- March 22, 2016
- March 10, 2016
- February 26, 2016
When it comes to minimizing costs and expenses across multifamily apartment portfolios “behavior management” isn’t necessarily the term you’d expect to hear from owners who have been successful at socking savings back into the bottom line. Yet that’s exactly the modus operandi utilized by top firms finding exceptional expense management opportunities in cost centers ranging from payroll to utilities to bundled marketing and even technology hardware procurement.
“Expense management is about thinking more than anything else,” says Brad Cribbins, executive vice president and COO of Alliance Residential, who joined Trammel Crow Residential vice president of asset management Nyla Westlake on the High Impact Expense Management panel moderated by Satteron Enterprises principal Jim Kjolhede at the 2013 Apartment Revenue Management Conference. “Organizationally we are trying to become more efficient relative to expense management,” Cribbins continued. “And we need to continue to press forward on that strategic thought conversation.”
At Alliance, executive leaders have found success in motivating expense management behaviors with the firm’s Ultimate Increase Championship contest that rewards community teams and individuals for significant achievements in expense reductions. Standout expense management programs at Alliance over the past year included creation of an internal help desk, reduction in irrigation expenses, and an $8,000 reduction in bundled marketing costs. Alliance is also adopting policies that allow employees to use their own smart phones as a primary business device.
Trammel Crow Residential has similarly empowered employees—particularly maintenance staff—to proactively work expense management across the firm’s portfolio. “Maintenance guys are always asked to do, do, do, and as a result residents interact with maintenance more than anyone else on site,” says Westlake. “It’s been a more difficult implementation, but we’ve begun quarterly maintenance visits to all units to head off issues before they occur.”
Westlake also says there are still significant budget savings opportunities in utility and recovery line items. “I feel like it is one of the largest areas of improvement and if you’re not thinking about timers and occupancy sensors for fountains and corridors and common areas with [energy hogging] monitors and touch screens, you’re missing out on a big opportunity,” says Westlake, who notes savings of $1,500 a month by turning off a community fountain at night, part of a utilities effort that increased asset valuation by $1 million. “Expense management is about behavior management. Even if you don’t have fancy benchmarking, just paying attention can save you thousands of dollars, so focus.”
Learn about the perks and benefits of working in residential property management and some of the reasons the industry provides career growth, stability and endless opportunities.