- June 30, 2016
- June 23, 2016
- June 20, 2016
It’s no secret that comparing your company or property’s operational costs against other competitors in your market can be a critical factor for success. But how, exactly, are you supposed to do this?
NAA recently spoke with past participants of the NAA Survey of Income & Expenses in Rental Apartment Communities to see how they’re using the survey results to improve their performance year after year.
1. Use the Results as a Budgeting Tool
“For existing properties, the information helps us budget for coming years,” said Susan Passmore, CAM, CAPS, Executive Vice President of Blue Ridge Companies.
Sondra Wimbs, Vice President of Property Management for Alco Management, said the data is particularly useful for budgeting for lease-up properties.
“If you’re starting a budget from scratch and looking at the lease-up budget, and projecting the next 12 months out even before it’s been built, it’s a great tool to look at what other people in that market spend in different properties,” Wombs said.
2. Compare Your Costs against Your Competitors
Greg Lozinak, Vice President and Chief Operating Officer for Waterton Residential, said all of Waterton’s properties participate in IES every year for benchmarking purposes.
“If we think our operating expenses are out of whack somewhere, we’ll see what similar assets are running at to see where the differences are,” he said. “We’ve looked at it [survey results] and it’s caused us to raise questions of our own.”
For example, Lozinak said, they might find that there’s a better cable contract other properties in a given market are using that a Waterton property should consider. Or, there could be cost differentials because of a how a property is staffed.
“If we’re staffed higher than others it could be required because of the age of the property, or the type of property. A high-rise community could have different costs because it requires regular corridor cleanings, or a property could be staffed higher because it offers a concierge service,” said Lozinak.
3. Guide Acquisitions
“When we are acquiring properties, having the information helps us establish operating pro formas to evaluate the feasibility of the deals, especially in areas where we don’t currently operate,” Passmore said.
Dan Haefner, President and Chief Operating Officer of Atlanta-based CFLane, agreed.
“We like to use it as general information in original underwriting assumptions for acquisitions, and as an ongoing benchmarking tool for actual operations once the acquisition is made,” Haefner said.
All IES participants will receive a free copy of the results this fall, and according to past and current participants, filling out the survey isn’t as hard to do as it may seem.
At Waterton Residential, the accounting team at the corporate level uses the company’s property management software to map their chart of accounts.
At Alco Management, Wimbs said the regional managers complete the survey and staff in the corporate office inputs the data.
“One survey takes maybe 10 to 15 minutes to get through. The first one takes longer, but once you get going it’s pretty easy to get through them,” she said.
Still on the fence about participating this year?
“You need to at least try it and do it, and just see how you can utilize it in your company,” Wimbs said.
The 2013 Survey of Operating Income & Expenses in Rental Apartment Communities Executive Report is available for download, and the same information is also available as an infographic.
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.