Over the last few months, Charles Schwab has come out with a series of commercials that I think are absolutely great! The overall premise is:
“In life, you question everything. The same should be true when it comes to managing your wealth. Are you asking enough questions about the way your wealth is being managed?”
The same is true for your property. Try reading that passage again, but replace “wealth” with “property” or “asset”. Keep in mind, oftentimes your “wealth” is “property” or “asset.” As we closed out 2014, most of us looked back to reflect on the year now behind us. As we enter 2015, we now look to how we will reach our goals for the year ahead. How will we make 2015 better than 2014? When it comes to your property, there are 3 questions you should start the year off asking your property manager. These questions, include:
1. Is my property at risk?
A recent case study came out which showed amongst all property management companies polled, there was an average of only 15% of tenants that were compliant with the insurance requirements in their lease and even worse, only 4% of vendors were compliant with the property owners’ insurance requirements.
If you called your property manager today and asked for a list of every vendor on your property and their Certificates of Insurance (COI), would they be able to furnish them? Within the hour?
2. How are you proactively managing my property?
We have had wind and rain over the last few weeks that has wreaked havoc on the Southern California area. For some properties, this was not an issue because properties were properly inspected and actions taken knowing that we were moving into winter months. Would a roof inspection have shown issues that could have easily and potentially inexpensively been repaired? Did your manager go out and walk the property after the first rain and heavy winds?
If I asked you when the last time your manager was out at the property could you tell me? What about how many times within the past month?
3. How will you increase my Net Operating Income (NOI) in 2015?
This is what managing the asset is about. And when you ask this question, the leasing aspect shouldn’t be the only consideration. As we start of 2015, just like everyone who made a resolution or a goal to get to the gym, diet, lose more weight, did you or better yet, did your property manager, make a goal to cut the fat, shed expenses, and increase your NOI in 2015?
When was the last time your property manager checked in with you and asked what your goals for the property were? Or are they just hoping you don’t sell so they can keep the monthly income?
Start a conversation, ask the questions, and demand a timely response. At the end of the day, you may look at it as you are only paying them $2,500/month to manage it. When you should be looking at it as you are paying them $30,000 a year to care for the property, be responsive to your tenants, and continuously search for ways to increase your NOI. Or better yet, what else should your property manager being doing for earning that $30,000 per year?
Are you interested in receiving a free management plan for your property or properties? If so, contact our Property Management Product Council Chair, Nicholas Ilagan at firstname.lastname@example.org