5 Tips on Property Management Budgeting
We’re midway through summer which means one thing for Property Managers… BUDGET SEASON! If you haven’t put much thought into next year yet, now is the time to do so. It’s never too early to start mapping out numbers for next year. Here are 5 tips on property management budgeting.
Review New Industry Data
There is constantly new data and technology coming out in the industry. It’s important to look into all the new apps and information as something might pertain to benefiting your property’s budget. This information can be found via blog articles, YouTube videos, real estate news sites, audio podcasts and more! Also, reach out to any property management organizations that you may be a part of. They may have educational courses or classes to teach you more.
Expect the Unexpected
While you may think you have everything covered, always expect emergency repairs. Establish a budget for those “random emergencies” that may pop up throughout the year. As they say, it’s better to have and not need than to need and not have! If it comes to the end of the year and you find yourself with excess budget, consider ways that you could apply it to “extras” that will improve your property and make your residents happy. Items such as indoor cleaning services or outdoor work like snow plowing services are always great add-on’s that will please your tenants.
A building’s past can tell you a lot about recent trends or issues that are bound to surface throughout the year. Noticing the constant boiler room repairs or pipes bursting can reveal that it may be worth it to invest it something new for the particular area. The common trend is that most people usually wait until their boiler bursts to replace it. Unfortunately, at this point the costs are far exceeding just the costs it would have been to replace it beforehand. Keep your property budget in mind and proactively invest in upgrades before it’s too late. You’ll be surprised how some seemingly little things such as this will go a long way at the end-of-year budget review!
Materials and Labor
Review the requirements that you’ve invested in through the year. Everything from staffing uniforms and tools to labor hours and overtime expenses can start to add up if you’re not paying attention to detail. Look for ways to cut some of the spending and see what areas have the potential to be trimmed.
Track your Payments
When it comes to preparing annual budgets, the process becomes a lot easier when you have past reports and numbers to look back at. Set yourself up for an easy report by taking the time throughout each year to track your current payments and invoice. Keeping these files organized will keep you from going crazy as you try to figure out what everything will add up to going into the new year.
While the process of budgeting may be one of the least enjoyable aspects of Property Management, it’s definitely one that can relieve the most stress each year. Being able to strategically spend and save where it’s possible can completely make or break a property. Don’t let your budget fall to the wayside.