Refuse and Paint Expenses- Budget Edition!
by Christin D. on 8/9/2019 9:42:00 AM
This edition of the Buyers Access® budgeting series takes a look at two of the largest recurring expenses a property realizes in monthly operations; waste disposal services and property painting requirements. Here we will review some of the most complicated issues faced by management companies within these two categories and explore solutions that Buyers Access® can offer access to from vendors within our strategic partnerships network.
About waste, recycling, and valet services
Waste services are not a glamorous, value added benefit that can be seen in day to day operations on a property by residents or prospects. On the other hand, we can guarantee that the waste services (or lack thereof) will be immediately noticed when it goes awry. Receptacle overflows, jammed compactors, nasty smells, and bulk items sitting at the curb take away from a property’s curb appeal, and make for some unhappy residents in no time. Nothing is worse than conducting a weekend leasing tour, and the trash receptacle areas create a detraction to the property. Waste and recycling services may seem like an easy thing to manage from a resident’s perspective, but the behind the scenes “plan” can be a bit more complex.
Waste service needs are unique from property to property. One asset can contain multiple contracts and invoices to process and monitor depending on things like: property location, vendor selection, equipment needs, local ordinances, bulk item disposal needs. and valet recycling and doorstep valet waste services. All-encompassing waste services are sometimes hard to find depending on vendor offerings in the area, requiring management teams to keep track of separate contracts for each of the services. Everything from the hauling of half empty containers to “contaminated” recycling bins that the recycling company can’t haul, causing extra charges and fees for additional services outside of traditional scopes defined.
Buyers Access® and Refuse Specialists work together to offer Buyers Access® members a simple solution to their waste disposal services. Refuse Specialists is a team of waste consultants who analyze, renegotiate, and monitor invoices for property management companies. Their services have no upfront costs, and the savings Refuse Specialists realizes is passed on to customers, saving them 20%-40% on waste expenses without sacrificing services.
Refuse Specialists - 4 Step Solution
- Refuse Specialists contacts each waste company you are currently contracted with and renegotiates the contract keeping it to a minimum of a 5-year term to avoid annual expense increases.
- A waste analysis is conducted on the current waste activities which includes evaluating equipment on site, haul frequencies, and other aspects of the waste health of a property.
- Once the contracts are negotiated based on the analysis of the current health, the contracts are delivered directly to the property management team to review and sign off on when appropriate.
- After execution of the contract(s), Refuse Specialists continues to monitor every invoice that is received for waste and related waste services, extra charges, fees, inefficiencies, and other inaccuracies, saving you time and money!
All about paint
Budgeting for recurring and non-recurring paint expenses
Paint frequently accounts for a large portion of a property budget. Buyers Access®, provides members a competitive advantage through access to national supplier partners; PPG and Sherwin Williams. Members have access to lower pricing, additional design resources, and industry leading expertise through account management by both Buyers Access® and the chosen paint supplier. Through the Buyers Access® program, properties can effectively create a practical strategy to manage all painted surfaces and lower prices, while increasing quality and useful life.
Matching Existing Paint
Paint can vary immensely and create many challenges for properties when it comes to painting surfaces on the interior or exterior of the buildings. Newer properties with freshly painted walls at construction may be difficult to touch up when that first resident moves out because of the commonality of primer not being used when the fresh surface was painted at construction. Paint touch up becomes challenging with varying sheen and primer practices. Paint types must be evaluated considering such things as type of property, average length of resident stay, and even geographical location. Working with the paint suppliers in our program and Buyers Access® simplifies the development of paint programs for a property/company and aids in streamlining paint operations.
Varying Surfaces and Paint Selection
Exterior paint surfaces are diverse and require various textures, qualities, and finishes in order to last on surfaces for the expected life of the paint project. For example, using the incorrect type of paint for a site-wide front door painting project could be detrimental if the paint easily chips when residents enter and exit their homes. Not only do these peeling doors create an eye-sore, they can also cost the property even more money than originally intended if they all must be re-painted due to the improper paint being used originally. Both PPG and Sherwin Williams have a complete exterior paint program that includes such things surveying the exterior needs and photo imaging services. Keeping the exterior of your buildings looking fresh is an investment that can help attract and keep your residents!
