Ben is like a lot of savvy longtime apartment owners. He’s been in the multifamily game since the early 80s and has gradually built up a solid, impressive portfolio of profitable buildings. Whether its issues with tenants, vendors or dealing with rough neighborhoods, he’s never been afraid to get his hands dirty. Gang members have lit units on fire, poured paint thinner all over his Mercedes Benz, and even had a maniac fire a machine gun into the side of his building. Needless to say, Ben’s seen it all.
But one thing that he had in common with many industry veterans is the inability and/or unwillingness to change with the times. Much has evolved in the last three to four decades with the advent of the Internet and the advancement of technology. As much as Ben had been through, there is only so much an owner can do to maximize the bottom line when he isn’t utilizing technology to its fullest. On top of that, he was already in semi-retirement mode; not as hands-on as he used to be, trusting his onsite managers more than he probably should, and just overall not 100% aware of where every dollar is going. He had always been old school, which means not exactly being the most organized when it came to bills and finances. Even with his experience and knowledge he knew he wasn’t maximizing his bottom line. It was time for a change.
This is where hiring a property management firm came in. Like most of his colleagues, management companies were a completely unnecessary expense in his eyes. He knew about the high-tech platform where you can literally see EVERYTHING that’s going on with your properties. Whether he wanted to see financials for any of his buildings, the latest maintenance issues, or the most recent applicants, it’s all available at the click of a mouse. Even tenants can apply for vacancies as well as report issues directly online which will get a guaranteed response within 24 hours.
That was all fine and dandy, but he didn’t need any of this right? He’s been in the game for over 30 years and he’s done very well for himself. But we pointed out some issues right off the bat for him when we got to take a look at his operation. Onsite managers weren’t screening tenants properly, weren’t reporting honest/accurate vendor costs or tenant deposits, properly fixing issues promptly; and many other unprofessional behaviors. It doesn’t take a genius to realize this is costing money, big time. It’s also costing Ben quality tenants.
The light bulb went off. Ben decided to hire a management company and went full steam ahead. By starting implementation right away, his bottom line was already looking better. Then his current employees were addressed being assured that as long as they were all on board there was no reason to drastically shake things up internally. Onsite managers were re-trained and there was correspondence with owner-approved vendors.
Within four to six months, Ben’s operation was as lean as ever. And the best part was that Ben saw his profits improve to a point well beyond the management fee; a win-win situation for everyone involved! At his age he couldn’t be happier with the results; he can now focus on growing his portfolio and enjoying his life without stressing about the little things.
No matter what your age or experience level is, it’s time to bring your own operation into the 21st century. Time is money and the “spend a dollar to save a nickel” mentality has never paid off for landlords. Automation is the key to efficiency and success in business today.
Pavan Gudapati is President of CGI Property Management and can be reached at (714) 572-4100 or at email@example.com.