The Quick Guide to Evaluating Property Management Companies
More than a third of homes in the United States are rented, and the number of renter-occupied housing units has been growing steadily since 1975. Many of these rental properties are owned as investment properties by absent property owners. These property owners need professionals who can provide management services such as finding renters, collecting rent, and cleaning and maintenance.
For entrepreneurial people, this presents a terrific opportunity to develop a business in a thriving sector. A recognized way of starting out in this business is to buy a franchise property management company.
As a franchisee, you’ll benefit from the franchise company’s branding and market reputation. You’ll have access to training and technology, and help with marketing your services and signing up clients.
But not all real estate property management franchises are equal.
Before investing in a franchise, you’ll need to do your research and due diligence. This should ensure that you buy the franchise that is best for you ─ the one that will help you attain your personal goals fastest.
What You Need to Review When Evaluating a Property Management Company Franchise Opportunity
It can be hard to know where to start when assessing a franchise opportunity ─ especially if you have little experience in business or property management.
We’ve created this list of seven questions to ask in your evaluation of a franchise property management company. The answers to these questions will help you determine if you should take your interest further.
Does the franchise have an established track record of success?
An established track record is important because it shows the franchise has a foundation of success.
A good assessment of a property management franchise would include looking at how long they have been in business, how many offices they have, and if they are still expanding.
Who are the clients?
The clients of property management franchises can be individuals or organizations that own many properties. They may include homeowners, investor property owners, and commercial property owners.
It is important to know who the clients are and what they want to assess the potential for your business in your location.
Does the franchisor have a great reputation in the marketplace?
Any investor considering investing in a property management franchise should investigate the reputation of the franchisor. A good reputation could be a sign of a well-managed and established company with strong customer service and effective marketing strategies.
Owning a franchise that is backed by a company with a great reputation and strong brand recognition should make it easier to attract clients to your business.
What kind of training do they offer?
Some franchises provide intensive training where they teach you the basics of property management, and then they send you on a few weeks’ worth of field visits with another property manager to get hands-on experience. Others offer less intensive training and will be more hands-off in your learning process.
To assess whether the kind of training offered is appropriate for you, you should first assess your current level of expertise in real estate, property management, and business, and what your requirements are.
What is their business model?
The business model of these franchises is usually quite simple. They help franchisees to build profitable businesses and take royalties from revenues. However, you’ll want to know more than this.
From the range of services you will be expected to provide, to the commissions, royalties, and other charges the franchisor imposes, and including what help you receive by way of marketing, technology, licensing, and employing staff ─ you’ll need to understand how the business operates to assess if you are cut out to manage a business within this model.
What tools and processes do they have in place for every area of the business?
The tools and processes that property management franchises have in place for every area of the business vary depending on the company. For example, there are companies that use software to manage their client’s properties. Other companies might use a CRM system to manage client relationships.
A franchisee should evaluate the franchisor’s systems and processes, including marketing, operations, support, and financials. Are these tools that you would be comfortable using? Are you happy to work to the company’s processes?
What are the initial and total costs? Do you get a fair ROI?
You’ll want a good return on investment (ROI) when you buy a property management franchise. You’ll be committing time and money to your business. You’ll want to know that your salary expectations are realistic ─ and that you have the potential to make a healthy profit on top.
It’s crucial to set a realistic budget when investing in a franchise opportunity, and then to understand the initial and total costs involved in buying, owning, and operating your business.
Next steps – evaluate yourself first!
A property management franchise is a fantastic opportunity to take control of your future. It can be an exciting and fulfilling move that will allow you to build your own business and live the life you want.
To make the right decision, it’s crucial to ask the right questions. Your first step should always be to evaluate yourself and make certain that this is the right move for you. Our simple franchise aptitude test will help you discover:
Your strengths and weaknesses
What you enjoy doing the most
The commitment you are willing to make
The experience you should exploit
The goals you wish to accomplish
This knowledge is vital to make a sound and profitable investment in a franchise that will provide the greatest potential to achieving your personal and professional goals.
Start your journey now by taking our franchise aptitude test.