A Terrific Procurement System can Improve Profitability for Property Management

A Terrific Procurement System can Improve Profitability for Property Management

Property management has to procure services and products frequently for its properties, and if this system is non-standardized and inefficient, it can take a huge chunk out of the profits. Cost of services and products has a major impact on the overall profit margin, and therefore it is critical to have a procure system that not only reduces costs but also deliver quality goods. Here are certain points that can help a property manager devise afantastic procurement strategy.

Have a Separate Purchasing Department

Instead of procuring at the property level, it is better to have a purchasing department that controls bids across all the properties. The type of services required and specification of products will be accomplished at the property level, and the requirements will be sent over to the purchasing department.

This way there is a single window for receiving bids, and the purchasing department is left with the responsibility of identifying and determining the best value and quality. The purchasing department will develop a list of qualified vendors, thus avoiding unnecessary quotes and possible fallacious information, and saving the time of the property manager.

Procuring Discounts Based on Volume

Rather than compromising on quality, it is best to procure discounts based on higher volume. Vendors will be more willing to negotiate the price when there is a bigger volume at stake. Here again, having a purchase department will be beneficial because all requirements across properties will be routed through a single department. This will increase the needed volume of services and products, which in turn will give better bargaining power to the department.

Consistency of Products and Services

Since the purchasing department controls the actual purchase, even though it is based on the requirements of individual properties, the services and products acquired will be of consistent value and quality. If there is no single basis for bids, there will be inconsistency in costs as well as quality.

For instance, manager of property A might select more discounts by compromising on quality of paint, while property B manager might procure costlier paint being more interested in the quality. Hence, there will inconsistencies in the product used, as well as the amount spent across two properties. On the other hand, the purchase department would already have a set standard on the quality of paint to be procured and will entertain bids from qualified vendors based on volume.

A Working System for Tracking Warranty

It is important to know whether the product is still under warranty before replacing it since this can help the company save money. Many products and services are procured to maintain the property. But unless there is a computerized system for tracking the warranty, it would be almost impossible to know whether you should buy another unit or call for repairs or replacement.

It is best to have an internal system, where the property manager simply has to enter the identifying code and serial number of the product or service to know the warranty status. If the purchase department is maintaining records of all the warranties, then these records should be accessible at the property level.

Tips for Communicating with The New Generation of Tenants

Communication skills have been the most important assets of property managers; however, communicating

effectively with the present generation of renters can become a daunting task. Firstly, there is a major shift to

online communication, which could require quite a bit of adjusting in using the right words, and knowing the

right nuances. Most tenants now use mobile devices, and they research online to find a suitable unit.

Therefore, having an online presence, and communicating effectively over emails, social media, and so on is

becoming increasingly important. Here are few effective tips that might help you develop the communication

skills needed in the present scenario.

Almost all Communications take Place on Social Media Platforms

Social media has gained tremendous popularity and almost all people use some social media platform or other

to communicate and interact. Therefore, property management will have to be not only active on social media

platforms but also engage with their audiences. For instance, creating a Facebook page with some marvelous

photos is only the first step.

You also have to engage with people who have visited your page. Therefore, monitoring your site and social

media pages becomes very important. You must be aware of the questions being asked and respond to them in a

timely manner. Secondly, property management should also know how to respond to negative comments. The

dispute should be dealt with calmly and professionally, without getting into a slinging match.

Focus on Making Outstanding Videos

A millennial crowd and a younger generation love watching short videos. Posting engaging videos on YouTube

could earn property management a marvelous following, but make sure to engage with the viewers on the site

and not neglect their postings.

Asking Prospects What they are Looking for in a Property

Some years ago, this would not have been the right strategy, but now it is important to know what prospective

tenants want. Engage in social media with different audiences to know:

 Whether they are seeking more amenities like a gym, tanning room, spa, pool, and so on

 It can even be a simple concept like a dish washer inside the unit or more conveniences when it comes to

owning a pet

Property management is likely to receive many suggestions with this strategy, and it is not necessary to consider

every one of them. With this type of survey, you can obtain a general idea about what most renters are seeking

in their units.  

Keep Up with Emerging Trends

According to latest studies, more than 25% people use apps or mobile sites to search for suitable apartments.

This trend is only going to increase, since people are depending more and more on their mobile devices and

smart phones. Therefore, do not forget to include tweets and text messages in your marketing strategy.

Additionally, make sure the property site is designed to be viewed across multiple types of mobile devices.

Try Different Approaches to Stay in Touch

Staying in touch with residents is even more important once they have signed the lease. Property management

newsletters can work fine; however, a personal email is usually more effective in soliciting a response.