Another example of potential shortcomings involved with improper paint selection can come in the form of increased risk and liability. It is common for properties to treat stairs and pathways in and outside the structures with paint as a surface, especially on concrete stairs and pathways. If the concrete is a smooth surface and the paint used is not porous enough or durable enough to withstand being on the floor, the property has increased its exposure to slips, trips, and falls along with the paint possibly peeling in an unreasonably short about of time. This can potentially cost the property money and time directly through re-touches or re-done paint projects, as well as liability issues.
Our team can help
Partnering with Buyers Access® eases the budgeting and decision-making process in waste and paint expenses. Buyers Access has key supplier partners: Refuse Specialists, Sherwin Williams, and PPG, who can aid in the budgeting process for these larger recurring expense categories. Not only do members have access to a full member services department and account management department within Buyers Access®, but they also have additional resources from industry leading experts specializing in streamlining paint and waste activities for multi-family communities. Contact our sales department today at firstname.lastname@example.org to learn how we can help your team through a successful budget season. If you are a current Buyers Access® customer, reach out to your account manager for more information regarding the programs and how you can get started.
Renovations and Amenity Upgrades- Budget Edition
by Christin D. on 7/22/2019 3:22:20 PM
To renovate or not to renovate, that is a common question quite often pondered by operators and investors in the multi-family arena. Many attractive benefits can exist when contemplating an interior or exterior renovation, and amenity upgrades. Renovations may yield higher returns, improve aesthetic appeal, facilitate resident retention, and freshen up aging communities to better compete with modern trends. If you are planning on renovating, analysis of the local market, testing the product, and calculating costs vs. returns are all recommended steps to help forecast potential returns. Amenity upgrades should be comparable to the competition and allow a community to closely compete with surrounding properties. Below we will look at types of renovations, steps to take before the process begins, and what amenity upgrades have prospects and residents interested today.
Before you Start Renovating
According to Darren Williams of Portico Property Management, testing your product against current market conditions and projected future trends is key prior to starting any renovation project. Understanding the demographic nature of your property, along with local consumer tastes and preferences is imperative when choosing design and scope. Surveying current residents on the improvements and their additional expense toleration is critical in deciding on potential upgrades. Renovating and pricing a project’s needed return not based on current market conditions is not recommended. Taking these initial steps are important to anyone trying to achieve superior returns, and to avoid vacancies due to over inflated rents. Investors typically can realize a return of 10%-30% in rent growth post-renovations.
Choosing Interior Renovations
Visiting submarket competitors, both new construction and renovated product can provide information as to what upgraded characteristics yield the highest returns when comparing quality, age, pricing and occupancy. “Owners report that replacing carpeting with vinyl, tile, or wood flooring promises the greatest return on their investment” says Caufield for MultifamilyExecutive.com. Upgrading interior lighting is another desirable improvement due to its ability to brighten and refresh living spaces, especially those with limited natural light. Kitchen and bath upgrades such as wrapping cabinets with new finishes, replacing hardware, as well as upgrading appliances are also remodel activities that may yield superior returns.
Choosing Amenity Additions and Upgrades
The standard amenity package offering for multifamily communities use to include a couple of grilling areas around the property, a workout center, tennis courts, and maybe a business center. It was not unusual for on-site laundry services to be offered if residents didn’t have their own machines or did not have hookups available to them. Fast forward to today, the amenity package desired by renters has shifted substantially.
Today renter wants communal space for gatherings and can inspire other social benefits. Areas where residents and their friends can watch popular sporting events and shoot pool is becoming more attractive, as the sense of community can propel itself into an amenity category all its own. Other examples of communal amenity spaces encouraging residents’ creative capacities are painting and art galleries, pottery and crafting workshops, music studios, and co-working spaces. The offerings of these creative spaces tap into a desire for a lifestyle that is appealing.
Wellness and offerings geared towards healthy lifestyles are another category ranked highly on the desired amenity lists. Offering community cooking classes, nutrition seminars, and other engaging and educational sessions allows residents to bond with one another while engaging in positive initiative to benefit their overall lifestyle. From these gatherings, residents will often form their own relationships inspiring further community building in the form of running clubs, painting and art evenings, and pet play dates. This, creates an organic, thriving community that will help attract new residents through word of mouth and retain current residents that see the value in the relationships built by these offerings.
