If you don’t plan and track your property management budget properly, you're setting yourself up for failure.
When we developed our strategy pack for property managers, we saw a lot of property managers struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial rental income.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your property management finances around and set you on the path to success!
Get the budget tracker tailored for management companies
Most management company owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for management companies
Here is an example of a (very) detailed budget for a property management company, to give you some inspiration
1. Office Rent and Utilities
Item | Description | Monthly Cost | Annual Cost |
---|---|---|---|
Office Rent | Lease for office space | $3,000 | $36,000 |
Electricity | Power consumption for office operations | $500 | $6,000 |
Water | Water usage | $100 | $1,200 |
Internet & Phone | Internet service and business phone | $200 | $2,400 |
Waste Removal | Garbage and recycling services | $100 | $1,200 |
Insurance | Property and liability insurance | $400 | $4,800 |
2. Salaries & Wages
Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
---|---|---|---|---|
Property Manager | 1 | $5,000 | $5,000 | $60,000 |
Assistant Manager | 1 | $3,500 | $3,500 | $42,000 |
Maintenance Staff | 3 | $2,500 | $7,500 | $90,000 |
Administrative Staff | 2 | $2,000 | $4,000 | $48,000 |
3. Property Maintenance Costs
Item | Description | Monthly Cost | Annual Cost |
---|---|---|---|
Landscaping | Grounds maintenance and landscaping | $1,000 | $12,000 |
Cleaning Services | Common area cleaning and janitorial services | $800 | $9,600 |
Repairs & Maintenance | General repairs and maintenance | $1,500 | $18,000 |
Security | Security services and systems | $600 | $7,200 |
Pest Control | Monthly pest control services | $100 | $1,200 |
4. Marketing & Advertising
Item | Description | Monthly Cost | Annual Cost |
---|---|---|---|
Online Advertising | Google Ads, Facebook Ads, etc. | $400 | $4,800 |
Social Media Management | Managing social media accounts | $300 | $3,600 |
Print Advertising | Flyers, posters, newspaper ads | $150 | $1,800 |
Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
Email Marketing | Email campaigns and newsletters | $100 | $1,200 |
Promotional Events | Special events and promotions | $200 | $2,400 |
5. Miscellaneous Expenses
Item | Description | Monthly Cost | Annual Cost |
---|---|---|---|
Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
Software Subscriptions | Property management software | $300 | $3,600 |
Licenses & Permits | Business licenses and permits | $100 | $1,200 |
Training & Development | Staff training programs and materials | $200 | $2,400 |
Contingency Fund | Emergency repairs and unexpected costs | $500 | $6,000 |
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What are the biggest expenses for a property management company?
Be mindful of these critical expenses. Here are five major costs every property management company needs to consider, along with some tips on how to manage them effectively.
- Property Maintenance and RepairsThese can consume a significant portion of your budget. Properties require regular upkeep, and unexpected repairs can arise due to tenant wear and tear or natural events. To keep these costs manageable, implement a preventive maintenance schedule, negotiate favorable rates with contractors, and invest in quality materials that offer longevity. Overspending often occurs when you delay maintenance, leading to more extensive and costly repairs down the line.
- Staffing and TrainingYour team is essential for smooth operations, but salaries, benefits, and training programs can be costly. This expense remains high because you need a skilled workforce to manage properties effectively and provide excellent tenant service. Optimize labor costs by scheduling efficiently, cross-training employees, and monitoring performance. However, avoid underpaying or overworking your staff, as this can result in high turnover and decreased service quality.
- Office Rent and UtilitiesPrime office locations come with high rent, but they can enhance your company's image and accessibility. Utilities like electricity, internet, and water are necessary but can add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient office equipment and lighting. Overspending often happens when you choose an office space that's larger or more luxurious than your business requires.
- Marketing and AdvertisingPromoting your property management services is crucial, but marketing expenses can be substantial, whether through online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we recommend in our guide. Overspending can occur if you invest in elaborate campaigns without a clear strategy or measurable return on investment.
- Technology and SoftwareThis includes property management software, communication tools, and other tech solutions that streamline operations. These are essential for efficiency and tenant satisfaction but can be expensive. Optimize by investing in reliable, scalable software and maintaining it regularly to avoid costly disruptions. You can overspend by opting for the latest high-tech solutions that offer features you don't really need.
