If you own and operate a property management company, you know just how hectic it can be to manage rental properties. This is especially true once your company begins to grow, gain new clients, and manage more doors.

While some owners of property management companies may get overwhelmed by this growth and be unable to keep up with the increase in responsibilities, there are ways to not only adapt to the increase in demand, but to thrive with it.

Some owners of property management companies choose to run their companies like landlords instead of like scalable businesses. This means that they are often overwhelmed, and their company can’t reach the level of success that it’s capable of.

These owners have to chase after rent, deal with phone calls constantly, and never get to enjoy their free time. But what exactly is the difference between this kind of business owner and the owner of a scalable company?

The owner of a scalable company will be able to adapt and grow as the demand for their services increases. They won’t be overwhelmed by day-to-day tasks because they’ve effectively trained their employees for every situation that may arise, allowing them to delegate most of their daily responsibilities and focus on gaining new clients.

They are able to sleep well at night knowing that the company they built runs smoothly and efficiently without the need to constantly take their work home with them. You can do this by implementing solid standard operating procedures in your company. 

Person presenting at the front of a room

So, what does the daily life of a scalable business owner look like compared to a property management company owner that does not have these systems in place?

A scalable business owner is able to:

  • Have time to spend doing what they love.
  • Rest easy knowing that they can trust their employees to handle tasks.
  • Live a more financially stable life.
  • Enjoy seeing their company grow without feeling overwhelmed or unprepared for the increase in demand for their services.

However, if you treat your property management business like a landlord, you will:

  • Have a cap on your business’s success.
  • Be unable to earn the amount of money that you know you are capable of making.
  • Be constantly overwhelmed by the day-to-day stressors of managing rental properties. 

So, how do you create a scalable property management company?

The answer is simple: you have to implement standard operating procedures for your company that clearly explain how to deal with every situation that may arise. That’s the key to being a successful property manager.

What Are Standard Operating Procedures and How Can You Effectively Implement Them in Your Company?

Standard operating procedures (SOPs) are sets of regulations in your company that dictate how things should be done in any given scenario. They ensure that your business runs smoothly and that each client receives the same high-quality service, regardless of who they are interacting with on your staff. 

A property manager talking about something on their laptop to a group of people in a conference room

Having these standards in place will help you keep your services consistent while working with a large number of rental property owners and tenants, in addition to helping new employees get the hang of things in a shorter amount of time. 

Your SOPs should be detailed and widely known throughout your company. This ensures that if you are ever unavailable or need to delegate important tasks, you will be able to trust that your employees could manage the company in the exact same way that you would. 

Whether you’re on vacation or taking a sick day, your property management business should always be able to run smoothly and consistently in your absence. This means that you, as the owner, will be able to rest easy and enjoy your time off without the need to stress about work. 

The Benefits of Using Standard Operating Procedures for Your Property Management Company

In short, using a standard operating procedure will allow you to work on your business, rather than working in your business. If you want to lower your stress and stay prepared as your property management company grows, these procedures are essential.

Keep reading to learn about five benefits that your company can experience when you take the time to implement SOPs. 

1. You Can Reduce the Need for Day-to-Day Decision Making

When you are able to effectively implement SOPs into your company’s setup, decision-making will quickly become a much easier process.

Four people crowded around a laptop in an office

But how does this work when it comes to your day-to-day business operations? In property management, there can be a long list of decisions to be made, including how to handle a problem tenant, what to do about a repair that needs to be made in a property, and so on. 

That’s just one day on the job! When you own a property management company, it can be hard to picture a way of doing business that doesn’t include the stress of daily decision-making. However, if you use a standard operating procedure with your team, it is entirely possible.

For example, if you have an extremely specific procedure regarding how your company collects and handles security deposits from tenants, your employees won’t have to spend time figuring out how they should collect the deposit, where they should hold it, how much they should charge, or any other aspect of the situation. 

Instead, by reading your policies that have already been put in place, the employee will know what to do. They will already be aware that they need to collect the security deposit prior to the tenant moving in.

Four people sitting at a table smiling and talking

When you have these systems in place, your employees will always know how to deal with a variety of different situations. This means that they will be less likely to make errors. 

Ultimately, it will be easier for you to delegate tasks and trust that they will be done correctly without you being present to watch over your company’s operations.

When you have distinct processes that can cut down on the amount of decision-making among your team, your operations are way more likely to run smoothly, regardless of how hands-on or hands-off you wish to be as the owner of the company. 

On the flip side, if you fail to distinguish a standard operating procedure for your employees to refer back to, you may be forced to make several decisions on the spot on a daily basis, which will not help your business run any smoother. 

Instead, make sure that your standard operating procedures cover a wide variety of potential questions and situations in order to direct your employees on how to deal with them. This will make a potentially stressful situation have a routine answer.

Cropped image of two people looking at a document on a table

2. Free Up Your Managers’ Time

Once you have your property management company running smoothly on the processes and regulations that you have set in place for your employees, you as the manager will be able to step back from the day-to-day operations of the business.

Your team will be able to work more independently, and they won’t need to ask you as many questions on a daily basis. That means you can free up your time to focus on growing the company, in addition to being able to rest at night without worrying about work. 

This setup ensures that you will no longer have to help your employees figure out what to do if a tenant is late on paying rent. There will be a specific procedure in place for them to use, and all of the necessary information will be readily available for them to access. This will ultimately result in more time freed up for you as the manager of the company.