Upgrading Dated Amenity Spaces
Taking an existing business center with basic office equipment and transforming it into a coffee bar and lounge with free Wi-Fi would likely be more attractive to today’s renter. Multifamily fitness center amenities use to include only basic cardio equipment and a multi-purpose weight machine or two. Now, upgrading the space to include a yoga studio with virtual fitness instruction is highly attractive to those seeking a healthy lifestyle. Using any additional square footage to house free weights and functional fitness equipment can help an older community stand out. Upgrades to amenity areas can allow older properties to better compete with newer assets by looking and feeling the same.
Off leash pet parks are also a common amenity being included with newer developments. If a community has extra outdoor space, converting it into an off-leash pet park or a community garden can appeal to today’s renter who wants to be able to utilize outdoor space as if it was their own backyard. Community gardens are very attractive to renters who have previously resided in single-family homes and enjoy nurturing gardens and harvesting fresh produce. Offering an option that allows residents to enjoy outdoor space in a personal way can make the community feel even more like home, and encourage further social interaction between residents.
Ready for Renovations?
Renovating and upgrading may be a realistic and economical way to generate improved returns, particularly for older communities with dated interiors and amenity spaces. Renters are leaning more towards an overall experience, personalized space, and functional offerings when deciding on their next home. To stay competitive, older communities can upgrade existing spaces allowing them to realize returns faster than a new build. For more information about how Buyers Access can help your team with interior and exterior renovations, contact email@example.com, and we will be glad to offer you a comprehensive solution in every phase of your project using the best materials at competitive pricing.
All About Ancillary Income - Budget Edition
by Christin D. on 7/5/2019 1:58:21 PM
Ancillary income, as it relates to multi-family housing, is revenue generated from necessities and value-added services offered to residents. This income category is designed to increase opportunities and can range in diversity across markets. Ancillary income should be accounted for when projecting budget numbers for the next fiscal period, typically year over year. Below we will take a closer look at the top sources of ancillary income often analyzed during budget season.
It is not uncommon for telecommunication services to be a part of ancillary income in multi-family communities. Opportunities for additional income can come from wireless internet, cable, or satellite services being billed back to resident for both common area and/or private usage. If a flat fee is charged based on occupancy for either value, it’s important to forecast occupancy and inflate the service cost by an average of 3% to adjust for inflation. Communities can also opt to bill back common area expenses realized through community televisions, internet services, and office operations. Once the total dollar amount adjusted for inflation for common area expenses is generated, divide the total by average projected occupancy in units to get the per unit projected income opportunity.
Laundry and Vending Services
Laundry and vending services also can create opportunity for additional income. Vending services commonly selected by multi-family properties are drink machines, snack machines, and machines that house healthy meal options. Laundry services commonly utilized are laundry rooms, dry cleaning services, and wash and fold services. Laundry rooms are typically in a centralized location and residents can access them outside regular business hours. This allows a longer time window for income to be generated and adds valued convenience to the residents.
Sub-metering services, otherwise known as “RUBS” income, is a service that will read water usage for each individual unit and report it to the water billing vendor, so it prints on the rent bill each month. Another aspect of this is an administrative billing fee for this reading and service to be done. In some cases, where submetering is not present, there is an occupancy and total building usage equation that can be used. It is important to understand which method is used prior to forecasting the budget. Utility increases are typically 3-5% year over year which can be obtained from local utility companies or your submetering billing provider.
Another source of utility income can be realized through rebate programs on energy savings energy saving rebates after completing an LED retrofit project on an asset. Utility billing companies can also cross reference current occupancy in comparison with generated utility charges for electricity. This will show if a resident has the electricity set up in the landlord’s name in which the charges would be billed back to the resident. On a vacant unit the property management company would assume this bill as it is in their possession. An additional fee for these bill-backs can be applied in many cases generating a bill-back fee and an actual submeter electricity expense.
Community Rental and Service Options
Properties may offer additional value-added services such as fitness-on-demand, personal training, and dog walking, to name a few. Another area of opportunity exists in the requirement of renter’s insurance and associated penalties for lapses in coverage. Parking can also generate additional income through options such as reserved parking, covered parking, or private garages. In addition, valet services, car washing services, and additional parking spaces can generate additional income for the property.
