In today’s competitive real market, the role of a property manager has drastically evolved and expanded. Far beyond mundane tasks of rent collection and property maintenance, they now grapple with a complicated array of responsibilities such as legal compliance, financial management, and customer service. Given this demanding landscape, it is no wonder that an increasing number of property management firms are turning towards the efficient strategy of outsourcing non-core duties.
Outsourcing involves delegating a wide range of non-core, yet critical, functions to specialist third-party service providers. This includes tasks such as maintenance and repair, tenant background checks, digital marketing, and even financial management, freeing up property managers to focus on building relationships and growing their portfolios## The Advantages of Outsourcing
According to a study conducted by Deloitte, 59% of businesses outsource to cut costs, and 57% do so to focus on their core business. This trend is not lost on the property management industry. Here are compelling reasons why property managers should consider it.
Cost Efficiency: Property management companies can benefit from significant cost savings accrued from outsourcing non-core functions. A report by JLL estimates that property managers can save up to 15% in operational costs through outsourcing, which also eliminates the need for recruitment, training, salaries, and benefits of additional staff.
Increased Productivity: By delegating time-consuming tasks to specialist service providers, property managers can focus their energies on higher-level, strategical operational activities that directly contribute to the bottom.
Scalability: Outsourcing allows property managers to quickly scale up or down their needed services based on the property or tenants’ demand, without affecting their core workforce or resources.
Expertise and Compliance: Outsourced professionals, especially areas such as legal services or accounting, can lend their expertise and ensure that property managers are always compliant with industry regulations and standards.
Addressing Concerns
Outsourcing is not without its challenges. There are concerns about losing control over functions, potential quality issues, and even security risks. It critical to select the right partner who aligns with your business objectives, retains high standards of service quality, and has a robust framework for data privacy and security. Thoroughly vetting potential service providers and negotiating clear and transparent service agreements can alleviate these concerns.
Successful Outsourcing – A Case Study
A prime example of the successful application of outsourcing in the property management industry is residential property management giant, FirstService Residential. The company chose to outsource its IT services to a managed IT services provider. The result was improved efficiency and productivity, reducing IT support costs by about 30%, as per a case study by the outsourced partner, MindSHIFT Technologies.
Conclusion
Like any strategic decision, outsourcing should not be approached lightly. Property management firms should consider their specific needs, objectives, and risk tolerance before diving in. Ensuring a good culture fit with the outsourcing partner is also paramount to a fruitful relationship.
However, given the evident benefits – cost-saving, increased productivity, scalability, and access to expert services, outsourcing appears to be a hard-to-ignore strategy for property managers striving to navigate the increasingly complex real estate environment successfully.
With careful planning and implementation, outsourcing can be the catalyst for property management companies to not just survive, but thrive in today’s demanding market.
Remember that behind every effective property manager stands a robust and versatile team. And, in the modern world, that team need not sit in the next office, but can be anywhere across the world, providing their expert services, at your fingertips.
