Property Management companies tend to be very territorial when it comes to their inventory. They want to only showcase their inventory. This works many times but what happens when you run out of inventory. This means that you are no longer generating income.
Why put yourself in that situation? Streamline works very well with combining property management with wholesaling other units. The thing to remember here is that you can manipulate which units show first. So, as a property management company, I ask the question: Why not reach out to other property management companies and create relationships?
In the past, I have had the opportunity to reach out to other property management companies in order to generate relationships. I will definitely say that it is one of the hardest things to do. We have only had true success when a relationship was established with the other property management company (wholesaler). Simply calling up companies and asking them for the ability to book their inventory can seem invasive. It is much better to set up a private meeting with an owner or head of marketing which explains the ideals behind your company and the reason why you are searching out a wholesaler.
I searched out a wholesaler because we continually ran through our inventory. We kept receiving phone calls and all we could do was turn them away. There are many property management companies out there who lack marketing and advertising. Many times, they are willing to pay 10%-20% commissions in order to get a booking. Why not tap into that market? Why would you turn away someone looking for a property, simply because you are booked? You are leaving money on the table.
The trickiest part of wholesaling is getting access to the wholesale companies inventory and calendars. Every company is different. Some companies protect that information. Other companies, who are much more advanced, provide you with feeds and access to their inventory. Setting up a wholesaler is not simple. However, once everything is established, you have another source of income.
The next challenge in the wholesale business is finding the right relationship with payment terms. Some companies want everything up front! Other companies will work with you and provide more flexibility on payments. I have had to hire an accountant to just take care of making sure that our wholesale units are properly paid. Managing this on a day to day basis eventually became too time consuming. The easiest way to irritate one of your wholesalers is to send out a late payment or no payment at all!
The benefits out way the negatives in wholesaling. There are a few things that I would recommend that need to be carefully considered:
1) Try to find a large company with a large inventory. When it comes to managing payments and the cost of getting everything set up, it is easier to just do it for one company and then test out the benefits of the relationship.
2) Do not go in cold turkey without providing a good reason as to why you want to work together with another property management company. You have many reasons!!! You get an excessive amount of calls that have to go unrented and turned away! You have a mailing list of XXXXX users who they can market their properties to. You know the area better than anyone and can represent their properties without a problem. You value customer service and you want to make sure that your clients always get the best treatment!
3) Always try to keep the information until the last moment. So, when you make a reservation with the property management company, try to give them just the name of the guest and no other information. You should manage the relationship with the guests
4) Your properties go first! They ultimately represent the most profit.
5) Make sure you are timely on payments. That is what ends up creating the best relationships.
6) Finally, maintain a close relationship with their owner or marketing team. They are truly your lifeline and they will protect you in times of trouble!