Property Management Growth with DoorGrow DGS 345: Hidden Profit Leaks Every Property Manager Has
What if the biggest obstacle to growing your property management business isn't your marketing... but who you're attracting? In this #DoorGrowShow episode, Jason Hull breaks down why traditional marketing advice is keeping property managers stuck competing for price-sensitive owners while overlooking a massive untapped market. Drawing from nearly two decades of coaching hundreds of property management entrepreneurs, he explains why warm, relationship-driven growth consistently outperforms cold digital marketing. Jason also explores the hidden operational costs of attracting the wrong clients, why communication isn't the real reason owners leave, how poor boundaries destroy profitability, and why your business should be built around trust.
You'll Learn[00:00] Why Industry Surveys Miss Real Growth Opportunities [04:58] Understanding Cheapos, Normals, and Premium Buyers [10:43] The Blue Ocean Most Property Managers Ignore [16:40] Why Communication Isn't the Real Problem [22:08] Escaping the "Cycle of Suck" [28:18] Setting Better Boundaries with Owners [34:55] Why Offline Marketing Wins [42:06] Building Growth Engines Instead of Buying Leads [50:14] Hidden Profit Leaks Every Property Manager Has
Quotables"Where you get your leads dictates the quality of the lead and how much they're willing to spend." Jason Hull
"They don't even want to buy property management. What they want to buy is a trusted advisor." Jason Hull
"Interruptions are the biggest thief in the property management business of profitability." Jason Hull
Resources TranscriptJason Hull (00:00)
Hey everybody, I'm Jason Hull, the founder and CEO of DoorGro, the world's leading and most comprehensive coaching and consulting firm for long-term residential property management entrepreneurs. For over a decade and a half, we have brought innovative strategies and optimization to the property management industry. At DoorGro, we are on a mission to transform property management business owners and their businesses.
We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. Now let's get to the show. Okay, so today's episode,
I'm going to share from my anecdotal experience in talking to thousands of property managers and all the feedback that I get, and all the people that are in our mastermind, what we're seeing is working. So here's what a survey can't show: a survey is basically lagging data, it's not showcasing what's
Innovating because you're not even usually asking questions about the latest innovations. So the questions inherent in this survey, my guess, are slightly flawed because they aren't asking some of the things I would ask based on all of the data and information that I get from this weird sort of fly-in-the-wall vantage point that I have in the industry.
we've always pushed this idea of three different types of buyers: cheapos, normals, and premiums.
Most cheapos self-manage. They exclude themselves from the pool of property management buyers. And then there's a small percentage that eventually go through the funnel online, and then you can capture through marketing. And these are this is what most companies base their pricing around, is based around the cheapos that they can get through internet marketing. Well, the best stuff usually comes through word of mouth or
Further out into the blue ocean. And so if you would like to see more about this, you can get my leads training by going to drgrw.com, which is doorgrow.com, or just go to doorgrow.com slash leads. So do the shortened URL or the longer URL slash leads. And you'll see our there is a clarity assessment you can do. There is a free training, and then you can book a call with our team.
And hear about some of the innovative gross strategies and stuff that we're doing with clients. So the thing to realize is that a lot of you know, it's showcasing these boomers as cheapos. And the the other thing though is it's it's saying that like 62% are represented here. And I think that the numbers of people that actually use property management is far lower than the 500 they surveyed. There's probably also a lot of people that
Aren't even aware of property management, even though they need it. There is this massive blue ocean. I think the numbers are probably more, maybe around 40-50% are self-managing versus using a property manager. And there's a lot of available potential business out there. And they're not looking on the internet. So here is some data that's not in the PM Trends report, but it's on trends.google.com. So if you go to trends.google.com.
And I just threw up an article on LinkedIn today before recording this episode. But if you go to this, go to Google Trends, backdate it to 2004 to the present, what and put in property management. And then feel free to add some other keywords like AI would be very telling, because we've seen the rise, meteoric rise lately of AI in terms of awareness and search volume. Put in real estate is another great keyword so you can kind of see.
What you'll notice is property management is such a minuscule amount of search volume, it barely registers compared to these other terms. And it spikes every summer and goes down every winter. If you remove those terms, is what you'll see. Now, in the last year, there's been a little bit of an uptick for the first time in basically two decades, which is amazing, which is awesome. That means market share is starting to maybe start to shift a little bit and grow. But there is this huge blue ocean of people that will never search the internet.
For property management. And that doesn't mean that they like doing it themselves. This survey probably isn't able to touch any of those people. And this, these are some of the people I get my clients to go after the most. Why? Because it's way cheaper. There's a huge blue ocean of people that are not looking on the internet for property management. The people that are looking on the internet are at the end of the sales cycle. These are typically the worst owners in a lot of instances.
