The Importance of Establishing an Annual Inventory in Property Management

Importance of Establishing an Annual Inventory in Property Management

Taking regular inventory is critical for having proper control over assets. This also holds true for property management, who not only have to keep track of inventory but also need to implement strategies for maintaining a respectable return from their assets. Properties should have a policy of conducting an annual inventory, which will provide the property manager adequate information to review and control the assets. Here are the main advantages of the annual property inventory.

Estimating Replacement and Insurance Costs

Inventory will provide detailed information about assets that includes supplies, fixtures, and furnishings. This information will help the property manager in making a decision about the type of insurance required and the coverage limits. Secondly, for taking insurance itself, you need to provide an accurate inventory of the assets to the insurance company. Failure to accept the proper coverage will mean increased risks, while paying for coverage on nonexistent assets will be a waste.

Reviewing each unit annually for the inventory will also help the property manager in detecting potential issues early, and repairs can be done immediately to prevent expensive breakdowns. For instance, timely cleaning of the HVAC unit could mitigate costly damages and replacements. While taking inventory, the usual checklist for units should include:

  • §Furniture
  • §Appliances
  • §HVAC
  • §Bathroom fixtures
  • §Window treatments

If the units are fully furnished, then convenience items like dishes and linens will also be included.

Preserving the Image of the Property

Appliances and property tend to become damaged, succumb to time and decay, or they simply seem to disappear over time, especially in the high frequent areas. This will make the property look quite shabby as years go by. Regular inventory will help property management detect items that are missing or damaged. Replacement of damaged or old items such as trash receptacles, flowerpots, and decorative fixtures can improve the image of the property substantially. With regular inventories, the property manager can figure out items that require frequent replacements and repairs. Such items can be replaced with things that are more durable, or they could be shifted to places where the traffic is not heavy.

Control over the Budget

Annual inventory covering the whole property will provide critical information that can be used for maintaining better control over spending and overall budget for the next year. Costly items such as digital devices, maintenance tools, and office equipment should be tagged with identification codes that will help in monitoring and tracking them more closely. Regular inventory will also promote a better program for asset management, which will be able to identify wasteful spending. Inventory will also help property management to record losses while filing tax returns and valuable data will be available for making more accurate budget estimates.

Forming a policy and introducing an effective system for taking inventory every year has many advantages for property management. The property manager will be able to exercise tighter control over the budget, and reduce wasteful spending which in this recession, could be the difference of creating strong financial health or insolvency. Damaged and old stuff can be repaired or replaced in time to avoid and more expenditures and to avoid a reputational hit, while the image of the property can remain unblemished. 

Handling Security Deposits for Property Managers

Handling security deposits for property managers

Almost all property owners like to have a security deposit from their tenants. This deposit is used for repairs if the unit is damaged by the tenant. The money is kept in a separate account and returned at the end of the tenant's lease. However, the security deposit has always been a contentious issue between tenants and property management or property owners.

In certain instances, where the property owner has not returned the deposit, the court has awarded twice the amount of the deposit as damages to the tenant. Therefore, the property management has to be very careful while handling matters concerning security deposits and here are some pointers that can make this task easier.

Know State Laws

Property management should be clear about the state laws regarding following aspects:

  • §How much amount can be collected as a security deposit
  • §After receiving such a deposit, how fast it should be deposited in the required account
  • §Whether any interest has to be paid to the tenant, and how such payment should be made
  • §Whether any reports need to be generated regarding the deposits

When it is a residential property, all state laws are clear about equal treatment, and being nondiscriminatory in charging these deposits.

Do not Categorize it as a Type of Rent

Security deposits have to be returned to the tenants at the end of their lease provided they have not caused any damage. Therefore, they should be treated as a deposit and not categorized under rent.

Charging Less is not a Marvelous Idea

Some property managers think of charging a lesser security deposit than what is legally allowed, in order to attract more tenants. However, this is a big risk, and it can cause many issues in the end, which can cause more loss compared to having lesser tenants. By charging an adequate security deposit, property management can:

  1. Weed out prospective tenants who are financially unstable
  2. Create a hedge against default in rents
  3. Create a protection against unannounced departure of tenants

Open Separate Trust Account

The bank where the amount is deposited, should know the money is for escrow or trust funds. Such funds are not forfeited, even when the property owner or property management is encountering legal problems. Secondly, even when the state laws permit mixing the security deposit amount with a rent account, it is always better to open a separate account, since that will keep the amount safe from accidental spending.

Record it on Video

A security deposit is the most contested issue, and therefore it would be wise to take a video recording of the condition of the unit when the tenant is moving in, since this provides strong evidence if the tenant takes the matter to court. In fact, the tenant can be provided a copy of the recording or a link to the video, which will help in resolving any issues, even before they start.

Inform the Property Owner about Policies

The property managers should inform the property owner about the policies adopted regarding security deposits, since there should not be any inconsistencies in this regard, when issues arise. And they most certainly will!

