- Compare multiple companies
- Understand how each management company works and makes its money
- Talk to current and past owners
- Get detailed information about what services are provided and all fees
- Weigh the pros and cons
There are many advantages to hiring a third-party management company. If you’re considering the switch, review the benefits these companies can offer.
Volume savings. One of the main advantages of using an experienced management company is your ability to leverage the company’s size. Because management companies allocate costs over multiple facilities, they help you reduce expenses. The cost-savings will vary depending on the size of the company and the number of facilities it manages. The more sites it has, the more savings that can be realized on items such as Yellow Pages ads, facility maintenance, advertising campaigns, Internet marketing and property insurance.
Branding. Most management companies will allow you to maintain your existing brand, so you don’t have to change signage and other branded items. However, you may also lose out on Internet opportunities, such as free listings on major search engines.
Shared amenities. Many larger management companies offer amenities that you, as an independent operator, could not provide, such as a call center.
Revenue management. Revenue management is much more complex than looking at your competitors’ prices and matching their rates and discounts. It’s imperative that you have a strategy to push rates higher while minimizing move-outs. While this can be a daunting task for an independent owner, a management company can help you manage and maximize revenue. Just be sure to understand the revenue-management philosophy of the companies you’re comparing, and review their quantitative results.
Human resources. The challenge of finding and keeping staff can be onerous and expensive. A management company will often take care of all hiring and firing, background checks and references, and training.
In-house legal counsel. Large management companies will also have experienced in-house legal counsel to review leases, keep up on industry law, and be available if a lawsuit occurs.
IT support. Small technical problems with computers, software, telephones or Internet service can cause huge headaches for most owners, wasting valuable time and opportunities. Third-party management companies frequently provide IT support services to all their properties at a significant cost-savings.