Bryan Talbott works in real estate property management and is a contributor to several publications covering this field. In the following article, Bryan Talbott discusses 8 ways to regulate property management costs.
Macroeconomics and the cost of living have been a whirlpool of craziness this year. From groceries to gas to everything else, life is more expensive than ever before for every person, family, and business.
So, it comes as no shock to most that property managers across the country (and, indeed, the world) are feeling the weight of hiked costs for general operations, materials, labor, and borrowing. Bryan Talbott explains that landlords and management firms are tasked with finding creative opportunities to keep operating prices as low as possible while providing an exceptionally high service level.
Therefore, it’s natural for them to wonder how they can regulate property management expenses. Luckily, experts have identified eight tactics to lower and cope with the seemingly never-slowing costs.
Building and Maintenance Prioritization List
There’s no denying that some enhancements or repairs are more pressing than others. So, . Bryan Talbott says that property managers should consider creating a list that prioritizes essential jobs.
The cost of repairs is only set to increase due to supply chain delays and hiked material and labor expenses. Thus, dealing with time-sensitive jobs will put budgets to better use, delaying the less-than-urgent tasks for a time when costs normalize.
Vendor Service Extension Enquiries
When vendor service agreements are near their expiration dates, property managers should seek to extend them, according to Bryan Talbott.
In the current financial climate, it’s quite normal to see pricing increases of over 20% when establishing new vendor relationships and agreements. Therefore, landlords might be able to gain some cost relief by utilizing their existing relationships and negotiating an extension.
The Right Insurance Protection
Without the right coverage, property managers must foot the likely extortionate bill themselves if something goes wrong.
A well-thought-out landlord’s policy includes a wide range of features, like buildings insurance, financial protection against rent loss, and accidental damage coverage.
In contrast, the wrong policy will be unnecessarily expensive. Thus, Bryan Talbott explains that managers should consider whether they really need extensive coverage.
To do that, they should think about their investment’s risk. For example, an unfurnished, high-end apartment in a modern building bought outright is unlikely to require building’s insurance. However, a furnished student house with a mortgage will probably need all kinds of coverage.
Effective Applicant Screening Processes
It goes without saying that the best tenants are low-cost. But landlords can only find those who don’t mind paying for value with adequate screening processes in place.
Bryan Talbott says that many landlords forget that screening starts with the property’s advertisement wording, where the ad is published, and the questions they ask applicants.
High-quality screening procedures reduce the likelihood of tenant churn and increase the chances of housing people who pay their rent on time. However, Bryan Talbott says that all property managers should thoroughly comb their state’s landlord and tenancy act to avoid breaking the discrimination laws and legislation.
The best screening processes involve:
- Looking for errors and omissions or “enhancements” of the truth
- Checking for financial reliability, moral character, and conscientiousness
- Verifying creditworthiness and income
- Checking for consistent work history
- Screening only the most suitable
Limited Communal Amenities
Adjusting the capacity, changing hours, or closing community amenities like gyms and tools decreases the cleaning costs in these (typically larger) areas.
Landlords should teach tenants how to operate the necessary equipment and appliances within the unit so they don’t unwittingly create conditions that could cause water damage, insect infestations, mold, and more.
Many experts suggest reminding tenants how to care for the driveway, wooden flooring, and lawn too. A little communication goes a long way to increase their respect for the property.
Bryan Talbott says that management teams should feel heard and satisfied with their positions and responsibilities.
Employee retention should be of utmost importance as pay increases and labor shortages continue to wreak havoc on employment. Company veterans can help control the cost increases related to finding brand-new talent.
Property Management Software
Finally, landlords and firms should invest in high-quality property management software to ensure expenses, tenants, and acquisitions are properly recorded. This will save a boatload of money in the future on unnecessarily high administration fees.