How can you grow your property management business without increasing the amount of doors in your portfolio? We promise this is not a brain teaser or a riddle (unless you want to treat is as such). Today we have the pleasure of bringing in someone who has accomplished just that: Andrew Dougill of Hoffman Realty, a Tampa property management and real estate company.
Andrew is one of Fourandhalf’s founding clients when the company was first launched five years ago, and recently we’ve heard Andrew say that he grew the bottom line of his company 100% without any additional headcount or overhead expenses. We asked him what directly attributed to that.
Identifying Profitable Clients
Hoffman Realty recognized opportunity about five years ago when all the private equity funds and institutional investors were coming to the Tampa area. It became apparent that they could grow their business quickly by adding a 1,000 extra doors to their already established portfolio of 300 properties.
So, Andrew did some work to find out what adding those investors would take, and how much time, people, systems, and technology they would have to invest in. When crunching those numbers, they realized two things:
- Adding institutional investor business would not make sense for them.
- 50 percent of profit came from just 25 percent of their doors.
Andrew decided that his main focus would be to find out exactly the profile of that profitable customer base and when he did find out, he ended up generating as much profit as he would have if he added the 1,000 doors from institutional investors.
Andrew will share the most advantageous customer profile for your property management business at the PM Grow Summit this upcoming January.
Maintaining Marketing and Sales Efforts
It would be great if you could just build a 400-door property management business, and just leave it there. However, even the most stable property management companies lose 10 to 15 percent of their portfolio every year. Andrew Dougill likens property management to a bucket with a leak in it; you have to keep filling the bucket with water to sustain a certain level. Hoffman Realty chooses to fill their bucket very selectively, adopting a quality over quantity method that has allowed them to not only grow the company, but maintain the successful standards that they aim for.
Andrew once told Alex that he was only interested in 1 of about 20 leads that would come in. Hoffman Realty is focused on finding the right landlord, with the right property, in the right part of town, possessing the right rent range. They have a profile describing the client who is profitable for their company, and have their radar on in finding that specific customer, the one that generates the highest return on their investment of time and resources.
You don’t want to miss him speaking about his customer profile and how to select the right clients, because identifying those customers is not always easy. We’ll see you in Florida in January at the PM Grow Summit. If you have any questions, please contact us at Fourandhalf.