Effective property managers are worth their weight in gold, says Gregg Huntingford, CEO of Spire Property Management. Company payroll, accounting and bookkeeping, tax, wealth management - just like these functions, property management is a role best left outsourced.
Huntingford explains that outsourcing the management of properties allows owners and landlords to focus on their core business without having to collect the rent, haggle with tenants and attend to maintenance issues.
He outlines some the ways in which professional property managers add value:
- First and foremost, good property managers achieve better tenant retention rates. This is a key priority for property owners as vacancies, and sourcing new tenants, pushes up costs through the commission payable to property brokers as well as high installation costs.
“Keeping properties fully let is a critical function in property management as rental income is the basis of the investment return on a property.” Huntingford notes that at Spire the focus is on maximising income by ensuring that vacancies are kept to a minimum with a creative dealmaking ethos. “We aggressively let space where it becomes vacant, and we look to retain existing tenants by proactively approaching them when leases are set to expire.”
- According to Huntingford, in addition to tenant retention, property managers can also assist with the reduction of property operating costs.
"Property operating costs need to be carefully observed to ensure that the most competitive price is being paid for the best possible service. Effective property managers can ensure that service levels of soft service suppliers are carefully monitored and managed to ensure the highest possible service level is provided to the tenant and their clients. In particular, utility costs and means to keep them low are increasingly pertinent at present."
- Property managers can also support landlords through the skilled use of another fundamental property tool - benchmarking. “It is essential to continually compare the performance of a building against similar properties in the same geographic area to ensure that it is matching, if not outperforming similar buildings,” says Huntingford.
“Property managers often engage in ongoing benchmarking for the buildings under their management to ensure that their performance is maximised, and if not, to find ways to improve the performance of each building.
"A reduction in the costs makes financial sense, driving a reduction in the cost of occupancy that tenants are faced with. The result is a reduction in vacancy levels and ultimately increasing the value of a building.”
- Huntingford also advises that professional property management teams will maintain the value of the building on behalf of the owner by ensuring that the facilities are maintained regularly and that preventative maintenance is undertaken to address future problems.
These are a few examples of ways that effective property managers add value to a building in the short, medium and long term. Although, in a bid to save a buck, it might seem worthwhile to “go it alone”, in the long term this misses the many opportunities to create additional value that one can find by partnering with a good property manager,” concludes Huntingford.