Delaying things can sometimes be a smart move. For example, orchestrated delays are an artful part of negotiating. But when it comes to managing your property’s day-to-day operations, although there are some things you can put off, there are others that you need to take care of ASAP. Keeping a constant watch on these will keep your investment at peak performance.

Lets look at 3 core essentials you must stay on top of and should never let slide, even for a day.

1. Occupancy.
Units that are filled put money in your pocket. Empty units take money out. Priority #1 for your management company is to fill up your property. Lost income from an empty unit is never recovered. If your occupancy level is below the market average, find out why. There can be any number of reasons tenants are moving out and others are not moving in, such as too much deferred maintenance. Whatever the culprit, fix it.

2. Attitude.
Once your property is filled up, priority becomes keeping it full. And more often than not, you’ll find the key to this is all about having the right attitude. Every member of your management team has to have a “can do” attitude; otherwise you end fruitlessly spending your time managing the manager and trying to turnaround poor attitudes. Find people who are inherently go-getters and ruthlessly dump those who are not.

3. Collections
Collections are always a high priority. Rental income puts the “cash” in cash flow. You can expect a few outstanding rents at the start of the month, but your management company should have all rent collected long before the next rental payment is due. Rents at go uncollected for more than 30 days are likely to never get collected.

The best way to handle this is to have a reporting plan in place that ensures nothing slips through the cracks. A “Monday Morning” report from your management company reminds them that your eyes are on their performance. The report includes current occupancy, projected occupancy, rent collected and delinquent rents.

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As important as property management can be to successful ownership of commercial properties, it is also not limited to a single person or company. To what extent you view the concept of property management as a team effort can often determine your relative success as a property owner.

Let’s explore the basic components of a management team and what each component needs to be able to do for your business.

First, there is the core management unit. This person or group can and should handle the following:

* Tenant applications
* Holding security deposits in escrow
* Coordinating tenant background and credit checks
* Rent collection
* Handling of tenant questions/issues
* Posting notices for eviction (as needed)
* Coordinating repairs/maintenance
* Marketing/advertising for new tenants

None of these important issues are to be taken lightly and this is important because many landlords often look as property managers as the rent collectors and may overlook other important things the management company should be doing.

Next, there is the property maintenance team. This team may not need to be used in its entirety, but each member is important, just in case you need them. The maintenance team should include:

* A contractor/handyman
* An inspector
* An electrician
* A plumber
* Landscapers
* A painter
* A carpet or flooring specialist

I could probably list others here but these professionals can be pivotal in both fixing small problems quickly and also turning around vacant units as quickly as possible.

The last part of your management team is what I call the paper group. These team members would include people like an accountant and certainly an attorney, who would both coordinate review of all your paperwork but also assist with the legal proceedings of any eviction. These team members are often the unsung heroes in property management and can make your business life much easier when you have them on board.

The best time to assemble your team in its entirety is during the early stages of property ownership and ideally before you ever purchase the property. The worst time to assemble your team is on an as needed basis, when you really need someone, as this can lead to high team turnover and poor overall performance.

Interviewing each team member, using referrals for out of area properties, and periodic evaluations of performance are all additional aspects of working with a management team that will additionally make your property ownership experience a better one.

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Today’s tight job market makes it difficult to find good apartment management personnel, especially for the entry-level positions. Currently about eighty percent of new hires come from similar positions at other apartment management companies. This means that not only is the applicant pool not large enough to meet current and future needs, but also that a number of these applicants do not have a stable job history.

This means that the apartment management industry must look in other areas in order to find good new personnel. For most apartment management positions at the entry-level customer service is an important requirement. Also, enthusiasm and loyalty to the company are very desirable in any employee. With this in mind, how and where are these people to be found?

One simple answer is by looking at the people encountered in daily life. Waiters and waitresses spend much of their time in customer service, and a good experience at a restaurant can be thought of as a mini-interview. This is especially true if you come after the rush hour for lunch or dinner, for then you see their character well into their workday. This is also the best time to have a five minute conversation with them, as they are not pressed into immediate service at other tables.

