With everyone looking for success in this billion-dollar industry, it is essential for every property management company, including the ones in Sabah, to grow your property management business to multiple locations. Easier said than done. We’ve got you covered. We understand that many might not know where to start especially when looking at new locations. Without a growth strategy, you may find yourself managing properties in areas out of your company’s comfort zone which might not be a friendly situation. It doesn’t matter whether you are eyeing to expand to a new location or have already been expanding organically, you will still need to have a plan to track your growth accordingly.
In this article, Pinstay Property Management Company in Sabah will be discussing the steps needed to move your property management company from one location to multiple locations. In fact, this tip has been utilised by some property management companies in sabah.
Devise Your Expansion Plan
For this plan, there are 3 main ways which you can utilise to expand to new locations, cities, states and even countries.
Bring on New Owners Directly.
The first option which is often utilised by property management companies is to bring on new owners in other areas. This is probably the best way to control your growth, because by doing so allows you to add on one property at a time and enables you to accurately measure your expansion success.
Acquire Another Property Management Company in Sabah
Another way to expand into another area is to look for companies that are looking to sell. But, before you agree to acquire another business, make sure to look into the following tips.
- Always make sure that the owner’s agreements are in good order and the company has good relationships with the owner because you will be purchasing these contracts when you are acquiring the company.
- The company is in good standing with the Internal Revenue Service (IRS) and has no outstanding debts.
- The company has reasonable operating margins and decent profits.
Basically, you are looking for a property management company in Sabah that can compliment and has the potential to enhance your business. By acquiring a company that uses the same property management software as your current ones can make your transition easier.
Set Up A Franchise
Another perfect option is a different model is to set up your company as a franchise. This helps you to bring on other property managers to manage their locations under your brand. This allows your business to expand without geographic constraints while it only changes your business model. You will be able to sell franchises and support franchisees as an Entrepreneur. You will need to do a whole load of work such as to set up a franchise model, build your brand strategy, determine your franchise fees and operation guidelines all franchisees must follow.
Research Your Target Areas
If you are seeking to expand to other markets, you should first do some research starting by looking at opportunities out there and look at where the market is strong. Spot the exact place where you want to seek out new owners with homes or properties to manage. Then, look at the management requirements differently from others in the location you are managing. Never assume that you are able to apply the same strategy and process as new areas have their own different set of rules, demographic and cultures. You might need to adjust your marketing strategy accordingly to the new area’s demographics.
Get Familiar With Local & State Regulations
Regulations of every state and city have their own regulations which may vary from one another. If the properties you are looking at are located in outside of your current properties’ area, you should always make the effort to understand them following laws and regulations:
- Property and other taxes
- Trash and recycling removal
- Buildings and Common Property Act
- Property maintenance and safety issues
- Contracts and notices
- Lease renewal
- Delinquency and tenant eviction
- Tenant screening
- Rental registrations
- Occupancy laws
- Utility operations
To make things easier you might want to find someone who understands the local laws and ordinances such as to hire a lawyer or accountant (or both) who lives in the property’s area.
Assess Your Company’s Needs To Expand
This will be the perfect time for you to assess your company’s current management processes. You should look for the gaps which you need to fill, as well as the current different types of procedures which you can replicate. Look for the places where your company should grow and meet the needs of new clients.
There are 3 actions which you should take to make sure you have adequate staffing keeping in mind that you are moving into other geographic areas.
- Take a look at your staff’s current workload. Make the effort to talk to your employees to understand them and how work is getting done, and whether or not they feel they need help already. If so, you make changes according to shifting responsibilities or add new team members.
- Determine whether you will need to staff up when you add new properties as you may need more staff in rental maintenance. Or you may need to hire remote workers in your target areas who have experience in managing properties.
- You should also look at the areas where you can hire outside vendors or contractors instead of permanent staff such as having cleaning or lawn maintenance services outsourced to others. If your properties are in another country or state, you should do your research before choosing your vendors.
What kind of software and equipment will you need to bring on properties in new locations? Will you need more technology devices or more software such as accounting, communication or even word processing apps? If your current software stack is slow, you may want to consider to invest in a more comprehensive property management software solution, one that allows you to streamline all the applications and even integrates third-party vendors into your system.
Determine Your Budget
Just as the saying goes; you have to spend money to make money. This is certainly true when you expand your property portfolio. Of course, adding properties means more revenue for the company but this does not come in an instance. Looking at your operating margins and how much those will increase by adding new properties. Your goal is to maintain or lower your operating margins to keep profits at or above current level. So, you need to determine and calculate whether you will have to increase your budget to add new hires. Will there be new business taxes to pay? Will the money coming in from new properties keep your profits strong? You should always take note that any new money coming in is a good thing but not when the cost you are putting into the new properties outweighs the benefits.
Assess And Adjust Regularly
Once you’ve put your growth plan into motion, don’t just leave it to collect dust but instead you can make the effort to assess how your new and old properties are doing. Make the effort to talk to the clients, residents and staff to ensure your business is meeting all the requirements and needs. Always keep an eye on your cost and profit margins and look for areas you can increase efficiency or even add new fees and services. You also take a look at all of your owners and assess if they are eating up your time. If they are, you may consider to replace them with another owner to allow you to maintain your growth goals.
Know When To Stop
Finally, you should have a predefined stopping point – a certain number of rental properties or a target profit margin that defines success for you. Without this benchmark, you may find yourself growing too quickly for your plan. Making that leap into managing homes across multiple locations can be a little tricky, but all you really need is a solid plan. Shore up your current plan and make sure they are running smoothly before venturing out into a new market. As always fill gaps in staff, marketing, infrastructure and knowledge of your properties’ area. Make sure to always refine your plan regularly. Stick to your plan and adjust wherever and whenever it is needed.
Now that we’ve shared our tips and you’ve know the tricks and tips to it, make sure to utilise it fully and go forward with your plan.