October 01, 2019
8 Property Management KPIs You Should Track
You can’t manage what you can’t measure. That’s why professional property management firms keep a sharp eye on several Key Performance Indicators (KPIs). So, which ones are the ones that matter? Here are 8 property management KPIs that every property management exec should be tracking.
1. Revenue Growth
This is the one that every company lives or dies by. Your ability to drive the bottom line is critical to company growth. Revenues should never stagnate. If they do level out, you need to look at root causes, and see where it could be appropriate to increase your fees.
Use software for property managers, you can set up and monitor arrear KPIs. Property managers will want to be able to keep track of the quantity and dollar amount of arrears across the property portfolio. You’ll want to be able to slice and dice the metrics by building or number of tenants or number of days outstanding. (The rule of thumb is to never have more than 5% of your tenants at more than 7 days overdue.)
2. Vacancies KPIs
The range and number of your properties is important. But of equal importance is your ability to keep them rented out to high quality tenants. If you have a higher number of vacancies, you need to look at the condition of the building, the market and how you can invest more in advertising or referrals. A good vacancy rate fluctuates between 2% and 4%, and anything over 7% in an urban market is a red flag that needs immediate attention.
3. Lost/Won Property Ratio
Property turnover is normal. Your biz dev people will pick up some new properties to manage, and some owners will move on to other property management firms. This could be as much as 20% in a year. The most important thing for any team to know is this: why did you lose the business? Is it something you can address? Are they moving onto a competitor as the competitor has property management software that makes reporting easier and builds better relationships with tenants? Or does it just boil down to fees? Whatever you do, when replacing a loss with a win, always focus on acquiring better quality properties as these will ultimately bring you more growth.
4. Average Rent
Just like retailers and ecommerce sites are trying to improve their average order size, property managers will want to see improvements in their average rent. The market is king, so you need to look at neighborhood averages and see where your building is positioned. Regular rent reviews are needed, otherwise you could be letting money slip through your hands.
5. Maintenance Costs
A property management firm is always trying to improve the value of a property through regular and preventative maintenance. This helps prevent bigger repair jobs down the road, and also keeps your renters happy. To better prioritize work and see, you should be able to access to all work orders, including current and completed, and drill down to maintenance by building, by manager, etc. You should also monitor work quality and response times.
6. Ad Listing/Marketing Channel Performance
ILS, PPC, organic search traffic, social media, outdoor signage, etc – which one is bringing you the most amount of leads? Property marketers will want to stay on top of how their listings are performing and where the most amount of leads are coming from. This will help you to allot your marketing and sales budgets.
7. Lead to Lease Conversions
So, now that you know which ad listings are performing best, what’s your conversion rate? With property management software, you can track the number of new leads generated by your ads and see which leads turn to applications and, ultimately, to successful approvals. This permits you to evaluate the effective closing rates of your leasing agents.
8. Customer Satisfaction
In order to keep vacancy rates down, and help improve the value of the property, property management firms should conduct customer satisfaction surveys at least once a year. Your tenants see the property every day, and know its condition and how it’s being run. This finger-on-the-pulse of your property will give you critical insights into where maintenance needs to be done, and where management is doing a great (or not so great) job. Improving the customer satisfaction rates of your tenants goes a long way towards driving up occupancy rates and average rent.
Property Management Software for KPIs
Property Vista offers online KPI reporting and dashboard tools to help you make smart, informed decisions that will increase revenues across your portfolio. All our solutions are easy to use, mobile-friendly and scalable. Learn more about our suite of property management software and see pricing here.