Outsourcing has evolved from a strategy for streamlining costs to one that directly contributes to revenue growth by introducing greater efficiency in the work flow. In its early years, only administrative tasks were outsourced. Today, you can basically outsource any type of responsibility regardless of industry. If you own properties and don’t have enough time to oversee them, you should consider outsourcing property management.
Benefits of Outsourcing Property Management
When you hear the word “outsourcing”, the first images that probably come to mind are those of a remote office managing all the different tasks delegated by a client. For those who have never outsourced before, the idea of entrusting a set of responsibilities to a third- party service provider may be difficult to accept.
But outsourcing offers many key benefits for those who are in the property business:
- Encourages Cost Savings – Yes there is a cost to outsourcing property management. But in the course of the long run, you will be able to generate savings because of economies of scale. The cost can be distributed over a wider range of services and a larger number of properties.
- Improves Productivity – When you outsource property management, you will no longer feel like you are being pulled in different directions. Now you have people who are designated to take inquiries on rentals, organize repairs with contractors, collect rent from tenants and create collaterals to market and promote your property.
- Greater Efficiency – For some people, just having 1 property to rent out can be a handful. Then there are those who have 20 properties to manage. Regardless of your ability, outsourcing property management can give you better organization and greater efficiency in your business. You have people who can update information through research, review and prepare contracts, manage payments and keep track of maintenance work.
Qualifying Your Property Management Outsourcing Partner
There are many agencies that offer property management services. But like other service- related industries, you will have your share of good ones and bad ones. How do you know which service provider to choose?
- Conduct Online Research – You can find outsourcing companies that offer property management services online. Many of these are located in remote locations like the Philippines.You may be asking yourself, “Why should I entrust my properties to a company thousands of miles away and where there is a time zone differential to deal with?”The answer is “Because you can and you should.” According to Application Check, the primary function of the outsourcing company is to organize your business. They do not have to be in the same place physically. Work can be done through online channels and frequent phone communication.There’s also a reason why the Philippines remains one of the top 2 outsourcing centers in the world, the other being India. Aside from cost advantages, Filipinos are widely reputed for consistently delivering high quality of work.
- Get Recommendations – Do not be surprised if associates and colleagues from the real estate community have outsourced property management services before.Find out who among your network has and get recommendations for prospective service providers.
- Identify Your Needs – Before actively searching for your property management company, conduct a review of your business and identify your immediate needs.Create a summary of all the different tasks in your company and categorize which ones are “essential” or “non- essential”. Essential tasks are those which you should manage yourself. These tasks are those that directly correspond to sales.Non-essential tasks are more administrative and supportive in nature. These could include phone handling, client support, rent collection and client vetting processes. These are the tasks that are usually outsourced to third parties.
- Prepare a List of Questions – When you have compiled a shortlist of potential property management companies, schedule each one for an interview. Prepare a list of questions to ask. Among the key questions you should ask are as follows:“What is your experience in property management?”
“What services or tasks are included in your workflow?”
“What is the breakdown of your fees?”
“How would you manage different properties?”
“How often would you send me reports?”
“What is your approach in dealing with vacancies?”
“How would you oversee repairs and maintenance work?”
“What is your approach in collecting rental payments?”
- Get References – Before finalizing any agreement with a service provider, ask them to give references. These could include previous or current property owners who have hired their services. Take the time to contact these references. Find out what their experience was working with the property management company.
Be suspicious if the company does not want to provide references. If they say a Confidentiality Agreement is still in place, don’t buy into it right away. These agreements usually lose their binding nature after 6 months.
You should also be wary of companies that do not have a mobile responsive website and social media pages. It could mean they are not invested in their business or have a suspicious reputation in the industry.
Outsourcing property management services is a proven way of increasing productivity, improving work efficiency at the least possible cost. Take the time to qualify the prospects and make sure the company has the competency and experience to effectively manage your properties.