Creating (and sticking to) a budget can be a delicate balancing act. The financial health of your property likely depends on your ability to meet occupancy goals and increase revenue, all while decreasing costs — sometimes in rapidly changing market conditions. Having the right tools and software at hand, as well as deciding on clear business objectives, can be the difference between a budget that falls flat and one that works hard for you. Here are five strategies to implement as you assess your spend for the coming year.

1. Look at the big picture

Determine how you and your property fit into your larger organization and drive overall business goals. Understanding this will help you articulate your own goals to your ownership for your property so you can more effectively plan for income and expenses and create a clear plan of action for reaching your objectives.

Keep in mind that, of course, increasing your renewal rate is important, and you should consider a reasonable target for your property. But think about what other metrics will help advance your goals. For example, do you need to increase awareness for a lease-up? Partnering with a local business might help you achieve that goal. The budgeting process is a good time to explore new initiatives to see if they fit into your larger objectives. If you can make a solid business case for a new initiative, include it!

2. Do your research

Get a clear understanding of your market (and any potential changes), your property and your competition. Factors to consider include:

• Are there new properties launching in your area? 
• Is a company’s headquarters moving in or out of town? 
• What major renovations will your properties undergo in the next year?
• How is your occupancy compared to the market average?
• What is your price per square foot compared to the market?
• What types of amenities, concessions or incentives are being offered in your market?

To get a better sense of market rate rent by region or ZIP code, consider downloading a free report from the Zillow Observed Rent Index (ZORI).

Any number of factors can affect your property management annual budget. If you haven’t already, perform a SWOT (strengths, weaknesses, opportunities and threats) analysis on your property and use it to identify the strengths and weaknesses within your organization and opportunities and threats outside your organization. This exercise will help you determine where you need to allocate funds as well as opportunities to increase revenue.

3. Choose the right advertising model for you

Think about which advertising model is right for you, subscription or pay per lease. Both are performance-based solutions, but there are differences to consider:

Subscription adopters — like Zillow Rent Connect — pay a flat monthly fee regardless of the number and origin of leads. There are three core packages to choose from, all of which include exposure on Zillow, Trulia and HotPads, as well as content-rich listings, immersive 3D Home tours and dedicated customer support. You can decide if an upgraded package is right for you based on where you want your ads to appear and the level of reporting you’d like to receive.

Pay per lease users — like Zillow Lease Connect — only pay for a signed lease after confirming Zillow is at the source of that resident’s first contact.

Before you settle on your final property management budget, download our budget tool and experiment with different advertising models to see which option will deliver the results that matter to you.

4. Use trusted software

Invest in a trusted property management software solution to keep the team organized and using the same data. A single, integrated solution reduces the risk of human error and lets you easily adjust projections where and when you need to. There are several well-known companies, such as RealPage or ResMan, that offer solutions. And Zillow Group’s pay-per-lease solution, Zillow Lease Connect, works with many of these property management systems to provide you with first-touch lead attribution.

5. Give yourself breathing room

Think through your most likely scenarios and set aside funds to cover unexpected costs. Despite your best efforts, your advertising campaign may fall flat, construction might run behind or a property could need significant repairs. Plus, market conditions can change overnight. Having a cushion can help you react quickly.

Developing a viable property management budget is a process. It can be beneficial for you to do your homework and create a plan, and then check on your progress regularly. Set incremental goals so you can measure your progress and make adjustments as needed.

Want to learn more about Zillow Rent Connect, Zillow Lease Connect or other ways Zillow Rentals can help? Leave your name, email, and phone in the form above and someone from our team will be in touch.