The best way to make an impression in such places is to leave a business card specifically designed for hiring in mind. It should have contact information to you personally, and also a brief description of the apartment management company. An attractive picture of one of the properties managed is also a good idea.

Another good calling card is a company newsletter, if your apartment management company produces one. Many apartment management companies now spend a good amount of time and money to produce a quality newsletter that looks much like a national magazine. Select an entertaining and informative issue, and keep a number of copies available to be given to prospective hires.

Attracting mid and senior level employees for apartment management personnel from other fields is not done often, and can yield very good results. One of the best areas to find new apartment management candidates is from the hotel industry. Advertising for higher level positions in their trade magazines can often bring rewarding results.

Another important and overlooked source is hiring from within. Apartment supervisors should be trained to make employee referrals when they have excellent employees. This is important for two reasons. First, it increases company loyalty, for many people will be more inclined to stay with a company if they hear about and see their coworkers climbing the career ladder. Second, these candidates have greater knowledge about the management industry and the company in particular.

In this regard, open positions within the management company should be made public and updated frequently. Having a website or other location where all positions are described is also a good idea. This allows employees to understand what career opportunities exist in the management company, even if they are not currently available. These and other ideas can help find great new apartment management personnel for any modern company.

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There is a belief that an apartment investor can “get away with murder” by not having a professional property management person on site is negligent on the property management spectrum. The stark reality is that next to the rents, the property management aspect is top of the list for essentials in the apartment investing market. The average apartment complex has a few hundred units and at the very least, 40 hours of daily work tasks. These tasks need to be done on the occupants schedule not the schedule of the management. This creates a very interesting dilemma for any of the property investors that feel a 40 hour employee on site is either unnecessary or unwarranted. In both aspects this is incorrect. A simple table will demonstrate why this is a reality and a reason to employ a property manager on site, at least part –time.

Four Reasons to Come out of Pocket for a Great Property Manager on Site

• Professional Presence: Many Residents Prefer and Expect a Person On Site
• Customer Service Advocate: Professional Approach
• ‘Fire’ Person: Daily ‘fires’ That Blaze and Can Destroy an Investment/ Separate from the Real ‘Flames’ of a Fire
• Maintenance Issues: If There is no Dedicated Maintenance Person On Site the Professional Property Manager Will Know Who to Call or Do it Themselves
• Collection: Collector of the Rental Units Dues.

These issues listed above are very important and that list is just a microcosm of the reasons that can be formulated in the realm of property management for apartment investing success. Many other reasons are commonsense related and need no further defining and if they did then possibly there are other investment alternatives in the horizon. The apartment investor realizes all too well that the risk of failure in the business of renting units to strangers is relatively high. The nature of the business screams for the property to be adequately protected with a professional on site during the working hours of early morning to late afternoon. This is just how it is so when the check is being written, for the purchase of the apartment complex, make certain that an additional percentage is weaved into the final amount. This will make it that much easier to hire the property manager off of sites like IREM.org.

Are There Reasons to Not Employ an On Site Property Manager?

Yes. The size of the apartment complex may will decide what time of management you will need.. The tasks are so monumentally challenging to own and operate an apartment investment that the reasons for not employing a trained professional are almost not there. For some areas of the United States, where the rentals can be seen as almost homeownership by the clientele, these are the ones that can afford to not have an on-site property person. In the end the apartment investor that is serious about maintaining the integrity of both the rental units and their own will think very seriously about the hiring of an on-site property manager.

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Some of the essential team members that you’ll want to have in place include:

· Bird dogs · A real estate agent or agents · A commercial mortgage broker · A banker (one or more) · A title company or closing attorney · A real estate attorney · Private lenders · An SEC attorney (if part of your business includes securing private funding) · An asset protection attorney · An accountant or CPA · Property management companies · Contractors

Contractors are the behind the scenes magicians that can really aid your overall cash flow in the long run as an apartment owner. Units that are in need of complete renovation or simply a few updates do nothing for you if they are unrentable. A good contractor (or collection of them) can minimize the time that units in need of some fixing stay vacant, thus optimizing your income from your properties.

