The ownership of properties my company manages is diverse. While the properties themselves are in Edmonton, Canada, located in the downtown core as well as the suburbs, our owners can be publicly traded REITs or private, family-based businesses like my own. We also have investor partners based in Toronto and others in Michigan.
Local has become national and even international, but our role as property managers remains the same: we must ensure the properties we manage are profitable for the owner.
Simple, right?
We all know it’s not as easy as it sounds. No matter what the current market situation is, where your property is located, or who the owner is, there are strategies we must be using at all times so the assets we manage perform well.
Preventive maintenance
I recall a discussion during a capital budget meeting about purchasing a new tractor to do the landscaping for a large property. The previous piece of equipment had started to fail regularly after only a few years. During the conversation, the owner said, “Property managers don’t know how to maintain equipment properly.”
This has really resonated with me ever since. I realized he was right. The tractor had not been receiving regular and proper servicing. We were allowing in-house staff to “tinker” with it when it needed repairs. Just like a vehicle that doesn’t receive regular maintenance, it eventually failed, and much sooner than it should have. The owner frustratingly approved the expenditure, knowing the equipment is needed, but wondered how long it would last.
As a property manager, I believe it’s my responsibility not only to set up proper, regularly scheduled maintenance, but also to learn the basics of how different types of equipment function. Whether it’s a tractor, makeup air unit, a boiler, or a pool, if you don’t have a basic understanding of how they work, how will you know how to maintain them?
Decrease expenses
A strong property manager will always have an eye on the bottom line. If you are responsible for a property, you are responsible for the spending. Are you spending wisely? Are you periodically going out to bid on regularly purchased items to make sure prices are not creeping up without you knowing it? Are you maximizing your purchasing power?
It’s easy to get comfortable with suppliers and contractors whom we’ve worked with for years. We build strong relationships with their representatives, and it can feel disloyal to look at another. However, the owner is trusting us to do our fiduciary duty, and that means not spending their money without knowing we’re getting the best price for the best service. Professional contractors and suppliers understand this, so we shouldn’t have issues reviewing pricing from time to time.
This is especially important on large capital projects. Building a scope of work—not letting your contractor do that for you—is key.
One of my first lessons in capital project management came from a supervisor, who kept reminding me that if you don’t build the scope of work, you won’t have quotes based on the same project. He used to say “apples to apples to apples.”
Increase revenue
My last point is one that generates a lot of conversation in our current economic times.
By the time this has come to print, we will have worked in a COVID world for a year. Many areas experienced a very downtrodden market. When COVID first hit, some properties suddenly experienced more vacancy than expected and what looked like the start of a recovery year in the rental market quickly turned into one of depleting rental rates and excessive incentives. Basically, some properties were “giving away the farm” to increase occupancy. That’s a tough market to work in.
However, it’s still our job to drive every dollar of revenue we can, and every member of the property management team needs to buy into this thought process or strategy.
Leasing teams can get caught up in becoming advocates for the prospect rather than representatives of the owner. The team on the ground must be able to distinguish between providing great customer experiences and doing what they can to increase income. Some want the deal so badly they advocate for lowering rent and increasing incentives. Yes, we want to make deals, but we have to provide our teams with all of the tools they need to be successful in leasing units.
This includes teaching employees how to complete proper market comparisons so that marketing teams and asset managers are working with the most comprehensive information when making decisions around pricing.
A succession plan:
Many areas in Canada are experiencing steady growth in the rental market, with additional inventory introduced every year. Whether we are in Canada or any other country around the world, we owe it to the owners to have a succession plan in place for continuous management of the properties we oversee. With new property management technology and increased customer experience expectations, we need well trained and qualified people to manage those assets.
Our role as property managers is to realize an increase in the income stream, growth in value, and to control the costs where we can. We should make sure owners are confident their best interests are top of mind, and that includes knowing that the residents are well taken care of, living and working in well maintained buildings that they are proud to call home.
About Wanda Bone
As Director of Residential Property Management, Wanda Bone oversees the residential team within Westcorp Property Management Inc., a wholly-owned subsidiary of an Alberta-based real estate development firm. The firm has been developing and operating income-producing assets for over 40 years in Alberta and British Columbia and branched out to southeast Michigan in 2015. With more than fifteen years in real estate management, Wanda is a proven leader, a licensed Real Estate Associate, and proudly holds her CPM and ARM designations. Wanda currently serves as a Director on the REIC Edmonton Chapter board and currently holds the Executive Position of Vice-Chair, IREM Council.