Are you thinking about adding more single-family rentals to your portfolio of rental properties? If so, you’re making a smart choice!
Even though you may currently own one or more single-family homes, the reality is that you can easily kill a home purchase deal by making one or more of the following mistakes.
Lack of preparedness
Many property managers look at their business as a revenue source, but according to Propst, it’s so much more. He recommends viewing your business as an asset that can increase in value and consider how you want it to evolve down the road. By beginning with the end in mind and setting up goals to grow your business, you can make it more marketable when it’s time to sell.
- Poor financial management
In an acquisition, financials can be difficult to get your arms around and verify. Are the earnings you post on your financials what you are actually earning? Propst says it’s important to ensure the customer’s, tenant’s and business owner’s books are all reconciled. Both the buyer and seller need to understand that the numbers put into the system are accurate. If you reconcile your books on a monthly basis, life is much easier when it comes time to sell your business and investing in a certified audit may be a good idea.
- Lack of documented processes
When you acquire a company, you also acquire its processes. Propst recommends analyzing these processes so you can best leverage strengths and tweak areas that need improvement. From there, integrate the processes into your business as a whole. Use technology to document all processes, such as business procedures and communications with owners and tenants.
Key performance indicators (KPIs) are important for anyone who is building their business and eventually wants to sell. Consider what is driving dollars and bottom line and focus on these areas. Instead of trying to do it all, set a few KPIs that help you reach your goal and place your efforts there.
What does Andy recommend to document processes? Tools like Traxion or even simply Microsoft Word.
- Poor data management
Do you have streamlined property management data? According to Propst, businesses should establish clear policies and procedures for how data is entered so it can be easily accessed and interpreted across the board. When managing multiple platforms (such as a tenant portal and owner portal), you need to establish data standards so you and your team can consistently enter data in the same way and avoid confusion (e.g.- “TX” instead of “Texas.”)
- Not knowing your worth
Do you know the value of your business? Property managers who begin with the end in mind by setting clear goals, along with mission and vision statements, are better equipped for long-term success. Be proactive in planning and focus primarily on initiatives that drive revenue for your business. Propst says that “Stepping away from the day-to-day of your business to create a game plan is an investment that will pay tenfold.” Making time to establish, review and adjust your goals is essential to understanding the true value of your business.
Get Property Management Here
For professional property management in the Houston Texas area contact Vestpro Residential Services at (832) 971-1841 or click here to connect with us online.