OFFSHORE PROPERTY MANAGEMENT – Saying that building a successful business in the real estate industry is hard is a major understatement. It takes indescribable amounts of hard work, dedication, and perseverance that get you through this hyper-competitive industry.

For this reason, the best real estate professionals are using all of the modern tools available to get even the slightest edge over the competition. However, there’s only so much you could do before encountering major hurdles in your business. Unfortunately, it’s often not about getting new property or clients – it comes in the form of scalability.

When you’re starting with your first 10 doors that’s easy enough to handle. But what if it goes to a hundred or a thousand? Instead of celebrating, Property Managers need to deal with mountains of administrative work. So, what often happens?

Businesses start hiring locally to handle the heavy workload. But this can cost a premium and as a result, owners would task in-house staff to handle the admin tasks – easy enough – it’s just paperwork.

Now, here’s the problem – studies suggest that these simple admin tasks can take up to 60% of the workload of your average employee. And, with more than half of the working hours spent on non-profit driving tasks – productivity and efficiency significantly decline.

Because of this repeating cycle of unproductivity, a business’s growth can become stagnant. Luckily, more and more real estate professionals are embracing the trend of outsourcing their property management services offshore.

Why Are Property Managers Outsourcing?

There are a lot of stigmas that go along with the term “outsourcing“. Granted, there are several risks involved – especially when your business is on the line.

But, thanks to advancements in technology, outsourcing not only saves you money but also mitigates risks and provides solutions to some of the most pressing business problems.

During a Podcast on the Property Management Show, Todd Ortscheid of GTL Real Estate said outsourcing has greatly benefited his business. On the show, he said:

A huge portion of our day – basically the first few hours were spent looking through service request that we got, dispatching vendors, and trying to get in touch with tenants that haven’t scheduled their repair work orders, which is taking an inordinate amount of time.

Sadly, this isn’t just an isolated issue. Earlier, we discussed how back-office processes can take up to 60% of a worker’s daily workload. To solve this issue, Todd said that he invested in outsourcing.

He contracted a call center to handle maintenance calls and has Property Management Virtual Assistants to handle tenant-related processes which include:

• Screening Tenant Applicants
• Data Entry work
• Collecting unpaid tenant balance
• Repair and Maintenance Requests
• Customer Service

These are just five examples of tasks property managers can outsource. If you want to get an in-depth look at the services you can offshore, check out our article below:

What Can Property Managers Outsource? – Key Considerations

Outsourcing Takes Away Tenant Interaction

One of the most underrated benefits of outsourcing is minimizing tenant interaction. Imagine how productive a property management team can be if they didn’t have to chase after tenants late on rent or take a 45-minute call about how a maintenance fee should be waived.

All of this can be automated with the help of outsourcing. Thanks to virtual assistants, leasing agents can do entire tenant-related processes from screening all the way to rent collection hands-free.

In fact, Todd Ortscheid said that he only has five employees in-house and has the rest in service contracts or outsourced. So, the only time they need to interact with clients is during major issues that need to be addressed personally.

This way, you don’t have to do a lot of leg work and focus on meeting more property owners, marketing, or other profit-driving endeavors. Not only that, the less you’re at work, the more time you get for hobbies, friends, and loved ones.

Offshoring Property Management Services Helps Your Business Scale

Smart Property Managers are those that know their limits. After hitting milestone after milestone, it’s easy for businesses to forget how quickly back-office processes pile up.

That’s why good property managers realize that sometimes, it would be irresponsible to keep the business growing. Here, the saying “Don’t bite off more than you can chew” rings true.

If your rental property business stops growing, owners or managers need to look at several factors. You’d see this scenario happen for a lot of small businesses. Meanwhile, you could also see businesses taking in more doors than they can handle.

Ultimately, this leads to expenses eating up supposed revenue. At this point, you’re not only wasting money but also precious time and manpower.

Now, let’s place outsourcing into the mix. The great thing about that is once you partner with an outsourcing company – you gain access to highly skilled and professionally trained individuals.

