Never will you hear an owner or supervisor say, "It's about the people...not the money." That being said, it is about having the right people to insure NOI increases and the property is profitable. Our job is to increase property values with one of the primary ways being the increase of Net Operating Income.
We look at how we can improve NOI with the obvious being rent increases. We do this through several key factors, however, we do not always keep them in mind as our site personnel go about their daily tasks.
* The first and most important way is through resident retention. In no other area can we have such a positive impact on income and expenses both. This is done through exceeding resident expectations, providing "WOW" customer service, effective communications, and insuring all of the team contributes and understands the critical nature of how it impacts the bottom line. We preach resident retention, however, I suggest we don't practice it on an every day basis. This is where having the right people, the right training, the right follow-up, and the right attitude will make the difference between success or failure.
* Second, keeping your eye on the market and your finger on the rent button. Managers for some reason are hesitant to raise rents. They perceive this and believe it will drive prospects and residents away. They also believed we would have empty properties when we started charging for water, sewer, and trash, only to find out it didn't happen. This is where a good regional or district manager through conditioning can eliminate that fear, and then passing on that conditioning to the leasing staff. Get a manager who resists changes to rents, and you will more than likely get those working with that manager to feel the same way. By keeping your eye on the market, knowing your product and the product of your competition, you can maximize rents in any market. Teach your team to be pro-active and the leader in the market, and you will probably find other properties wanting to be like you and following suit.
* I have said this a million times, resident retention is not an event....it is a process. Like the first bullet above where I talked about one of the keys being resident retention, if you provide exceptional service and a great product don't be afraid to ask for its value. Why is it we wait until 90 days before lease expiration to then send a resident a letter or make a contact (maybe for the first time), only to have it asking for more money. I have blogged about this before and stress the importance of making resident retention a process, which will lead to a higher success rate of retention and higher revenue.
* Don't be afraid to adjust fees to increase revenue. Application fees, administration fees, late fees, and of course pet fees are all part of our revenue. This is especially true for pet owners, as they will pay for their pets. Now I have never been advocate of pet rent, and find it crazy to expect a pet to have a job to contribute to pet rent. Pet owners however, will pay a pet fee and few managers would ever contemplate making the pet administration fee for that lease term only or raising the fee to overcome an annual fee. I can hear managers cursing me now, however, stepping out of the box is often a way of stepping into success. I heard of a community raising their pet fee by $100, however, they included a free annual checkup with a local vet in the area. The vet was anxious for new business, and would come to the property four times a year (one Saturday each quarter) to give registered pet owners an exam for their pets. He got a ton of business and the pet income increased by $11,000 in the first year. I also suggest we need to do a better job of verifying pet owners are registering their pets so we can collect fees, and you may have heard me talk about my pet amnesty program and how it improved pet income at one property almost $4,000 in one month it was done.
* Collections are another way to improve income. Time is money, and insuring your team knows how to effectively and efficiently collect rent and fees can have a huge impact on income. The basic aspect of this is being consistent, firm, and timely when addressing collection of rent and fees.
* Finally to the expense side of the equation. Managers are so focused on the numbers, they often miss the meaning of the numbers. It's kind of like the old saying, can't see the forest for the trees. We have them doing monthly reports, but do they really know what they are looking at and are they effectively monitoring expenses during the month to be pro-active versus re-active? My suggestion is they are not, and keeping their eye to expenses (especially turnover and service) and training their team to do the same can have a huge impact on meeting budget or being over budget.
This is why property management is not a job...it is an adventure. We can always find way to improve and we can always encourage our people to improve and excel. I remember a manager that had for the first time exceeded budgeted NOI in several months and seems to have an attitude of "stepping back" rather than looking forward. I asked her if since she proved she could do it, was there any reason why it could not be done every month. She looked at me and said, "I suppose I could." I asked her to review her statement and told her I had faith in her team and her and would not accept "suppose or I could" as a response. After all, what was done was already history and I wanted her to keep her eye on the future...that my friends is the only thing that matters. Almost every month after that for the rest of the budget period, she met or exceeded goal.
No comments:
Post a Comment