Best Practices for Small and Rural Property Management

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Transcript Best Practices for Small and Rural Property Management

Best Practices for
Small and Rural
Property
Management
Corporation for Supportive Housing
MHSA Small County TA Call
December 15, 2010
www.csh.org
Why is PM Different in Small
and/or Rural Areas?
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Economies of scale are elusive for small
properties or small portfolios;
It is challenging to deploy staff to administer and
maintain properties over large geographic areas;
Small organizations have less cushion to absorb
changing market conditions;
Most small counties lack experience managing
the Permanent Supportive Housing model.
Why is PM Different in
Supportive Housing?
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Property management within the context of
supportive housing can be thought of as being
responsible for a “double bottom-line” maintaining safe, clean, cost-effective properties
while also partnering with supportive services
staff to help ensure that at-risk and formerly
homeless tenants are able to remain living in the
housing successfully.
Keys to Property
Management Success
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Organization Goals
Portfolio Composition
Revenues and Operating Budgets
Leadership
Staffing and Organizational Design
External Relationships
Unique Market Opportunities
Best Practices:
Organizational Goals
The best property management organizations:
 Clearly identify how property management fits
with their mission;
 Align staff, board and leadership to achieve
common outcomes for the properties, the
residents and the organization;
 Take pride in their product: strive to be the “best
housing in the neighborhood”
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Best Practices:
Portfolio Characteristics
Portfolio characteristics impact profitability:
 Challenging properties may require more
revenue than management fees provide.
 Geographic concentration: the smaller the
portfolio, the tighter the geographic spread
should be.
 Condition of properties: New or newly acquired
properties should be in good condition.
 Reserves: Properties must have adequate
reserves to sustain them.
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Best Practices: Revenues
and Operating Budgets
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Organizations with small portfolios – especially if
geographically dispersed – need additional
sources of revenue.
New property management organizations need
funding to cover start-up costs.
– Sources of start-up and operating support:
• Development fees
• Asset management fees
• Grant revenue
• Fundraising
Best Practices: Leadership
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Strong, hands-on leaders who are deeply
involved in operational details;
Innovative and flexible;
Expressly empowered by their boards, the
property owners and their bosses to set
standards, policies and procedures across the
portfolio.
Best Practices: Organizational
Design & Staffing
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Flatter organizational structures work better;
Clear assignment of responsibility for property
management tasks;
Hire for positive attitude; be willing to train;
Focus on staff quality, team-building and
retention.
Staffing rule of thumb: Number of nonmaintenance staff should range from .30 to .45
FTE per property.
Best Practices:
External Relationships
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Excellent external relationships were a
characteristic of all model firms studied.
– Strong relationships with vendors, including
prompt payment of vendor invoices.
– Strong business relationships with banks,
regulatory agencies, courts and municipal
services.
– Knowledge of and relationships with social
services agencies in the community help
provide tenants with the best possible range
of services.
Best Practices: Unique
Market Opportunities
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Most successful organizations are adept at
creative responses to market opportunities.
Examples:
– One small CDC partners with a larger
management company for training and technical
assistance.
– Several companies use resident managers,
offering free or reduced rent in exchange for
basic janitorial or emergency response services.
– One organization helps residents launch
businesses to do landscaping, unit turnovers and
other custodial work.
Operations
Strong similarities were observed
in how companies organized,
deployed and focused their
operations.
Best Practices:
Administration
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The smaller the properties, the more centralized
the administration.
Make rent collection and occupancy the top
priorities.
Keep teams connected with structured and
regular meetings.
Best Practices:
Maintenance
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Manage maintenance close to the properties.
Establish a regular maintenance schedule and
stick to it.
Conduct regular unit inspections to identify work
order priorities.
Stock only minimal inventory.
Consider residents, part-timers or contractors for
custodial work.
Establish a single point of contact for work
orders.
What are the advantages of
a small portfolio?
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A small organization focused on delivering highquality property management services can have
a dramatic impact on the quality of a
community’s housing.
Small organizations can often be more flexible
than large ones, reinventing themselves as they
grow, and in response to new opportunities.
Finally, a skilled, hands-on leader can work
wonders with a small portfolio, overcoming the
absence of strong systems.
High impact solutions
The best companies routinely choose solutions to:
 Optimize curb appeal;
 Minimize the time required to prepare vacant
units for occupancy;
 Engage the right skill level for the task (i.e., do it
right the first time.
 They are flexible in assessing using in-house
staff vs. contracting out based on cost, time and
quality.
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Systems
Successful companies adopt standardized
systems and customize as appropriate.
 Property management accounting: general
ledger, accounts payable, accounts receivable.
 Tracking vacancies.
 Budget and budget monitoring reports.
 Work management system (can be manual).
 Regulatory reporting capacity.
 Annual audit readiness.
 Personnel, payroll, benefits management.
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Source of Information
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“Best Practices for Small and Rural New
England Property Management Firms”,
Prepared for NeighborWorks America by Judy
Weber and Laurie Gould, 2002
Other Resources on
Property Management
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Toolkit for Developing and Operating Supportive
Housing, Housing Operations Section
Best Practices Manual: Integrating Property
Management and Services in Supportive Housing
The Seven Dimensions of Quality for Supportive
Housing
Supportive Housing Property Management
Operations Manual
All available at www.csh.org
For questions on
Property Management
contact Anne Cory or
Alan Saunders at the
Corporation for
Supportive Housing