I hate to break it to you, but…
We’re more than midway through summer which means one thing for Property Managers…
If you have been trying to push it out of your mind and not think about it yet, now is the time to do so. It’s never too early to start mapping out numbers for next year.
Do your homework before you start
If you can’t measure it, you can’t manage it! Dig up old research, previous budgets, market/sub-market conditions, and variance explanations before you get started. This will be crucial information in preparation for your budgeting process.
Expect the Unexpected
Your contingency plan… needs a contingency plan! While you may think you have everything covered, always expect emergency repairs. Prepare a budget for those “random emergencies” that may and probably will pop up throughout the year. As they say, it’s better to have and not need than to need and not have! If it comes to the end of the year and you find yourself with an excess budget, consider ways that you could apply it to “extras” that will improve your property and make your residents happy. Items such as indoor cleaning services or outdoor work like snow plowing services are always great add-on’s that will please your tenants.
Review New Industry Data
There is constantly new data and technology coming out in the industry. It’s important to look into all the new apps and information as something might pertain to benefiting your property’s budget. This information can be found via blog articles, YouTube videos, real estate news sites, audio podcasts and more! Also, reach out to any property management organizations that you may be a part of. They may have educational courses or classes to teach you more.
A building’s past can tell you a lot about recent trends or issues that are bound to surface throughout the year. Noticing the constant boiler room repairs or pipes bursting can reveal that it may be worth it to invest it something new for the particular area. The common trend is that most people usually wait until their boiler bursts to replace it. Unfortunately, at this point the costs are far exceeding just the costs it would have been to replace it beforehand. Keep your property budget in mind and proactively invest in upgrades before it’s too late. You’ll be surprised how some seemingly little things such as this will go a long way at the end-of-year budget review!
Materials and Labor
Review the requirements that you’ve invested in through the year. Everything from staffing uniforms and tools to labor hours and overtime expenses can start to add up if you’re not paying attention to detail. Look for ways to cut some of the spending and see what areas have the potential to be trimmed.
Control the Controllable!
Prepare yourself for the budgeting process mentally, emotionally, and physically. Set aside specific times when you devote yourself to working on the budget. If you can, delegate some of the tasks to your staff. And help yourself be on top of your game by getting enough sleep at night and eating right.
There’s no reason to put off creating your next annual budget. Just remember – you’re not planning for the next year, you’re planning for the longevity of your property. The financial health of your community, including your property values and the lifestyle of your residents, all hinges on creating a budget that works for your association.
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