How to stop your business hitting the wall.
Many vacation rental businesses start small. Perhaps originally just renting out a second home when not in use. At this stage, it can seem pretty straight forward. You list the dates, hand over the keys and collect a decent return on an otherwise empty space. Profits can come fairly easily so it seems logical to start expanding, using the same methods. What they don’t tell is that this cannot continue indefinitely. This growth is limited. Business models need to be built to handle expansion. There is a limit to how far they can expand without putting in systems for their day to day operations and the logistics of running their business. Today, we’re explaining the process of how you can avoid this plateau and take your business to levels you once thought were impossible.
When the administrative pressures become too much and your business can no longer expand. This is the property management wall. Combining the maintenance and cleaning of multiple properties, as well as customer facing responsibilities means that many managers cannot keep their level of growth up past a certain point. When there are simply not the hours in the day to fit in the tasks associated with running a high volume vacation rental business of you are running it as you ran your first property. Instead of the freedom of having your own business, you find yourself at the mercy of thousands of administrative and minor tasks, working seven days a week on repetitive and time-consuming tasks that sap the joy from managing your business.
We hear from countless managers that reach between 30-40 properties and then have nowhere to go. The workload becomes unmanageable. There are simply too many tasks and not enough hours in the day to consider adding to their property inventory. The profitability and stability of the business are not yet at the level where extra staff can be brought in to handle the new responsibilities. For some, this even means not just plateauing, but even suffering a dip in standards as tasks have to be prioritised over others and human errors occur. This is your business hitting the property management wall.
However, the good news is that the wall is a tipping point. And, it can be surmounted. Once you overcome the wall at this point in property management, your growth can be tremendous. The step that is required to push past the 30-40 property level is often cited as being more difficult than then taking your business from 100 to 1000! It is that after 30-40 properties, the daily tasks, as well as costs, become too much for a small business to handle. To get past the plateau, and to just give you more time for yourself, you need to hand over these tasks to a property management system that can complete the administrative of tasks of any number of properties.
Once you have a system that can automate and handle the repetitive and time-consuming tasks each property brings with it, you can apply it across your entire business. Once it is running smoothly, the impact of adding a new property become minimal, whilst the extra profits it will bring allow your business to growth exponentially.
Kigo will allow you to push past this wall of 30-40 properties without having to take on any extra staff. Property managers have reported being able to take on more than 100 new properties without expanding their staffing costs. If you have to increase staff costs to extend your business, you will never be able to increase your rate of growth. For many businesses, they have reached their peak profitability at around 30-40 properties and are at a place where expanding their business will only increase profits minimally but will push their workload to an unsustainable level.
The Kigo system starts by automating all updates, across all portals, including multi-unit developments. This means that updates to availability, pricing, and descriptions can be done for numerous properties and portals from one centralised system. Many of the updates will even be done automatically in response to bookings. This means that you can add to your property inventory without increasing the administrative work and time spent on these tasks. In fact, you will actually have more time and will not have to think if you have time to take on another property.
You can also schedule a full maintenance calendar to organise cleanings, maintenance and key handovers. Updates will be sent to staff based on your booking calendar so no task or handover is ever missed. You can even use tools like Kigo Revenue Management to set the optimum prices for every single one of your properties. This removes the need for market analysis and constant pricing updates. As well as this, it matches prices to demand meaning each property is sold for the maximum price. The system works for any number of properties and drives revenue from each. You add to your inventory and to your profits without adding to your workload. Kigo understands the vacation rental industry and it built to carry out the admin on any number of properties in a way that guests respond to and in a way that drives bookings. The system amplifies revenue whilst only requiring a minimal input from you as the property manager. The more resources you give Kigo to work with, the better it will perform. This is what allows property managers to avoid this plateau, to dodge the wall and get results from their businesses that at one point seem fanciful.
And this is why we built Kigo. Our product was created by actual property managers that saw this blockage to the growth of their business and decided to automate the things they knew could be handled by a sophisticated software. Using Kigo means you only have to do things once and they are updated across all of your properties. This means you can have the inventory and turnover of a major business whilst still carefully controlling your business using the same tools you started out with, and being able to keep that connection and level of passion in everything you do that made you want to start in the property management business.