Getting Back to Basics (JPM)
Analyzing Residential Operations and Diversifying Services Will Strengthen Your Company in a Challenging Economy
by Barbara Holland, CPM�
The following is an excerpt from the Jul/Aug 2009 issue (Volume 74, Number 4) of JPM�, Journal of Property Management.
How does your bottom line look today? What about your clients' bottom lines? A great number of economic troubles are facing the world of professional property management, including premature breakages of residential leases; tenant businesses closing their doors or asking temporary reductions in rents; high turnover costs; increases in marketing expenses; forced reduction in staff, decreases in management fees and leasing commissions, and more.
In order to survive the turbulence, "back to basics" needs to involve improving your bottom line by diversifying your services, and analyzing your operations for ways to cut expenses. These tasks may mean the difference between your successes and failures as our industry continues to meet the challenges of a major recession.
Fit The Profile
Many of the steps your property management company must initiate to survive in these challenging times will be similar to the steps needed for your clients. Stabilizing or increasing income will mean more hours working with your staff to improve their marketing and leasing skills. It will require an analysis of who your current residents are. You can begin by finding out whether or not you need to market to a different resident profile.
It is not difficult to create a resident profile report. Extracting information from the initial resident application will provide most of the data, such as number of adults and children, annual salaries, type of employment, distance to work, and number of cars. Once the first resident profile report is developed, on-site staff can revise the report on a semi-annual or annual basis to determine the changes due to resident turnover.
You can also make revisions to your current residents' profiles due to personal and business changes during the year. As rental rates increase, the annual salary requirements of your residents will increase. By reviewing your resident profile, you can determine if your current residency will be able to absorb their rental increases in order to remain residents of your community. Changes in rental rates have a direct relationship with the resident profile. Is your marketing strategy meeting your goals of attracting residents who can afford living at your community, today and next year?
It's important to find out what businesses are located within a one or two mile radius of your building that can support the community. Often, specific rental incentive programs for these businesses need to be developed and promoted through various marketing tools - from postcards, to flyers, to letters, to human resource departments.
To make such programs more successful, telephone calls and actual visits to the businesses are vital, allowing more direct communication to "sell" the benefits of the apartment community to employers who could promote the property through their internal newsletters, magazines and company manuals. Some management companies go even further, meeting people in their business parking lots with donuts and hot coffee, while they hand out their flyers.
Changing or adding to your existing amenities will also impact your resident profile. For example, if your apartment community has a tennis court that residents do not use, review the resident profile and results from a survey; you may find that you can and should convert the tennis court to a basketball court, or something else that residents will use and appreciate.
The full article is available as an online exclusive in the Jul/Aug 2009 JPM� issue.
IREM Members have free access to the JPM� online archives and the "Online Exclusives", articles that are only available on the IREM Website. Non-members can subscribe to JPM� at www.irem.org/jpm