Feed Your Property Well, Go For Low Hanging Fruit
- May 22, 2009
As CAP rates rise, property managers and owners are looking to adjust to their current realities. The economic and financial crisis has forced owners to change course and look to plans B and C. In many cases, the proposed cash out year of 2009 has been pushed back to at least sometime in 2010 at the earliest, based on a new owner’s ability to obtain financing.
So what does plan B and C look like? For many, this concept was never thought of upon acquisition. But that is okay. It is never too late to change direction and tact for a while when you hit a stiff headwind.
Because holding on to properties for longer is now plan B, many have to readjust. "As Vacancies rise – and as some owners are also forced to hold on to buildings longer than intended – assisting clients' bottom lines has risen to the top of property managers' job descriptions. Thus, such firms have set out on the hunt for savings and revenue." Commercial Property News, Dec. '08, pg. 24
What does it look like to hunt for savings and revenue? Obvious answers are water-saving devices in tenant’s bathrooms and kitchens and CFL lighting in the common areas. But did you know that while these are good measures, there are better ones for this category? For example, using LED lighting in the common areas instead of CFLs. LEDs use, on average, 6 to 12 watts of energy compared to 23 to 35 watt CFLs. They cost more but payback is typically under two years and they last up to 10 times longer than a CFL. Wireless water control monitoring of tenant’s water usage makes sense in some markets where there are federal and state tax benefits. There are several utility companies who will pay for you to install regulators on your boilers.
The three endeavors above not only put money back in your pocket, but more importantly they raise the value of your property in this difficult financial time. Thus, you are better positioned for prosperity when it comes time to resell.
What do your current ads look like? Pick up any local apartment guide in your city and you will notice that the benefits in the ads almost always read something like this:
• 1, 2, and 3 bedrooms
• Large floor plans
• Pet friendly
• Nearby shopping
Wouldn’t it be more interesting if your ads read something like this:
• Cleanest property in fill in your town name here
• Larger kitchens and living rooms for your comfort
• Dog run for man’s best friend
• Sparkling blue water in our pool
• Walking distance to Wal-Mart
Since you are already paying for print advertising you may as well make it impactful. Not many do. I would write on the power of Google AdWords for your advertising but that is for another column.
Let me leave you with a ‘maintenance man’ tip of the week. Now that the warm weather months are upon us, more water is likely to be used via hose. Make sure all the bibs around your property are checked bi-weekly for drips that you are unnecessarily paying for. Tighten those bibs!
(Scott Yahraus is the president of Apartment Energy Consultants, a company that certifes multifamily properties as being “National Green Apartment Certified”. Click here to visit their Web site or www.GreenRetrofitter.com email Scott at Scott@GreenRetrofitter.com)