The Pros and Cons: Big Owner-Clients for Property Management Success

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Published September 19, 2022. Updated July 24, 2023.

As a property manager, generally speaking, more properties mean more profit. So, when you are building your property management business, do you want to sign a couple of big owner-clients, or do you want to manage properties for numerous clients who own only one or two properties? Which is best for your bottom line?

It's an excellent question to consider as you think through your business plan and the best types of clients to fit your goals for property management success. However, if you're not, a property management consultant can help you evaluate which types of clients best suit your business. 

Today, we talk about the advantages and disadvantages of signing on a client with an extensive property portfolio vs. smaller clients with fewer properties — and how each type of client can impact your operations and success.

What Are the Advantages of Big Owner-Clients?

Pitching your services to a big corporate client can seem intimidating, but it can also be exciting. Landing a big client can give your property management company instant credibility and excite your team at the idea of rubbing elbows with an impressive client.

However, is it worth the stress and effort? Will a large owner-client translate into massive success or more effective property management? Or does a big client simply mean more work without the pay-off?

Here's what to consider.

Pitching your services to a big corporate client can seem daunting. Is it worth the stress and effort? Will a large owner-client translate into massive success or more effective property management? Here's what to consider.

1. Big Pockets

The first and most apparent advantage of landing a big client with many rental properties is the cash injection to your business. 

Corporate real estate investors have a bigger budget to spend on small businesses. If you do your due diligence and stand your ground, there are opportunities for valuable contract negotiations.

A bigger paycheck means peace of mind for property management business owners and the resources to grow a successful property management business. Clients with big pockets can also be more financially sound, meaning consistent work for the foreseeable future. They can add immediate stability and cash flow to your property management operations.

2. Opportunity for Future Work

Larger organizations have more opportunities for future work. 

Even if units that you are currently managing for them sell, there is a high likelihood that the company will replace these with different properties. Therefore, you won't need to spend as much of your time prospecting for new clients

Smiling businessmen shaking hands in office, growing property management company concept.

However, you will have more time to devote to other aspects of your business — for example, fine-tuning your systems and procedures for effective property management. This could translate into improved efficiency and better profitability down the line.

3. Industry Credibility and Prestige

Signing on a big client is a fantastic boost for your company's visibility in the property management landscape. Association with a well-recognized company can improve your credibility amongst other real estate investors, both big and small.

Make sure to build secure and trusting relationships with your clients so that you can count on them to keep sending work your way. You will also want to be able to ask them for a testimonial or referral to use when marketing your company to new potential clients.

4. Rigid Standard Operating Procedures

Depending on your standard operating procedures (SOPs), this point may be an advantage or a disadvantage. 

If you are starting your property management business and snag a big owner client, you can benefit from the systems and structures the client would like you to follow. However, if you have been operating with specific systems for some time, it might be challenging to take on board a client that wants you to do things their way.

Be careful not to diminish the efficiency and consistency you have built for your growing property management company when taking on a big client.

What Are the Disadvantages of Big-Owner Clients?

Large clients may mean a massive cash injection, but it could come at a price. They may place a lot of pressure on your property management business and be far more demanding than smaller clients. Think about the following disadvantages before signing on with a big client. 

1. Big Clients Want More Bang for Their Buck

Do more doors mean more profit? They should, but that's not always the case with a large client adding many doors to your management portfolio.

Bigger clients tend to be more price-driven. They may want to negotiate lower costs at every turn. Overseeing fifty units owned by a single owner rather than fifty individually owned units should take up less time. However, your big client still needs to make it worth your while to manage their doors, even at a high volume.

You could consider bringing down your fees slightly. Just be sure to have done all your calculations before entering negotiations with them, and don't cheapen your services to please a big client that could be costly to your bottom line. 

Additionally, be careful about offering discounted services to one client but not others without an equal opportunity for all clients to earn a volume discount, for example. Smaller clients could leave if they learn that one bigger client gets special treatment.

2. Big Clients Have Big Expectations

Many corporate businesses know they are doing you a favor by choosing your company to oversee their property portfolio. As a result, they might have greater expectations about what you should do for them as part of the property management package. 

Be open to negotiations, but don't bend over backward for the sake of a big client and, in so doing, lose sight of everything that makes your business successful and unique.

For example, if your new potential client wants you to inspect their properties five times a year instead of the usual twice a year — your SOP (standard operating procedure) — then make sure to bill them for it.

3. Big Financial Impact If They Leave

Losing a client who owns one or two properties is not a significant loss compared to losing your biggest client with a significant number of doors. 

Parting ways with a big client will be a massive financial blow to your company. As a business owner, a client with multiple doors can make up most of your income, so losing that income can lead to tough decisions for your company — including layoffs.

Businessman giving a presentation with colleagues, property management success concept.

Work hard to serve them well to decrease the likelihood of them moving to a different rental property management company. However, stay true to the essence of what you are and how your business operates.

If taking on a large client (then losing a large client) could have the potential to devastate your income and workforce, it might not be worth it. 

4. Big Clients Can Have a Big Hold on Your Business

Property management businesses may become beholden to their "Big Clients."

Once you have onboarded a corporate real estate investment company, you might become fearful of losing that client and the corresponding income. This could drive you to make concessions in the way that you would normally do things and lose sight of your core business values.

If taking on a big client would impact how you serve your smaller clients or the quality of your customer service, you might need to reconsider taking on that large client to maintain the relationships and income you have from your smaller clients.

Which Client is Best for Your Business?

The client best suited to your business is the one you can serve the most efficiently and profitably toward your plans for growth! However, it can be tough to make a decision about significant billables from a big client vs. turning the business away.

A property management consultant firm can help you review your processes, team, and goals to help identify the types of clients or a different property owner you should pursue.

Big owner-clients and smaller portfolio clients bring different things to the table. Clients with large portfolios can be a useful cash injection, while a handful of smaller portfolio clients can lend stability to a long-term plan. It's crucial to weigh the costs to your team members, processes, property management services, resources, and your bottom line.

Choose Clients Wisely for More Property Management Success

Do you want to aim for those big-ticket clients or stick to serving individual property owners? A big client can help you stand out in your market within the property management industry, but it might not be the right call for your business.

No matter how you scale your business, property managers must ensure they have the processes, technology, and people in place to maximize your profit per door. 

To attract the right kind of clients, you must have the correct business infrastructure. The right property management coach can guide you on how to find the ideal balance for your successful property management business.

Real-Time Consulting Services has the experience and insights you need to help you build a client base that leads to more property management success! Reach out soon to connect. 

Ready to learn more about your company's profits? Get our Free Profit Calculator! 

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