In case you were wondering if I was dead…I am not. I have noticed that every time I have to think about the whole trademark dispute I get writer’s block. This time not only did I have to think about it, I had to collect all my evidence, send it off to my fantastic lawyer and pay him some more money. Anyhow back to business.
Buildings Have Inertia
When I took on the building project I knew I was in for a hell of a ride. I hate to break it to the get rich quick folks who might have landed on this blog by mistake, but property management is hard work. Dealing with people and old buildings is difficult. Contractors are a giant pain in the rear. It’s not like you can just give up and go home either. Turning a building around consists of being more stubborn than reality. You as the manager have to hold the line.
This Chart Is The Result Of Hard Work And Vision
If you look at the rent roll, this is the potential income for every month. See how it goes up? That’s good. In this case it means that we have only one vacant apartment.
Notice the collections number going up as well. Also good. This means we are collecting a lot of money.
See how the arrears number is going up? That’s probably bad debt we will never collect on. That’s bad. Why is that number going up? Well just two residents are causing that number to skew upwards. They each owe about $6000 each. We’ve been kicking these characters out since June – July and the sheriff is gonna come a’knocking this month. In the world of building management getting the non-payers out fast is good. That way you can find someone good to take their place.
Doing Away With Stupid Promotions
From the minute I started I completely eliminated promotions. We used to give away thousands in free rent. This attracted all the neighborhood hoodlums who could not manage their affairs and money. Come live here! We’ll give you free rent because we’re desperate. I’ve kicked out like 10 of these characters already.
Raising the Rent
Rents are up a full $100 per unit and we also charge extra for parking that used to be free. Don’t sneer at parking charges, we’re getting about $600 monthly more just for parking.
No New Residents Are Defaulting
This is how many of the apartments I’ve rented since June are not paying their rent. ZERO, ZILCH, NADA. They are all paying their rent.
I am not actually improving the units more. I changed the timing of when the apartments were ready. Timing is everything! Before I showed up, we used to show dirty disgusting apartments. Then once someone rented it, it got renovated. Currently we fix them up as soon as we can so that decent people can picture themselves living there. It also keeps the staff from freaking losing their minds as people move in. The end of the month should not be a surprise. By having the units ready ahead of time, we can relax on moving day because everything is done. Does it cost more to fix it now? No, it saves you money and improves the quality of resident that you get.
Just to prove that arrears do not go up forever, here is a second building I manage. Here we collected so much dough this month we surpassed the rent roll by $20,000. I’ve been working on this project for a while now, but people have paid me back the money they owed.
Working On The Chronic Cases
In this building we have a lot of people who have been with a long time who like to get interest free loans from us. It’s offensive because in some cases their rent is really low, we get $300 – $400 more now than they pay and they still don’t pay. So how it works is that the tenant won’t pay, we do our legal magic, take them to the Landlord & Tenant Board, they ask for a payment plan, we give them one or the adjudicator gives them one, they pay up. When their payment plan is over…they immediately start back with the arrears again.
Other than cash flow issues this causes, it wouldn’t be so bad except for the legal fees. The building gets to pay those. Thousands of wasted dollars we could spend on maintenance, improvements, parties… Don’t get me wrong I don’t mind paying Jeff Shabes for a job well done, it’s just that it’s the same bad apples that keep him busy.
Here again I’ve started with the continual late payment forms. They can behave or move. All these guys are month to month. It will take me years to get them out. Frankly, the continual late payment forms give 3 months to vacate. Count ahead folks…November, December, January…how many empty apartments do you want in January? So I didn’t give the continual late payment forms out this month.
It’s Not Just One Aspect That’s Important
There’s no straight answer for a lot of property management problems, it’s a combination of little details that need refinement. Paying attention to legals, making sure apartments are rent ready, teaching your on site people sales techniques, keeping your finger on the pulse of the place and making sure problems get addressed quickly or not at all in other situations. Some problems will go away on their own or should be completely ignored.
Progress Not Perfection
There is no such animal as perfection…you’re just trying to do a little better every day, every month, every year. I actually make many mistakes, but no one says I have to hold that position. Admit it and move on to try a new solution, a new tactic until the problem is conquered. Every building is different and each resident is different. That’s what makes my job interesting. I even get late night obscene phone calls from a lady these days…
Credit is Due To Others
I am great at property management, but I would literally be nowhere with out the people who work hard on site every day. I’m like Captain Pickard “Make it So!” I declare and stuff gets done. Still there’s no way that I can paint every apartment, manage every tenant, clean the lobbies or even pay for tradespeople to work without the support of the owners and site managers. On the other side of the balance sheet, the owners are mostly responsible for keeping costs under control and getting trades in. They want it that way. One of the owners is a fearsome negotiator and while I’m working on the offensive side of keeping income as high as possible she’s playing defense and keeping expenses low.