Control Systems for Property Management
There are critical numbers vital to track the performance and asset value of your Rent Roll. These numbers form part of your control systems.
Rent Rolls which implement solid Control Systems breathe easier and sleep better with peace of mind knowing that there is very little chance of missing something important. These Rent Rolls are far more efficient in proactively fixing potential errors rather than spending hours and possibly thousands of dollars down the track ‘putting out the fire’.
A Control System is a tool that manages, directs, regulates and reconciles the work in your Property Management department.
So what Control Systems do we look for in Rent Rolls and why are they important?
Here are some examples – we hope you find them helpful:
- Leasing – Where in your office can we find all the relevant steps from Application received to move in day for each property rented this month? A Control System should also be used to double check that all let fees have been applied at regular intervals. We’ve seen let fees missed and plenty of them. One missed let fee per month could cost a Rent Roll more than $5000 per year. Scary isn’t it!
- Vacating Where in your office can we find all the relevant steps from a Notice sent or received to Bond finalisation for the current month? This data should be reconciled with what is available on your portals for rent and also the vacancy list in your Trust Accounting software. If there is a discrepancy between these three areas, why? Failing to regularly reconcile and control this area increases the risk of missing a re-let. Sadly our Coaching team found one that was vacant for 6 months (and should have been rented) and guess who had to pay the rent? That’s right, the Business Owner. This mistake cost the Rent Roll over $10,000.
- New and Lost Business – How is this tracked and reconciled with your Trust Account Data? Where in your business is a list of New and Lost Properties for the month with a daily running tally of Properties under Management? This number should be reconciled with a Property report in your Trust Accounting data and it should match. If not, why doesn’t it match?
Control Systems & Critical Numbers
- Lease Renewals – Where are your Lease Renewals tracked in your Rent Roll business? At a glance, where can you find the Renewals sent to Tenants for the next few months and the number returned? How is it tracked? If you charge for Lease Renewals, a Control System will also make sure you don’t miss any Lease Renewal fees. Yes, we see these missed too and lots of them.
- Property Compliance – How can you quickly identify every Property under Management is complaint with relation to Smoke Alarms, Safety Switches, Corded Window and Blinds and Swimming Pools? Our Coaching Team have seen very little evidence of this Control System in Businesses we visit and it’s so very important to reducing your risk.
- Document and Conversation Management – how does your Rent Roll business deal with current Landlord, Tenancy and Property documentation, archived documents, paperwork for work in progress, email management and recording, phone call and conversation recording? What are your standards? It’s often the case when we visit a Rent Roll business there are no standards. Paperwork sits in in trays, in email folders in Outlook, lever arch files, cardboard folders, plastic sleeves and who knows where else. If we had to locate a document or a diary note in your Rent Roll, how long would it take us to find it? In a recent example, a Property Manager told us it took her 45 minutes to find an invoice.
So why are control systems important? Peace of mind is a good place to start, but if you like sleepless nights, waking up at 3 am and emailing yourself something you have forgotten, you like to react to problems, put out fires and have a high level of risk in your business, then don’t change a thing!
If you’d prefer peace of mind, to increase efficiency and if you want to make sure every dollar has been collected in fees, perhaps it’s time to take a look at adding Control Systems in your Property Management department.
To find out more about Control Systems and the critical numbers to look out for in your business, speak with one of our Business Services Advisors for a Free X-Ray Meeting (30 mins).