6 Steps To Grow Your Property Management Business to Multiple Locations
Property management companies are poised to experience portfolio growth in the coming years. Many property managers are thus looking to take advantage of this anticipated boost by expanding to multiple locations. If you have the ambition to heighten your business in this industry, you should consult reputable experts like myHomeSpot.com.
Some property managers wish to manage their companies expansion process internally to save costs and control the process. Even if your company has already started expanding organically, it is essential to plan and manage the process keenly not to overstretch your resources. This article will list six key steps that will help you prudently plan the expansion of your property management business externally.
Assess Your Company’s Ability To Expand
Before beginning an expansion process, it is critical to survey the company’s current state to determine if your assets, staff, and infrastructure can support the desired expansion. You will need to meet with your team, evaluate their current workload, job performance, and satisfaction levels. Such an evaluation will help you estimate how many new hires are required and in what positions.
Your company’s current infrastructure will also require upgrading to serve the locations you are expanding into efficiently. The new office location will have to be furnished and equipped at the same level as your main office. If your current software is not up to the task, you must buy reputable software that will automate processes like applications, tenant screening, lease signing, and e payments.
Thoroughly Research The Areas You Seek To Expand Into
Property managers often do a deep dive into an area before considering expanding into it. They check for any market gaps and challenges in the location. It is unwise to assume that you can apply the same marketing, rental, and maintenance practices you currently use in a different place. A new location is bound to have diverse regulations, demographics, and business norms.
City and state regulations like zoning, property taxes, fair housing, accessibility guidelines, occupancy laws, tenant screening, lease renewal, tenant eviction, etc., vary greatly, especially for rental properties. Suppose you are expanding to an area with different regulations. In that case, it is advisable to hire a local lawyer or accountant to walk you through any additional legal obligations your company might face.
Create A Comprehensive Expansion Plan
Whenever your company plans to expand to a new region, city, or state, you must ensure the right team and infrastructure to support such a venture. Growing without a plan will mean that your property management company might find itself conducting business in locations with different regulations, business norms, and clients than what you are accustomed to.
Some expansion plans that carry little risk to your original property management companies include acquiring another company in the area you are expanding to or franchising your current company. These are nuanced processes that will require excellent legal requirements and shrewd business acumen to pick the right company to buy or persons to make franchisees.
Determine Your Budget
Expanding to a new location will generate new income for the company after offsetting the initial startup costs. When developing, you must assess all your expenses for the new site, e.g., infrastructure, new staff, marketing, etc., and ensure that your company can comfortably foot the bill.
Examine your operating margins and estimates how much you can expect those to grow by when you add the new location. The projected income will let you know if you are taking unnecessary risks or not.
Set The Plan In Motion
After all the research and planning, you will finally have to break new ground and make a commitment to your company’s expansion. Decide which staff members will be working at the new location and which remain at the original office. Conduct training sessions at the new location if there are new skills or regulations that your team needs to learn. Plan how you will integrate and train any new hires into the team. It is advisable to hire persons who are already experienced in the location you are expanding into.
Keep A Watchful Eye Over All The Locations
Expansion means you will be delegating more tasks to your staff. It does not mean that you will have to give up control. Check new owners and how their accounts are operating. If some properties are more trouble than they are worth to the business, consider axing them. Examine the profit and cost margins for any areas where you could increase efficiency.