And, with a variety of skills at your disposal, there could be a broad range of solutions that could be applicable to your specific business needs. For Property Management, a Business Process Outsourcing (BPO) company such as Global Strategic can provide:

• Phone & Email Support
• Creating and Processing Work Orders
• Creating Bills / Invoices
• Reconciling Bank Accounts
• Screening Property Applicants
• Status Reports
• Listings & Online Management

Small Property Managers Can Extend Their Workforce for a Fraction of the Cost

According to the U.S Small Business Administration, more than a third of small businesses currently outsource. More importantly, outsourcing gives small businesses the opportunity to get more done without investing too much capital.

For the longest time, there’s always been a debate on which is better: in-house or outsourcing? But, in most cases, the answer would always depend on a business’s needs.

However, if businesses want to effectively scale, then staffing should be one of their top priorities. Manpower directly impacts everything in a business. Like a simple physics formula, we can say that manpower is proportional to productivity.

The more people you can get working, the more tasks can be completed at a faster rate. But, as you hire more in-house staff, this can translate into a massive reduction in revenue and profit.

Hiring new staff equates to paying more for health care, insurance, and other benefits. Additionally, you’d also have to pay employees for the training if they lack the skills to do the job.

According to Salary Expert, rent collectors in the US have an hourly rate of $14-$25. Meanwhile, hiring in the Philippines would be significantly cheaper, not to mention the other costs of employing someone locally besides just the simple salary.

Conclusion

Outsourcing is an effective way for property managers to increase productivity and efficiency in a cost-effective manner. And, for small businesses that want to streamline their operations, outsourcing provides a way to strengthen your workforce for a fraction of the cost.

That said, there’s more to outsourcing than just saving on costs. So, if you want to learn more about how your property management business can effectively use outsourcing talk to us today!

Global Strategic can help with your business needs and give you the Strategic Advantage needed to edge out the competition. Learn more about how offshore outsourcing to the Philippines can help your business and future business growth.

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The word “structure” is a broad term. But in this context, we’ll refer to structure as the responsibilities and reporting related to customer focus in real estate and property management.

Moreover, all organizational structures have pros and cons regarding transaction costs and the principal-agent complex. Thus, the business model is what we’ll focus on in this article as it better represents the sentiments of property managers.

In the business model, the focus is directly on outsourcing as a business strategy. Here, managers focus on value-creating resources and how it’s used within the firm.

Examples of value-creating resources are top managers, agents, and other integral employees that focus on driving profit into the businesses.

As such, management should decide if the value activity should be in-house or outsourced. Furthermore, the firm should determine if a value-creating resource available in-house should be considered a separate function (outsourced) or keep it as a task within the organization.

For this reason, firms outsource non-dollar-productive activities to property management virtual assistants. Examples of these are data-entry or tenant-related documentation or processes. Most of these tasks are simple in nature – as a result, third-party services can handle them with ease.

Outsourcing as a Business Strategy

An organization’s business model relies on its “strategic capacity“. Danish economist Birger Wernerfelt says “strategic capacity” is determined through service, marketing, delivery, and monitoring.

Moreover, within the context of “capacity“, we can view a company’s competitive advantage as its value-creating activities and their interrelation.

For example, a real estate manager (agent) may prioritize a new lease over a customer service meeting. Additionally, new leases reduce vacancies and increase rental income.

However, both activities are important. But, one can be considered as a value-creating activity while the other doesn’t directly serve that purpose. As a result, managers can easily outsource customer service-related activities.

Meanwhile, based on the structures of property management outsourcing, two arguments are primarily discussed. Peter Palm from the Department of Urban Studies, Malmo University, Sweden conducted a study on outsourcing and says these two arguments are “resourced-based view” and “transactional costs”.

What is a Resourced-Based View (RBV)?

According to the study, the resourced-based view states if certain tasks are not done within a firm’s core business, they should be outsourced. Meanwhile, the next argument, “transactional costs“, states services available on the market for a lower price with the same or better quality than in-house, you should turn to the market.

Thus, outsourcing strategies should consider balancing the skills of third-party services in relation to the cost. Still, both terms are closely connected with each other.

