– Guest Blogger, Tommy Hiltz, Colliers International
When I tell people my company does property management, I get plenty of pleasant, vacant smiles. The truth is, not many people know what we do, how we do it, or even why we are needed. Many people have violent flashbacks to the front office workers at their first apartments, who refused to acknowledge broken appliances or leaky faucets. In their mind, we represent that worker, albeit a bit nicer and hopefully more responsive. Our purpose remains associated with negative occurrences and retroactive inadequacies. Yet property management can justify itself in tangible ways not only to owners, but to tenants, employees, and customers.
While the scope can be as wide as the “management” implies, the property manager faces three main objectives:
1. Handle unforeseen events
2. Assist with future planning
3. Oversee expansion
1. Handle unforeseen events – A roof of a multi-tenant office building leaking during a thunderstorm is a bona-fide nightmare for all parties involved. Tenants might try to call the owner, who could be an institutional investor which, due to its remote location, is functionally incapable of handling the emergency. The tenant might then search the internet, praying that whomever they call does quality work as rain water continues to pool on computers, carpeting, machinery, and equipment. Property owners engage property managers to avoid this scenario.
On any given day, we are called to deal with cracked windows, burst pipes, broken air conditioning units, and countless other problems. Property managers can offer a painless resolution to harrowing situations by being prompt and flexible, bringing detailed experience and a robust rolodex of professional service providers.
2. Assist with future planning- A critical aspect of property management is preserving the value of the building for the future.
Because we spend so much time at the properties, we have an intimate knowledge of current conditions that enables us to plan repairs and property improvements and budget with accuracy the properties performance. While some of these expenses, such as Maintenance and Repairs, require us to make educated estimates that account for risings costs and different circumstances, others can be more intricate.
Our planning often involves large capital outlays such as renovations, expansions, or freestanding construction. If an owner has an opportunity to increase the return on investment (ROI), internal rate of return (IRR) or resale value, the property manager is in a great position to point out that opportunity and then oversee implementation of the plan
3. Oversee expansion- Many owners feel unequipped to evaluate the financial merits of a possible project and many lack the time or knowledge to oversee the physical implementation of said project. The property manager can coordinate with the owner, contractors, subcontractors, and other involved parties to ensure that projects run not only on-time, but at or under budget. At Colliers, we routinely oversee significant projects with the goals of adding value and maximizing tenant satisfaction.