3. You Can Hire Employees at a Lower Cost

When you’re running a business, it is typically much easier to lower your expenses than to increase your revenue. In fact, one of the fastest ways to help the financial health of your business and increase the profit that your company is bringing in is to find creative ways to reduce costs.

Two people smiling and looking at a laptop screen

If each and every step involved in completing a specific task is recorded and easily accessible, then you will in turn be able to hire employees with less experience in the property management industry without sacrificing the high-quality services that you provide to clients and tenants. 

In short, if you make it easy for new employees without any experience in the property management industry to know how to do the daily tasks of your company correctly, then you’ll be able to hire less experienced workers at a lower cost. In fact, you may even be able to delegate some tasks to a virtual assistant.

4. Experience Less Employee Turnover in Your Company

Anyone who manages any kind of business knows that training new employees can take a long time and a lot of effort.

On one hand, your time is valuable, and you could be spending that time growing your business and finding new rental property owners to work with. On the other hand, poorly trained employees can end up costing your company more time and money in the long run. 

Even if you are able to hire an excellent employee with a great work ethic and experience, if they are not properly trained once they are brought on to the team, it will be difficult for them to adapt. This will only end up harming the consistency of your services.

If you invest time into implementing solid a standard operating procedure into your business model, new employees will have an easier time learning exactly what is expected of them and how they can best do their job. 

A property manager and her client sitting on the same side of a table talking about something on the open laptop in front of them

If a situation comes up that they have not experienced before, they will easily be able to refer back to your policies and process for that specific situation. While they will still need some training, they won’t have to disturb you every time they need answers to a specific question. The onboarding process will prove to be an easier transition. 

5. Standard Operating Procedures Help You Effectively Plan Your Finances

When you have detailed operating procedures in place for your company, your general income will be much more predictable and reliable. Standard operating procedures will reduce the overall risk of unexpected events and challenges happening that can impact your revenue and bottom line.

This can help your company’s revenue remain consistent throughout the year. If you and your employees don’t have set procedures to refer back to, you will have to make all of your decisions as they come.

This can result in more money being spent because when last-minute decisions are being made, it’s often easier to throw the budget out the window in order to solve a problem quickly. 

After all, how many times have you said “yes” in the moment to a business decision that you should have said “no” to? While we are all guilty of this, having procedures in place to help you make these quick decisions can help you save money in the long run. 

A property manager using their phone and laptop at the same time

By having procedures in place when it comes to how to deal with late rent payments, marketing, maintenance and repair issues, evicting problem tenants, and more, you will be able to stick to your budget and maintain a more steady stream of cash flow.

What Kind of Standard Operating Procedure Should You Implement for Your Business?

You should implement standard operating procedures in every aspect of your property management company. This can be easily determined by keeping track of each and every task that you and your team perform in one day.

Take note of every little step that is required for you to complete a task, as this will allow you to determine your standard operating procedures and write them out effectively. 

As the owner of the business, you should never have to repeat the same task over and over again. Your standard operating procedures should be a detailed collection of SOP documents that provide any of your employees with a thorough explanation of how to do every task related to your property management company.

It should include a wide range of clear instructions, videos, and any other relevant details for every aspect of your business operations. To help you start the process of setting up standard operating procedures for your staff, here are some recommendations for where to begin:

  • The process of tenant application.
  • The tenant screening process.
  • The minimum criteria for approving a new tenant.
  • Your policy regarding overdue rent payments and any associated late fees.
  • Your process for charging, collecting, and holding security deposit funds.
  • The sales process of your company.
  • The process of onboarding new rental properties. 
  • Your pet policy.
  • The process for evicting problem tenants.
  • The marketing process for vacant properties.
  • Your smoking policies in different rental properties that your company manages.
  • Your policy regarding tenants painting their rental homes.
Four people talking around tables in a cafe

While this list does not include everything that you need to have a solid and reliable standard operating procedure for your company, it should get you on the right track to a smoother way of doing business.

However, it’s important to remember that just because you have created a standard operating system, it doesn’t mean your work is done! As your business grows and evolves, you will need to continuously update your processes and procedures to ensure that it remains effective. 

Where Do I Keep My Company’s Standard Operating Procedures?

When thinking about where to store your standard operating procedures, it’s important to consider its accessibility to your employees. Everyone in your company needs to know exactly where to find it at any given moment.

A great place to store this information is through a Google Drive account that all of your staff has access to. If used correctly, Google Drive can be an excellent resource for keeping your team on the same page.

Not only will your staff be able to access your standard operating procedures conveniently from anywhere at any time, but multiple team members can access the information at the same time. This can come in handy throughout a wide range of situations.

For example, if you have a property manager on your team who is out inspecting a rental home and they come across a problem that they aren’t sure how to solve, like previous tenants’ mail piling up, they will easily be able to access your set procedures on their phone. 

Cropped image of four people around a table in an office

Or, if you have two team members who are in separate situations where they need to check a specific policy regarding how to handle late payments from tenants, they will both be able to access the file at the same time should they need to. 

Google Drive is an excellent resource because it is entirely free to use, so it can add value to your business’s operations without adding yet another expense to consider in your budget.

Through here, you’ll be able to store any relevant checklists, Excel spreadsheets, word documents, and video files. If necessary, you may even limit what files certain employees will be able to access. 

Bottom Line

Like most companies, a property management company need standard operating procedures to keep every team member on the same page, maintain a consistent client experience, and remain prepared for their business’s growth over time.

We hope this article has been helpful!