Property management professionals are always looking for opportunities to make adjustments and cut costs wherever they can in order to cut costs and continue to realize profits. Cutting back on expenses is never easy, but there are ways that you can save some money without having to sacrifice service or efficiency. Here are a few ways that you can start cutting costs in your property management business.
Maintenance and Repairs
Multi-family owners and property managers can benefit from implementing cost saving strategies such as investing in their own major mechanical machinery to cover in house maintenance and repairs. Investing in equipment like augers and pressure washers pays off in the long run when compared to the costs of hiring outside vendors. Using wood thresholds to seperate bedrooms from hallways can save on costs where carpeting can be replaced in smaller sections from obvious wear, versus less worn spaces, like bedrooms. Looking into rebids on contracts once a year or more, particularly with pest control companies, fire safety inspectors and alarm monitoring companies is always worthwhile.
Training and continuing education can also pay off in big savings as there is proven value in certified maintenance for things such as cleaning pools and retrieving Freon from compressors. Educational opportunities expose employees to new ideas and technologies and provide professionals the chance to network and share ideas about how to manage their jobs better, vendor references to look into or avoid and strategies for work related situations that are common to encounter. When looking into cutting costs, look into organizations that offer comprehensive designation and certification programs for multifamily industry professionals.
Considering long term benefits, there are others way to save and make money in property management areas. First is determining when a change in focus is needed and if new procedures need to be introduced allowing for a bigger bottom line. An initial investment in software and other types of technology will most likely be necessary.
Advertising Techniques and Know How
Look back on advertising techniques. In times past, print advertising, such as apartment guides, was considered the primary venue for attracting new renters. Today, more owners are finding a higher payback in online advertising. Typical renter demographics include a large number of technologically oriented renters ranging from 20 to 35 year-olds. The Internet has become the primary way of reaching this demographic of renters. It also gives prospects access at any time of day and allows them to retrieve more information than by telephone or in a printed directory.
Having websites where where callers can see property pictures, layout, and unit floor plans and learn about the community’s features is even a benefit for small owners. Websites can also be set up for renters to submit maintenance requests to the office and even to pay rent online.
When thinking of websites it is important to have a domain name that is easy to find. One tip is creating a domain name that is memorable and is associated with what you have to offer or the location of your property. This increases the likelihood of higher traffic volume to your site. For a property in Des Moines Iowa, for example, DesMoinesApartments.com is a likely domain name. However, domain names can easily already be registered, in this case a little bit of creativity goes a long way such as adding to the original idea like MyDesMoinesApartment.com allowing for your domain name to be available.
A valuable note when considering your website address, is making sure it is printed on all literature and advertising methods, including front entrance signs, to catch the attention of people driving by. Ensuring control of your domain name is also important. Several companies, like GoDaddy.com, offer registration for less than 10$ a year, allowing you to directly register your website rather than having a designer, who may stake claim of ownership with the domain name.
Submetering will require work on the property managers end but can have lasting long term benefits when it comes to cutting costs and saving money. It is becoming more and more common for properties to switch from including water and sewer in the rent to having residents pay these charges on their own. One study found that overall usage decreased by almost 30 percent when residents paid water and sewer charges directly. There are several ways to do this. The easiest method is ratio utility billing systems, or RUBS, which simply is allocation of the monthly bill. Slightly more complicated is hot water allocation, which involves estimating each apartment’s usage based on how much hot water they use. The most involved, but also the most accurate method of billing, is direct submetering. It’s important to note that owners should conduct more detailed analyses of these methods before making changes. In addition they should check local laws as submetering is prohibited by some local ordinances.
Lastly, miscellaneous income is gaining more attention from owners because it is usually pure profit. This can include contracting for phone/Internet/cable services, computer and printer usage, faxes, copies, door side garbage pickup, notary services, package delivery and mailing, and even dog walking. Polling tenants to see what services they want may be a good starting point for discovering new profit centers.
Multifamily properties offer a wide range of opportunities for investors of all sizes in both large and small markets. While large property owners and managers often benefit from economies of scale, small property owners can implement similar cost saving strategies to retain their assets value and remain competitive in the marketplace. By leveraging technology and other systems, commercial real estate professionals can help to improve properties value in this very active market.