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True profitability isn't just about more properties; it's about strategic cost control and creating a business that operates independently of you.
How do you actually turn a property management company into something truly profitable? I get this question all the time, and the answer is surprisingly simple. Here’s what you need to keep in mind.
Understanding profit. Profit is simple: you need more revenue than expenses. You either bring in more or spend less to make that happen. In the beginning, most people really only have room to cut costs because the number of homes they manage doesn’t change much. So the real first step is getting honest about your expenses and seeing where your money is actually going.
Cutting expenses. Take an honest look at your current costs and see what can realistically be trimmed. If you’re new, you may not have much to cut, and if you’re doing everything yourself, there might be nothing to cut at all. It could just be your own money keeping things running. Even so, staying on top of those expenses is the first step toward staying profitable and keeping the business healthy.
"The goal is to have your business running smoothly without you."
Increasing revenue. The next move is boosting what you bring in. You can add some fees to certain services, and you can add more properties. Those two alone can make a noticeable difference and help you actually keep some money at the end of the day.
Building a self-running business. After you’ve created a profitable company, the next challenge is stepping back. If you’re the one doing everything, then you are the machine, not the business. The goal is to have the company run without you constantly in the middle of it. That comes down to hiring great people and putting solid systems in place.
At the end of the day, there are two questions I always come back to: Am I profitable, and can this business run without me? If you’re not profitable, everyone connected to the company, from your team to your vendors and owners, is at risk. If your business can’t run without you, then you’re still the one holding everything together instead of the business operating on its own.
Get profitable and build it to function without you. If you ever want to talk more about property management, feel free to reach out at (210) 802-9959 or send an email to info@peaceofmind.co. I’m happy to answer your questions.