In property management, the 80/20 rule—also known as the Pareto Principle—essentially means that roughly 80% of outcomes come from 20% of causes. Applied to property management, this principle can show up in several ways:
- Tenants:
- About 20% of tenants often cause 80% of the issues, like late payments, maintenance requests, or complaints.
- This helps property managers identify high-maintenance tenants early and focus on strategies to reduce problems.
- Maintenance and Repairs:
- Around 20% of properties or units may require 80% of the maintenance work.
- Recognizing this helps prioritize inspections, preventive maintenance, and budgeting.
- Revenue:
- Roughly 20% of tenants or units often contribute to 80% of your rental income.
- This can guide decisions on which tenants or properties deserve more attention or investment.
- Time Management:
- Property managers often find that 20% of their tasks produce 80% of results, such as addressing tenant complaints or negotiating leases.
- Focusing on these high-impact tasks makes the job more efficient.
In short, the 80/20 rule in property management is about identifying the small portion of factors that have the largest impact—so you can focus your time, money, and effort where it really matters. Here How much do commercial property managers make in the US?