Going Green in Property Management

Going Green in property management

More and more people are starting to appreciate green initiatives, and certain tenants are not averse to paying more rent for properties that are focused on saving the environment. However, property management still has to tread carefully before committing to going totally green, as there is a substantial percentage of people who would not want to be inconvenienced, or pay more for green properties. Green initiatives can be brought in gradually, and it can be implemented in certain properties that have a local demand for such measures. Here are certain steps that can help the property implement green solutions.

Metered Utility

Installing equipment to meter utilities can help property management keep track of consumption, and maintain efficiency standards. This might attract a proactive crowd of tenants who have similar ideas for protecting environment and saving resources. Prospective tenants who search for such properties will be more inclined to manage their energy usage optimally, which will bring down shared costs of utility in apartment complexes.

Focus on Recycling

Start with the property management office, where program for recycling paper and ink cartridges can be initiated. Make the recycling program known to everybody, by displaying a prominent sign. Take this initiative further by encouraging tenants to do the same by placing convenient bins that will help to recycle cardboard, paper, aluminum, and plastic. If the recyclable material fetches money, it can be used towards purchasing eco-friendly lighting and other environmentally beneficial initiatives. 

Green Lighting

Steps should be taken to phase out incandescent lighting, and switch to CFL and LED lamps, which are, much more energy efficient. Incandescent lamps are available cheaply, as they have been overstocked, but they work out more expensive in the end. In fact, many prospects now ask the property manager, why olden type bulbs are still being used, when they are touring the property.

Overall Changes

There could be certain practices existing on the property that may seem not so eco-friendly, and this might discourage "green" prospects. Here are certain aspects to consider, when you are trying to build a green reputation for the property.

  1. oIf the property has a nice pool with beautiful surroundings, it is definitely going to attract prospects. However, make sure there is not any strong odor of chlorine or any toxic chemicals emanating from the water. Such odors might indicate, property management does not care about what they use to keep the pool water clean.
  2. oAnother major attraction for tenants in any property is the landscaping and the well-manicured lawn. However, make sure the service vendor sticks to sustainable eco-friendly practices. This would include use of proper fertilizers that are mainly organic, growing only those plants that need lesser water, especially in arid areas, and energy-efficient equipment and vehicles.
  3. oWhile inviting prospects, a delectable layout is always welcome on the refreshment table. However, make sure to avoid Styrofoam cups and plates, since that does not provide a green impression.

Taking care of these smaller details will make a sunny impression on prospective tenants, who are looking for eco-friendly properties. Additionally, make sure to communicate and advertise your stance on the environment through newsletters and Facebook postings. 

Providing Multiple Options for Paying Rent is a Clever Strategy in Property Management

Providing multiple options for paying rent

One of the most important jobs of property management is to get tenants to pay their full rents on time. This is quite a tricky task, even when you have a friendly reminding strategy and stringent measures in place to punish delinquencies. Certain studies that were conducted, found that tenants were more likely to pay their rents on time when they had access to multiple and convenient payment options.


Digital Payment Options are Preferred


These studies also revealed some interesting facts about the preferences of most tenants. Apart from having multiple payment options, most tenants now prefer the convenience of online transactions and ability to pay their rent through mobile channels. The study revealed the emergence of the following trends:


  1. More than three quarters of tenants use more than one payment option every month
  2. Tenants feel it is important for them to have multiple options for getting their bills and making payments
  3. Tenants who were provided with the facility of electronic billing, found they were able to manage finances much better
  4. People who pay their bills through their mobile phone has increased by about 50% in the last couple of years
  5. More than 70% people, who are online even once a week, prefer to pay their monthly bills online.


This study has revealed the shift in preferences on how people choose to pay their bills. Therefore, it is important for property management to provide the options that their tenants now prefer. The study also revealed that tenants who paid their rents online were much less likely to be late with their payments compared to tenants who paid the rent through the mail or any other offline method. Hence, the best strategy would be to provide not only online payment options, but also to encourage tenants to use this mode of payment. 


What Tenants think of Online or Mobile Payment Options?


It is interesting to note, why tenants like to pay their bills through online or mobile channels. According to the study, more than half the people said that they preferred these payment options since they saved time, while 45% people preferred them because they could access it anytime and from anywhere. However, the majority agreed that electronic billing and online payment options were very convenient, considering their busy schedules, and it enabled them to make payments when they were on the go.


Additionally, over 90% of the tenants like paying their rent online, because they were able to receive email reminders when their rents were about to be due, and were able to attain an immediate acknowledgement when they made the payment online.


Making Life Easier


From the point of view of property management, online options have several advantages, apart from the fact that it makes tenants pay their rents on time. Once the system is in place, the billing process and payment procedures are streamlined, hardly requiring any effort or time of the administrative staff. Hence, from every angle, property management can greatly benefit, when they are able to provide multiple online and mobile payment options.  


On top of this, property management was able to keep less people from trafficking in and out of the office. Convenience counts!

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.


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. 

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