When meeting with new prospective clients, property management firms often talk about the value they bring in terms of customer relations and reporting. However, the greatest value that a PM firm can bring is to drive up the property value of the owner’s building.
Currently, the world is in economic flux as the Coronavirus pandemic takes its toll on our communities and workplace. The real estate market is feeling the brunt of this uncertainty. Perhaps there is no better time for property managers to work to mitigate the effects of COVID-19.
Pricing Rentals
How has the market changed? Global News recently reported that “The COVID-19 crisis could put up to 7,500 homes back on the long-term market as owners seek to minimize losses, according to advocacy group Fairbnb Canada, a coalition of homeowners, tenants, tourism businesses and labour organizations.”
Now’s the time for property managers to review how property values in their market has changed and evaluate their current pricing strategy. If units are priced too high, the vacancy rate will be undesirable. Priced too low, and there’s money left on the table. And, it’s not always that cut and dry. A property in a highly competitive market may opt to keep rent rates competitive, knowing that even a percentage-point increase in their vacancy rate could significantly impact cash flow. Yet a luxury apartment may accept a higher tolerance for vacancy in order to find their ideal renter and maintain a higher price point. But too high, too low… either way, revenues drop. It’s finding that optimal point that is key.
Maintenance
All professional property management firms have a plan for preventative maintenance. The repairs the management company makes now averts future problems that will run a great deal more than adjustments along the way. And, it prevents deterioration and depreciating value. Without these preventative measures (as well as a reserve put aside for needed updates and renovations) a property’s resale value can really suffer. In short, an efficient property maintenance program saves money by minimizing risks, extending the life of appliances and equipment, and keeping tenants happy. And, of course, a well-maintained building brings in the highest possible market rents.
One situation where property management software can help ensure owner value is through a detailed and organized history of the building’s maintenance records and ongoing inspections. This type of accurate documentation of pest control, HVAC maintenance, upgrades, new equipment purchases, etc., can help an owner command a higher selling price.
Screening
Especially during times of economic uncertainty, getting the right tenants has never been more important. The wrong tenant can take a chunk out of profitability, especially if it goes as far as having to get an eviction notice. And, by then, the risk of damage to the property has just skyrocketed. Property professionals cannot compromise on the quality of a tenant. The screening process should be consistent, and include a credit check, background check, reference check and in-person interview.
Often property managers use only the FICO credit score that accompanies the credit report to determine whether an applicant would make a good resident. But that doesn’t offer a complete picture. Consider this: Some people have never missed a rent payment but are late paying bills.
Property Vista offers a comprehensive solution to assessing applicant suitability. It includes an integrated credit check with Equifax, an assessment of the applicant’s mean income from their past location to their new location, a statistical analysis of the historical information in their credit report and a probability analysis of the rest of the metrics. This gives you a more rounded view of whether or not a prospective tenant is a good fit for your property.
How Property Vista Helps
Here at Property Vista, all our solutions are designed to help property managers improve efficiencies while improving the customer experience. To learn more about our solutions for marketing, leasing, communication and operations, check out pricing and get a demo here.
