Four Pitfalls to Avoid in Property Management

Gill: “At one of our properties, we reduced water consumption by more than 8 million gallons in one year (an 18.69% decrease), resulting in a $32,000 savings in utility costs in 2015.”

IRVINE, CA—From wasting water to not tracking revenue stream, there are a few major mistakes to guard against in order to remain a strong property-management firm, Western National’ Property Management ‘s regional VP Donna Gill tells GlobeSt.com. We sat down with Gill for an exclusive interview about what to look out for to remain on top in today’s ever-competitive property-management field. GlobeSt.com: Water conservation is a serious concern, particularly in California. What should property managers watch out for in this area? Gill: Educating your team on sustainable practices is the key to successfully implementing and executing water-saving strategies. By staying current with rebate programs and new energy-saving technology , property managers can keep conservation efforts top of mind as they monitor utility usage and operating costs. Our firm employs conservation tactics such as replacing heavy water-usage devices with low-flow showerheads, faucets, and toilets to minimize water waste. For example, by installing low-flow toilets, we have been able to reduce water usage from 3.5 gallons to 1.6 gallons per flush—a 54% reduction. This translates to enormous savings, both for our residents and for property owners. In addition to utilizing indoor retrofits for water reduction, we are also reviewing our outdoor water usage. By replacing our outdoor irrigation sprinkler systems with drip irrigation systems, converting turf areas to synthetic turf and installing native plants to limit water consumption, we have reduced our properties’ impact on the environment, as well as optimized the cost efficiency of managing our assets. As a result, we are seeing a significant decrease in our operating costs, enabling us to maximize our profit margins and net operating income. The proof is in our financials . For example, at one of our properties, we reduced water consumption by more than 8 million gallons in one year (an 18.69% decrease), resulting in a $32,000 savings in utility costs in 2015. GlobeSt.com: Property managers need to be savvier about technology than ever before. What do they need to know about this? Gill: Utilizing outdated technology can actually be a financial liability for property owners. For example, laundry-washing machines and dishwashers that aren’t up-to-date and energy efficient can be a huge disadvantage in terms of water consumption and utility costs. Replacing outdated washers with newer, high-tech appliances can reduce costs in the long-run, and reduce utility bills on a month-to-month basis. In addition, resident-focused technologies such as online-rent paying options and online maintenance request forms can help to facilitate excellent client communications and increase resident retention. In terms of adapting to the ever-evolving advances in technology, our firm has an entire committee in place focused on identifying new technologies that can be integrated into its properties. By leveraging new technology, we are able to enhance our residents’ living experience, while also improving our management platform on a continual basis GlobeSt.com: Of course, communication is the key to just about everything in business. How does it apply to multifamily property management and residents? Gill: Poor communication, or lack thereof, can be disastrous for property owners and managers. Our firm understands that consistent communication is essential to ensuring resident satisfaction and quality care. Our open communication policy with employees, vendors, and residents enables us to operate efficiently and deliver high-quality service, which in turn allows us to attract and retain tenants. In addition to avoiding problems, ongoing communication can also help to educate residents regarding a property manager’s efforts to improve and/or maintain a property. For example, many property managers create an ongoing dialogue with residents regarding water consumption and sustainable practices. Through this dialogue, residents are more conscious regarding water usage and typically also recognize the effort their property management firm is putting forth when it comes to sustainability. We communicate these messages to residents through weekly and monthly emails, online blog posts, website updates, onsite bulletin boards, and signs posted throughout a property. We encourage residents to actively participate in cost-saving measures, ensuring that they see the direct financial benefit of a reduction in water usage throughout their apartment homes and community. Raising awareness about any of the initiatives a property manager is undertaking is essential to its success.  By communicating frequently, property managers can strengthen resident relations, increase overall resident retention and thereby reduce turnover. GlobeSt.com: What should property managers look out for with regard to tracking?  Gill: Monitoring a revenue stream can make a difference between meeting financial goals and missing the mark on a budget. Property managers understand that tracking operating costs is essential to ensuring that expenses are minimized and efficiency is maximized. Our firm utilizes proprietary revenue-management software at each of our communities that provides a historical summary of performance and helps us to forecast future trends. By tracking this information continually, we are able to make educated predictions that help us to manage each property strategically, ultimately protecting the bottom line for property owners. In addition, it’s useful to track sustainability efforts to produce bottom-line results. Our firm works with a third-party provider to monitor water and energy usage at each property in real time. This strategy enables us to immediately address any deviations from planned usage, which could result in increased expenses. As a result, we have been successful in exceeding our financial goals for utility savings and increasing our profit margins over time.