How to spend less with your property management company?
Here are practical tips to help you, as a property manager, optimize your budget and manage expenses more effectively.
Expense | Tips to Optimize |
---|---|
Maintenance Costs | Partner with local contractors for regular maintenance at competitive rates. |
Labor Costs | Implement a scheduling software to optimize staff hours and reduce overtime. |
Utilities | Install energy-efficient lighting and HVAC systems to reduce energy consumption. |
Marketing | Run social media campaigns for your properties and collaborate with local real estate influencers for free exposure. |
Cleaning Supplies | Train staff on efficient use of cleaning supplies to reduce waste. |
Equipment Maintenance | Set up a maintenance log for regular equipment checks and servicing. |
Rent/Mortgage | Negotiate lease terms during renewal or consider refinancing options. |
Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
Office Supplies | Purchase supplies in bulk and go paperless where possible with digital management systems. |
Tenant Screening | Use cost-effective, reliable tenant screening services to avoid costly evictions. |
Property Management Software | Choose a property management system that offers essential features with low transaction fees and integrates with other systems. |
Staff Training | Conduct regular in-house training sessions and use free online resources. |
Waste Management | Implement a recycling program to minimize waste and reduce disposal costs. |
Technology | Invest in smart home technology to increase property value and reduce maintenance costs. |
Linen and Laundry | Partner with a cost-effective linen service and consider reusable options where applicable. |
Legal Fees | Stay up-to-date with local regulations to avoid fines and costly legal issues. |
Transportation | Plan maintenance routes to maximize efficiency and reduce fuel costs. |
Inventory Management | Use inventory management software to track supplies and reduce overstocking. |
Pest Control | Schedule monthly pest control services and maintain cleanliness standards to prevent infestations. |
Security | Use a reliable security service and invest in surveillance technology to protect your properties. |
Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
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Expenses that are just useless for a property management company
Yes, some expenses for your property management company are just unnecessary. They don't contribute to increasing revenue or improving tenant satisfaction.
Property Management Expense | Reason It's Useless |
---|---|
Luxury Office Space | High-end office spaces don't necessarily attract more clients and can be a drain on the budget. |
Premium Software Subscriptions | Unless you need advanced features, most property management tasks can be handled with mid-range software. |
Excessive Marketing Materials | Overproducing brochures and flyers increases costs and leads to waste. |
High-End Office Equipment | Top-of-the-line office equipment is not always necessary and can be cost-prohibitive. |
Traditional Advertising | Paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your property management company. |
Multiple Uniform Styles | Having various uniform styles increases costs without adding significant value to the tenant experience. |
Overstaffing | Overstaffing leads to higher labor costs without necessarily improving service quality. |
Premium Memberships | Expensive memberships for industry associations often go unnoticed by clients. |
Exclusive Office Supplies | Using rare office supplies can inflate costs and complicate procurement. |
Costly Office Furniture | High-end furniture is not always appreciated by clients and can be a significant expense. |
Custom Printed Stationery | Personalized stationery is a minor detail that most clients overlook, and it can be expensive. |
Unnecessary Software Features | Paying for software with features you don’t use is a waste of resources. |
Premium Water Brands | Most clients are content with filtered tap water, making expensive bottled water unnecessary. |
Extra Company Vehicles | Maintaining a larger fleet than needed increases operational costs. |
Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
Overly Frequent Office Renovations | Constantly updating office decor and layout can be costly and disrupt operations. |
Expensive Office Decorations | Elaborate decorations are often ignored by clients and add to the cost. |
High-End Office Supplies | Luxury office supplies are prone to damage and expensive to replace, often going unnoticed by clients. |
Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
Expensive Marketing Campaigns | Frequently launching costly marketing campaigns is often unnecessary. |
Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
High-End Maintenance Equipment | Specialized maintenance equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your property management company!
Managing a budget for a property management company when funds are tight can feel overwhelming. It's like being trapped in a cycle where any unexpected repair or maintenance cost can throw your finances off balance.
This constant pressure makes it nearly impossible to invest in property improvements or expansion projects, leaving you always reacting to expenses rather than planning for growth. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together funds and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on increasing your revenue. More income means more financial stability and more resources to invest in your properties.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of property management companies just like yours. Get them now!
Make your property management company more profitable
We have studied the strategies of the best management companies in the world. All their tactics are explained in our pack!