Superior Property Management: Do you know what it looks like?

By Jeff Goldshine
President, Finlay Management

The significance and importance of "Superior Property Management" is a discipline of real estate that rarely gets the attention and focus that it truly deserves. No matter what condition our financial markets are in, what is important to an owner is the continual laser focus on the asset.

A manager is hired to maximize the value of your asset. Sounds wonderful, right?

These are great "buzz words" to hear, but what exactly does this mean? How does an owner truly evaluate the BEST management company? Is there a handbook to guide this most important decision?

Sorry to say, there is no easy answer to the most important decision that a multi-family owner will make. This exercise should not just be limited for a newly acquired asset, but a revaluation of your existing management company in place.

The following is a guide to help you decide who is the right management company for YOU!

SIZE OF ORGANIZATION

"THE BIGGER, THE BETTER?" Really?

There are many large property management companies with 50,000 units or more in our industry. You will receive a presentation from senior executives that will feature an engaging PowerPoint presentation from a handsome team of professionals. You will be wowed by the array of marketing techniques, attractive financial packages, as well as impressive client list.

You will hear why the "Big Guy" is better than everyone else. It all feels good, and deciding on the "Big Guy" is comfortable. Many have made this decision. Before you make this decision, something to think about.....

Will you ever see these people again?
What leverage will you have to get the attention you want?
What is the quality/experience level of the Vice President/Regional Manager that will work your property? Can you meet them?
What frequency will your asset be seen?
What is the internal financial review process before the owner sees the financial package?
Is managing the asset a number one priority, or is getting your business and adding to portfolio count more important?

Superior Property Management. Do You Know What It Looks Like?

THE MID-SIZE /SMALL OPERATOR

The local or smaller operator may not have the name recognition of the larger organization, but you need to explore the quality of the operation and reputation of the owner.

Are they willing to take on challenging assignments and not just trophy deals? How strongly is the owner aligned with the success of the company?

The management presentation may not be as slick, but look hard and gauge the commitment to excellence and reputation.

What involvement will the presenters have with the asset being considered?
What is the quality and experience level of senior management and Regional Manager?
Evaluate financial reporting and flexibility.
Who answers the tough questions? Who is the contact person?
Understand internal financial review process.
Who provides the leadership and drives results?
Are they hungry for your business?

THE MOST IMPORTANT ASSET, PEOPLE....

So much to evaluate and understand. Success only occurs with a constant focus on getting the BEST team to perform.

Areas to explore include:

Understand the hiring and training and development process.
Is there a proactive performance evaluation process?
How are people managed and motivated?
Ask to hear success stories.
Drug/Criminal background check?

Explore the "people management" focus with the perspective management companies. Determine if a person counts as an individual or just a number?

BACK TO BASICS: GOOD OLD FASHIONED PROPERTY MANAGEMENT!

Aside from the glitz of the presentations that you will see, focus on the basics. Do not lose sight of how properties should be operated. Do your homework on this aspect of the business.

A few items worth mentioning:

• Understand the process of managing revenue/expenses.
• Process for maintaining successful curb appeal?
• How important is emphasis on rent collection procedure?
• Property manager understanding of bottom line.
• Property and team appearance.
• Marketing, training and outreach programs?
• Accurate tracking of marketing sources and personnel performance.
• Mechanical expertise/preventive maintenance/capital improvements.
• In-house vs. Contractor mentality.
• Leadership to drive success.

In closing, the art and science of "Superior Property Management" is comprised of a myriad of moving parts. It is not a one size fits all business.

The choosing of a property management company is not a decision that should get made on the basis of a PowerPoint, stylish brochure, or cosmetics.

The industry is a continuing and evolving business that blends new technologies and products, with basic management and respect of people, marketplace and customer service. Experience, common sense and "commitment from the top of an organization" do matter. Consider who will best represent your financial and professional interests, who will be proactive in the goal of maximizing your bottom line, and who will be most responsive and communicative when you need answers.

Choose wisely.

Jeff Goldshine is a multifamily industry veteran, who has been responsible for the management of over 60,000 units in his 35-year career. Finlay Management is an experienced, specialized multifamily management firm with expertise in market-rate, senior and affordable housing Jeff can be reached at jgoldshine@finlaymanagement.com or (240) 426-2605.

FAA is a federation of 11 local affiliates, representing over 490,000 apartment homes in Florida. Both community and associate members in good standing of a local affiliate are automatically memebers of FAA and NAA.