Economist Oliver E. Williamson characterized this link as organizations integrating specific assets (or competencies) that create value. Thus, specific value-adding features are defined as the company’s core business.

Through this, outsourcing stepped away from short-term cost-cutting means and focused on long-term strategic outsourcing. Currently, this trend of long-term outsourcing better reflects the organizational structure and business model.

What Are Transactional Costs?

All business or service agreements have transaction fees. These include contract formation, information retrieval, and service exchange participation. Thus, transaction costs are all costs associated with performing an activity.

Transaction costs include contracting and getting information. As the transaction can include opportunistic behavior, expenses connected with misunderstandings, disagreements, and anything else that interrupts the service delivery exchange are also transaction costs.

According to the study, transaction costs can be studied on three levels. First, we have the overall structure of the firm. This level examines operational parts and their relationships.

The second level focuses on how the organization is structured which functions should be undertaken within the corporation and why. Third, how human assets are organized in the company.

Themes Motivating Property Managers To Outsource

In the study, real estate owners answered interview questions based on four themes – Role and Function, Information Sharing, Regulations, and Experiences.

These became the basis or deciding factor for them to look into outsourcing. Shown below is the table and the result of the interview.

The primary theme that motivates real estate owners to outsource is divided into two parts – organizational choice and role and function. These themes focus on the work managers want to outsource, the size of the team they want to hire, and the current number of clients/properties they need to be managed.

Based on the table above, property managers should already have a baseline on what to consider when it comes to outsourcing. But, each organization would need specific strategies to make outsourcing work efficiently.

If you’re ready to start your outsourcing journey, Global Strategic can help with your business needs and give you the Strategic Advantage needed to edge out the competition. Talk to us today and learn more about how offshore outsourcing to the Philippines can help your business and future business growth.

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Outsourcing Property Management Services – When Should You Do It?

Outsourcing, with all of its benefits, does have risks that need assessment. But, if you’re planning on scaling up your property management services, then outsourcing would be the way to go.

Entering into something like outsourcing can be nerve-racking, especially for a business that has never done it before. But don’t worry, because we’re going in-depth into when you should start outsourcing your services.

If you’ve been growing your team but are having difficulties with scaling your business, then you should look into outsourcing. Another area you need to take a look at is your back office.

When your back office or administrative tasks are starting to pile up and eating up in-house resources – outsourcing can be a simple solution. More importantly, this can become a more cost-effective alternative to hiring locally.

This is especially true at the moment when finding staff- especially good quality- has become increasingly difficult in many locales.

At the end of the day, each organization is different and requires different needs. Outsourcing isn’t suitable for every role in every business, but it is usually suitable for some roles in most businesses. If you start outsourcing repetitive, non-core functions of your business, then you get to free up valuable time and money.

Businesses become more comfortable with outsourcing over time. As a result, it can start to look at other roles that it may not have previously considered. Thus, increasing its profitability even more.

From here, you can start to push for profit-making efforts such as meeting more clients, investing in marketing, and more. So, without further ado, here is the checklist for when outsourcing your property management services should be done:

Outsource Property Management Services to Lower Labor Costs

One of the first things businesses look at is how much outsourcing can lower operation and labor costs. If you’re ready to get rid of unnecessary operational costs – outsourcing should already be a priority.

Earlier, we discussed how stacking back-office tasks can eat into a company’s resources. Naturally, while your company grows and gets more clients, the amount of paperwork and admin duties grows with it.

Scenarios for this vary, but generally, tasks like these can become a heavy toll for in-house employees to handle. In turn, you can hire more employees to do these tasks for you. But then, you quickly realize that the labor costs starting to pile up. And, that’s if you can even find suitable staff for the roles.

Another way we can take a look at this is by looking at our opportunity costs. For example, the budget that was spent on hiring could’ve been used for sales and marketing to improve revenue.

That’s why a lot of property managers are going to the Philippines to find professionally trained and highly skilled property management virtual assistants at a cost-efficient rate.