Why? Because word of mouth captures the best stuff first and then the shitty stuff that falls off that table, the scraps that fall off the word of mouth table. Those are the people now that don't care about word of mouth or they don't care who people say is great. They think you're a commodity. They're looking for the cheapest company. And so generally there's a much higher percentage of cheapos that you're going to attract by doing digital or internet-based marketing.
YouTube. The challenge is there's a large percentage of owners that are not looking or searching for property management. They're not looking for property management stuff on YouTube. They're not looking for property management stuff on Google. They're not looking at all. They don't care about property management. Most people
That are even property managers are not usually consuming content around property management. Not very often. A lot of them self-identify as more of a real estate brokerage or real estate agent or anything else that they think is cooler. I even had a client I was coaching recently, and he said that he's really had this mental block, this mental block about wanting to tell people that he's a property manager. And I said, Don't tell people that you're a property manager.
Property managers in your market, he was in New York, are basically somebody that sits in a big building that, you know, they they help do leasing. That's kind of people's perception. You are an asset portfolio manager. You are an investment specialist. There's so many other ways you can present yourself. You are the entrepreneur that hires the property manager. I don't want my clients to identify as property managers. I want them to identify as an entrepreneur because identity limits growth.
the second thing that filters, which is perception. There's a really negative perception about property managers among real estate agents, among investors that are aware that most property managers, if I have you in a room and I say by show of hands, how many of you started your business? Because all of the other property managers in your market sucked. Usually almost everybody's hands go up. And then my joke usually is, but not yours, right?
And then they all laugh. So, but nobody wakes up in the morning wanting to start a crappy company.
So you could waste a massive amount of time trying to do a bunch of social media marketing, a bunch of YouTube videos, a bunch of content creation. And it's not generally going to get you the best clients because where you get your leads dictates the quality of the lead and how much they're willing to spend. And what we find is the clients you can connect with offline through warm lead strategies.
through direct outreach, through creating relationships, through networking, and some of the growth engine strategies we teach at DoorGrow, the conversion rate is way higher. The leads are way warmer, and which means the close rate's gonna be way higher. The trust levels higher, so you're able to get more deals on more easily. And it doesn't cost you anything. It costs you time, but it doesn't cost you any marketing or advertising dollars. And the and a lot of people like, well, I'd rather spend money and save time.
It these leads, warmer leads, take less time. They take less time in the sales cycle to convert. Cold leads take way more time because now you're a commodity and you're competing with all the other companies and now you're in this weird race to the bottom and you've attracted cheapos. Here's the other thing you won't see in this report. The other thing, it does not mention the operational cost of dealing with these different categories of owners. Cheapos, normals, and premiums. So here's the thing.
It talks about communication being the number one factor. I've heard this so many times, and I'm gonna tell you that I believe that this is a red herring or a lie. You have been made to believe by everybody the number one pre reason people leave companies is communication. But it's not because of a lack of communication, like everybody says. It is because of bad boundaries and bad expectations, so owners think.
That they need to be communicated with all the time. And then you have this huge burden of communication to fulfill. And it's very difficult to impossible when you have a whole bunch of crappy owners and a whole bunch of crappy properties and a whole bunch of crappy tenants, and you're caught in what I call the cycle of suck. So this is how the industry is caught in the cycle of suck because most property managers take on any client. So now you have bad clients. They take on any property. So now you have bad properties. And then you do tenant screening, but
You can't really filter that much because the tenants are going to be bad tenants if the property is bad or the owner is bad. Now it's a difficult situation for you to deal with, and you're basically a shit shield for a slumlord. And so now you've got these three things in the cycle suck, which leads to the fourth, which is you're gonna have a bad reputation. And this sums up the entire industry in aggregate. And this survey is based on the industry in aggregate. Okay, so.
What do we do with this? one, you need to realize that the best owners and the best clients that you they they don't want to be involved with their property. They don't want to know everything that's going on. They want somebody, what they actually want. They don't even want to buy property management. Everybody's selling the wrong product. What they want to buy is a trusted advisor, that they could actually relax into.
You have to be the dominant person in this relationship for them to be able to relax and to trust your leadership. And that reduces your operational costs significantly. This is how my wife's business at 265 or so units at its peak.
She still had 60 to 90 percent profit margin. These were C-class properties, and her owners, the boundaries were set very strongly that she is not going to talk to them. And if she calls them, they need to sit down because she's asking for money, because there's a significant problem. And they didn't call her. They they never called to like say, Hey, did you get that tenant in place yet? They just trusted her because she was so on top of things and she set very strong boundaries from the beginning.
This is something we coach our clients on heavily. Is that if you think that your business is all about communication, you've built your business the wrong way. Your business is about management. It's about leadership. And it's about allowing the owners to actually get away from their property and not have to hear from you.
