Depending on several factors like the type of services and location of the provider, property management outsourcing can cost a lot. You’ll have to prepare even more if you want a dedicated property manager for more than one asset.That said, one common strategy to lower property management outsourcing expenses is to turn to providers from developing countries like the Philippines. What other things can you do to cut down on costs? This article will walk you through the top 10 tips you can try.
1. Identify Your Property Management Outsourcing Needs
Before you outsource your property management functions, the first tip in lowering your property management outsourcing costs is to have a clear view of what you need.Identify your core and non-core functions, and identify which ones need the assistance of a property management company. It’s generally recommended to keep your core functions to your in-house property managers to retain control, but this will still depend on your resources.If you already have an in-house team, it will also help if you figure out their skills and capabilities, so you can eliminate those skill sets from your outsourcing standards.The bottom line is: figure out which property management services you need help with. Communicate it clearly to the property management company of your choice, and try to look for several options that can give you the best value for your money.So, how exactly do you identify your property management needs? Below is a step-by-step guide.
Step 1: Assess Your Current Situation
First, you need to have a clear overview of the current situation of your property. Evaluate your current workforce, that is, if you have one, and check their current performance. You can use various KPIs for your reference.If your in-house team’s performance is up to par, then you can go ahead and tick off their workload from the list of functions that you plan on outsourcing. Meanwhile, if you’re not getting the results you want, then identify the possible lapses. You should outsource those functions if the said lapses are uncorrectable.
Step 2: List Down All Tasks
Next, list down all the property management tasks involved in your operations. Separate the core operations from non-core functions. Go back to the first step, and see if any functions are already being performed well by your existing team. Similarly, check the list for property management functions that are currently flawed.Remember, if you decide to outsource your core property management functions, make sure to take your time in choosing the best service provider possible. This is the same for non-core functions, but the former involves more major operations that can heavily affect the state of your property.
Step 3: Evaluate Each Task
Lastly, evaluate each task on the list you made. Whether it’s under core functions or non core tasks, you should consider outsourcing it if:
- The task takes a lot of your team’s time
- The task requires specialized expertise, such as legal knowledge, accounting experience, etc.
- Your team can’t provide the level of quality that the task requires.
If you’re working on a limited budget, you may have to slow down on putting functions on the outsourcing table.Feeling a bit overwhelmed? Check out the top five property management functions outsourced to the Philippines.
2. Leverage the Property Management Outsourcing Provider’s Technology
Different property management outsourcing providers have different offers. Since another one of the things you’ll need to pay for revolves around software, equipment, and other management programs, you’ll save a lot more money if you work with a company that can already provide you with these resources.If you don’t have a clear view of the figures yet, take some time to compare the prices between personally purchasing the software systems needed for the offshore property management team, and having the company shoulder it.
3. Look for Flexible Property Management Outsourcing Plans
Property management outsourcing companies usually charge either a flat monthly fee or a flexible rate based on the required results and resources.If you have unique service needs or the usual monthly rates exceed your budget, see if a flexible plan will fit your needs better. It can be harder to manage your finances since your monthly expenses may vary from time to time, but you can expect to get your money’s worth based on the actual results and services you’re getting.
4. Embrace Property Management Automation Solutions
AI and automation have caused quite a buzz in the Ecommerce and outsourcing industry, gaining both positive and negative traction.However, as more property management outsourcing companies adopt the technology, we highly recommend working with AI-versed providers and embracing automation-related solutions.Integrating AI into your property management operations will help you save quite a lot of money since you’ll need a smaller workforce, lower billed work hours, and fewer software programs, ultimately lowering labor costs.Here are some more specific ways how automation can aid you with your property management needs.
Allows More Efficient Data Management
Compared to traditional data management methods, integrating automation tools into your property management operations means having access to your data anytime and anywhere. The tools will collect, store, and process relevant information, such as tenant details, lease requests, and financial transactions, all accessible in just a few clicks online.
Improves Communication Between the Property Owner and Tenant
Certain AI messaging tools come with message pop-ups and notification widgets. This is particularly helpful for property owners who are already tired of sending the same reminders over and over again. The property manager can also keep track of the property’s needs, especially when it comes to rent collection and lease management.
Enhances the Level of Financial Management
Automation reduces the need for manual intervention and repetitive tasks. Over time, this leads to cost savings, allowing property management companies to offer more competitive rates or reinvest in improving their services.
