Principles of Effective Property Management

Effective property management requires a close working relationship between tenants, investors, and managers. This enhances the ability to satisfy each party’s needs while improving NOI (Net Operating Income), ROI (Return On Investment), and the property itself. Industry expertise and knowledge in property management cannot be replaced, but there are some basic principles that underlie all good property management solutions:

  • Effective, responsive and customized service.
  • Strength, generated from team effort and training.
  • Creativity and understanding of management principles.
  • Goals to enhance the value and esthetics of a property.
  • Constant reevaluation of procedures to ensure superior levels of quality.

To get a bit more specific, there are two major branches of property management – logistical and physical. A key factor in the logistics of property management is financial reporting. Financial reporting must be timely and accurate to be effective. Regular and comprehensive reporting (typically in a monthly fashion) establishes continuity and reduces the number of lines of communication, thus maximizing time and minimizing confusion. Such reports should always adhere to GAAP (General Accepted Accounting Principles), though employing a higher set of standards for quality assurance is frequently advisable.

Specific reports, such as cash to budget variances, cash flow and income statements, balance sheets, and complete transactional accounting registers, are fundamental and essential to the property management process. Specialized reporting, such as HOA Architectural and Compliance Logs, Affordable HAP Vouchers, Tax Credit Project Status Reports, Periodic Commercial CAM Reconciliation, and Resident Violation Notices, can make the difference between a good project and a great project.

In addition to financial reporting, up-to-date property management software is an important part of logistics. It enables customized reporting for each type of property managed. Investing in infrastructure is critical to managing a diverse portfolio. The more quickly a property management system can identify problems and produce solutions, the more successful a project can be. Further logistical involvement is necessary in developing bid specifications, securing competitive bids, and coordinating with contractors, vendors and suppliers.

Beyond the logistical or back-end component of successful property management is the physical component. Preserving, maintaining, protecting and enhancing the physical and financial aspects of real estate holdings is of paramount importance. Without corresponding efforts in logistical and physical property management, neither can achieve complete success. This includes emergency management as well as regular visitations and inspections of the property. Comprehensive inspections deliver far-reaching results, and should include lobbies, stairwells, landscaping, recreation facilities, walks and driveways, parking lots, and other physical aspects of the real estate.

Maintenance and on-site management training programs should be conducted regularly. Safety inspections for compliance with loss prevention and OSHA requirements must also be performed. Additionally, the managers need to assemble regularly to discuss market trends, ongoing training, contractor service quality, and current regulatory issues. Following these procedures and refining system effectiveness and cooperation is the surest way to optimize management in the 21st century.

Profile of a Financial Advisor

For the purpose of managing assets as well as investments, you may need to hire services of a financial advisor who provides advice on dealing with such issues. A lot of tasks are taken up by this professional, like helping you to financially plan your retirement, considering insurance policies etc, besides investments. Plans for setting aside educational funds, mutual funds and investing in stock markets and real estate are also addressed. He is the best person to approach to help you maintain a budget and stick to it. In other words, he takes up the entire responsibility to assess the financial circumstances of a client.

Since you are going to invest your hard-earned money, it is necessary to find a proper advisor to help you manage your finances. If they are certified, they would have the necessary qualifications. Experience in the relevant field is a must along with a proven track record of at least four to five years. The person should be sensitive to needs of the client and they must be able to communicate with the clients well. Remember that you are going to need these services for a long time to come so make sure you select after research.

A financial advisor also addresses the need of a client for liquid cash at any point of time. His advice on short-term investments is vital. For him understanding the financial circumstances of the client is of prime importance. He should know the market and payback on investments in all financial schemes he recommends. He also addresses the need for liquidity. All in all, this is one professional whose services you should seek well in advance, while the going is good. Timely advice and investment are the umbrellas for any rainy day.

Depending on the choice of the client, the financial advisor can help the client invest for long-term and short-term gains. Emergencies in life could crop up any time and hence cash should be set aside in advance. He is responsible for advising clients on the risk element involved in some of the investments and clear the cobwebs of doubt with regards to the payouts with such financial risks. It is with the assistance of an experienced advisor on finance that you are able to improve financial status over a period of time.