Through Rae parker
Property maintenance and utilities are some of the biggest and most difficult costs to control in your properties. When run with outdated and inefficient processes, they can seriously affect your income. In a recent webinar featuring Grace Hill’s Stephanie Anderson and Mark Vanderhoof, as well as AppFolio’s Kelly Dean and Daniel Waas, our panelists addressed the most common maintenance challenges that can streamline your task boards, improve relationships with residents and increase your NOI. Read below for a recap of the webinar, plus tips from those who attended.
How does maintenance affect the NOI?
There are many reasons why maintenance can affect your NOI. If you compare two properties, where one has all the procedures, technology, and employee training in place and the other does not, it could be argued that the latter is not sufficiently prepared and its long term effects. could be very costly down the line.
Grace Hill’s Mark Vanderhoof explained that it’s hard to give a precise number, but there are plenty of examples that companies should watch out for that can affect their bottom line. These examples include:
- A lack of culture, policies and procedures that can increase the risk of staff disengagement and workplace injuries;
- Many more emergency calls and service requests which can become very costly and burden on-site staff and residents;
- More moves are due to poor service and dissatisfied residents, resulting in longer turnaround times due to lack of inspections; and
- Poor employee retention due to lack of training, resources and heavy workload
Why is it essential to examine how maintenance affects NOI now?
There is no better time than now to take a look at how you run your business. Everything we knew before has changed dramatically, but the core of what maintenance teams do is still there, it’s just time to rethink how it’s done. Maintenance is the heart and hands of any community, and maintenance teams have a real opportunity to make changes.
Grace Hill’s Stephanie Anderson encourages property managers to sit down with their maintenance teams (even at entry level) and explain that everything they do on a day-to-day basis not only has an effect on the community, but also a financial impact. When you explain this to them, they begin to realize that their mundane daily chores have the potential to save money.
The goal is not only to protect the property itself, but also to continue to help your team understand what is on budget versus what is not, or what is an emergency, so that you weren’t going over budget and they weren’t overworked.
In addition, have utility management software is a great way to control and understand the costs of your property. It can automate the processing of your invoices, the billing of residents and collect data in real time. Your team can save time and become more efficient, while the learnings you collect will enable you to make data-driven decisions. Utility analysis can spot spikes early on, with weekly updates instead of waiting until the end of the month to compare spreadsheets. Having the option to receive weekly reports allows you to compare your buildings against each other or against your peers and can help you quickly determine any opportunities for improvement.
Main maintenance areas to consider
1. How can a procurement strategy control real costs?
It is very important to have a sourcing strategy because you need some form of accountability. This strategy can include buying items in bulk, maintaining inventory, streamlining your processes, and allowing your team to plan orders in advance to help you save on labor costs. It also helps manage your expenses, ensure compliance, and consolidate your total expenses by having a list of approved vendors and items. Just think about how much time your team will save by not having to stray away from the property for one-off purchases – and instead have these items on hand to speed things up like unit towers.
Here are some of the top tips our webinar attendees shared when it comes to creating a sourcing strategy:
- Order only what you need, especially large appliances or more expensive items. Only order out-of-stock items for out-of-stock items or items that you use daily, weekly, etc. (Kali)
- The best way to estimate a budget is to look at historical costs and add or remove anticipated changes. (Karen)
- Try to compare the budget with the actual expenses at the end of each month with the team so everyone can see where we went over budget and where we saved money. The next month’s budget is then reviewed so that everyone knows how much it is budgeted for. (Brittany Clark)
- When setting your annual budgets, take a look at the monthly actuals from the previous year and think about things like, “Where did we spend less and where can we save?” And “Where have we spent too much and should we ask for more?” “(Kali)
2. What are the hidden costs of not performing inspections at key times?
Sometimes we think of inspections only as pre-move-in and out for residents, but there’s one inspection that gets overlooked: inspections of your entire property. Routine and annual inspections are very important and allow you to detect and prevent serious problems. A good example is erosion on your property due to poor landscaping and climate change. These two factors combined can lead to significant damage to your property, such as rotten wood, structural integrity issues, and pest issues.
Here are some of the top tips our webinar attendees shared for performing inspections:
- Having inspections can also help with the budgeting process. This allows you to plan ahead for lighting replacements, etc. (Melissa)
- A lot can happen when a vacant home is left empty for a long time and no one is looking after it. Try to do weekly unit inspections to check for things like water leaks, organic growth, pests, etc. is important. (Kali)
- Just because you have money in your maintenance budget doesn’t mean you should spend it. Many monthly and annual budgets are designed to give you more money than you likely need as a buffer. (Kali)
3. Why is the rapid and efficient conversion of apartments an essential element to increase the NOI?
Unit towers represent a significant operational expense. According to the National Apartment Association (NAA), the cost of a single ride, including lost rent, starts in the $ 1,000 range and can quickly grow to $ 5,000. AppFolio has developed a digital dashboard that tracks all the work required to minimize the unoccupied time of a unit. It’s also clear in showing you where you’re spending your money based on the level of ownership, allowing you to make the best decisions. The convenience of having a software solution can also save your team valuable time and allow things to be planned with vendors in advance. Even if your technicians are not yet comfortable with using new technologies, providing the right training and resources can make everyone successful.
Read below for tips from our webinar participants on why quick and efficient apartment conversions are essential:
- If you find that you have too many moves at the end of the month, try staggering them to help your team transform units faster and more efficiently. (Ugly)
- It is important to understand the strengths of your team. Some maintenance staff are very good at solving flooring problems, while others are more seasoned at handling larger problems. Understanding and recognizing the strengths of each team member can save money. (Kate)
- The faster the turn, the faster a new resident can move in. It also reduces the risk of losing additional income and vacancies. (Ugly)
- Stay in touch with your suppliers on the turnkey expectations of your properties. It is not wise to spend money on suppliers who are overpriced and don’t do quality work, or those who have to come back again and again because the scope of the work has not been made clear. defined. (Kali)
Having the right procedures and processes in place makes a huge difference to the fluidity of your day-to-day operations. Properties that do not have the resources to invest in a software solution and instead use the traditional pen and paper route run the risk of spending an astronomical amount of administrative time researching work orders, and often spend more time to follow up with maintenance and residents than actually doing the work. Having outdated processes also affects your NOI from a compliance and staff perspective, as you are not able to have the accountability and data needed to make important decisions. Partnering with the right technology provider is essential for a smoother operation and allows your team to work smarter, not harder.
At AppFolio, we know there’s no shortage of work, but the challenge really is optimizing your team’s skills, inventory, and uptime. Customers love Pacific Capital Management have seen dramatic results within their business once they have automated their maintenance processes. “Now that we have the whole process in AppFolio, we’ve improved our NOI by re-billing utilities to tenants, never missing a charge. We earn over a thousand dollars per month in additional income, $ 12,000 per year, which has had a significant impact on the value of our assets, ”said property manager Brandi Brophy.
Giving you the tools you need to be efficient and have the right data so that you can make the right decisions is a priority in the services offered by AppFolio.