BY ARI CHAZANAS
There has never been a more challenging time to attract and retain good tenants, so it makes sense to re-evaluate the way we do things in order to avoid the dreaded “business as usual” complacency that can hinder progress in this industry. Overall, a changing marketplace demands a requisite response to keep both tenants and property owners satisfied.
As a property manager, you may often feel as if you are in the service of two masters. On the one hand, you want to be aligned with your property owner in a practical and goal-oriented partnership that focuses on the realistic expectations of the property. On the other hand, a happy tenant means long-term occupancy in a unit that generates consistent revenue.
Unfortunately, these two “masters” do not always see eye-to-eye. So it’s important to find that balance in which both parties are contented. You may think that’s easier said than done, but this doesn’t need to be a daunting task — not when you have clear-cut objectives and carefully considered strategies for reaching them.
You’ll often find that both parties want the same thing, but they may sometimes want to get there along different paths. It’s up to you to know which path is best in every situation.
Here are some sure-fire ways for property managers to make the best choice at that proverbial fork in the road.
Putting Yourself In An Owner’s Position
Try to look from the owner’s position for making any decision going forward. Treat every property you manage as if it were your own vested asset. That means having complete knowledge of every aspect of the property. Work alongside your owner to review all of the critical factors for ensuring the property is fully leased, and make sure you are apprised of the various data for the market in which the property exists. Dedicate yourself to establishing a high standard for reaching the goals you and the owner have identified together.
An owner should welcome your input and participation as part of a team aiming for success through a smart plan and consistent execution of that plan. This relies on constant contact between you and the owner so progress can be monitored and analyzed, victories learned from and adjustments made when strategies fall short of expected results.
This is vital for working with tenants and owners alike. Thorough communication avoids confusion, reassures and builds trust. It also helps better educate you on the condition of the property and the tenants who reside there.
A property manager who demonstrates a consistent presence on-site will make tenants feel comfortable in the knowledge that there is someone at the wheel when a problem arises. Establishing a rapport with your tenants builds confidence in your management skills and capabilities. But more importantly, fostering strong connections with tenants helps to humanize them so your approach to solving problems is always appropriate while continuing to follow all the best practices.
As for working with owners, communication is the lifeblood of a profitable property. You are the liaison between the owner and the tenants, and your job is to make sure the owner knows that all the tenants are satisfied and, should a problem arise, that you can address any issue.
Work From The Numbers
When ownership and management are on the same page in regards to net operating income (NOI), then there is a clear approach for achieving the desired results. But it can be tough to decide on that approach until the numbers and projections are fully analyzed by all stakeholders.
It starts with having a realistic understanding of the demands posed by the property and taking account of applicable financial and operational data in order to generate the most revenue. These demands include available resources for making repairs and upgrades, overhead expenses, debt on the property, along with occupancy objectives and barriers. Operational data takes into account the state of the property and the needs of the tenants that must be met so as to promote a positive environment — simply put, making this a desirable place to reside.
Once the parties have taken all of the critical numbers and factors into account, management and ownership can begin to build a data-driven approach to meet the revenue goals that have been created. Does the building need repairs? Do the units need to be updated? Is the property in compliance with local codes and regulations? These can pose challenges to reaching revenue goals for the year or even for a longer-term outlook. The owner may want to have that work completed, but it could mean a reduction in revenue while portions of or even the entire property remain temporarily unoccupied. Conversely, if repairs or updates go unaddressed, that could bring the value of the property down, which could also be detrimental in the long run.
The property manager’s input into the best strategy should be well-advised and welcome by ownership because it’s you who are the face of the property with both new and existing tenants. You want to have your finger on the pulse of what’s happening on-site and for your contribution to be invaluable in deciding how to proceed.
Choosing The Best Tenants
The property manager is responsible for screening prospective tenants. Every owner may agree on the basics of what they are seeking from a tenant — someone who is quiet and pays on time — but there are other attributes that make up the ideal tenant for each property owner. A smart property manager will consult with ownership to know which type of tenants are acceptable while always remaining in compliance with current anti-discrimination laws.
Maintaining a strong working relationship with tenants and owners alike can be tough, but it’s the smart, organized and dedicated managers who thrive best in this industry. I hope these tips have enabled you to reflect on the state of property management at your buildings and helped identify any weaknesses in your current system.