Peter Lohmann's Newsletter - Issue #184

RPU: A Do-Or-Die Metric

ProfitCoach calls Revenue Per Unit (RPU) one of the six “Do-or-die” metrics for residential property management companies. I want to say a few words about our own RPU and how I think about it.

Revenue per unit is easy to calculate; just take your total company revenue in 2025 (ignore brokerage & maintenance revenue) and divide by the average number of doors you managed throughout the year (then divide by 12 to get the monthly figure). Let’s walk through my own company as an example. RL Property Management did $2.03M in 2025 (after backing out maintenance revenue), and managed an average of about 700 doors through the year. 2,030,000 / 700 / 12 = $241. So our RPU last year was $241.

RPU defines the revenue side of your “unit economics” (unit is a financial term here, not referring to the actually doors). Basically, how much money do you have to play with for each door you’re expected to manage?

If this number isn’t good (I’ll define good in a second), your world be pain until you fix it. There just won’t be enough revenue coming in to cover your costs with a decent profit left over. No matter how fast you grow, no matter how low your churn, and no matter how hard you work, nothing will be fun or easy until you right-size your RPU. You must start with this.

We surveyed 100+ Crane members recently, and calculated their RPU:

(If you’re into this type of thing, you can download the full 33-page industry report which has a lot more charts and graphs like this one exploring revenue and profitability, marketing channels, churn rates, global talent usage, hiring tools and more.)

RPU is so important that ProfitCoach says “A 10% increase in RPU can easily lead to a 100% increase in profitability.” That’s because all else equal, any increase in your RPU drops straight to the bottom line (ie, it’s all profit). Their research found the industry average RPU was $222 in 2021. But the top 25% most profitable management companies in 2021 had a far higher average RPU: $317 to be exact. That’s their benchmark, but you don’t need to hit it in order to run a great, profitable business.

In fact ProfitCoach provides some guidance for setting your RPU goal. If average rent is:

• Under $1,000, your RPU should be 20 to 25% of average rent

• Between $1,000 – $2,000, your RPU should be 15 to 19%

• Over $2,000, your RPU should be 10 to 14%

That would peg our recommended RPU at $247-$312, so we’re very close to that range at $241 last year. My guess is we’re right on track for year-to-date. Not bad for not charging leasing fees!

If your RPU is below the recommended figure, this should be your #1 business priority.

To raise RPU, obviously you have to charge more for what you do. The great news is you have lot of flexibility in how you can accomplish this. Here are just a handful of ideas to consider (all of these must be fully disclosed and agreed to by both parties):

• Raise your management fee on new owners

• Raise your management fee on existing owners (make exceptions freely)

• Increase the fees you charge owners leasing and lease renewals

• Start charging a markup on 3rd party work orders (or increase it)

• Keep late fees and other miscellaneous tenant fees instead of giving to the owner

• Make owners pay for their listing photos (incorporate into the turn scope)

• Charge owners for utility setups & transfers

• Charge an annual technology fee (or similar) to owners

• Introduce a myriad of tenant programs (eg RBP) and behavioral fees

These are just the ones I could think of off the top of my head—there are dozens and dozens of others. Todd Ortscheid at PMAssist has an entire course on this. By the way, did you know that Crane members now get the PMAssist paid newsletter as part of their member benefits? Members click here to access.

RPU isn't glamorous; this is back-to-basics stuff. Nobody gets into property management dreaming about spreadsheets and fee schedules. But for many of you, fixing your RPU is the single highest-leverage thing you can do for your business right now. It’s your constraint. The math is brutally simple, but so are the fixes. Pull your numbers, learn where you stand, and if you don't like what you see, start there.

-Peter

Wolf built his own AI agents, and I reorganized my entire PM company.

Wolf and I are back on the mic, and this one covers a lot of ground. He's built two custom AI agents (Bruce and Sophia) running inside his PM company. We also reveal an upcoming Crane member benefit we've been building for months: an AI-powered local policy tracker that monitors city council, school board, and county meetings in your service area. Subscribe to your local jurisdictions and be notified by email of anything relevant to your business.

Then I get into something I’ve only shared a snippet of: RL's shift from departmental to a pod hybrid model at 750 doors. Owner churn was the driver. "I never know who to call" was the complaint we couldn't shake. Six weeks in, two clients saved from churning just this week. If you're into AI, org design, or just want to hear what we're building behind the scenes:

Available on Apple Podcasts & Spotify

Property Management Companies For Sale This Week

• Spring, TX residential management business (asking $499k, ~200 units under management.

• 40-year property management company in Los Angeles, CA (asking $1.1M, ~$870k annual revenue, ~300 units)

• Boutique property management firm in Denver, CO (asking $450k)

• Mixed residential and commercial PM portfolio in Ontario, Canada (asking $699k, ~$1.1M annual revenue)

Sponsored by PropertyManagement.com. This just got real. If you're buying or selling a PM company, a verified profile with certified performance metrics & real customer feedback beats any pitch deck. Serious operators are already on it. Free to get verified.

Industry News & Events

• Big news: An appellate court just ruled that a 2019 NY State law requiring landlords to accept section 8 vouchers was unconstitutional.

• The median age of a rental unit is now 45 years old, the oldest on record, according to Harvard's Joint Center for Housing Studies. More from Jay Parsons on this. In 1992 the median age was only 29 years.

• I was a guest on the Property Management Business Podcast with Marc Cunningham. I don’t do a lot of guest pod appearances these days, but made an exception for Marc. He’s an OG!

• Next week I’m pulling back the curtain a bunch of industry projects I’ve been working on, plus revealing what we’re doing with Crane this year. Register here for the event + recording. This will be my biggest live show of the year, with special guests Jordan Muela, Co-founder of LeadSimple and Brad Johnson, CEO of ProfitCoach.

Closing Thought

A few quick things before you go…

• Last week’s issue went to 21,167 readers (51% opened, 4.6% clicked)

• The most popular link was about Property Management University (122 clicks)

• Property managers: Your professional trade association is NARPM. You need to join if you’re not already a member.

• Did someone forward you this email? Subscribe here.

Software I’m using to scale my 700+ door property management company:

Note: These are affiliate links, but I’ve been recommending all these companies long before any financial arrangements came into place.

The content of this newsletter is for informational purposes only and does not constitute professional advice. I may have consulting agreements with, or financial interests in, companies mentioned in this newsletter. Additionally, some of the links included in this newsletter are affiliate links, meaning I may earn a commission if you make a purchase through these links. Always perform your own due diligence before making any financial or business decisions.