Lessons in Cash Flow: Property Management Edition
- Jarrett Nixon
- Jan 26
- 3 min read
During my 14 years as COO of a property management company, I had one overarching mission: to keep operations running smoothly. From tech implementations to regulatory challenges to managing people, my projects were varied.
I learned a lot, but at first, I thought these lessons were unique to property management. But over time, I realized they applied to any business—whether it’s property management, trades, home services, or beyond.
The most important business operations lesson?
Cash flow is critical.
Cash Flow Project Examples
The first thing a Rental Property Manager needs to do for a new client- assuming the property is vacant - is to find tenants. We used dedicated Leasing Agents, whose job it was to find the best possible tenant, for the best possible rate, in the fastest reasonable time.
The sooner we found a tenant, the sooner our clients got their rent (cashflow), and the sooner we could collect our fees.
If we paid commissions before the company got paid, we put the company in a negative cash position. Timing plays a pivotal role in cashflow management.
Property Marketing needed to be fast and smooth. Syndicating listings across a wide network while reducing repetitive workload is common now, but a big advantage 10 years ago.
We needed people who were licensed, trained, and motivated to sell. Commissions had to be worth their time. Yet we had to balance prices with what the market would bear. We had to carefully balance price, value, and
The smoother we could make the paperwork and onboarding, the happier everyone involved would be, the more deals we did - and the better our cashflow
Timing plays a pivotal role in cashflow management
When it comes to customer service, third-party rental Property Management can be like being between a rock (the landlord) and a hard place (the tenant). Statistically, most of the time things go well, but there is an inherent tension.
If we didn't collect rent, we didn't get paid. So that became the number 1 process focus. 90% of Accounts Receivable in Property Management start with collecting rent. Our first employee scorecards started with checking rent collected weekly.
Making rental payment easy, flexible, and convenient was the single most impactful way to collect 99.5% of rents, on average.
Managing customer service workload with communication tools, strategic policies, and automation was critical to reducing client (and staff!) turnover.
Accounting automation, with robust checks and balances allowed us to process thousands of transactions monthly, with a very small team.
Revamping our Security Deposit process freed up a lot of employee time, and reduced stress and mental burnout. By setting out clear steps to follow, we reduced decision-making and "judgement calls", which led to less conflict with tenants, faster turnaround, and more consistency across multiple locations.
Basic staff Scorecards can be a game changer
Property Management Maintenance is a critical need for clients, but it was not always a profitable department. My thinking about this department changed over the years, but cashflow was always in the back of my mind.
Employee Maintenance Managers were a strategic asset - valuable to clients, so helped close deals, they kept clients and the rest of the team happy. On the other hand, the department created cashflow pressure.
Until we started having them check their own performance by filling out a scorecard, most employees overestimated how many hours they spent on billable (vs non-billable) hours.
Faster project turnaround usually kept tenants happier, clients happier, and was better for cashflow.
Pricing strategy could greatly change revenue - and not in a linear way. When clients felt costs went up too much, they would seek other options, sometimes only affecting the maintenance business within the business, and sometimes losing the client altogether.
All these projects had varying objectives - often , but one common underlying focus: improving the company’s cash position. Through the ups and downs of client relationships, market turbulence, staffing, and operational challenges, the businesses that weather storms and grow sustainably are the ones that manage their cash flow effectively.
Based on all my years as a business operator, I’ve developed a cash flow resource that helps businesses:
• Identify their most valuable initiatives (Rocks).
• Focus their team’s time and energy on what truly matters.
• Create space for busy owners and their staff to work smarter, not harder.
Because no matter your industry, ensuring a healthy cash flow is the secret to navigating challenges and unlocking growth.
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