Is Your Property Competitive in the Market?
Remember, an apartment building is a business. An individual rental unit is part of what contributes to the success of that business.
Making a unit rent ready may be the single most expensive expenditure an owner or manger does on a regular basis. Put too little money into the unit and the business may suffer due to being unable to compete in the market. Put too much money into the unit and the business may suffer because of a lack of cash flow or poor return on investment.
The trick is finding the happy medium of being competitive in the market while not over capitalizing in the process of making a unit rent ready. In other words, keep your eye on the bottom line. A rental units’ purpose is to generate income for the business. This does not mean you use only the cheapest materials or the lowest bidder. Know your market and be honest about the grade of building you have. Is the property an “A”, “B”, “C” or a “D” building?
The goal is not only to be competitive regardless of the property grade, but to beat the competition as well.
Use the best material appropriate for the grade of building. Strive to make a C-minus into a C-plus, a B-minus into a B-plus and so on. Use dependable, quality contractors and suppliers. A call back to repair sub-standard work typically costs twice as much as the cost of quality work done right the first time. Sub-standard work also leads to unhappy residents and vacancies, both of which will affect the bottom line negatively.
Good quality work standards coupled with quality materials appropriate for the property will lead to higher quality residents, improved income and a sustainable business model regardless of the grade of building you own or manage.
Choosing a quality contractor is like choosing a doctor. If you went to the doctor, you would ask his advice on how to treat whatever ails you and confer with him on the best approach to achieve improved health. You would be wise to learn from the doctor’s years of experience.
Choosing the right contractor is just as important to your financial health. A professional contractor will temper you if needed, make recommendations and not be afraid to tell you “there is a better way”. The best contractor is like an experienced partner with your best interests in mind.
In order to keep a project running smooth, on time and on budget; always keep the points below in mind.
1: Proper Planning
2: Clear Objective
4: Vendor Control
A break down in any of the above can result in lost time and money. Improper scheduling or control can cause delays or extra work that can affect the total cost.
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