Enter your email address for weekly access to top multifamily blogs!

Multifamily Blogs

This is some blog description about this site

Multifamily Budget Busters: Hidden Line Items That Put You in The Red

Multifamily Budget Busters: Hidden Line Items That Put You in The Red
Budget season. It’s that joyous time of year when multifamily owners and operators break out in cold sweats, start obsessing over spreadsheets and settle in for some sleepless nights.  This year, budget planning could have been particularly painful. Thanks to the pandemic, property managers have seen revenues decline while simultaneously incurring unanticipated expenses. Generally speaking, 2020 has done a number on most companies’ financials.  Fortunately, 2021 doesn’t have to repeat the performance of its predecessor. By turning the lessons learned in 2020 into budget line items for 2021, apartment communities have the opportunity to streamline operations and pinch a few pennies in the process.  Erasing the Red The economic conditions created by the COVID-19 health crisis in 2020 forced management companies to accommodate residents and families facing lost or reduced wages. The widespread inability of renters to make monthly rent payments was a significant setback to the bottom line, and it was compounded by the necessity to implement enhanced cleaning and sanitization services, deploy virtual platforms for tours and leasing, and equip associates with the resources required to work remotely.  Those same budget costs won’t be surprises in 2021. While we don’t know how long the pandemic will last, the industry has found ways to push through it. Fortunately, many of the tech innovations that multifamily has turned to during the health crisis have established operating efficiencies that begin to offset any decrease in rental income and the expense of new services. That isn’t to say that everything has zeroed out at this poi......
Continue reading
366 Hits
0 Comments

Multifamily Budgeting Tips During a Pandemic

    It’s that time of year again, budget season. In a normal year, budgeting comes with it’s own set of challenges, in a year with a global pandemic, it can seem nearly impossible.    I had the opportunity to sit down with 3 multifamily friends to chat how they were weathering the budget season in the middle of a pandemic.  Marcella Eppsteiner, Vice President of Marketing for Mission Rock Residential, Kim Boland, Director of Digital Marketing for Morgan Properties, and Savannah Wheeler, Vice President of Finance, Treasury and IT for Mission Rock Residential discussed next years budgeting strategy and how to adjust to an unpredictable world moving forward.    Embracing Nimbleness and Agility  Pivoting in the time of COVID requires nimble responses and openness to change. ”During a week in March where everything stopped, we realized 2020 was going to be an outlier,” Marcella says.    Mission Rock Residential, which typically does extensive performance evaluations for each of their communities when planning budgets, won’t just be comparing year over year, but several years to get a better idea of how far off they are from the norm due to the pandemic. Marcella shares that this year’s data alongside the five previous years should be a key factor for budgeting, along with prioritizing requests.   “Traditionally, we would share feedback and input for the strategy. This year, the real difference is seeing the granular data points that are strategy-determining factors for each department,” Marcella  says.   This year’s global economic upheaval propelled......
Continue reading
1105 Hits
0 Comments

Unlocking the Mystery of Maintenance Expenses

maintenance expenses  “Here’s the list of the supplies we need.” Maintenance Expenses is often the expense area where there always seems to be more days in a month than dollars in the budget. Every week a stock of supplies is ordered.  All too often it results in overrunning the budget.  Workorders have to be completed.  Apartment turnovers have to be completed. There are a variety of explanations for the budget variance report. It includes excessive amounts of resident service orders, scheduled unit inspections and a move out with a high volume of damages.  But this is what we face every month at our communities.  I think its possible to create some structure behind maintenance purchasing.  Not only will this assist in managing expenses against a budget.  It will also provide detailed explanations when future budgets are presented for review. Generally explanations to increase the maintenance budget start with an average of what has been spent.  We justify  an increase because surely supplies will cost more in the future.  Neither are not very effective arguments to defend expense increases. Creating a plan starts with an overview of the schedule for the property for the upcoming month. Turnover Expenses How many apartment homes will be prepared for move in? Generally there are ten to fifteen items that are purchased for every  apartment being prepped. replace the sanitary items in the bathroom. caulk for the countertops in the kitchen, vanity top and shower area in the bath. drip pans for the cook top. The list of ite......
Continue reading
2378 Hits
0 Comments

