5 Ways to Reduce Operational Expenses for Multifamily Property Owners
1. Hire a high-quality property manager
If you do not personally manage your property, hire the right manager. Always interview multiple managers and speak with their current customers for feedback. Make sure to set-up weekly calls/meetings to maintain accountability and oversight.
2. Minimize repairs with predictive maintenance
Band-aids waste money. Create a maintenance schedule for your high-ticket depreciable expenditures (HVAC, plumping, lighting, fire safety, and compliances) to save significant operational costs. Resist the urge to push large expenses to the next year as small fixes will eventually cost more.
3. Consolidate service providers & Create a written sourcing strategy.
When selecting and identifying service providers look for vendors that provide a suite of services rather contracting each service out. Also, ensure guidelines are in place for all vendors. Align vendors with your sourcing strategy to reduce cost and add value.
4. Buy in bulk
Always plan ahead. Work with your manager to create a holistic view of operational costs across your properties. Identifying overlapping expenditures and determining appropriate opportunities for cost reduction is crucial to achieving healthy cash flow.
5. Consider the eco-friendly options when renovating
a. Low-flow shower heads & toilets
b. Energy star rated water heaters & appliances
c. Smart AC systems
d. LED/Energy efficient lighting