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Top Methods to Increase NOI in a Softening Market (Or Any Other Time)

Top Methods to Increase NOI in a Softening Market (Or Any Other Time)

 

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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......
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Strategies for Creating the Right Budget Now and in the Future

It’s budget season!  For many companies, this is a several month-long process of fact finding, planning, and negotiations.  Your budget and budget process can have an enormous impact on your operations, so we’ve outline several different methods of creating budgets, their pros and cons, and how to prepare for implement such methods in the future.   Method 1: Increasing last year’s budget by X% – Problematic if the prior budget is off The easiest way to setup a budget is to look at last year’s budget and actuals and then increase a combination of those numbers by a certain percentage based upon expected market conditions.  However, what it makes up for in simplicity, may cause problems down the road.  Did last year’s budget create the optimal operational incentives to achieve your goals?  Does it provide the right incentives for your star performers? Pros: Simple to implement if you have a prior year budget Cons: May not be accurate May create disincentives for strong performers and reward weak performers What if your best property manager has managed to optimize the performance of their property.  Occupancy is high, rents are strong, and expenses are kept at a minimum, and their next year’s budget is based upon their stellar performance.  You are essentially rewarding them with a more challenging budget due to their great prior year performance, which could cause them to not make the effort to meet the less achievable numbers, or worse, they could decide such unfair treatment is a reason to quit. ......
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The Right Price for Maintenance

The Right Price for Maintenance
Originally appeared in National Apartment Association's UNITS magazine in March 2014. Is your portfolio consistently over budget? Many multifamily companies have poor property level purchasing habits that have become an accepted way to do business. Busted budgets, rogue spending, decentralized purchasing programs and a general lack of control at the corporate level are just a few of the issues that plague companies that don’t have a technology-based managed procurement plan in place. Typical Purchasing Environment Typically, MRO, paint, floor covering and office supply purchasing decisions are handled at the property level. However, pricing and discounts are negotiated with suppliers on a corporate level. This creates a problem as the purchasing decisions made at the property level are not always in line with corporate guidelines and can erode the value of the negotiated supply contracts. This leaves the management company with little or no control over the supplier, product, and pricing choices being made at the property level, not to mention that maintenance team members who are actually making purchases are doing so against a budget they may have never even seen or understand. Bill Nye, CEO of Fayetteville, North Carolina-based, Caviness and Cates explains, “Before we had a technology solution for purchasing, some of our maintenance team members were keeping budgets with a legal pad and a calculator, some of the savvier property managers had spreadsheets, but even those were hit or miss in terms of accuracy.” A Better Way to do Business e-Procurement solutions are designed to increase NOI for man......
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