Property Management Basics

[Kelly DeWinter]

We started out Investing in small rental properties and have had good success with managing the properties. Long story short, we have picked up an additional 3 commercial and 2 residential properties to manage through word of mouth. After a year it's become clear that we would like to expand our Residential Property Management. So a our questions:

. What is a reasonable property management goal (number of units) to shoot for in a 1,3 and 5 year basis
. What are 5 ways of generating leads for residential properties to manage
. I have the ability to generate a list of Landlords in my area, Are there template mail letters/post cards that we can use to get started

[Nathan Gesner]

I don't have time to answer all your questions but here's a start.

A reasonable goal? That depends on your market. In Houston you may be able to pick up hundreds in one year. In my area, you'll be luck to pick up 20 (particularly because you're competing against me!). You'll have to study your market and make that determination for yourself. It's not only determined by the number of units available but by the quality of property managers already in the market and how you can differentiate yourself enough to attract the business.

How to generate leads? Once your company is set up, market heavily to real estate agencies. The vast majority of agents know nothing about property management, nor do they want to. Set up a referral system where agents are paid a referral fee for every Landlord they send to you that signs a contract. How much do you pay? That depends on what the business is worth to you. If a single-family earns you $100 a month, it's reasonable to pay $200 - $300 for that business. I personally offer $200 for a single-family and then $50 per unit on multi-family properties.

[Chris Matson]

Something else to keep in mind.  Managing your own properties is fine but in TX if you open it up to others you need to operate under a broker’s license.  Good luck!

[Kelly DeWinter]

Originally posted by @Nathan Gesner:

How to generate leads? Once your company is set up, market heavily to real estate agencies. The vast majority of agents know nothing about property management, nor do they want to. Set up a referral system where agents are paid a referral fee for every Landlord they send to you that signs a contract. How much do you pay? That depends on what the business is worth to you. If a single-family earns you $100 a month, it's reasonable to pay $200 - $300 for that business. I personally offer $200 for a single-family and then $50 per unit on multi-family properties.

 Thanks Nathan;

I've started to create a marketing plan to Realtors and have access to a database of active agents in my area. I'm not a marketing Guru so this is going to take awhile LOL.

[Nathan Gesner]

@Kelly DeWinter I think a key component of the marketing plan is demonstrating value. The agent needs to understand why they should send business to you. I do that a couple ways:

1. I pay them. It's only $200 but that's better than nothing and doesn't require much effort on their part.

2. I have marketing information that demonstrates I'm a professional. I compare my services to those of the "competition" and the private Landlord: online payments, solid screening, no evictions in 5 years, over 340 rentals under management, member of NARPM and higher code of ethics, etc.

3. I offer a guarantee: if the client decides to sell the home down the road, I pay the referring agent a referral fee.

They get paid, they know their client is going to a professional, and they know they'll get paid again if the client decides to sell. Win, win, win!