return of unused portions, as well as a clear accounting for any deductions. Consulting with a lawyer is crucial to ensure your agreement is legally sound and reflects your specific circumstances. We’ve shared some relevant resources below: Learn more about property management agreements, featuring a free template Learn about security deposit insurance, and its pros and cons Financial management Effective financial management in property management involves establishing clear rent collection procedures and maintaining organized financial records. This includes tracking rent payments, managing tenants’ security deposits, and adhering to landlord-tenant laws to avoid legal disputes and financial penalties. Keeping detailed records can help property managers resolve issues efficiently and ensure transparency with tenants and property owners. Solutions such as property management software can streamline financial operations, automate routine tasks, and perhaps most importantly - ensure accuracy and regulatory compliance with respect to various accounting regulations and legal requirements. Evictions Evictions are a legal process to remove a tenant from a property. Common reasons for eviction from rental units include nonpayment of rent, property damage, lease violations, and criminal activity. Property managers must follow their state's rules for eviction notices, such as unconditional quit terminations and termination for lease violations, to ensure the process is lawful and fair. State laws regarding unconditional quit terminations and terminations for violation of a lease vary widely. Unconditional quit notices typically demand that tenants move out immediately without an opportunity to remedy the violation. States like Indiana and Mississippi allow landlords to issue these notices for serious or repeated violations, with Mississippi requiring 14 days to move out. For lease violations, the notice period and the opportunity for tenants to remedy the breach also differ by state. For example, in Kentucky, tenants generally have 15 days of written notice to cure a violation, but if the same violation occurs within six months, landlords can issue a 14-day unconditional quit notice. In contrast, states like Iowa and Maine require a seven-day notice period for tenants to address lease violations before eviction proceedings can begin. In California, on the other hand, tenants must be given three days or more to cure the violation before landlords can file for eviction (source). These legal nuances emphasize the importance of PMs and tenants understanding their specific state regulations to navigate eviction processes appropriately. Property maintenance and repairs Maintaining rental properties is a legal obligation for landlords, ensuring that properties are safe, habitable, and free from hazards like lead, asbestos, and mold. This includes weatherproofing, providing adequate heating and water, and ensuring electrical systems are functional. You can find out more about these issues in our Property Maintenance Guide for PMs. Landlords must also give notice to tenants before entering the property for repairs, as required by most state laws. When in doubt, consult a legal advisor to ascertain the specific laws that apply to you in your state. Tenants have the right to a habitable living environment, and failure to meet these standards can lead to legal consequences as well as issues with occupancy rates. Indeed, when landlords fail to make required repairs, tenants have several options depending on their state's laws. Tenants may withhold rent, make the necessary repairs themselves and deduct the cost from the rent, pay a reduced rent, report the issue to local building inspectors who can order repairs, or even break the lease and move out. Additionally, tenants can sue the landlord for a partial refund of past rent or for damages caused by the substandard conditions, including discomfort and emotional distress. Get our preventative maintenance checklist for property management Learn about the importance of pest control to maintain a pest-free environment Second Nature's Guidance Staying informed about state-specific regulations, maintaining organized records, and ensuring compliance with federal laws such as the Fair Housing Amendments Act is key to successful property management. On a practical level, understanding and adhering to property management laws and regulations is crucial for property managers to ensure smooth operations, maintain property value, and foster positive tenant relationships. Learn more about property management company best practices, marketing, and more in our Second Nature Community.

Calendar icon July 3, 2024

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