Continuing on from part one, we look at the next four ways to boost your department income and profit:
5- Leases Expired- another key area we see where income has been lost, is allowing leases to fall onto a periodic status without renewing it back to a fixed term. This ‘oversight’ will cost the company dearly if you charge a lease renewal fee.
6- Routine Inspections (if charged)- so many times when we have conducted business performance health checks, we have found routine inspections not being carried out at the regularity committed to on your management agreement. If you are in a state that conducts inspections every 3 months, then we commonly see inspections occurring every 5-8 months instead. Where offices have committed to 6 monthly inspections, we see them being done every year. The main reason is simply a lack of monitoring by management and so property managers get away with it. Ensuring your routine inspections happen on time, and should you also charge for them you are losing valuable income but not ensuring they occur every time. (By the way, adding extra fees like a lease renewal and inspections can be done easily with training)
7- Automated Management Fees- when conducting business performance health checks we print off the property list and record how many properties are being charged at what management rate. The number of properties that have such a low rate (under 5%) and also charged at 0% can be surprising. When this is brought to the attention of management it turns out these were a mistake or overlooked, and then corrected. Don’t wait for a business health check to pick this up. Print off your property report, look through all management fees charged and ensure they are all where they should be!
8- Automated Monthly Fees- like management fees, also check that all monthly administration fees are being charged at the agreed rate. If entered incorrectly (or not at all) at the start of new management, then it is fair to say that unless you actually go and double-check all of these monthly fees are being charged in accordance with your total property numbers, then this could be like money being thrown away off the end of a jetty!
When we work with departments we see them like a sponge filled with water and just about every department we have worked with has only about 70-80% or less water rang out. There is still plenty of water to come out of the sponge and plenty of department income to be had with the same number of properties you have right now. What we find as the main barrier that stops this is principals and property managers believing it isn’t possible!
Be the one that believes it is possible and go and do it!
The rewards are well worth it!