Recruiting New Staff in Property Management

Recruiting a new employee to join the property management team can be challenging task, especially when you have to focus on defining policies and roles, and assimilating the new member into the corporate structure. However, when proper measures are adopted for taking the new person on board, property management can cut out some of the training costs and reduce the possibility of friction and stress with existing staff.

Secondly, providing the new member with the right resources and tools will not only build morale but also lessen the employee turnover rate. Here are some important points that can help in making the recruiting process smooth and effective.

Detailed Job Description

To avoid future disappointments, it is important to provide a detailed job description to candidates even before the interview. Orientation programs and training sessions may help, but the candidate should be ready to fit into the position. Detailed guidelines could include comprehensive strategies, possible career paths, and earning potential.

Honest and Open Representation of the Company

Misrepresenting company culture, company policies, and required duties is a big mistake. The new employee will not only be frustrated when he or she finds out the truth, but will also become disillusioned about company expectations and policies after a few weeks on the job.

Detailed Instructions

The new employee should be given detailed instructions about practically everything from company policies, management structure, dress code, to the place where he can and cannot park his or her vehicle. This can help the employee avoid embarrassing mistakes and he or she can have a clear-cut outline on what is expected.

Proper Introduction

Key staff members and supervisors must be given adequate information about the new employee, which may include a job description and resume. Arrange a semi-formal meeting, where existing staff members can discuss the overlapping of roles and allocation of specific duties for the new employee. It is always magnificent to have the new employee partner with an existing employee or supervisor, who can be a mentor. The mentoring role could include clearing doubts of the new employee, and helping him or her adjust to the work environment and company culture.

Follow-up Meetings

It is important to know how the new employee is doing and whether he or she is able to cope with the workload and existing company culture. Scheduling personal meetings once a week, in the beginning would be a prudent idea, and later it could be done monthly or bi-monthly. However, always have an open-door policy for encouraging comments and feedback from the new employee.

Pro-active Approach of Management

Property management should have a pro-active approach concerning new employees. Concerned manager or supervisor should be quick to reward the new employee when he has performed well, or when he has taken extra initiative. Management should also be vigilant about negative behavior and should make the employee aware of the consequences of continuing along such lines. Performance reviews should be held on a regular basis since this will not only bolster confidence, but also will provide a clear picture to the employee of what is expected of her or him.

Explain to Tenants the Effort Required in Delivering a Clean Unit to Them

It is the legal duty of the property owner or property management to deliver a clean unit when a new tenant moves in. Similarly, tenants are also required to keep the unit reasonably clean when they are moving out. However, this rarely happens, and property managers have to hire cleaning contractor, to make sure the unit is tidy and clean for presenting to new tenants.

For property managers who are making all these efforts and incurring these costs, why not let the new tenants know the amount you have invested in preparing the unit for them. Better still, rather than explaining what has been done, you could provide invoices of the cleaning service. Apart from providing the invoice copies, the cleaning service can also be referenced in the inspection report.

Obtain a Detailed Invoice

However, a simple invoice from the cleaning contractor will not do, since the tenant is not going to know what exactly was done to the unit. So it would be much better to turn over an invoice that mentions in detail all the areas that were worked on, and the different types of surfaces that were cleaned. When you present copy of such an invoice, then the tenant will also have the opportunity to check out all that was done to clean the unit. This is why it is prudent to reference this invoice copy in the inspection checklist and report.

Here is a general list of items that should be included in the invoice:

  • §Cleaning of all bathrooms
  • §Cleaning of all windows, outside and inside, with window frames
  • §Cleaning of all kitchen surfaces, pantry, drawers, cabinets
  • §Cleaning of dishwasher
  • §Cleaning of oven
  • §Cleaning of curtains and venetian blinds
  • §Cleaning of light fixtures, power points, and switches
  • §Carpet cleaning
  • §Vacuuming and mopping of all hard floors

Additionally, these items can be checked by tenants and you could have them sign off on the property inspection report, confirming all this work was completed.

In the Event of Discrepancies

If tenants find any discrepancies or if the cleaning in a particular area is not up to their standard, the invoice will prove that you had it commercially cleaned and are in accordance with the cleaning schedule.

However, it is marvelous and astute practice to entertain objections of the new tenants about the standard of cleanliness, even though the unit has been cleaned by a professional service. Thank them for their feedback, and ask them to list specifically the cleaning that was sub-standard, and if their complaint is genuine then you should remedy those items. 

Why do all this?

Tenants usually have no idea about the cost that goes into cleaning a unit and making it ready for them. When you show them how much you have invested in pre-tenancy cleaning, it will clearly demonstrate that you care for your tenants and about the property. Tenants will start to respect your commitment and they may respond by keeping the unit in stellar condition as well. 

