Is your business performing well? If you’re not tracking important metrics, it’s difficult to say for sure. Keeping tabs on certain key performance indicators (KPIs) will give you some objective criteria by which to judge your success and help illuminate where things are working well and where there may be some room for improvement. If you’re not sure what KPIs to track, we’ve got you covered; let’s take a look at three of the most useful metrics for property managers.
Occupancy rate
Your occupancy rate at any time is simply your number of units with a resident divided by the total number of available units you manage. There’s not necessarily a single benchmark to aim for here — occupancy rates can fluctuate based on factors outside of your control, like the state of the rental market generally and the location of your property. Generally speaking, you want your occupancy rate to be roughly in line with the average in your area. If your rate is lower than the average, it can indicate that other property management companies are doing a better job attracting residents, but if your rate is much higher than the average, it might indicate that your rent prices are below the true market value. If you’re staying close to the local average, that’s usually a good sign.
Resident turnover rate
You can calculate your turnover rate for a year by dividing the number of residents who moved out that year by the total number of residents under your management. You’ll always want to aim to lower this when possible, because every time a resident moves out, it costs you. The unit stays vacant for some period of time, so you’re missing out on some rent money, plus you need to spend time and money working to get the unit filled again.
The best way to evaluate your resident turnover rate is to track how it changes over time. If it declines, you’re moving in the right direction; if it starts drifting upward, try to find out why and see if there’s anything you can do to reverse the trend.
Lead sources
Whenever any prospective resident expresses an interest in one of your properties, try to find out how they heard about the property. Keep track of their responses and see what percentage of leads come from each source. You’ll be able to see what sources are effective for you, which can be a big help in crafting your future marketing strategies.