A leading Property Management Firm in Las Vegas, NV wanted to determine avenues to establish a scalable growth model. Even though demand for their services has been high, the owners were extremely careful with the risk of increasing scale. They did not want to increase the scale at the risk of impact on the quality of their services. The firm currently manages 125 properties with a team of 4 staff members.
With all-time low homeownership of 63.5%, v/s peak in 2004 at 69%; more than 8M additional households across the nation have been today renting as compared to back in 2004. Las Vegas which witnessed steep property prices drop in 2009, had become a favorite investor destination. The property rates, as well as rents, have risen at an astronomical rate.
The owners had several core issues they were trying to solve:
- It was difficult to find time to focus on business strategy. A lot of their time was going into managing operations.
- They were finding it difficult to find the talent to manage and run the operations.
- Employment and benefit costs have been rising significantly putting downward pressure on margins.
- Resource turnover had been all-time high – they were finding herself re-training new employees every few months.
- Wanted to capture the demand and grow their business to increase market share.
They knew they were not positioned to scale without proper tools, processes, experienced talent and low-cost execution capabilities. They had the brand, reputation, and excellent customer loyalty but lacked operational execution to support their growth ambitions.
The Time Factor
The property management market in Las Vegas is highly fragmented. The top 5 property management firms have less than 10% of the total market share. The investor interests in the market provided an opportunity for several small property management start-ups with less experience and substandard service. The market today offers the potential for consolidation. The owners have been also thinking about growing via acquisition route at a much faster rate while continuing to grow organically. They have set a target to increase their size by 3 times over next 2 years.
They knew the “What” but the question on “How” has been interesting. The property management industry today is faced with costs of technology, marketing, operating overhead and compliance. As a result, there has been downward pressure on margins. On top of that growing competition is adding to this downward pressure. To make the matters worse, some of the leading residential brokerage firms had been showing growing trend of entering into the property management market. While they knew the competition will be high; they have also been watching the industry data carefully and want to make sure they continue to maintain their differentiators. In spite of the competition, the timing seems just right. The homeownership had been the all-time low. More than 40% of the households have been renting. As such they have the confidence that their business is poised for growth.
ValueOptim owners have been residential real estate investors in Las Vegas and have properties managed by this company. On one of their visits; they learned about the challenges facing their property management firm. The owners also have a strong business process outsourcing background and have been serving the needs of more than 20 small and medium business including real estate companies in California and Washington region.
The owners reviewed ValueOptim services – three things caught their attention:
- The ValueOptim Talent Hiring and Training model. ValueOptim only hires the top 4% candidates in the market. They have training programs in place for real estate property management.
- ValueOptim has a complete end to end property management process and optimization framework that they supplement with leading-edge technologies depending on needs of the customer.
- ValueOptim services are cost-effective and address the challenges captured above.
The owners decided to start a pilot program with ValueOptim for 6 months with 2 back-office processes. First 3 months were difficult as they gained a better understanding of their partner and methods of working. The knowledge transfer process had some bumps due to their time availability. However, soon they realized that their partner was patient, vested in their success and making required investments to ensure success. Today, after 12 months they are pleased with the results. A team of 3 ValueOptim resources work on several operational support tasks that include – new property onboarding, property marketing, tenant screening and application processing, property maintenance support, book-keeping and monthly statements and IT support activities. These resources are based out of ValueOptim’s highly secured 200+ seat facility in Jaipur, India.
ValueOptim has been able to collaboratively work with the property management company to:
- Standardize and document all processes with consistent execution.
- Bring forward 38% Cost Reduction in Year 1.
- Improve customer experience – 24X7 operation with better response and resolution times.
- Continuous Improvements and review of automation possibilities to improve productivity.
The owners started with only 5 key processes and now are gradually adding 8 more processes this year for ValueOptim. They are pleased with the results as this partnership has not only reduced costs, but they are also able to focus on more important tasks for their business and it is helping them grow and add more properties. They also have access to add more resources quickly with ValueOptim as their business scale grows. ValueOptim can also offer resources that clients can interview and directly train and manage.
We can help you make a difference in supporting you with managing your operations. We offer a strong blend of property management, operations, and technology skills. Please contact us today at firstname.lastname@example.org. You can also visit our website at www.valueoptim.com to submit a request for free consultation and a no-obligation proposal.