Summertime for most people means swimming, baseball, and BBQ. It signifies something different to commercial property managers, though: it's a budget planning period for property management. But this complex process involves a lot of documentation and high-stakes guesswork.

Budgeting for property management can help you make wise financial decisions and be ready for sudden costs. A carefully planned budget will provide you with greater financial control, allow you to foresee a property's budgetary requirements, and enable you to monitor a property's long-term performance.

Make A Schedule For Budget Planning For Property Management

Budget planning for managing properties is a year-round job. It always takes longer than you imagine to gather proposals from suppliers, choose projects for the coming year, and keep track of spending. Ensure you set yourself up for success by planning and establishing internal deadlines for your tasks. Allow enough time to gather the required materials and secure the necessary authorizations. Include the point person at each stage of the process when assigning tasks.

Take Occupancy Changes Into Consideration

Adopting a mixed work model by more businesses may cause occupancy levels to vary more than usual. Have early talks with residents to find out what your team may do to keep them on your property, including restructuring the lease terms or adding additional amenities. To help your team correctly allocate expenses in critical areas like HVAC units and amenities needed to run at lower levels, ask returning tenants if they would utilize the facility full-time, on a limited schedule, or not at all.

Make Use Of Your Work Order Information

A well-planned budget must be quickly adjusted when unanticipated equipment malfunctions occur. Analyze work order trends in equipment repairs regularly to stay ahead of asset problems. For instance, how many elevator entrapments did you experience in the previous year, and how much did it cost to fix them? This can assist you in estimating the life of necessary equipment and accounting for replacement expenses when creating your property management budget.  

Work order data can also be used for staffing level assessments. Keeping the proper headcount is essential because engineer payroll is one of the most significant costs in the planning phase of the property management budget. Use a software program that gives you accessibility to work orders and preventative maintenance data to achieve this. You can use statistics to inform your decisions and adjust headcount as necessary if you know how much time the staff spends on various request kinds.

Standard Operating Costs

Data with no context could be more helpful. Compare your operational expenses to competitors' portfolios to find areas to improve. Property managers may keep costs under control and maintain their competitiveness by providing a valuable point of reference. Using third-party data sources is regarded as best practice in this field. 

Keep Awareness Of Trends Among Tenants

Tenant demands and priorities change quickly, so, usually, they could feel behind the times. Keep informed of the latest developments in tenant experience trends to direct limited funds where they will have the most significant impact. An excellent place to start is by reading reports and publications from the industry. To know what tenants want, go right to the source. This can be accomplished in smaller buildings by conducting casual talks or mailing out surveys to tenants. Therefore, tenant experience applications are preferable for teams trying to standardize the feedback process. With these apps, you can stay in constant contact with your tenants. You can send them pulse surveys to find out how happy your tenants are.

Automate Procedures With Technology

Gathering the massive amount of data required for budget planning in property management is typically a huge time waster. Fortunately, all data can now be kept in one area via current building operations platforms and point solutions, enabling property staff to perform analytics reports instantly. Property management software may gather data and present it in understandable, visual formats that support well-informed budgets, saving time and effort compared to searching through paper files or messy Excel spreadsheets. Designated accounting software should also be considered, depending on the scope of information needed for the property management budget planning process. It automates other laborious accounting processes and keeps track of income and expenses.

Finally

The first and most common mistake that most property managers will make is just hoping for the best with no budget. This way of thinking is still present in far too many property managers. If that describes you, think about how much healthier your profit margins could be if you put in a little budgetary work.

These suggestions can be used all year long to reduce expenses and improve the efficiency of your tasks. Still, they will be especially beneficial when it comes time to prepare your property management budget.