The story of success or failure of a property management business is revealed in the data. A PMC that does not actively monitor and measure critical KPI’s (key performance indicators) is like a ship without a rudder—and disaster is never far away.
A KPI is quantifiable data that a business can use to benchmark and measure to determine if it is reaching established operational and strategic goals. A property management company that understands the importance of data is usually in tune with what works and when to take corrective actions.
KPI’s are roadmaps to better decisions
KPI's help to identify potential problems and bring about potential improvements. KPI's can help you to identify if your company is on track for success or not.
Small to medium-sized property management companies that track vital KPI’s are far more likely to meet their goals and have sustainable success. Evaluating relevant KPI’s help prioritize activities that produce the greatest revenue. They also help to eliminate activities that are not cost-effective.
How to choose the most relevant key performance indicators
First, before identifying relevant KPI's, a property management business should have documented processes in place. Next, a PMC needs to identify which KPI’s are most important, and when variances are identified, adjust processes as necessary in order to reach established goals.
Below are typical KPI’s for a PMC of any size (this is not an inclusive list):
- Net property acquisition cost
- Occupancy rate
- Customer acquisition cost
- Customer lifetime value
- Annual contract value
- Maintenance costs
- Property management fees
- Net operating income
- Rent-ready cost
- Occupancy rate
- Days on market
- Number of showings
- Properties won / properties lost
- Showings by leasing agent
- Average commissions per leasing agent
- Number of daily incoming & outgoing calls
Go beyond spreadsheets
Every business should be measuring relevant data. KPI's help you understand patterns and provide you with corrective paths of action, if needed. If your property management software doesn't provide easily measurable and accessible analytics, you owe it to your business to find a solution that will.
PMC's may also need to track and report on unique data. Ask yourself, does my property management software allow me to generate reports based on customized data?
Do not settle for property management software that limits your analytics or forces you to change your business processes. Instead, use a property management solution that you can customize to fit your unique business needs.
Do not change your business to fit your software. Change your software to fit your business.
Jimmy Warlick works in the sales department at Propertyware and has been with RealPage for seven years. He has worked in the property management industry for 12 years. Before joining Propertyware, Jimmy served in the United States Air Force in Europe and also worked for the U.S. Justice Department. Jimmy is a University of Texas at Dallas graduate and calls the DFW area his home, where he lives with his wife and two daughters.