And so when you suck at boundaries, communication becomes the number one factor. When you s and then you're gonna suck at communication because you're setting up an impossible game. Here's the thing: this does not talk about the level of interruptions, and interruptions are the biggest thief in a property management business of profitability. I want you to visualize this. Imagine you're writing a blank check and it says on it, steal all of my profits, and you're handing this to every client you bring on.
It says, call me whenever you want to. Email me, call me, text me whenever you want to. Here's the blank check to steal all my profits. And I will have team members and AI tools and technology and all of this stuff to communicate with you all the time and over-communicate, which just really makes you even more anxious. That makes you feel like you have to manage the manager. And that's not what they really wanted to buy from you. That's the booby prize they get by dealing with a property manager that doesn't know how to lead.
That doesn't have good boundaries.
like Sarah and I talk about this and she jokes and she's like, how many of my owners do you think knew what color we painted the walls or knew what kind of carpet we put into their property? They have no clue. They just trusted us to take care of it for them. They didn't care. They didn't want to know
Long as rent came in. They would call me surprise sometimes, she said. And they'd say, Why am I getting more rent than I was before? Why why is more coming into my bank account? She said, we raised the rent. FYI.
So here's the thing I want you to recognize.
First, there's three types of buyers: cheapos, normals, and premiums. Cheapos generally are going to opt out and self-manage because they're so cheap. But you should have three different price points and three different plans. The premium plan stuff that they mention in this report is useful. But because we've been building premium plans with our clients and helping them figure out the premium tier of their pricing, none of this stuff is a surprise. This is all stuff that's generally included in premium plans that we've been doing for over a decade.
though, you have to change your marketing to attract premium buyers. You're not going to get those by doing digital marketing and attracting the people that are now of super aware and super price sensitive that are searching on the internet. And so you're going to skew towards premium buyers more if you change your lead sources.
On some of the lowest rent properties, they have the highest operational cost. Operational cost was not factored into this report or survey. Not all owners are worth it and not all properties are worth it. And so you have to be aware of this and you need to be cleaning out your portfolio and you need to be firing the properties and the owners that are not profitable or just raising your rates on them to make sure that you make sure that this is profitable, right? Okay.
So these are some of the things that I wanted to point out in this report. I hope this is helpful for those that got this report and are looking into it. I think the the numbers are a bit skewed. It's obviously skewed a bit towards the different services, the different vendors and the different you know partners that came together to advertise and promote this and the sponsors. My recommendation is shift your marketing to offline.
This is the secondary effect of AI. Why? Because AI slop is the age we're in right now. And anyone can create anything AI-wise, digital-wise, marketing-wise. And so there's gonna be more and more digital just bloat and waste and noise. And those that are willing to pick up the phone, that are willing to go out and reach out and that create strategies that are have high leverage. We call these growth engines.
And if you would like to learn about some of the growth engines or get a free two-hour training, no fluff, that breaks down seven to nine different engines you can install in your business that are unique and different from what you're doing now. There are a lot of them are similar, for example, realtor referrals, but we have a strategy that is 10 times more effective. We call realtor intros. And so if you there's like targeting groups and simple changes like using a QR code and a booking link.
Could maximize the results of walking away from groups with leads. Stuff like this. So when you're doing presentations, so there's all these different strategies we share inside our mastermind. And we are at the forefront because we have an army of people focused on aggressive growth. Most masterminds out there in property management are nuts and bolts or operations. Ours is primarily focused on growth, and that growth drives the res the need for operational you know.
decision making operational fixes and challenges for fast growth, not just for building a bunch of AI tools and building a bunch of bloat and getting a bunch of tech and having the most efficient business. We want to optimize for growth. It doesn't matter if you have the coolest, most high tech business, if your profit margins aren't growing and your revenue isn't growing and your doors aren't growing and they're they aren't growing rapidly. And so if you want to shift out of being in survival to maybe being more
Getting having realistic goals, like 100, 200 doors a year, or even like our clients beyond that into what we call impossible goals, where you're able to come up with strategies and clever, unique ways to scale your business more quickly, then check us out at doorgrow.com. Reach out to us. This is the stuff that we have been focused on for 17 plus years now. And because we're always like we always have new, fresh ideas and
New guinea pigs and new people working on this stuff. We have accumulated, I believe, the fastest growth strategies that exist in the marketplace. And many of them cost zero dollars. In fact, I can usually grow companies faster if I convince them to turn off all the digital marketing, all the APM leads, all the Google ads, all of the SEO stuff. Stop spending money on that. And we put the time and energy towards warmer lead strategies that are out in the blue ocean.
Where there's tons of available business and very little red bloody water competition, like there is at the end of this cycle of people searching on the internet where you everybody's fighting over the coldest, shittiest, worst leads.
