Budgeting Tips from Regional Property Managers: A collection of tips I received attending a budget seminar with Regionals from multiple companies with a collective 250+ budgets under their belts. 

Budgets are stressful, mainly because you are also doing your other completely full-time+ job and trying to hit a deadline, without any consideration for what's going on at your property.  It's often done in a sit, start, get up, sit, start, get up routine, and that (at least to me) makes it even more challenging. Does your company do a budget boot camp and whisk you away from it all to get things done? I hope so, but I know that isn't always the case.

Thank you to these ladies for the great tips: Angelique Mazzella, CAM, CAPS, Kimberly Fox, Melissa Cooke, CAPS®, ARM®

Budgeting Tips

• Know your owner's objectives. If they are 3rd party vs Owner Managed there is a difference in how they will approach the budget. Are they selling, keeping, adding value, just maintaining? Ask questions and find out!
• Do detailed variance reports and keep all notes for all year. It seems so simple, but if you don't keep everything, you might forget. (I kept a drawer o' things and tucked in anything that caused a variance so I could revisit for next year. I also shoved my CapEx dreams into that drawer so when budget time came, I had initial numbers, scopes and all kinds of things).
• Keep your team involved and get their input, especially Service Supervisor, but share info with everyone!
• Cheaper isn't always better.
• Start early for budgeting success.
• Keep your resident's enjoyment in mind!
• Plan out a 5 year plan and lay your Capex out into this plan. Be prepared to justify these expenses, whether value add or really needed.
• Use numbers, pictures and market surveys to support what you are asking for. Sometimes the numbers speak for themselves but sometimes a picture is worth a thousand dollars. (HA!)
• Put everything in your budget and then start trimming. Don't skimp from the get-go or you will forget things. Get it all in and then trim excess. Know the ball park that your approver/owner would like to see (cost per unit).
• It's all about that Debt Coverage Ratio- which we failed to define in our session, but it is the ratio of cash to the interest principle and mortgage, and it is super important as it affects owner's ability to get loans.
• Know some basic industry standards like what Repairs and Maintenance, Payroll, and bad debt should be.
• Sometimes you get a higher NOI at the sacrifice of your property. Example: if you are skimping on paint and people are dissatisfied when they move in, you may save that money now and bump up your NOI, but when those folks don't renew and your reviews go down, that savings may cause future issues. Never ignore something that needs to be done to save money. Find the money in another place and don't forget to look at bumping revenue to pay for the things you need.

Contract Negotiation

• Ask how your vendor makes his money and have an understanding of their costs and profit margin.
• Have an agreement with your vendors about expectations, for paints, cleans, turns, etc. 
• Collect scopes of work and use them for your bidding process. Example: for landscaping have the mows, grass height, trim schedule, number of annuals, etc and ask folks to bid to that scope so you can get a true comparison.
• Compare apples to apples when soliciting bids. Read the contracts.
• Note for vendors: ask questions about your customer's needs- are they looking for cheapest, nicest, mid-grade, warranty, etc.
• Ask for insurance and references. See how quickly they get these items to you. Sometimes if it takes them a while, then it takes them a while to complete the job as well!