Let’s say you are already overworked, understaffed, and touching the limits of a stretched budget with your multifamily portfolio. As the comedian, Ron White opines, “Let’s just say.” Now what? Well, JW, what do you have to add to my already overflowing as-tall-as-the-wall-of-China-list-of-things-to-do, brimming plate?
Hopefully, a few things will lighten the load by freeing up some dollars and, eventually, staff time. As with much of what I write for my audience, I hope that in each article, you find at least one actionable process, procedure, or idea worth advancing within your rental property or portfolio. What you measure is what improves. Consider:
A Cost Cutting Strategy that Counts
Landscaping is an asset. It gives character to a place and makes it distinct, often pleasurable. But over-growth can be unsightly and costly. One, as a negative attribute, and two, as a money/water/labor waster.
It can be fun cutting stuff down, but there is more to sustainable landscaping than just getting out the chainsaws (safety glasses required here). Sometimes the value proposition is merely maintaining current topsoil efficiently (read eliminating erosion).
Right-sizing landscaping is utilizing your grounds budget to increase value, aesthetic value, visual value. Here is a quote from the University of Minnesota Sustainable Landscaping Urban Design Information Series:
“The key to creating a sustainable landscape is understanding the design process is first. ”
Learn more at the Sustainable Landscaping Urban Design Information Series website. Another website with useful information is Sustainable Landscape Designs.
Real Estate Tax and Utility Bill Auditing.
Check it out. Really. View this cost-cutting strategy without the qualifier statements; our company is too small, too big, or our buildings are too old. I’m not referring to RUBS (Renter Utility Billing System). I am suggesting having property management perform a complete audit of utilities paid by the property- all of them;
- Trash pick up (acts like a utility)
- Internet services
- Electronic security services (gating, cameras and electronic locks)
Utility bill auditing services are very fragmented, and I am unaware of an industry leader to recommend. If you have one that provided you with excellent service, leave a comment to let us know. For real estate tax auditing services, stay local. Start with your accountancy firm and request a referral with this specialized expertise in this area.
Submetering is not always a good idea. Think long-term when contemplating this. It has an equal number of pros and cons that can fall hard in one direction- sometimes an operational asset. Submetering benefits are property-specific. Therefore, consider its use on a property-by-property basis.
Technology Can Helps You Cut Costs
Technology is another tool you can use to cut costs; the key is to find a provider that can point to something they deliver that will help reduce costs. Technology platform provider 365 Connect is one company that knows the industry well, since 2003, they have exclusively served the multifamily sector, winning a mountain of technology awards along the way.
The 365 Connect platform stands out as a cost-cutting machine. They target the resident life-cycle; this is where expense and revenue intersect. They have built a simple marketing machine to syndicate leasing data to high traffic housing search engines, social media, and classified sites, all from your own community branded website, which works on any device (desktop, mobile, tablets).
What is cool about their platform is every piece integrates with social media, eliminating redundant log-ins. They deliver a cost-effective bundled package for less than you will pay one listing service. This platform reduces online marketing spend, but it cuts labor costs through pure automation. Be sure to visit the 365 Connect website.
Gutter Cleaning and Water Flow
Clean All Gutters – for real. And downspouts. Check to assure every gutter has a splashboard directing water “away” from the building. Depending on the size of the development, this cost-cutting strategy could take one hour or one day. Gutter cleaning, while seemingly a small item, provides an excellent long-term payoff. Inspect gutters for functionality and to assure they are securely attached.
Inspectapedia is all about building and environmental inspections. Here’s a link to multiple articles relating to water entry and water damage to buildings.
Cross-Training Your Employees is a Cost Savings Idea That Works!
What’s our most significant asset? Our people and employees. There is nothing better than an in-house mentoring program for a property management company to “connect” our best people with leaders inside the company. The benefits of cross-training far outweigh the costs.
Mentoring dips the up-and-comer into the knowledge of senior management. One thing that disappears over time is institutional knowledge when longstanding employees depart for whatever reason. Mentoring allows part of this knowledge base from employees, leaving the company to remain by instilling your companies particular traditions, tradecraft, and operational strengths into those mentored.
Implementing an effective cost-cutting strategy comes from having a single-voice message across all company communication channels. With mentoring, the one-on-one guidance of senior management instills knowledge into the next generation of leaders.
Where is the cost-cutting strategy here? In reduced turnover, higher staff buy-in to the message and the genuine feeling of inclusion of in-place staff. Here is one such website link specific to property management and mentoring.
Perhaps I have stretched a bit by saying these concepts are “easy.” Each recommendation requires an initial investment of time to consider their viability for your assets and the ability to commit capital and contemplate their use in current circumstances. However, if one idea meets the implementation test, I submit that the long-term benefits will outweigh the initial costs.
Consider the implementation of one or more of these cost-cutting strategies by doing some serious brainstorming. Start with the list above and add other costs-savings opportunities that fit your property or portfolio. Write down the item or tasks, the costs, and potential benefits.
Until you write it down, it’s not real. I say this because words on pages (electronic pages, paper, text, IMs) can add value when they are shared. With others within your organization. Those thoughts and ideas we keep between our ears need an audience if they are ever to see the light of day.
Consider performing a mini-SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) of each costs-savings strategy that makes sense for your assets. A short-list of viable options should materialize pretty quickly. Divide the recommendations into immediate, short-term, and long-term cost-cutting strategies and deploy accordingly. Implement the outcomes that have the best opportunity to blossom into reality. What you measure is what improves.
Cost-cutting strategies in property management require applying the right solutions to the asset in front of you. It means taking the asset-centric approach means it is better to implement one quality solution than three fly-by-nights to say you accomplished something. There is no replacement for the experience of a highly trained professional property manager or good common sense.
John Wilhoit is the author of the best-selling book on rent roll analysis: How to Read and Rent Roll. See also the companion guide to measuring the quality of rental income: Rent Roll Triangle. Find JW’s Podcast here.