Okay, so if you want to go beyond what you just see in this PM trends report and you want to start innovating and being part of a community,
In person, not a bunch of Zoom calls, because growth and scaling happens in the room. Our mastermind is in person in the DoorGrow Mastermind. And yeah, it's expensive. But if I can help you offset it by adding 10 new units residually monthly, our program's paid for. And or if I can help you find another $10 per unit if you have 100 or 200 units, our program's already paid for forever. And that's why our program is there's no commitment.
It's month to month because we know we can offset the cost of the program usually within the first month or 90 days if you're willing to put in the work. If you need to add doors, if you're willing to put in the work, or if you already have a bunch of doors, if we can just find more operational costs. The three biggest levers operationally, financially, are people planning and process. And we have a system for this we call the super system. And this is where magic happens because your biggest expense besides taxes.
Which you can offset and eliminate is people staffing. And so if you can reduce those, also our program is easily worth it. Just consider that for the one, two, or three grand a month, depending on the level of the program you're in with us, we're like your cheapest team member that helps you make the most money. And it's an absolute no-brainer. So come join what hundreds of property management companies have realized. And the other thing I want to point out, what this doesn't talk about.
There's some invisible blind spots that every property management business I've ever looked at has. There's three foundational leaks. I've talked leaks I've talked about on the show previously. There are also six leaks that exist inside the pipeline. And most people are like, How do I grow? How do I turn on the leaks? And they're ignoring what comes after that. The hose. This is branding, reputation, sales pitch, pricing, all these things that will help clean up.
without even changing your current acquisition channels or lead sources, you could double the amount of deals that you're bringing on.
so if you would like to really grow your business, you want to grow quickly, you want to shore this up, you want to hear about our new door machine where we do the growth for you. I hire and train and manage a salesperson in your market. Then reach out to us at doorgrow.com and check it out. Now, today's sponsor, I want to read this message from our sponsor. We have an awesome sponsor today. It's super. If you haven't heard of Super,
You can check them out at higher super.com. Now, ring ring, who's there? Not property managers. Over half don't answer their phones during business hours. Hot leads calling you directly or going straight to missed calls. If you're spending time and money on growth, you need to actually capture it. That's where Super comes in. Super's AI receptionist sounds lifelike, answers 24-7, and is trained on property management. It even makes follow-up calls to leads you might have missed. Go to hiresuper.com/slash doorgrow and stop missing revenue.
Missed calls. Cool. So go check that out. Now, these are the key things. I again shout out to Peter and Jordan and all the cool people that were involved in putting this report together. I think this brings up a lot of the industry that pay attention to it a little closer to where we've been trying to push people over the last decade. I'm really excited to see some of the conversation that comes out of this and some of the innovation that comes out of this.
And yeah, and if you have ever felt stuck or stagnant, you want to take your business to the next level, reach us at dorgo.com for a free training on how to get unlimited free leads. Again, go to dorgo.com/slash leads or text the word leads to 512-648-4608. Also, we have a free community. We've migrated it from Facebook. It's now inside our own app. You can get the app by going to your app store right now on your phone. Do this right now.
Go to just search for DoorGrow and you'll see the DoorGrow Hub inside the App Store for iOS or the Google Play Store. Download this. There is a a space inside of this that is the new DoorGrow Club. And if you go to DoorGrowClub.com, it will take you to our new space inside of the DoorGrow Hub system that we have, our new community.
Most of the really cool places are locked down for our property management mastermind members or people that are in our PM Growth Launchpad, which is a little tool for that's really cheap, like 97 bucks a month to help some property managers get really good at cold calling and go create business right now. If you're struggling for doors, it's the most easy, consistent, I mean it's hard work, but it always works if you do it right. And growth strategy, and then in our mastermind, we have
more advanced growth strategies so you don't have to do the cold calling, that you can create leverage that once you build these growth engines, they just you keep a little fuel in them and they just keep running and they feed you more and more business. You can stack these, which is really awesome. And they really don't cost any money. It just takes time and it takes less time than doing cold lead marketing, like I told talked about earlier. So check us out, but go to DoorGrowClub.com
If you want tips, tricks, and ideas to learn about our offers and stuff like this, go to doorgo.com slash subscribe, subscribe to our newsletter, opt in. We would love to send you some cool stuff. And if you found this even a little bit helpful, don't forget to subscribe on whatever channel this is that you're listening or viewing this on and leave us a review. It helps us. We'd really appreciate it. It's a little way you could give back. Thank you. We appreciate it so much. And until next time, remember the slowest path to growth.
is to do it alone. So get a good group. Get in with a really good group of people that are focused on high paced growth. And so let's grow together. Bye everyone.