5. Use Cloud-Based Platforms for Your Property Management Outsourcing Operations
Traditionally, property management requires the team to have hardware-based management tools, leading to piled-up infrastructure costs as the staff grows.To avoid the expenses that come with this, make sure to use cloud-based management platforms. This will particularly be cost-effective in property management outsourcing wherein your main office, the in-house team, the offshore staff, and the property itself may be in different locations.Cloud-based platforms are especially recommended for property management functions like rent collection, finance auditing, finalizing lease agreements, and tenant screening.
6. Incorporate Digital Property Management Outsourcing Innovations
In-person viewings may not seem like a costly property management operation to look into, but more frequent visits mean having to pay higher fees for property inspection, maintenance, cleaning, and overall management.Fortunately, in this digital era we live in, more and more property management outsourcing trends and innovations arise each day. One of the best ones you can incorporate is a digital property tour. Here, interested tenants and property buyers can easily take a look at your property through a virtual experience.Outsource this function to your chosen property management company to cut down on future on-site fees of the property. A well-made virtual property tour will be a big advantage to rental properties and commercial properties. Apart from cost savings, it can also bring on more prospective tenant applications and real estate clients, benefiting your sales goals.Want to try more digital innovations for when you finally outsource property management? Below are some of the foreseen trends in the coming year.
Integration of AI and Machine Learning
The use of AI to assist property management services can help in predicting timely maintenance needs, automating tenant requests, and analyzing market rental rates. It can also provide insights on when might be a good time to buy or sell real estate assets.
Blockchain in Leases and Contracts
Blockchain could potentially simplify and provide more secure processes for lease agreements, payments, and property transactions. The transparency and immutability of blockchain technology can provide an added layer of trust for all parties involved.
Virtual Reality (VR) and Augmented Reality (AR) for Property Showings
You can expect several property management software powered by virtual reality and augmented reality. These technologies can provide potential renters or buyers with an immersive experience of the property without them having to physically be present. It also allows more effective property inspections for potential tenants.
Data Security and Privacy Enhancement
With an increasing amount of data being collected and processed, data security and privacy become paramount. Innovations might focus on encrypted storage solutions, robust cybersecurity measures, and protocols that align with global privacy regulations.
7. Try to Negotiate With the Property Management Company
Price negotiation (as long as they’re done reasonably) isn’t a bad thing to do, especially if you’re a company that just wants to achieve a cost-effective property management outsourcing experience.That being said, when provided with a quote, and you think you’re paying more than what you’ll get, communicate with the outsourcing provider. Ask them if there’s a way to work around your budget without taking away the core functions you want to outsource.Side note, not all property management companies will accept negotiations. To ensure that you’ll get budget-friendly rates, we recommend outsourcing your needs to developing countries. Here’s a guide on how you can outsource property management to the Philippines for your reference.
8. Avail Free Trials Offered by the Property Management Outsourcing Provider
Most property management outsourcing providers offer free trials or demos that last for a week or two. Their main goal is to show you what you’ll get if you continue to outsource your services to them, so make sure to avail of this when offered.A free trial period is also a good way to know if you’ll get your money’s worth throughout the property management partnership, helping you save more money in the long run.
9. Consider Availing of Long-Term Property Management Outsourcing Contracts
Some property management outsourcing companies offer long-term contracts, ranging between 3 to 12 months. This may seem like letting out a big amount of money compared to only paying for a month’s worth of service. However, long-term rates are usually discounted, and you’ll end up paying even $1,000 less than what you would normally in a regular monthly setup.Of course, this is only recommended if you’re 100% sure of the outsourcing provider’s capabilities. You can consider this cost-saving strategy after a few satisfying months with your current provider. We also recommend acquainting yourself with the pros and cons of outsourcing property management before committing to it.
10. Choose the Right Property Management Companies Partner
There are several challenges in outsourcing property management services. To mitigate risks, work with an experienced property management company that will put your needs above everything else. The success of the whole strategy will depend heavily on the quality of service they’ll provide you with.Because of this, it’s just right that you take your time in choosing the best property management outsourcing provider before actually working with them. Consider factors like the company’s reputation, client reviews, service inclusions, field expertise, and company culture to ensure that they can meet your needs and expectations.It’s also best to look through several options instead of just one or two, so you can take a good look at all your options price and service-wise.
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