“You either get better or you get worse, you never stay the same.”
We talk a lot about business growth in the Fourandhalf blog: we show property managers how to scale up and increase revenues and profits.
But what if you don’t want to grow your property management business?
It’s a very valid point, you are at a spot where you have a lifestyle business that is profitable, you’re happy with your current staff and portfolio, and things are working fine.
So, the question remains: If you don’t have to grow or you don’t want to grow – can you still benefit from marketing?
The Truth When It Comes to Property Management
As you know, most property management portfolios only retain 85 to 90 percent of clients year after year. That’s a natural portfolio turnover for any property management company.
People move back into their properties, sometimes they sell those assets, or something else may come up. You can expect your portfolio to drop 10 to 15 percent every year, even if you are doing a fantastic job.
Financial Implications of Property Management Portfolio Turnover
Take a look from a financial perspective. If you have a 300-unit portfolio and you lose 15 percent of your inventory to natural turnover every year, that’s a loss of 45 properties. When you think about what you earn on those properties in a year, it translates into a loss in annual revenue of $72,000.
Sustain to Continue the “Lifestyle Business”
You need to make an investment if you want to sustain your happy and profitable lifestyle business. Even if you have no plans to grow your property management business, you’ll have to spend smart money out into the world to replenish the portfolio that you need to replace. Knowing where to spend your dollars will also allow you to get a better quality of clients onto your portfolio.
So what marketing methods will allow you to sustain your property management business?
Recommended Marketing Methods
Focusing on your reputation as a property management business is perhaps the best way to passively sustain growth for years to come. With the right reputation, owners will be knocking on your door wishing to work with your company.
Another recommended method is creating content. Content showcases your unique selling proposition to your prospective clients so they know you’re the right choice for their property. Content marketing is a way for owners to find your company on the Internet.
Finally, lead nurturing is a great way to stay in touch with prospective clients. You can stay on the radar of clients you lose so that over time they may come back to you when they are ready to re-sign or buy a new investment property.
If you spend $1,500 a month on marketing and acquire four quality properties every month, you will more than replenish your natural turnover and increase your profitability, while enjoying your business.
Please contact us at Fourandhalf if you have any questions about sustaining your property management business. We’d be happy to tell you more.