Dealing Confidently with Tenants

Dealing confidently with tenants is critical to effective property management. Surprisingly tenant phobia is common amongst property managers, and they tend to either ignore tenants or allow tenants to set the rules. Both situations are disastrous, and they can lead to much more complications and legal troubles. Hence, property managers should learn to deal with tenants confidently and professionally, without being scared or rude.

It is Easier than You Think

The main aspect that shakes the confidence of a property manager is the objections raised by tenants and the right response that is required in that situation. However, you will find that there are only certain numbers of objections tenants can raise, and in time, you will know that these same complaints are made repeatedly. Based on this information, all you need to do is patiently hear these complaints, and with experience, you will learn to provide the expected response for the situation.

Improving Your Negotiating Skills

Sharpening your negotiating skills can help a lot in dealing with tenants confidently. The best way you can learn to be an adept negotiator is by learning from your mistakes. So you should keep notes about why negotiations took so long, or why they failed completely.

Next time you find yourself in a similar situation, you will be much better prepared. Additionally, keep notes of what worked as well. However, never show discomfort while communicating face to face with tenants. Once they realize you are out of your comfort zone, the will try to take to advantage of you. 

You may want to have a witness or someone else with you that you work with and also to record the conversation just in case there is any fallacious tenant accusations.

What You should never Say to Your Tenants

You should never say to a tenant that you do not have time or you are too busy to listen to what they have to say. Tenants will immediately form an opinion about you that you are rude or that you cut corners.

In such a situation, tenants will start responding accordingly, and you will find that they have started to pay their rents late or they are not following the terms of the lease agreement. It is a natural tit for tat response on the part of tenants, when they feel you are ignoring them or not giving a fair hearing to their complaints or requests.

However, there will be times, when you really may not have the time. In such a situation, you only have to phrase your words appropriately. Instead of being dismissive by saying you do not have room in your schedule for that day, put it more positively by saying you are going to attend to their request shortly.

How to Respond When You do not Deliver

In property management there will be many instances when you are unable to keep to deadlines or finish the repairs by the promised date. Even in such situations, you can still maintain your confidence and professional attitude. Respond by giving another date of expected completion, and you do not have to provide a list of reasons or excuses why the job could not be completed on time. The main reasons for the delay can be mentioned briefly, however, avoid entering into an argument with the tenant.  

Tips for Reducing Tenant Dissatisfaction and Move Outs

Surprisingly, the industry standard for resident turnover is more than 50%, which is a lot. The main cause for this quick move out rate is a conflict between tenant and property management or property owner. These conflicts mainly arise because of the gap between expectations of the tenant and the services available, and state of the property.

A mismatch of expectations could be for anything, ranging from the level of cleanliness or the repairs necessary for the unit. For this reason, the ideal solution would be keeping everybody on the same page. Here are a few tips that could help reduce conflicts and quick tenant move outs.

Use Checklists

Checklists are indispensable for a property manager, especially during the move in move out process. Various ready-made checklists forms are available for mobile devices, or property management can design customized ones that suit specific needs.

The supervisor or property manager must walk the tenant through the unit to make sure all expectations are met. Discuss issues that will be billed to the resident in the final statement. It is best to have a frank dialogue with the tenant about the way certain issues will be resolved, and do not keep any secrets during move in and move outs. This is not the time for double talk or ambiguity.  

Discuss the Move out Process First

It is a remarkable practice for property management to discuss the move out process, during the time the tenant is moving in. Staff should reveal the prorate policy to the tenant, and the amount he is expected to pay for carpet cleaning, painting, and so on. The tenant should also be informed that these are the existing rates and they are likely to change, depending on the tenant's length of stay on the property. This bit of information is often overlooked, and is the cause of many abrupt conflicts.

Transparency is Vital for Building a Fantastic Reputation

Most tenants want to write a bad online review about the property when they are moving out, as this is the time that they are most likely to be upset. This is mainly because they have experienced situations and costs that they did not expect. Therefore, being transparent about everything that matters is pivotal if you are planning to build a sterling reputation.

Secondly, it is best to ask for the feedback from the resident whenever a task is completed such as move-ins, maintenance tasks, rent payments, and most importantly during move-outs, which will give property management an opportunity to smooth out any ruffled feathers. Encouraging feedback from tenants throughout their stay is essential. This is not only to build a respectable reputation, but also more importantly to know what the tenant feels about different issues and possibly correcting so this scenario does not repeat itself.  

Document Everything with Photos or Video

Conflicts mainly arise when there is no evidence to support claims about damages made by property management. Photos or video provide irrefutable proof, and there can be no arguments once the damage or expected repair is reported and shown this way. Now there are apps available that enable you to take photos and generate a report rather easily.

