Posts Tagged ‘Real Estate’


5 Reasons to Shop Your Leasing Staff

Sunday, June 10th, 2012

Fore years my colleagues and I have debated the pros and cons of secret shopping property managers and leasing staff.  On the one hand it can lead to better performance and often to higher occupancy, increased rents and better customer satisfaction.  On the other hand, it is often easy to detect making it’s value suspect at best and may cause distrust among staff and low morale at worst.

Notwithstanding the potential pitfalls I have seen the benefits far outweigh the costs in terms of higher professionalism, customer satisfaction, team building, higher rents and lower turnover of both residents and staff.   What makes this practice so effective is the underlying messages that secret shopping communicates.

1.  Secret Shopping puts your staff on Notice:  Professional leasing personnel will appreciate a company culture that values secret shops.  They understand that performance must be based on measurable factors and that company training will put them in a position to succeed rather than fail.  Secret shops, give them an opportunity to show their mastery over the training.

2.  Secret Shopping exposes weaknesses and pinpoints training opportunities:  How else would you have any idea of the areas needing attention among your staff if you don’t measure the effectiveness of your staff in a real world scenarios.  Secret Shopping is the only way to accomplish this.  If done properly with the idea of helping your manager or leasing agent, they will see the secret shops as an opportunity to grow with the company.

3.  Secret Shopping documents efforts to maintain fair housing practices: If you have ever been shopped by a fair housing advocacy group you know the necessity to be consistent across every tour in every property.  Secret shopping is a very effective way to train this consistency and provides written documentation of your company’s efforts to periodically train and test your staff.  Having a consistent, measurable and goal directed shopping program will get you miles ahead if ever questioned about your fair housing practices.

4.  Secret Shopping ensures consistency across teams and properties: Multi-Family Management is by it’s nature, difficult to homogenize.  Policy manuals can go only so far when the training director or regional manager is miles away.  Secret Shopping can provide an element of consistency across many different communities because the measurement and expectations of the professional shopper are the same regardless of the community.  The shopper does not give concessions for a new person or someone who is going through a rough patch.  They report on each shop in the same way allowing the property management firm to assess the needs of each property.

5.  Secret Shopping provides documentation for employee evaluations: Employee evaluations are critical to the staff improvement process not to mention the basis for giving increases and promotions as well as reprimands and terminations.  Secret Shops, because of their inherent objectivity, make excellent backup for personnel decisions that need to be made.

Although it is important to acknowledge and understand that there are risks associated with secret shopping; it is equally important to understand the significant advantages that secret shopping offers to progressive property management firms and apartment building owners.  Properties are better run, residents are better served and rents are maximized by staff members who are well trained and tested in real world applications.  Now go Shop your people and reap the benefits!

Peter Blogs regularly as The Apartment Sage on his website www.freerentsurvey.com/find-us/.   With over 20 years of property management experience to draw from Peter enjoys sharing his knowledge and insights with others in the industry.  Peter is always looking for ways to help industry professionals and is available for sharing articles and blog posts and speaking on a variety of topics important to the industry at no cost.  You can reach Peter by email at peter@freerentsurvey.com or by phone at (949) 613-1044.

 

 

5 Steps to Building A Killer Budget

Wednesday, June 6th, 2012

Not to offend anyone but really, budgeting is no fun.  Every Regional Manager knows the drill; start in August (aka mid November) and finish before the year is up.  If you’re like me, you come away each year wondering exactly what the benefit is all about and why we let this dreaded and time sucking activity ruin our otherwise productive and goal driven lives.

 

Dictionary.com defines a budget as:  “an estimate, often itemized, of expected income and expenses for a given period in the future”.   If we accept this definition then we must also accept that sometimes events beyond our control cause income and expenses to vary from our best estimates. All too often, however, budgets are used to judge how well a property manager is managing and how well the Regional Manager is leading.  Unfair?  Yes of course, but not likely to change.  Budgets will forever be the key indicator of success or failure of a property.  How then can you insure that you always start with an accurate budget while still leaving room for the inevitable unscheduled losses to income or overages in your expenses?

 

In a word, it’s all in the preparation.  By taking the extra time to research and plan for your budget, you will not only produce better and more accurate results but you will demonstrate to your superiors that you were willing to leave no stone unturned to make your budget numbers the most accurate possible.  Remember, the better you can explain your rational for the budget, the better your boss can explain it and “sell it” to his boss.  I find it useful to follow the 5 steps below to ensure my budgets are always on target and realistic:

 

Step 1.  Gather your backup.  Depending on your business, you may have other items but these should serve as the very minimum:

 

  • The property’s P & Ls for the last three years.
  • The property’s last three years of Budget vs. Actual Variance Reports
  • Most recent rent roll showing amount charged, collected and any incentives in the pipeline.
  • Real Estate Tax bill and expected increase
  • List of all utilities and expected increases with dates
  • Detailed discussion notes with your manager regarding planned improvements, repairs, replacements and inventory stocking.
  • A list from your Payroll department showing who is employed on the property, when they were hired and how much they make.
  • Rent increase binder or file showing when the next increase is expected.
  • Current Market Survey showing where you stand relative to your competitors and whether or not you expect to gain occupancy or vacancy in the coming year.

 

 

Step 2.  Use your company’s budget template or find a good one on line.  I have a great one I use if anyone is interested.  I wrote it in excel to answer a lot of the questions above. You can download it from my website by clicking here.

 

Step 3.  Go down the budget list line by line and review the information in your backup folder.  For example:  If you are working on the Electricity Cost for the year compare the last 36 months.  Take note of any seasonal trends in the amount and cost of electricity. If appropriate you will already have called the utility company’s customer service line and asked them if they are aware of any upcoming rate increases.  If they are, determine when and how much and put that information in your calculations. Finally, for every line item (please do not overlook this) you should have a short one or two sentence paragraph presenting the assumptions you used to determine the budget for this line item.  For example:

 

“Electricity:  Assuming a normal seasonal trend, electricity costs will be highest during the heat of summer and lowest in winter.  According to XYZ Electric Utilitiy, the rate for electric usage is expected to increase by as much as 4% by March or April.”

 

Step 4.  Review your major categories for accuracy and consistency over the previous three years.  A typical budget will have the following major categories:  Income, Payroll, Utility Expense, Maintenance and Repairs, Administrative and Management Fees.  Make sure each of the totals in these categories is in line with previous years.  If you have a category that is quite different from the same category from a year or two ago, it might signal a problem with your individual line items or it may trigger a variance that you will need to explain in more detail.

 

Step 5.  Put it all together and look at it from a big picture point of view.  If you can answer the following questions and back them up with detailed assumptions, you are well on your way to a budget that will work for you instead of against you.

 

  • Does it show more income than the year before?  If not, why not?
  • Are increases in expenses contained to only a few percentage points?  If not, why not?
  • If you answered no to any of the questions above can you explain in detail what you can do over the course of the year to correct the issue or alternatively make up for the shortfall?
  • Is all your backup well organized and easy to reference when the time comes to present the budget?
  • Is the budget presented in a professional and organized folder that will demonstrate your clarity of thought on the issues?

 

At the end of the day it’s all about the preparation.  The better prepared you are to explain your budget, the less likely your boss will be to change it.    Keep great records, back up your assumptions and stick to your guns.  Chances are, your good preparation will translate into a budget everyone can live with.  Good Luck!!