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Andrew Dougill came to Tampa, FL in the 1980s. After asking the admin for a rubber (i.e. eraser) on his first day on the job, he realized words definitely have different meanings to different people. When applying this to the word “grow”, that can mean growing the number of doors, growing the size of your company or growing to dominate the market.
However, when you add doors, you have to add employees and that comes with training, HR, etc. It also means you increase your overhead plus you have to maintain systems to deliver a quality service/product to customers.
Andrew’s session explains how you can you grow your property management company without adding doors.
When you add doors you have to add employees and that comes with training and HR, etc. It means you increase your overhead plus you have to maintain systems to deliver a quality service/product to customers.
In 2010, Hoffman Realty was invited to a meeting with a fund manager. At first the prospect of adding doors to their company was very exciting until they found out the budget.
Upon running the numbers, the most interesting thing they learned was about the profitability of their current portfolio:
So it was decided, what if they took on 1000 new doors, they spent their time learning what made the 25% so profitable. Then they could apply the across the rest of the portfolio.
1) Where does the money go:
The biggest expense is labor related costs.
Labor should go into places where it adds value (core tasks)
Labor shouldn’t be going to non-core tasks:
Decided to upgrade through acquisition. This means. every time they brought on a well performing account, they got rid of a poor performing account.
2) How to upgrade
Find your target owner,
Have money to maintain their properties and recognize the value of their tenant
Find your target property
There is a sweet spot with cost of rents (too high or too low = more expenses on your end).
Close to transport, shopping, schools
How do you recognize a target owner?
In order to find quality owners/properties:
This allows you to focus on your target customer
So you’ve decided to fire an owner:
Tip: Send them a fee increase letter (either you get the fee increase or they hire a new company).
You can grow your business without adding doors. The key to this is:
Andrew Dougill has been a real estate investor and residential landlord for more than 30-years. He is a Realtor, professional Property Manager and is the co-owner and Broker of Hoffman Realty LLC in Tampa, Florida with his wife MaryAnn Hoffman. Hoffman Realty has managed residential properties in the Tampa Bay area since 1988. Prior to joining Hoffman Realty, Andrew spent the first 2-decades of his working career as an engineer, designing computer hardware, software and firmware for use in industrial, aerospace, military, public safety, business and residential computer systems.