Usually, repetitive tasks that you can outsource come in the form of data entry, processing information, answering emails, bookkeeping, and other admin tasks. Additionally, a company’s accounting staff often ends up overworked and pushed to their limits with all the paperwork and backlogs they need to go through and many of these tasks could be easily outsourced.

Outsource to Focus on Streamlining Property Management Business Process

Efficiency and productivity come in the form of simplicity. Therefore, a streamlined business process directly equates to a more effective and productive environment.

With this, outsourcing services can help any business streamline its process by eliminating or automating unnecessary workload. For example, a high-quality outsourcing company can help you with processes such as the following: customer service, tech support, data entry, and accounting. After setting up the business process, the outsourcing company will continuously hire and train personnel as needed.

Another benefit of going to an outsourcing company is the ability to change the services you need as you see fit. Obviously, this won’t be a one-off thing and you need to consistently check up on your outsourced staff as they are now an extension of your company.

Now, the difference is you just need to “manage” the work instead of “working” it. As a result, you get more time to focus on your business’s core, profit-driving processes.

Property Management Companies Should Outsource if they are Growing Fast

Property Management is a highly competitive industry. If you have the opportunity to rapidly expand your reach and services, then you already have an edge against your competitors.

However, as we mentioned earlier, quickly growing your business demands higher labor costs and a difficult hiring process. To bypass this issue, you can simply outsource services to start scaling up.

When you get more customers or clients than your in-house staff can handle, you’ve got two options – hire locally or outsource from countries like the Philippines. And, in outsourcing, you can opt to go for freelancers or book a meeting with a BPO company to discuss what they can do for you.

If you start a relationship with a BPO company, you can start to clearly identify what needs to be outsourced and what can stay in-house. The Philippines is the BPO Capital of the World, which means that companies here know what they’re doing.

Outsourcing Helps with The Hiring Process

Whether you need a team of 10 or 100, a BPO company will ensure that you get highly trained workers ready to help you streamline your business. This is also more apparent when looking at hiring.

As your company expands, more and more positions need to be filled up and if you’re looking at local talent, then labor costs can skyrocket. This would be one of the best times to start outsourcing.

Meanwhile, outsourcing can not only help you reduce those costs, but it also helps you with finding the right people for the right job at an unprecedented pace. That’s because the Philippines has one of the highest numbers of readily available workers. Most of them are fresh university graduates looking for work in BPOs.

In contrast, hiring freelance workers can become a hit or miss, especially if you want to find a specific skill set. Hiring a property management virtual assistant for your business is a big decision and you want to ensure that you have the right person for the job.

More importantly, you want some degree of assurance that if they are not the right person, they will be able to replace them with someone else relatively seamlessly.

The hiring process can also take months as you need to interview potentially hundreds of applicants. That takes time, effort, and resources, especially if you’re just trying freelancers out. After all of that effort, your VA may decide to work for someone else, go back to another industry, or outright disappear on you without any notice.

While some companies can assume this risk, others cannot, and need to look to reputable BPO companies who they can not only trust to get the work done but also can trust with your data and processes.

With the help of BPOs, you get virtual assistants who are trained by industry professionals to ensure that the job you need gets done. More importantly, BPOs consistently hire technically skilled talent in various industries.

Outsourcing Property Management Services Gives You Time to Strategize

Think about how much time you spend strategizing for your business. According to an article from Personiv, 88% of their CFOs said that they didn’t have time to strategize because of doing transactional tasks.

The issue with small and medium enterprise companies is that those in leadership roles are wearing too many hats. When this happens, valuable time that’s supposed to be allocated for strategizing is pushed aside.

Rather than focusing on non-core responsibilities, you need to focus on deadlines, finalizing documents, and balancing books. But, with outsourcing, you can now focus on more engaging work. Plus, you will have less stress knowing that your outsourced team already has got you covered and won’t let items fall through the cracks.

Hopefully, you’ve got a good idea of the importance of outsourcing your property management services. So, if you think you’re ready for outsourcing, contact us today so you can get the Global Advantage and learn how Global Strategic can help solve your business process needs!

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