Designing a property management bonus structure in 2024 feels like decoding a secret recipe that's key to scaling your company these days. With the recent labor squeeze and a dizzying 33% employee turnover, retaining your company's talent is pivotal now more than ever.

So, the secret sauce to keeping the team glued together? A solid bonus structure! According to INVL asset management's survey, 73% of your employees would stick around long term in your team if given financial incentives in the form of bonuses.

However, bonuses on its own aren't the solution to happy employees. 45% of property managers find it difficult to retain workers despite offering bonuses and good salaries. Largely due to the exhaustion from long hours and unmanageable workloads.

That's where a good tech stack that supports your employees comes in. Thanks to the advent of AI automations in property management, PM teams are now saving 3 hours per day per agent.

What are the KPIs When Evaluating Your Team for Bonuses

A good bonus structure is not about money; it's about creating a work environment where your team can thrive.

Bonuses are not just extra zeros on your bank statement. They're a big, fat "thank you" from the boss, a solid pat on the back saying, "We see you. We value you." In a field where your team members' efforts rarely get acknowledged by residents and owners, that recognition? It's gold.

Typically, property management bonuses are structured around the following metrics:

The Bottomline / Profit

Forget the old school top-line focus; it's all about rewarding the magicians who maximize profits while keeping costs in check. This golden metric ensures your team's goals sync perfectly with the company's financial health. This metric incentivizes property managers to focus on cost control, efficiency, and overall profitability of the properties they manage, aligning their incentives with the financial success of the business.

Number of New Doors

Spotlight on the trailblazers who bring fresh units under your wing. Helping them keep their eyes on the prize can be a positive motivator. Don't forget bonuses for coordinators who are managing those doors. New doors = More Bonus.

Occupancy Rate

Hand out kudos for keeping the occupancy rate north of 95.5%. It's about celebrating those who keep the lights on, and the rooms filled, setting the standard for industry excellence. This is where strategy meets stamina.

Rent Collection

Rewarding the savvy ones who keep overdue rents to a minimum is a no-brainer. It's about highlighting the importance of cash flow without turning it into a wild west of receivables. This challenge is all about keeping delinquencies in check.

Lease Renewals

These are the folks who make tenants want to stay, not just pay. By rewarding lease renewals, you're building a community that lasts. Managers are incentivized based on the percentage of residents renewing their leases, either annually or biannually, encouraging efforts to retain tenants.

Resident Satisfaction

This one is for your virtual assistants who answer inquiries, and resolve maintenance tickets daily so they get incentivized with the rest of the team as well.

Diving into these metrics helps sculpting a team culture that's geared for growth and efficiency. Let's turn these Key Performance Indicators into standing ovations and watch your team and properties flourish.

Decoding the Property Management Bonus Structure: What's the Magic Number?

In the USA, leasing agents may receive bonuses ranging from $50 to $500 per lease, with quarterly bonuses based on meeting specific criteria like occupancy rates and renewal rates. In property management sector the average bonus percentage is around 12.9%.

Leasing Commissions: A flat rate of approximately $175 for each lease signed strikes a balance, offering a tangible reward for efforts in securing new tenants.

Renewal Bonuses: With an average of $100 per renewal, this approach fosters a team effort in maintaining occupancy rates, rewarding both office and maintenance staff for their contributions to tenant retention.

Quarterly Incentives: These incentives are pivotal, focusing on a myriad of performance metrics. By tying bonuses to a percentage of salary (8%-10% for site teams, 20%+ for Regional Managers), companies can drive performance across various dimensions, including NOI growth and customer satisfaction.

Maintenance Bonuses: Recognizing the critical role of maintenance staff with a $350 quarterly bonus, plus perks for exceptional service, underscores their contribution to the property's appeal and functionality.

Annual Turnover Cost Bonus:  

This approach allocates bonuses based on the efficiency in managing turnover costs, promoting a collective effort to enhance tenant satisfaction and reduce move-out rates.

Tenant Retention Strategies: Tenant retention bonuses may be based on metrics like lease renewal rates or resident satisfaction levels. By rewarding property managers for successful tenant retention efforts, companies aim to maintain high occupancy rates and foster long-term tenant relationships.

Total Fee Income Percentage: This metric motivates managers to excel across all facets of property management, from leasing to maintenance and customer service.

NOI Growth Focus: Special bonuses for key positions like Managers and Assistant Managers underscore the importance of NOI growth, encouraging a collective effort towards financial health. Calculating the NOI quarterly (every 3 months) is considered a fair assessment to give a bonus on average of $150 to the Managers and AMs meeting NOI goals. Some property management companies have a monthly evaluation of NOI and get on average $50 per month as bonus for meeting their NOI goals.