Property Management
October 2008
“Very”, says John Russell, Associate of Januarys Consultant Surveyors and head of their Property Management department.
According to David Sparke, senior manager in the real estate advisory team at PricewaterhouseCoopers, “cash is king in times of a property downturn”. He goes on, “When a downturn threatens, businesses need to take stock of the situation and determine what range of options might be appropriate, depending on how the situation develops”.
This might sound obvious advice, but how can you make this work for you if you are a commercial property owner and the market is depressed? There are not too many options! To sell up is not an option, releasing assets from the portfolio when the market is low, does not make any financial sense. So the need to make your assets work as hard as they can for you in a challenging market is paramount and this is where your property management team can make a massive difference to the balance sheet at the end of the day.
Well run accounts, keeping on top of cash flow, dealing with late-paying tenants and reacting swiftly to recovery of rents are all part of the day-to-day rigours of your property management team. It is an important balancing act that takes time and needs input on a daily basis and whilst this service costs, it is money well spent in the bigger picture of things.
Over the years tenants have become more demanding about the quality of their accommodation, they expect a nicely presented property that is well maintained with common areas that are regularly looked after. They are cost conscious, not just about rents but about service charges, energy costs, security and cleaning charges. Landlords do not have the time to monitor all these things and this will, over time, irritate tenants if it is not taken seriously. Owners must also conform to government legislation and have a duty of care to their tenants.
So your management team is a very important segment in maximising returns from your property portfolio, particularly in a marketplace where everyone wants more for less.