3 Ways Property Managers Can Think Like an Owner

Laura Khouri

In times of economic uncertainty, many multifamily owners look to increase NOI through strategic operational analysis and adjustments. Often, when access to capital is limited and expensive, these stakeholders will turn to property management professionals to drive efficiency, distinguish their assets from the competition and improve cash flow.

The truth is, in our current financial climate, where inflation is elevated and the cost of capital is the highest in over a decade, property operations can make or break the success of a multifamily portfolio. This is why looking for a property management firm that thinks like an owner is paramount for institutional investors.

As a seasoned property management specialist that oversees almost 24,000 apartments, we have a direct connection to what owners want and need from their property management professionals. Simply put, we think like an owner because we are an owner.

Here are three ways we incorporate a multifamily ownership mentality into property management to effect greater profitability and success for our multifamily clients.

1. A customized approach

Multifamily landlords know that every market they’re in and every property in their portfolio is unique. They understand each market’s fundamentals and the specific strengths and challenges of each property to position themselves for the best possible returns for their clients and investors.

Similarly, owners expect their property management team to have a deep level of market knowledge and to develop operations strategies that address each asset individually. This is why our team applies a customized approach to every multifamily community we manage.

For example, we study leasing and occupancy statistics along with other relevant data to cultivate a highly detailed comprehension of each market, right down to the street corner. Our executive team also walks our properties regularly to thoroughly assess the continued preservation of each asset. Regularly scheduled as well as surprise visits enable us to get to know our employees by name, see them in action, and create that connection between the onsite teams and leadership. This practice helps us determine which repairs or capital expenditures need to be made, which amenities make the most sense, and how well resident needs are being met, all key components in making the right property management decisions for that property.

2. Creating efficiencies

Under challenging market conditions, owners and institutional investors are especially focused on controlling operating expenses in order to boost their assets’ bottom line and ROI. To that end, landlords rely on their property management team to operate their communities efficiently and effectively. An ownership mentality means property managers are highly attuned to the expenses multifamily owners face and know how to minimize costs while maintaining high levels of quality and service.

Our large portfolio of owned properties as well as those fee-managed for clients allows us to utilize economies of scale when it comes to purchasing insurance, maintenance supplies, construction and capital expense items, technology and so much more. This is especially important today, when insurance rates are increasing at a rapid pace, material costs for renovations have skyrocketed, and the price of labor is on the rise.

Efficiencies can also be gained through sustainable energy practices, a centralized communications structure, and leveraged negotiating with vendors. Perhaps the biggest savings, though, come from proper risk management, where potential problems are nipped in the bud and solved before they become costly.

Thinking like an owner helps property managers identify areas where cost efficiencies can be created and better financial outcomes can be achieved.

3. Generating long-term value

Property managers with ownership insight are always innovating ways to generate ongoing value for the communities they operate, whether in the form of reduced costs or new revenue streams. For example, we consistently assess our competitors’ amenities, determine when and how to make renovations to stay ahead of the curve, implement technology to increase operational efficiencies and implement changes that will further enhance the resident experience.

We also look for moves that can be made now that will position the property for ongoing success when the economic climate swings, when market fundamentals shift, or when the unexpected (like COVID) happens. We might suggest amenities that have longevity, switch suppliers in advance of price hikes, stockpile materials, appliances, and other equipment ahead of a supply chain crunch, partner with a popular local vendor or add resident services that reflect emerging societal trends. This helps protect owners from undue risk five, 10 or 15 years down the road.

In taking the long view, thinking like an owner can increase multifamily property value well into the future.

Management teams with an ownership mentality are critical to a multifamily community’s success in the current economic environment. Property managers who think like an owner can deliver a customized approach, generate operational efficiencies and create long-term value that yields strong returns for owners and institutional investors for many years to come.

As president of Western National Property Management, Laura Khouri oversees a multifamily portfolio of more than 170 apartment communities that are home to over 23,000 households with a combined value of more than $8 billion in real estate and annual revenues over $350 million.