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Proactive Approach in Property Management

proactive approach in property management

Many tenants are under the impression that property management starts acting only when an issue pops up, and therefore they should be available any time of the day or night. Most tenants are highly sensitive if their issues are not addressed immediately, which could be anything from a noisy neighbor to peeling paint. Unfortunately, tenants do not realize that property managers have a very hectic schedule, where they take care of daily tasks, do administrative work, and conduct inspections to prevent issues before they start affecting tenants.

Therefore, it is necessary for property management to educate tenants about priorities, and in exercising discretion about what is considered urgent and knowing about issues that can wait.

Emergencies

Tenants should know what would constitute an emergency that would require immediate action from property management. Such things would include fire, pest or mold infestation, and lapse in security, water damage, and severe structural damage. All this situations call for immediate intervention on the part of property management to correct the issue.

Do Not Delay

At the same time, delaying in complaining about any issue is not going to help property management. For instance, if the tenant notices an issue with the dishwasher, it can be reported immediately, instead of delaying the complaint for a few days and waiting for an appropriate time. When the matter is delayed, property management will not be able to contact the service contractor on time, and could end up with extra charge for coming on weekends to repair the problem. If the parts are not available, it could cause further delays. Hence, it is best to report issues as soon as possible, but wait for them to be fixed according to their priority.

Expecting After-Hours Service

Some properties provide 24 hours resolution service through a call center. However, the staff is mainly trained to resolve simple issues like providing information about property rules, pool hours and so on. The call center will of course relay urgent issues to property management, but tenants cannot expect immediate resolution of issues like noisy neighbor or a dog barking, after office hours. Calling repeatedly is not going to solve the problem, and the tenant might not even receive a return call.

Service and Responsibility

Even though excellent customer service should be the priority for property management, the responsibility of tenants cannot be ruled out. The property manager is not expected to bend rules to resolve a problem that has been brought on by an irresponsible tenant. For instance, when a tenant forgets to pay for utilities, property management is not required to address the problem, until the bills are paid.

Establish Guidelines

Property management will have to take the initiative for managing all types of situations by taking a proactive approach. Establish guidelines for reporting issues and complaints, and communicate to tenants when the various services will be available. It is important to be consistent in delivering what is promised, as that will promote goodwill and build better relationships with tenants. Additionally, review service contract policies and adopt measures to create a better work environment and at the same time resolve problems quickly and efficiently. 

Property Management During Leasing Season

property management during leasing season

There are certain months during the year when comparatively more people are seeking to rent suitable apartments. During these months, property management will encounter more prospects visiting the property, and there might be existing tenants wanting to renew their leases. Therefore, property management should implement a two-pronged strategy of keeping the property ready for visiting prospects, and committing resources for encouraging renewal of lease from existing tenants.

During this crucial time property owners, administrative staff, and the property management team should work collectively to meet the set or ingrained goals.

Maintenance and Repairs

The first step would be to check for potential issues in maintenance and getting them serviced or repaired. This could present an excellent opportunity to interact with your tenants, build better rapport, and retain outstanding tenants. Here are certain points for implementing maintenance checks:

  1. Most maintenance issues are to do with plumbing. Hence, inspect tubs and sinks, and check for dripping or leaking faucets. Visually inspect plumbing fixtures for rotting gaskets and leaks.
  2. Inspect doors and windows to check the caulk and weather stripping. If it is worn out or causing leaks, immediately repair the issue.
  3. Fire protection devices such as smoke alarms should be tested and their batteries should be replaced.
  4. Air-conditioning system is another major area where various issues are possible. Before the onset of warm season, test the air-conditioning in each unit.
  5. Check for any signs of possible mold, fungus, or pests, and take necessary measures to prevent an infestation.
  6. Check the overall structural integrity of the building, roofing, and the condition of the common areas.

Online Solutions

While proper maintenance and repairs will mostly take care of tenant retention, offering streamlined online solutions for rental processes will attract new tenants. Many communities are taking advantages of technological advances and now offering better online solutions for rental processes. It is not just about providing the virtual capability of paying the rent online, but the complete process.

