Have you ever noticed how some property managers have thriving businesses—they're always busy, receive mega-client referrals and perhaps even get a box of Belgian chocolates at holiday time– while the rest seem to just "get by" and struggle to keep the few clients they have?
I spoke to Tom Carcone, a successful property manager and property owner with a 99 percent client-retention rate and he frankly explained why this happens:
"Owners want a business partner, not a rent collector."
So I picked Tom's brain, discovered the secrets to his success and compiled a tip list for you called: "Client Retention: The Top 10 Tips for Property Managers."
- Have a 60-day Opt-out Clause.
Build a 60-day opt-out clause into the contract. This eliminates risk for clients and they won't feel pushed into a corner with a locked-in contract.
- Total Transparency: Use an Online Portal.
Make financial and legal documents available through an online portal for instant access. Include contractor billing orders, leases, income and expense statements and tenant communications.
- Don't Mark Up Contractor Fees.
Clients don't appreciate contractor mark-up fees. Raising profit margins this way is one of the biggest reasons owners leave their current management companies.
- Be a Partner and Advisor.
Establishing a relationship as a partner/advisor begins with sharing your knowledge and resources. Inform clients of their legal obligations as property owners and suggest remodeling enhancements to cut costs and boost their properties' market and rental values.
- Offer Direct Deposit.
Some payment methods can take up to a week to clear accounts. This can be inconvenient for remote landlords. Use direct deposit to ensure the fastest transfer of rent payments.
- Give Tenants the Option to Pay Rent Online.
Encourage tenants to pay their rent online. It's convenient for renters, handy for owners and keeps your records in order.
- Send a 1099 at the End of the Year.
Have your accountant send property owners a 1099 at the year's end and provide clients' accountants with login access to client financial data during tax time.
- Create a Blueprint of Property Management Best Practices
To maximize efficiency, draw up a detailed blueprint of client goals and property management processes and procedures, including tenant evaluation, rent collection and maintenance.
- Be Responsive to Owner and Tenant Requests.
Respond to owner and tenant requests within 48 hours and follow up with a quick call or email when work is completed.
Follow these tips to the letter, and you just might receive a bottle of Pinot Noir to pair with those hand-dipped strawberries covered in Belgian chocolate this holiday.
Have a client-retention tip of your own that's helped build your property management business? Post it in the comments section.
– By Stacy Sare Cohen