In addition to parking, storage is an income opportunity for communities who can accommodate designated storage areas. Storage closets can be rented out and incur additional monthly income for communities. This value-added benefit offers convenience to residents and opportunity to investors. The funds realized through storage income can be forecasted by analyzing historical storage unit occupancy and multiplying it by the monthly dollar amount charged per storage space. Adjust for inflation or any forecasted increase in storage fees charged on new leases and renewals for further accuracy.
Ancillary income categories should be reflected on the income portion of the budget and forecasted each year. Analyzing year-over-year income opportunities on storage, parking, along with utility trends can help draft an accurate budget. It is important to account for any potential service expense increases the property will incur for ancillary services. Accounting for these expenses helps quantify the profitability between ancillary income and expenses.
What areas of ancillary income are applicable to your community budget this year? Are there any you would like to add? Buyers Access® can connect members with service providers in these categories to help facilitate mutually beneficial partnerships while offering competitive pricing. Contact your account manager to learn how you can add ancillary income to your budget next year. Not a member yet? Contact firstname.lastname@example.org or call us at 1-800-445-9169 for information about how you can tap into the exclusive resources and opportunities so many existing Buyers Access® clients enjoy.
Special Edition- Get Ready for Apartmentalize 2019!
by Christin D. on 6/21/2019 3:52:45 PM
Each year the National Apartment Association puts on an epic conference in a premier location featuring anything and everything multi-family! This year, Denver, Colorado, has been elected to host this amazing event and Buyers Access® cannot wait to see all our members, industry partners, friends, and future business partners at our booth, #1223!
If you are attending Apartmentalize for the first time, you are in for a treat! Get ready to network and interact with likeminded industry professionals and explore new potential resources at the Expo. Below is an overview of the various program elements you can partake in at NAA, and we encourage you to visit the event homepage online by clicking HERE!
Game Changer and General Sessions
Mindy Kaling, or “Kelly Kapoor” from the NBC hit show, The Office, will be kicking off Apartmentalize speaking at the opening General Session that begins at 12:45 p.m. on Thursday, June 27th.
Other “game changer” speakers that are going to be at this year’s NAA event include Brandon Stanton, David Rendall, Judi Holler, and Alli Webb! The show starts with Brandon Stanton, founder of Humans of New York, delivering an epic message on the power of storytelling on social platforms, on June 26th at 4:30pm. Moving into June 27th, you can check out Heather McGhee who will speak on transformative organizational change, David Rendall, the hilarious stand up leadership comedian with strong messages on empowerment, or catch Judi Holler of HOLLA productions for some defining courage insight. Friday will wrap up with game changer, Alli Webb of Drybar, speaking about a uniquely fabulous approach to business that has gained her major success!
Catch a “Deep Dive” seminar session where you can learn from influential industry pillars such as Dr. Debbie Phillips, Ed Wolff, and Susan Sherfield about career development on Friday at 12:45pm. You can also catch the industry data mining optimization “Deep Dive” which features 4 brilliant sales and marketing experts who will show us how to use data to our advantage when interacting with residents and prospects at a higher level.
The main event, the moment we have all been waiting for is the NAA Exposition! The grand opening will be held at 2:15pm on Thursday, June 27th and you can visit Buyers Access® at booth #1223. At the Exposition, Buyers Access will be giving live demos of e-commerce, procurement optimization, and launching our exciting new program, Bidders Access. Come see us for fun interaction, learning, and a chance to win a $250-dollar Sunglass Hut gift card!
Apartmentalize is an amazing place to attend the apartment industry’s best breakout sessions, which include insightful information on various topics across the multi-family business. This year, NAA will have over 85 different breakout sessions dedicated to topics in areas like maintenance, industry trends, affordable housing, operations, and marketing, to name a few.
Another exciting portion of this years NAA conference is a focus on health and wellness, bringing functional wellness front and center in the multi-family industry. The Wellness Labs series will host quick 15-minute breakout sessions bringing attention and focus to physical and mental well-being, and tips that are applicable to a multi-family professional’s life. We love the focus on the whole picture in terms of optimizing your personal and professional lives with wellness strategies, and we can’t wait to see you there.
