6 Reasons To Outsource Real Estate Management

Given the amount of work that needs to get done in a real estate agency, ideally you want a low cost solution that also contributes to revenue generation. It may seem like a version of real estate utopia, but the truth is such solution exists in outsourcing. Here are 6 reasons why you should outsource real estate management:

1. Less Costly Option to Increase Staff

 

As business grows, you will eventually have to increase staff in order to delegate some of the work that needs to get done.

You options are as follows:

  • Hire a Full- Time Employee
  • Hire a Virtual Assistant

 

Using cost- benefit analysis, the smarter choice is to hire a real estate Virtual Assistant. First let’s look at the cost considerations:

When you hire a Full Time Employee or FTE, your costs would include:

  • Basic Salary
  • Government Mandated Benefits
  • Company Benefits
  • Incremental Cost – Internet
  • Incremental Cost – Utilities
  • Incremental Cost – Rent
  • Incremental Cost – Telephone
  • Incremental Cost – Contingencies

 

It has been estimated that the total cost of hiring an FTE is equivalent to 1.4 times his or her basic salary.

When you hire a real estate Virtual Assistant, your costs would include:

  • Actual hours worked

 

You could provide benefits or incentives if you want, but you are not obligated to.

Now let’s assume that your FTE’s basic pay is calculated at $16 per hour and he works 8 hours per day, 22 days a month. The estimated total cost of hiring an FTE can be calculated as follows:

$16 x 8 hours x 22 days = $2,816 Basic Pay per month
$2,816 x 1.5 = $3,942.4 Total Cost of Hiring an FTE

You can contract the services of a Virtual Assistant for $7 to $10 per hour. By comparison, the total cost of hiring a VA can be calculated as follows:

$7 x 8 hours x 22 days = $1,232 in VA fees every month

With a Virtual Assistant, you save up to 69% in compensation costs. Please take note that we have not factored in costs of recruitment, selection and training.

Now let’s look at the benefits side.

2. Proven Way to Increase Productivity

 

Outsourcing real estate management work will also increase productivity in a number of ways.

First, in our previous example it showed that it would cost you $3,942.4 per month to maintain an FTE versus $1,232 for a VA. At that amount, you can hire 3 virtual assistants, outsource more tasks and get more things done.

For example, instead of hiring 1 Virtual Assistant, you can get 3 virtual assistants to handle each of the key tasks in real estate management:

  • Administration – e-mail filtering, phone handling, calendar management, appointment setting
  • Marketing – Website management, SEO, social media, blogging, online advertising, graphic design
  • Sales Follow Up – Outbound calling, e-mail support, customer referrals, after- sales surveys

 

Second, a VA does not have to work 8 hours every day to become productive. Since they are paid based on productivity, you can assign 3 to 4 tasks per day and have them work only 4 to 6 hours every day.

By contrast, studies have shown FTE’s only render 90 minutes of productive work every day. That’s only 19% productivity. The rest of the time left in their shift is spent surfing the net, taking water cooler and bathroom breaks. And those are paid hours!

Finally, by outsourcing work to virtual assistants you will have more time to dedicate to the essential functions of your real estate agency. You will have more time to meet with prospective clients, accommodate buyers to open houses and auctions and other matters that will grow the business.

3. Enhance and Maintain the Quality of Work

 

As mentioned in the previous section, administration, marketing and sales follow up are among the key tasks you should outsource to virtual assistants.

Other types of work that you should outsource include:

  • Back Office Support – Accounting, Human Resources, IT
  • Customer Service – Inbound phone support, chat support, e-mail support, social media moderation

 

These tasks should be outsourced not only out of necessity but also to ensure the high quality of work. Virtual assistants can do this because they have the expertise, experience and time to guarantee deliverables meets or exceeds expectations.

4. Lower Risk Approach to Growing Your Business

 

If you want to expand your business, outsourcing is the way to go. First, it is a cost effective solution. You can hire as many people as you need to fill in all the roles your business requires.

Second, it introduces the quality of flexibility in your business. You can schedule your virtual assistants according to what you believe is the most effective way in managing your business. For example:

  • Regular office hours – Telemarketers, administration, inbound call support, IT and outbound sales
  • After office hours – Chat support, social media moderation, accounting,

 

Third, if revenues aren’t coming in the way you expected, it’s easier to adjust the manpower schedule so you can fit in their work hours to your budget.

Fourth, every time you hire a new Virtual Assistant, you will not incur additional costs in operation. As a proprietor of the virtual assistance practice, he or she is responsible for their own cost of business.

5. Best Solution for Managing Manpower

 

As anyone who has hired FTE’s before knows, the challenges go beyond the actual cost of having them on your team. What challenges do we mean?

  • Managing employee morale
  • Handling employee disengagement
  • Attrition rate
  • Office politicking
  • Managing egos and attitudes

 

When you are thinking of terminating an FTE, you have to abide by the labor laws of your city state and the provisions of the employment contract. Terminating an FTE will entail the following:

  • Adjudication process
  • Payment of separation benefits
  • Payment of pending benefits
  • Recruitment, selection and training of replacement

 

Collectively, these obligations will break open your monthly budget. On the other hand, with outsourcing, if you are not satisfied with the performance you can simply terminate the agreement with a written notice.

You only have to pay for work that has already been submitted but unpaid for.

No need for dramas, legal paperwork and reputation management.

6. Simplifies Your Accounts Administration

 

When you outsource, you are delegating a series of tasks to an approved third party. Your responsibility extends only to compensating them for the work they have done. They are responsible for their own paper work. This includes payment of taxes and benefits.

Outsourcing work makes the organization of your business so much easier and worry- free.

In this technologically- driven world, outsourcing has become more convenient, efficient and effective. Incorporating outsourcing as a business development strategy in real estate management is the best solution to grow your business and ensure profitability.

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