Modern tenants are looking for e-applications, and other online methods that are convenient and help save time. Approval methods involving paper processing may not be appreciated by most people, since there are quicker and more convenient ways of doing these things now. Hence, offer a complete solution to prospects, where most of the things are taken care of online. 

Take Care of Your Team

Whether it is on-site or off-site maintenance team, the administrative staff, or the property manager, they all should be adequately trained and prepared before the onset of leasing season. Review equipment, supplies, tools, and make sure adequate staff is available to meet any type of situation. Consider, extended work hours during the leasing season, since you never know when you will need personnel for additional work. This would be an extra investment, but a well thought of strategy for having more staff on the premises during these times could pay off well.

Lastly, property management should keep in mind that first impressions count a lot, and therefore before the start of the leasing season it would be a marvelous time to upgrade or update the property website and social media pages. 

Property Management―Frills vs. Size

property management frills vs. size

Requirements of various types of tenants keep changing, and it is important for property management to keep on top of the current trends. An emerging category of young professionals is taking prominent position in the property market. There are many professionals looking for proper accommodation, especially near commercial areas and in metro cities. The interesting fact is that most of these professionals are willing to trade size of the apartment for frills and better amenities.

The Trend

According to statistics, the average size of the typical apartment in major cities has been steadily reducing for the past five years, and most professionals are more concerned about amenities and other facilities provided in the units, compared to living space. In many modern apartment complexes, there is the trend of allocating quite a bit of area to micro units, which shows that living space is becoming smaller.

Even though living space area has been reduced, rents have steadily increased, especially in properties that provide better amenities. Young professionals and even families are willing to pay higher rents, provided there is parking space, Wi-Fi connectivity, fiber optic broadband, and better satellite television or cable connection. 

This is because the poor banking situation has forced many people to rent. It is more difficult to obtain a loan nowadays and certainly a few years after the Alan Greenspan financial crisis.  

Small units, particularly in urban areas are very much in demand, as many professionals are relocating to cities with better prospects. It is not only the amenities provided in the units making a difference, but also the jobs, facilities, entertainment, and shops available in the immediate vicinity. Secondly, stringent standards implemented for mortgage (briefly mentioned above) and rising prices of new homes has reduced the number of homebuyers and increased the number of renters. This has put added pressure on cities, since the demand for accommodation keeps increasing. 

The Proper Focus

All these statistics and trends provide important clues for property owners and property managers. The focus should be on increasing amenities and developing better facilities that young professionals are looking for in apartments. Investing in better storage space within the units, and providing better Internet connectivity would be a good idea. Property management can also think of renting the ground floor areas to shops and small businesses that will make it convenient for tenants to shop and access important facilities and services.

If the property is relatively old and the living space of most units is quite large compared to modern standards, then strategies should be in place to facilitate sharing of the apartment unit by multiple renters. This would involve careful drafting of the lease agreement, where the responsibility of the rent is shared equally by all members renting the single unit. Many young professionals are not averse to sharing their living space, provided there are separate bedrooms.

A Long Commute is not Appealing

Property managers facing increasing vacancy rates can think of revamping their marketing strategy to attract young professionals. Investing resources for this category of tenants promises solid returns, provided the property has a sparkling location, and is near offices and commercial establishments. Most modern professionals are now looking for accommodations near their place of work, and do not want a long commute. Property management can carefully consider all these factors and implement strategies to tap into this emerging category of tenants.

Improved Occupancy Rate in the Property Market

improved occupancy rate in property market

Many property managers and owners feel that new constructions and increased supply of rental units is going to create improved supply and bring the rent down. There are also concerns about increased vacancy rates, as people might want to move to newer units. However, there is no need for panic, as statistics prove otherwise. Even though close to 200,000 new units have come into the rental market, the occupancy in existing units have not decreased, and the rental rate has continued to grow and seen the best levels.

In fact, the occupancy rate has been 95% for the second quarter of this year, and growth rate for rent is 2.4%, which are very promising signs. Hence, this time, even with new supply of units the property market is flourishing. Here are some of the reasons why it is different this time.