Items needed for Awesome Property Management

The quality of work of a carpenter is largely dependent on the availability of proper tools, and the same principal is true about any other job. Property management also needs the right tools to do their job terrifically and successfully. This obvious fact is often ignored in certain areas of property management, which usually results in tenant dissatisfaction, and an increase in vacancy rates.

As a property manager, you are confident about your team being hard working and results oriented, but if you fail to provide the right tools, you will not only have a low quality of work being demonstrated consistently but also an organization of frustrated employees. The tools required will vary depending on staff responsibilities and their area of operation.

A decision about investing in such tools will mainly be dictated by cost and the need for improving the type of work being delivered. Here are certain things that are generally needed for running a successful property management operation.

Communication Devices

A communicating device is one of the most important tools for property management staff, especially when it is a big property with many units. For instance, the resident might find it convenient to put in a maintenance request through the online portal; however, property management staff has to be equipped with acute communication tools for organizing the task, implementing the request, and for reporting the completion of the job.

Software and Office Equipment

The latest software will not only make tasks easier for property management staff, but enable them to complete more tasks in a given work day. If the office staff is spending time in entering the same data twice or multiple times then there is definitely something lacking in the system, which should be fixed immediately to arrest a drop in productivity.

Secondly, hardware should match up to the software that is loaded on it. If staff has to wait a long time for the device to boot up or for a report to be generated due to insufficient memory, then there is no point investing in costly or new office software.

Ongoing Training and Refresher Courses

When everything is changing at a rapid pace due to technological advances, it is necessary to keep the staff up to date of such changes, and provide them with the required training for handling the latest developments. For instance, maintenance personnel might need a refresher course to keep with advancements in green technology, or the office staff might need training in handling the new software system.

Latest Apps

Property management should consider equipping their staff with latest apps that can help improve their efficiency and save time. Here are some apps that are worth considering:

  • My Inventory Manager: This app will enable staff to keep track of all the things on the property. Apart from furniture in the different units, and office equipment, they can pinpoint where sports equipment and tools are even when they are scattered all over the property.
  • Happy Inspector: This is a poignant app for inspections since it has useful checklists and enables staff to generate reports and import data.
  • Rent Tracker: Obviously the most useful app, which keeps track of rent payments and also has a host of additional features. 

Providing the Latest Amenities to Gain a Competitive Edge

With the millennial crowd forming the majority of renters, it is crucial for property management to not only satisfy their needs but also consider new amenities that would attract them to the community, or make them renew their leases. The best strategy would be to focus on latest tech amenities that are most sought by modern renters.

This is not just for the urban housing sector, but also a vital point to consider for outer areas where the developments usually take place at a slower pace. If property management or property owners want to gain a competitive edge this year, these high tech amenities are worth considering.

Smart Features

While a fully automated home may still be a dream, it is still worth considering various smart features that can make a major difference to a community. For instance, Bluetooth speakers, Apple TVs, and integrated docking stations are going to become common, and renters will seek better Wi-Fi connectivity and ability to control their homes from their tablets.

Certain luxury communities have already introduced the latest platforms such as Monarc Tree that enable renters to control their entertainment system, lighting, and thermostat settings through an app on their smartphone. Property management will have to keep a close eye on these technologies, if they want to capture the section of renters looking for smarter homes, which is increasingly growing by the day.

Vehicle Sharing Services

Most of the millennial crowd hates the hassle of owning and maintaining vehicles. They prefer to be near workplaces, schools, and shopping malls. However, they are attracted to communities that have vehicle sharing services on-site or nearby. Ride-sharing services are increasingly becoming popular all over the country, and many have introduced features that make it more convenient. Users can now easily check availability of vehicles, make place reservations, and even pay for the services using their smartphone. 

Energy Efficiency and Environment Friendly

Most renters now prefer communities that implement energy efficiency plans and green features. This has prompted many communities to seek certification from LEED (Leadership in Energy and Environmental Design) program. Communities have to satisfy certain prerequisites for earning points and receiving particular certification levels.

For instance, a carbon dioxide sensor may be required to for controlling the thermostat for DCV (Demand Control Ventilation). Certain communities that have gained high levels of LEED certification have CHP (Combined Heat and Power) plants on their site. These plants capture energy that is usually lost in generating power, and use it for heating water, and overall heating and the cooling of the units. This decreases the community's dependency on the grid, and helps a fantastic deal in saving on utility costs.

Property management will have to consider many things before enhancing features and planning upgrades. However, the main considerations will be the budget and target audience. It is essential to know how the feature is valued by your target audience. For instance, a pet lover might appreciate a dog spa, while a young renter might consider it a joke, and would be seeking connectivity for his Xbox in the theater room.

Page 31 of 54