Peter Lohmann's Mailing List - Issue #68

Why Benchmarks Matter for Property Management

On The Importance of Benchmarks

  1. What % of rent did your company collect last month?

  2. How profitable is your company year-to-date?

  3. How many doors did your BDM (salesperson) close in July?

If can answer 2 out of 3 with data (not guesses), you’re well above average.

Our industry does not have ready access to some of the most critical KPIs and data points that we need to run our companies well. It’s actually insane.

But even if we did, it would be nearly useless without benchmarks. What’s a good lease renewal rate? How profitable is the average property management company? What constitutes good performance from a BDM?

The good news — thanks to outstanding work done by ProfitCoach and NARPM last year, we now know how profitable the average property management company is. The answer is 11% for 2021 - after adjusting for normalized owner compensation. The benchmark (average of the top quartile) is 32%.

Now that’s some useful information! Something to shoot for, and some context around the data. Amazing.

Today I’m writing with some more good news on the benchmarking front. RentScale has been quietly collecting data about property management sales and marketing performance, and recently started publishing a monthly scoreboard. Here is October’s:

October 2023 ScaleClub Scoreboard

ScaleClub is RentScale’s community of property management sales professionals (BDMs). Every month they tabulate data from the companies that participate and produce this scoreboard. So here we can see that the average BDM received 24 valid leads in the month of October, up 25% from September. Additionally, we can see how many doors the top BDMs closed (95) and the average BDM closed (9). RentScale appears to use “top 50%” as a benchmark, which was 15 doors in October.

So what does this all mean?

If you own a management company and received 10 leads last month, you have a lead problem. You’re way below average. Now you know what to work on. That’s powerful! (You’re tracking your owner leads with LeadSimple…right?)

If your salesperson received 30 leads but only closed 6 doors, you have a performance problem. Leads were above average but doors closed was way below. Now you know what to work on. That’s powerful!

I’m trying to illustrate the importance and power of having good data within your company, and a set of benchmarks to compare it to. Absent those two things, figuring out what to work on in your business is no better than a guessing game.

RentScale is getting a shoutout today because they’re doing work to compile and share industry data, which is immensely valuable. Well done!

I Want To Leave You A 5-Star Google Review

Google reviews are a game.

They’re inaccurate and unfair. Any stranger can maliciously review your company, and it’s effectively ~impossible to get fraudulent reviews removed.

The problem is that google reviews have a huge impact on our business; it’s a game we’re forced to play. So, let’s play.

Fill out this form and I will leave your company a 5-star review sometime in the next 60 days (I only do 2 per day to avoid tripping Google’s filters). I might even send the link to others and ask them to review your company too, if you’re willing to do likewise. I will have to limit this to the first 100 entries, so don’t wait to fill it out.

This week’s issue is sponsored by: Lethub.

In property management, every minute counts. LetHub is stepping in with an AI solution designed to streamline the rental process from start to finish.

Here’s what you should know:

  • It quickly captures leads from ILSs, Facebook, contact forms, websites etc.

  • Provides potential renters with immediate, humanlike responses, regardless of the hour.

  • Uses AI to ensure that only qualified renters make it to your shortlist.

  • Simplifies scheduling property tours, which leads to 25% more tours and 50% freed staff time.

  • Features customizable workflows for targeted outreach, allowing you to craft specific email and text responses based on ‘if this, then that’ scenarios, much like Zapier.

If reducing the days your properties sit on the market is on your to-do list, LetHub might be the tool to help you do that. It’s about working smarter, not harder, and the promise here is to help you sign leases up to four times faster. Considering giving it a try? It might just be the edge your business needs.

How I Started My PM Business

Patrick Donley recently interviewed me about how I got started in real estate and property management. We dive into key principles for running a successful business including lessons from the E-Myth and Traction. You’ll learn how I niched down to scale up my business, how I allocate my time for maximum ROI, and how to smash limiting beliefs and start thinking bigger in terms of what’s possible for your life and business.

Watch on YouTube (or you can find in your favorite podcast player - links here):

Industry News and Events

Closing Thought

- - -

I have one property management coaching slot open right now. Grab time here to chat with me & learn more.

That’s all for this week! Have a great weekend. -Peter

Did someone forward you this email? Subscribe here.