Open Space Series
The open space segments at NAA will be a peer-to-peer learning experience you won’t want to miss. Engage and interact with like-minded industry processionals on topics such as resident loyalty drivers, smart home technology, and maintenance focused conversations. Collaborating with the industry leaders lined up to host these peer training and engagement sessions will enrich your mind and inspire you to do great things moving into the tail end of 2019! Don’t miss it.
Got a topic that you have been wanting to learn more about in the multi-family industry? Check out the Express Education offerings kicking off on Thursday, June 27th which will offer 30-minute sessions on topics such as career development, industry trends, fair housing, leasing, and more. These sessions will run from 2:45pm-5:30pm on the 27th and pick back up from 10:30am-2:45pm on Friday the 28th.
Other things to know
Download the new NAA app or visit the online “map your show” tool by clicking here now and start mapping out your show experience. You can add the events that you want to attend to your outlook calendar with a click of the button, share it with your co-workers and friends, and access the master exhibitor list to plan your show visits. We hope you have safe travels to Denver, stop by our booth #1223, and have a great time at this year’s NAA Apartmentalize event in Denver, Colorado!
Buyers Access Solutions
Bidders Access and Capital Projects for Budget Season
by Christin D. on 6/19/2019 9:49:37 AM
Capital projects are typically larger expenditures planned in advance by management teams in the multi-family industry. Without needed organizational systems in place for bidding projects, along with a comprehensive understanding of scopes required to complete the repair, comparing bids from various vendors can be a painful and time-consuming task. In this edition of our focus on Budget Season, we will discuss an example of how the Bidders Access bid solicitation platform is utilized at a property for a very large elevator modernization project.
Create and Solicit Bids to Vendors
One of the elevators on “XYZ” property has gone down a couple of times throughout the year, and it is getting more challenging to find parts to bring it back into operation. Since it’s the only elevator in the building, it is important that the management company get the elevator to a more dependable level. In addition, the scopes of work given on bids must also quite often coincide with a clearly defined plan of repair set forth by a city or county inspector, or other permit requirements. This could mean replacement of the entire elevator, modernization, or continuing to repair as needed. Any which way, the owners and managers of the property will want bids, detailed pictures, and clearly defined scopes of work. They will not want to pay for anything additional that is not imperative resulting in a dependable and functioning elevator. So how can Bidders Access help?
Bids come Quickly and Easily
Within 15 minutes a Property Manager can log into the Bidders Access system, a cloud-based work flow and document management bid solicitation platform and set up a new standardized RFQ/RFP (Request for Quote/Request for proposal). Once an RFQ/RFP has been initiated by the Property Manager, vendors immediately accept or decline the opportunity to bid on the project. This allows the Property Manager to know right away whether they need to request additional bids, or not. Once accepted, all details of the bid will be available to bidders in the same format. Bidders will be required to fill in line item detailed costs, answer questions created specific to the project, and to upload any necessary documents, like pictures warranties, insurance, etc. This saves the Property Manager and vendor substantial time and effort, standardizes process, provides for document management in one location, and organizes all communications by job and vendor. Nothing gets lost!
It is an industry best practice to obtain 3 bids for capital projects or repairs more than $5,000.00. Bidders Access makes the scheduling, bidding, and communication easy, and clearly defines the awarded vendor with the click of a button. This cloud-based bid solicitation platform keeps things organized and where you need them and when you need them, so you always have your bidding information at your fingertips. It provides for email alerts between all parties for an invitation or intent to bid, for bid updates or changes and for responses to bid requests, making everyone’s job easier.
By standardizing the scope information requested, Bidders Access ensures that information submitted back from the vendors can be easily reviewed, and is apples to apples. When collecting bids, the scope of work is critical in supporting the decision process, and ultimately the results. Typically, scopes and pricing can largely change if not well defined. Bidders Access makes it easy for vendors to reference what areas of the project they must supply pricing and detailed information, as well as questions relative to the defined scope of work to be completed. Upon completion of the bids, the Bidders Access system provides the capability for side by side comparison of every line item, as well as all required questions, and communications.
Simplicity in Awarding
Finally, once all information is gathered for the elevator modernization project, there will be multiple bids in the system for you to consider side by side. By going through each element, one can use the seamless design of the Bidders Access platform to compare, present, weigh in, and decide on a winning bid. With the click of a button a bid can be awarded, and the other bidders notified that their bid was not selected.
