Property management is already a robust industry, and most current property managers anticipate expanding their portfolios in upcoming years. For those looking to expand into new locations, figuring out logistics can be tough. Let’s check it out, what it takes to make the switch from only adding properties in already-covered areas to taking a property management business nationwide.
How to Take Property Management Nationwide
1. An Expansion Plan
There are three effective methods for expanding to new areas. Property managers can:
- Bring on new owners directly
- Set up franchises
- Work with other property management companies
For most established property managers, the third plan is the simplest one to follow. Find industry associations like Valley Management Group that work with PMs in different areas and reach out to ask about business opportunities. Just keep in mind that working with other companies means converting over to new systems and eliminating redundancies, so current PMs will need to incorporate those changes into their expansion plans.
2. Research on Target Areas
Before expanding into new markets, take the time to do some research. Find out about local opportunities and try to focus on areas where the market for property management is strong.
Try to account for differences between new properties and those already under the company’s management, and don’t assume that the same rental, marketing, and maintenance processes that work for one area will be equally effective everywhere. It’s important to get familiar with state and local regulations as well as differences in demographics and culture.
3. An Idea of Expansion Needs
Now is the time to assess the property management company’s current processes. Look for both current procedures that could be easily replicated elsewhere and gaps in the company’s portfolio that need to be filled. The chances are good the company will need to expand both staffing and infrastructure to meet the needs of new clients.
4. A Set Budget
Expanding a real estate portfolio requires some working capital. Before reaching out to other PMs or industry associations, check the company’s current operating margins and evaluate how much they will increase by expanding to other areas. The goal here is to set a reasonable new budget for adding staff, upgrading software, purchasing equipment, paying new business taxes, and otherwise facilitating the expansion.
5. Regular Assessments and Adjustments
The company’s expansion plan will require regular assessments and adjustments, so don’t just assume everything is working out fine and leave the original plan on a shelf to collect dust. Take the time to check on how both old and new properties are doing and make sure clients, residents, and staff all feel that the PM company is still meeting all of their needs. If the company’s profit margin seems like it’s suffering, try looking for ways to improve operational efficiency or areas where the company could benefit from adding new services and fees.
6. Know When to Stop
There’s such a thing as too much growth. Defining a pre-determined stopping point is a great way to avoid outgrowing the company’s original expansion plan. Some PMs target specific profit margins, while others only want to manage a certain number of properties. The important thing is to have a pre-defined stopping point.
Start Building a Multi-Regional Property Management Portfolio
Ready to bring property management to the next level and start building a multi-regional portfolio? Just make sure to have a solid plan in place and reassess it frequently. It’s essential that PMs ensure that their operations are running smoothly and they know what to expect before they rush into new markets.
