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Investment Property Management:? What Metrics To Track And Why?

Whether you manage your own investment portfolio, or hire a property management company to manage your investments, there are key metrics to track and measure if you want to truly find success.? Any two real estate investors will define success differently, especially when it comes to property management.? If you follow on-line forums dedicated to real estate, you will notice heated arguments on the merits of using property management companies as opposed to do-it-yourself management.? So this is not a topic that has a lot of, let?s just say, agreement!Before listing the metrics I suggest you track, I will caution you that I leave a lot off of this list.? Many of the traditional metrics and numbers that you see quoted by property management companies such as vacancy rates, are not going to be on this list.? That is because my company was not built from the mold of traditional property management companies.? At least, not as real estate investors have defined them.? As of this AM, my company manages 1,317 properties in Memphis and an additional 32 in Dallas.? We are currently adding roughly 40 properties a month to those portfolios and each of those is owned by passive investors.

Why is that important?? ?Operating a successful property management company that is growing is not easy in today?s investment environment.? It requires doing thing differently.? It requires measuring things, differently?Metrics to Measure & Questions to Ask Your Property Manager. Much of the argument you read on-line against using property management revolves around a lack of trust on the part of investors and a very poor reputation as a service industry on the part of the management companies.? That is why tracking traditional metrics ONLY should not matter to management companies, and investors should be digging deeper and asking different questions when deciding if using a management company is the right route for their portfolio.So this is written as advice for both property management companies and real estate investors and I make two very general assumptions:All business people want to be truly great at their business.

All investors want to be profitable investors. I realize that those are extremely general assumptions and, to all of our amazement, there are actually business people who could care less if their company is great as long as they make money, and there are real estate investors who clearly don?t care if they make money or not.? But let us not digress ? here is the list.What percentage of your management portfolio do you rent each month?Taking the number of closed rental contracts by the last day of the month and dividing it by the number of properties under management on the first day of the month will measure this metric.? As an example, if you entered the month managing 200 properties and rented 10 properties by the end of the month, your percentage would be 5%.? This is a very quick way for a management company and a prospective investor using the service to measure the average length of stay.? A very quick and unscientific way!? If you average renting just 8% of your management portfolio each month, which you would think is a relatively small number, then you rent roughly 100% of your portfolio each year.? Your average length of stay is 12 months, regardless what the marketing material or any other websites say.? Measuring this metric gives you a very quick look at length of stay, specific to that management company.For a management company this is very important for you to internally measure how good your service is to the tenant.? It also helps you to pinpoint areas for improvement.? The reason for measuring end of the month contracts against beginning of the month portfolio is that it allows you to account for properties you rent in the month that did not exist in the portfolio at the beginning of the month.? When you have 12 consecutive months of activity, you have a consistent metric and any anomalies caused by a growing portfolio are addressed.

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Source: http://www.freedommentor.com/investment-property-management-what-metrics-to-track-and-why/?utm_source=rss&utm_medium=rss&utm_campaign=investment-property-management-what-metrics-to-track-and-why

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Source: http://iapetus-lounger.blogspot.com/2012/08/investment-property-management-what.html

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