Based on the above it’s easy to see that Bidders Access system can add value to every on-site management team’s bidding process. By having everything organized and in one place on a cloud-based system you are always organized, and have immediate access to all your bid information, anywhere, anytime. No longer will you have to search and access information from multiple locations, numerous email attachments or hard copies. Have everything for your capital projects easily accessible, well organized, and ready to present with the Bidders Access program.
If you are interested in learning more about Bidders Access or any other components of the Buyers Access suite of services offered, please reach out to our team by calling 303-991-5550 or email us at email@example.com. We know you will be glad you did.
Budget Season is Upon Us!
by Christin D. on 6/11/2019 4:06:00 PM
The next few months in multi-family management will be the busiest time of the year for many properties. The summer months typically include an influx of residents and prospects searching for new homes, a higher number of expiring leases up for renewal, employees cycling through vacation time, increased HVAC maintenance calls, and its swimming pool season. Then, as soon as you catch your breath, the first draft of your budget is due. Whether this is your first budget or your 50th, proper preparation can make the experience and budget season a success. In this article, we will help to define and provide some tools to inspire your quest with this year’s budget season!
Unit by unit inspections
If you haven’t done so already, it is a great idea to conduct an annual or bi-annual unit-by-unit walk of your property. This is especially important for properties 10 years or older. Unit-by-unit walks can help teams plan for recurring capital replacements, renovation projects, and turn costs. For turnkey costs, click on the following highlighted words to link to our flooring and paint estimation tool for budget expense forecasting.
Collecting serial numbers and appliance information can also make life easier in many ways and is good information to have on hand. You never know when you will have that on-call emergency refrigerator or stove malfunction over a holiday weekend, and you will need to look up relevant information. Unit-by-unit inspections and inventories are great for preventative maintenance, forecasting turnkey expenses, planning large capital projects, and to identify any hazards that may not have been reported. You may even catch a few unauthorized pets or other lease violations in the process.
Pricing for vendor services
Contact current vendors and see if they are going to be keeping their rates the same or if rates will be changing in any way. The Buyers Access® Account Management team and Member Services departments can obtain the best possible pricing for all your products and help to make this a much easier process. Wouldn’t it be great to have an advocate that is constantly focused on bringing savings into your budget, and a higher NOI?
Completing unit-by-unit inspections along with an exterior and interior common area inspection is required when building your short term and long-term capital project plan. The Buyers Access® suite of services includes access to Bidders Access®, a comprehensive capital project bidding platform. For more about Bidders Access and how it can help you this budget season, please click on the following link www.biddersaccess.com, or speak with your Account Manager to get started right away.
Recurring operating expenses
Completing an audit of all contracts is also a helpful budget tool. Click on the following highlighted words to access a contract audit spreadsheet to use when conducting a contract audit. Budgeting the necessary amounts for contracts currently in place, and that will affect the upcoming budget season, is key to maintaining accuracy throughout the year on property financial statements and variance reports.
When drafting the Income portion of your budget, it is important to look at historical rental increases, fees, and other income categories. and how they have performed over the past 5 years as well as the past 12 months in detail. Pulling reports on market conditions from apartment data sites and analyzing historical and current market data will help to forecast income categories such as application, administration, and pet fees, to name a few. Also, pulling industry data for your area can help forecast projected rental increases for lease renewals and potential rent growth on turns. Historically, most properties typically see between 3-5% rental increases, but some may realize higher gains if in a high demand market, or if there are other factors such as a substantial rehab.
Other expenses and bids
Click on the following highlighted words to access a payroll expense spreadsheet, which is designed to aid in the calculation of the annual payroll expenses by a property, or by portfolio. Also included is a standard budget worksheet and a bid comparison form to aid in the overall planning of recurring and non-recurring operating and capital expenses.
The document library below is for anyone to use as a tool to aid in preparing for an annual property budget. For a full property spending analysis contact our team at 1-800-445-9169, or email Buyers Access® at firstname.lastname@example.org.
- Standard Budget Worksheet
- Summary of Contracts per Property
- Capital Replacement Worksheet
- Flooring per Apartment
- How Much Paint Do You Need Per Apartment
- Payroll Spreadsheet for Budgeting
- Bid Comparison Form