The Value of Setting Standards on Products, Services and GL Coding

The Value of Setting Standards on Products, Services and GL Coding
  Setting standards on products, services, approval processes, and GL codes not only makes your process more efficient, but also saves you money and makes costs (and budgets) more predictable.  When paired with software to elevate visibility and enforce controls, your organization can more easily get the right things done, and eliminate time spent wondering what to do and/or what happened.   Product and service standards, approvals and GL coding all have common attributes.  They are necessary in order to operate profitably and to provide your residents with high quality service, and yet there are too many choices.   What are Product and Service Standards? Defining what products and services to use for a given class of property or region is what I mean by product and service standards.  For example, there may be a certain carpet spec and color used in your class A properties, and specific appliances used in your class B properties.  You may have regional differences in what you decide to specify, for example you may want to use an eggshell paint in more humid areas, and flat paint in temperate areas.   Some of the categories in which companies often enforce standards include:   Floor Covering Carpet Cleaning Appliances HVAC Water Heaters Paint Paint Services Landscape Services Plumbing Fixtures Lighting Fixtures Fire and Security Equipment Window Coverings   If you don’t provide guidance on standards, your staff may have too many choices of what to buy, who to buy from, and what to pay.  As you c......
Continue reading
1380 Hits
1 Comment

Budget Season: Tips to Make This Challenging Time Less Painful

Budget season is among everyone’s favorite. It’s right up there with tax day, cleaning out the garage and having toenails pulled.  Much thought goes into creating a budget – not to mention a lot of back-and-forth from everyone who is a part of the process – but the information is often obsolete the moment it’s finalized. The spreadsheet might look tidy, an accurate spending forecast for the year to come, but things change quickly. Budget-breakers, such as unforeseen repairs, unexpected increases in vendor costs or the need to upgrade to a more sophisticated software platform can throw the original budget into disarray. Seeing that the process of constructing and modifying a budget can be painful, here are a few concepts that can help alleviate the process: Be timelier: Many companies want the first draft of the budget to go to the asset management team in September, which doesn’t take into account four more months of revenue when attempting to predict up to 16 months out. Seeing that many are not approved until December or early into the next year, constructing a budget too early can paint an inaccurate picture. Delegate some of the hours elsewhere: This is not advising companies to skimp altogether on constructing a budget. But seeing that the information can become outdated the moment it is printed, perhaps it’s best to shift some of those hours to other tasks. When I was at AIMCO, our COO estimated that 100,000 hours were expended per year on budget preparation on the 385,000 u......
Tags:
Continue reading
2201 Hits
0 Comments

5 Tips To Help You Prepare For Budget Season

5 Tips To Help You Prepare For Budget Season
As a residential property manager, you’re likely already gearing up for the 2017 budget season. As busy as property managers are with the many hats they wear — marketing and sales, screening prospective residents, assisting with all manner of residents requests, and more — most understand that putting together a solid budget is critical for financial performance all year long. A budget tells you where you are and where you’re going, and it helps you measure your progress along the way. It provides an organized and easily understood look at money coming in and going out for anyone who might need the information, including your staff, community investors, and financial professionals. It’s also an invaluable tool for you in assessing how your community is performing, identifying any fat to be trimmed, and adapting as situations change. As you prepare your 2017 budget, take a look at the tips below to help make the process as painless as possible. Review industry dataVisit the library, use an online database, or search online to review standard income, expenditures, profit margins, and other metrics for your industry. You can find lots of free information simply by searching online for various keywords, and you can also find annual reports from market research firms that give away some information for free and include others for a fee. Generate methods for increasing revenueIf your community isn’t at full occupancy, create a marketing, sales, and communications plan before working on your budget. Does your website need work? Should you be focusing......
Continue reading
973 Hits
0 Comments