Creating a Data-Driven Property Management Business
As our HOA communities grow and develop, so will the need for property management companies. In this day and age, the growth of HOAs is increasing at an unbelievable rate. Did you know, Homeowners' Associations in the United States number 351,000, with an average of 22 new associations forming daily? In addition, property management companies have also seen a growth rate of 2.5% within the last few years!
Another significant part of a property management company's success is the property managers that oversee their clients. Depending on the size and type of management company, property managers can be responsible for as many as 6-15 communities at one time. Not to mention the day-to-day operations, communication, and the vast number of meetings required to do their job. Property management companies that take more of a team approach will often divide managers into teams of 5-6 to oversee as many as 50 associations at one time.
Why is having property management software so critical to driving data?
When managing multiple properties under one roof, the expectation level can be overwhelming and often different for every management company.
Take, for example, the idea of a school. You have the principal (the management company). Your vice-principal (a leading manager that oversees multiple managers), next is the teachers (the property manager), then the PTA (the Board of Directors), and finally the students (the HOA community members).
As a property management company, the example of a school structure is multiplied by 10, leading to more time and money. An advantage to management software is that it allows you to manage your communities in a more data-driven and productive way, all while saving time and cost in the end.
Collecting data is another considerable perk that comes with creating a data-driven property management company. Collecting data allows a management company to obtain accurate data across all communities and locations. In addition, the amount of research and collective data that are obtained can be utilized to provide a better experience for their clients.
Community Management at an Enterprise Level
As a way to better understand the importance of a data-driven management company, let's explore TownSq Business — a data-driven enterprise solution built specifically for property management companies and their communities.
TownSq business works as a platform that allows managers to manage their entire portfolio from one application. Being that most managers and management companies are known to manage multiple communities simultaneously, TownSq Business enables management companies to integrate TownSq into their clients' HOA business. As a result, all parties including the HOA and property management company are integrated as one.
TownSq business works as a one-stop headquarters for all your HOA management needs. TownSq works as a centralized place where managers are able to visualize and access all information in one place vs. having to manually gather every community's information. Unlike typical management software, TownSq Business takes into consideration the factor of convenience and optimized performance.
- Control multi-association and portfolio access all in one place.
- Create company level roles for global access to all clients.
- Manage an entire portfolio of communities from one screen at your desk or on the go.
Broadcast multi-client announcements
One of the largest struggles that property managers often face is the lack of streamlined communication and time spent creating announcements between multiple properties — especially when the announcement is the same one for every property. The purpose of TownSq business is to not only help eliminate this problem but also help all parties involved streamline communication between different properties — no matter the circumstance or geographic restriction.
- Saves time - Communities that experience serious weather conditions such as hurricanes, tornados and winter storms must take serious steps and precautions to ensure the safety of their community. As a property management company and manager of your HOA community, you have a responsibility to take action — communicating a strategic evacuation plan or important safety measures will be a vital part of your role. By using TownSq Business, a manager is able to send out multiple announcements by the click of one button vs. having to send numerous emails and chains of communication to multiple different communities.
The benefit of data intelligence allows management companies to track managers' performance and satisfaction, along with their performance as a manager of their community. Tracking KPI's are a large part of the success that leads to managing a well-rounded property management company.
Tracking metrics - KPI (key performance indicators) are metrics that help manage and measure a company's performance. These are important for a data-driven management company.
- KPIs helps evaluate performance and roles as a property manager.
- Assists in identifying open opportunities that are specific to your business.
- Can help in identifying and obtaining future clients.
- Helps create and compare different strategies within the community.
- Converts off-line and shielded interactions into easily accessible and transparent ones.
- Provides valuable insights into a team's performance.
When it comes to tracking metrics, it's important to take specific factors into consideration — one of which is establishing a list of KPIs that will be most important to your business and community.
- Strategic growth – Which KPIs will bring development to the community.
- Identify unacknowledged areas of improvement that are often suggested by the community.
- Audience – Who will maintain these KPIs? Is your team capable of improving the company's performance?
- Financial status – Does your HOA suffer from economic growth?
- Community involvement – Is your HOA Board of Directors and community members willing to help the community reach its goals?
5 Key Metrics Property Managers Should Track to become more data-driven
- Business development efforts - Tracking the number of lost and acquired properties will help ensure a more effective budget for the coming year.
- Property management software: TownSq Business
- Feedback: obtain feedback from clients on how to improve your property management company
- Net operating income (NOI): The NOI is an essential KPI — it helps track the community's overall health.
- Vacancy and occupancy rates - Review market rates by evaluating and comparing other KPI's within your surrounding areas.
- Average Arrears - Arrears help track the company's cash flow — money present in theory but are not yet available. Arrears also helps indicate financials that are owed to the property management company, which include past-due fees and rent.
- How can your company help reduce high arrears?
- Offer online payments through a mobile application or community website.
- Client retention "churn" - "Churn is a measurement that tracks the retention rate of any given business."
- The overall goal is to lower your churn rate. When doing this, a business can maximize its recurring revenue while reducing its unit turnover expenses. Consider the following tips as a way to help your business reduce turnover.
- Obtain feedback
- Prioritize positive feedback
- Understand your client's value
- Improved training
- Customer acquisition cost (CAC) - provides accurate data on how much you're actually paying on average, per new client.
- Helps determine profitability, efficiency and optimization
- Calculate Property Management CAC Formula
- CAC = Total Sales Expense + Marketing / # of new clients acquired