Maybe it’s time to raise your fees for property management. After all, you’re the one pulling your hair out dealing with prospects and tenants, marketing properties, handling maintenance and repairs, dealing with complaints and handling evictions. You’re ensuring the satisfaction of owners, knowing that you are the custodian of their investments- but you’re in business to make money too.
Property Management Fees Based on Old Models
Property managers collect fees for services to keep your property’s vacancy rates at a minimum. With economic downturns, business owners left no stones unturned looking into ways to trim over costs and to frankly, stay in business. Property management companies, in response, offered low fees in exchange for primary services and many property owners jumped on the offers.
Denver is a Property Manager’s Market
In Denver, it’s a property manager’s market. More and more companies are increasing fees, and improving the services provided to property owners. Being in a booming real estate market provides property owners an excellent time to rethink and polish their property management services, and to frankly rethink the fees they are charging.
Property owners are willing to sign amended contracts with higher rates because of what they will gain from their property management company. Tenants in the Denver rental market have high expectations of their landlords. They expect well-maintained units, functional facilities, safety and security features, convenience amenities, perks and resident events. Property owners know that exceeding the expectations of tenants and providing efficient management of their properties leads to higher quality tenants, better tenant retention, and overall satisfaction of tenants. When you can offer more to your tenants, you as a property owner can ask for more in return.
Pushback on Raising Property Management Fees is Normal But Also Rare
But you might get push-back from some of your property owners and that’s okay. It’s normal, but it’s also rare. Most owners, if you are doing a great job with their property, are willing to accept increases for the services they are receiving. In preparing to raise your rates, the following tips will help you:
Have Confidence — Why the increase? It will be easier to stand behind your fees if you know the reasons for it. Know the value that you provide property owners. If you get push-backs like, “Well such and such is charging less…,” say, “We are not competing on cost, we are competing on service.” Being confident allows you to show and tell the value you provide your owners.
Know the Market — Assessing the market and understanding current pricing and trends helps solidify your decision to increase fees.
Know Your Value — Like fine wine, you can charge more for quality. Never assume that you must be cheaper than your competitors. The key is to differentiate yourself from the competition by providing better services. When raising fees, it’s no different. What property owners really want from your company is help solving their problem.
Property owners are uber focused on their ROI. It is no different for property management companies and sometimes it is necessary to raise fees. It is not something to feel guilty about, especially if you are confident in the services you provide. Remember, your services are not a commodity and the cut-rate firm is not the most valuable.