Finding contractors who both do good work and do so in a timely manner can sometimes be challenging but remember that it is a tougher economy out there right now and people are looking for work. Make sure your contractors are necessarily bonded and insured and don’t be afraid to move on if someone does poor work or, worse yet, shows up late or not at all. It is your business and you have every right to expect quality and timely work.

I suggest having a variety of contractors at your disposal. You won’t need all of them all of the time (at least you hope not) but there is something to be said for specialization. Maybe you’re replacing carpet in your units as they turn over from one tenant to another. A professional carpet installer might be a perfect fit for getting a couple of units done at a time. You could make similar arguments for plumbing, electrical work, painting, etc.

Some contractors will claim they can do it all but you rarely need it all when managing apartment units. For assorted odd jobs, a good handyman is always a good bet and they can be great allies when tenants call with fix it items. It is both easy and practical to have budgetary limits set with your property management company so they can coordinate with contractors as needed for small jobs and avoid you getting bombarded with calls for ‘nickel and dime’ issues’.

Remember, this is a business and, as a business owner, it is both reasonable and advisable to delegate as much as you can so you can actually enjoy the fruits of your labor. Remember that just about all highly successful businesses share a common mindset. Success is a state of mind that is shared by few but for which principles are more freely shared than you might think. Make the acquaintance of wealthy people and pattern your own business after what they have done. This is one of the most basic secrets of becoming wealthy beyond your wildest imagination. Now that you have heard what I have to say about building a team, the next step is to find the deals that will help you build the fortune that is out there for the taking!

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Since a professional team is so important to your success as a real estate investor and, more specifically as an apartment owner, I would like to take the opportunity to discuss how to find and use these team members in a little more detail.

Just to recap, some of the essential team members that you’ll want to have in place include:

· Bird dogs
· A real estate agent or agents
· A commercial mortgage broker
· A banker (one or more)
· A title company or closing attorney
· A real estate attorney · Private lenders
· An SEC attorney (if part of your business includes securing private funding)
· An asset protection attorney
· An accountant or CPA
· Property management companies
· Contractors

Property managers are the epitome of delegation when it comes to owning apartments. A rare few among real estate investors actually enjoy the property management side of the business but most would prefer to have someone else do it. The larger the number of units, the more important it becomes for you to seek professional property management. Among the many services they provide are:

· Tenant screening and selection
· Rent collection
· Call center for tenant questions and problems
· Marketing/advertising for new tenants
· Arrangement of property cleaning and minor maintenance
· Processing of evictions (as needed)

Would you want to have to handle all of that, especially if you owned a building with 20 or more units? Probably not. Property managers charge a percentage of the gross rents (usually 5-10%) for their services and, when done well, it is worth every penny because you can truly be a business owner, rather than owner, manager, troubleshooter, and shoulder to cry on, all at the same time.

Property managers come in a variety of shapes and sizes and who you choose will largely depend upon the type of building you own (i.e. the number of units). Smaller buildings can usually suffice with part-time managers, such as realtors who do management on the side for extra income. Just make sure they provide the full complement of services you’d come to expect, so it doesn’t end up creating more work for you later.

Larger buildings are more time and effort intensive for a property manager so I suggest one of two things: an on-site manager or a fully staffed management company. An on-site manager is there to collect rents, be a resource for other tenants, arrange cleanup or repairs, and to simply keep an eye on the place. They are usually offered discounted or free rent for what they do and this can be a valuable resource when you have a good manager.

Professional management companies can do everything an on-site manager can (absent living there) but are usually also more involved in marketing and screening for new tenants. They can and should do all background checks, collections of deposits, and walk throughs with the tenant when they move in. Ask other investors who they’ve had success with and you will be on your way to finding a good management company for your own property. Can you see how your empire can now be created without you not having to be a jack of all trades?

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