Diminishing Popularity of Single Homes

Even though rate of construction of new apartments for last couple of years has remained almost the same, the demand for apartments has increased. This is mainly because many families now are not eager to move to single homes, and prefer apartment units. Secondly, the rate of homeownership has also fallen considerably since 1995. This indicates there is lesser supply of residences, since homeownership is providing costly for many people. Even though rent may be high, people prefer to stay in apartments for a longer time, because the cost of owning a home works out to being even more of a financial burden.  

In addition, it is easier to move out of an apartment than a home. On top of this, the recession still continues.

Ownership is Scary

People have not forgotten the foreclosure crisis, where homes and equity were lost within minutes. Many people are now much more cautious and do not much care about homeownership. Secondly, families now prefer living in apartments compared to suburban homes, since they do not want long commutes and prefer to be near workplaces and play areas available at the core of urban areas. Additionally, most of the people seeking accommodation are young professionals, who are repaying their student loans. This means, they do not have the credit rating required for down payments on new homes.

Median salary ranges of America have continued to decline. The American economy is nothing to smile about and this is reflected in all those renters across the landscape.

Supply has Still not Caught Up with the Demand

During the recovery period after the recession, financing home construction was difficult, which means deliveries were late and inventory rate increased. Secondly, even though there is growth in new construction now, it has not caught up with the increased demolitions of obsolete structures. Additionally, many structures were converted to senior housing and condominiums, which increased the divide. Therefore, the market has not really caught up with the increasing demand, as can be clearly seen from the higher occupancy rates of some of the metropolitan areas.

New Apartment Units are Class a Category

Most of the new apartment units are in the top pricing bracket, since they come under Class A urban core category. This means only a few renters will be able to afford an upgrade to these expensive apartments, and only the new upwardly mobile crowd can think of renting these new apartments. Therefore, there is still a heavy demand for existing Class B and B+ units, which are generally more affordable by a vast section of society.

Avoiding Major Mistakes in Property Management

avoiding mistakes in property management

Property management is a challenging job and can be hectic at times. There is ongoing administrative work to be managed emails and phone calls have to be answered, and various marketing strategies have to be implemented to make sure the vacancy rate stays to its minimum. In such a frenetic schedule, chances of committing certain sizeable mistakes are high and they can prove costly. Here are some of the major mistakes that are quite common in this industry, and they must be avoided.

Avoiding Routine Maintenance

When property management is trying to keep costs to the minimum, it becomes quite tempting to ignore minor maintenance issues, such as leaking faucet or servicing of a water heater and so on. However, this is a major mistake, since a small maintenance issue can quickly turn into a major repair where you will have to spend more money on something because of your dereliction. For instance, a leaking faucet that is not attended to, can soon give way, and cause flooding in the unit, which is so much more expensive to set right. Hence, it is better to be proactive and address maintenance issues right away, even if they seem minor.

 

Unwilling to Increase the Rent

Inflation is the bitter reality, and rising costs affects everybody. However, property management cannot ignore raising the rent, just because of fear of increase in the vacancy rate. It is imperative to maintain a decent return on investment, and raising the rent is inevitable at some stage. However, the new rate should be comparable to the rent charged by other similar properties in the area. Secondly, when you plan to increase the rent, provide sufficient notice to tenants.

Not Implementing Terms and Conditions of the Lease

It is quite difficult for property management to maintain excellent relationships with tenants and at the same time enforce all the terms of the lease agreement. Most property managers tend to take the easier route of being the "nice guy", and overlook things that are in violation of the lease. Such an attitude can land property management in major trouble and legal issues that can work out quite expensive.

For instance, not charging penalty fees for late rent or allowing pets when it is violating the lease agreement. The best approach is to maintain cordial and friendly relationship with tenants, but being firm when the situations demands it, and keeping to the terms of the lease at all times.

Ignoring Important Property Expenses

Property management usually has to walk a tight rope by managing expenses, and keeping costs to a certain percentage of the rent charged. This often leads to cutting corners when the budget becomes tight or certain expenses have gone beyond the expected amount. However, certain expenses such as insurance and taxes are paramount, and a property manager cannot afford to ignore them. If the taxes are not paid in time, it will result in not only penalties, but also various legal issues.

The same goes for homeowner's insurance as well. It will be frustrating to know (and possibly a game changer) that insurance was not in force or in effect after the fire department just finished putting a fire out in the complex.    

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