Are You Losing Control of Your Property?
Let’s face the cold hard facts – even a dedicated, professional management team can get in a bind once in a while. Proactive managers realize preparing for the unexpected is essential, whether it’s a cash shortfall or a sudden downturn in the market.
But, from an owner’s perspective, warning signs you have lost control of your property create uncertainty and stress. Here are some signs you might be heading for major problems – or worse, financial disaster.
Frequent Cash Calls Signal Poor Planning
Do you ever call your owners and ask for a temporary infusion of cash? If you find yourself trying to get caught up month after month, there’s a problem. Multifamily rental income should cover operating expenses and provide profits for the management company and property owners.
The solution: Prepare a realistic operating budget – and stick to it. Review your budget with your team and owners frequently to identify areas where you can tighten the belt or renegotiate third-party contracts. Your managers should have access to accounts payable aging reports with supporting detail.
Late Payments, High Eviction Rates and Low Retention Rates Signal Poor Leasing Strategies
If a resident gets behind on their rent, it’s hard to catch up. The longer the situation continues, the more lost revenue your company experiences. While you may immediately start eviction within your lease terms, a better solution would be to prevent problems from becoming a property-wide issue.
The solution: Initiate strong resident screening and vetting protocol. Include a master rent roll that details rents collected and outstanding balances for every unit. A monthly review of aged accounts receivable reports will help you spot potential patterns early, allowing you to modify your leasing strategies before things get totally out of control.
An Uptick in Resident Complaints Signals Poor Communication and Customer Service
Residents deserve to have a consistent and efficient way to report maintenance issues. If you find your office personnel are fielding a high volume of complaints, it might be time to take a look at your reporting and responding processes. Can your residents report major problems – like a plumbing leak or electrical problem – 24/7? Does your maintenance team respond quickly, acknowledging the report and providing a realistic time frame for resolution?
The solution: Implement a maintenance policy that includes routine inspections to eliminate unnecessary inconvenience for residents. Provide digital and/or printed documentation that identifies issues that qualify as emergencies and the proper channels for requesting service. Encourage renters to use online resident portals whenever possible. Keep owners in the loop. Disgruntled residents may track down the owners if their problems aren’t resolved quickly. It’s never a confidence-building experience for an owner to get a call about a plumbing leak at three o’clock in the morning.
Low Occupancy Rates and Limited Renewals Signal Weak Marketing Strategies
When you’re reviewing your rent roll and monthly tenant reports, remember to review renewal numbers. Low renewal rates may signal failures in your marketing campaign strategies as well as customer service issues.
The solution: Review your marketing plan, including online reputation management and referral strategies. If you don’t have a quick make-ready program so you can turn your units efficiently, make that a priority. Offering early renewal options for current tenants and pre-leasing programs for future tenants can boost retention rates and lower vacancy numbers, too. Initiating a sixty-days out plan to start the discussion about renewals works well for many multifamily property managers.
If you recognize any of these red flags, it’s time to review company policies and processes. Better for you to take control before your owners lose confidence in your ability to manage their investment properties.
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AppFolio, Inc. develops Property Management Software that helps businesses improve their workflow so they save time and make more money. Appfolio submits articles & blogs including topics of Resident Retention, Improved Owner Communication, Time Management, and more. |
