While there aren’t simple, universal solutions that bookkeepers for property managers suggest for saving or making money, the general principle is this: keep expenses low to avoid running on losses. In our never-ending quest to provide the best property management bookkeeping services, we’re constantly searching for new methods, discounts, shortcuts, and tricks to make property management as profitable and easy as possible.
Some of the levers property managers have for making and saving money are in the realm of forced appreciation, i.e., intentional action to increase property value through New Operating Income (NOI), and others are merely a matter of frugality and good property management bookkeeping services. To that end, we’ve put together eight ways to bolster your bottom line!
1. Schedule Regular Maintenance to Avoid Expensive Emergencies
Pipes burst, roofs leak, and toilets clog—it happens. Be proactive about maintenance (regular site inspections and scheduled preventative maintenance are a good idea), particularly in areas that can lead to pricey repairs in neglect, like roofs and gutters. Prioritize repairs that affect tenant quality of life and might be most costly down the road. Catching a small leak early is cheaper than replacing a caved-in roof later.
Well-maintained properties also attract and retain great tenants while allowing for commensurate rent increases, and keeping maintenance costs low keeps operating costs low. Another thing to think about: depending on the needs of your property, an in-house maintenance team (alongside outside bookkeepers for property management) might be a money-saving investment to keep things spiffy.
2. Spend a Little on Curb Appeal to See a Lot in Revenue
Your property will inevitably need upgrades and repairs, but with a bit of foresight, those don’t need to be bank-busters. Sure pipes burst (see above), but paint also chips and bushes grow over. There are cheap, simple steps to improve curb appeal that don’t require the expertise of a plumber, carpenter, or electrician. Almost anyone can clean a window or rake leaves, and you might be surprised by how easy it is to rent and operate a power washer.
Major renovations like restored flooring or extra rooms add major value but never underestimate the power of a fresh coat of paint, tidy landscaping, furnishing, or even a lobby espresso machine.
3. Reduce Utilities and Increase the Bottom Line
Utilities can be a sneaky, unseen—and costly—expense. Stuff like drafty windows, energy-intensive lighting, and leaky faucets or showerheads are a drain (pun intended) on your bottom line. Upgrading to water-saving dishwashers and laundry machines or energy-efficient lighting adds property value and saves money on utilities.
Think outside of the box! There’s more than one way to save money on utilities. Talk to your maintenance team about these small but meaningful updates:
- Don’t merely replace incandescent bulbs with LED (although they do use 75% less energy and last 25 times as long), but consider ways to improve natural light.
- In addition to regular HVAC maintenance and installing energy-efficient thermostats and appliances (which save up to 40% according to the DoE), improve insulation and seal drafty windows.
- Install low-flow showerheads and devices (which save around 30% on water use), and ensure pipes, toilets and faucets are watertight.
4. Offer More Paid Services to get Paid More (Mo’ Services, Mo’ Income)
Amenities! Sure there’s tangible stuff like pools or gyms, but also consider service-based amenities, like house-cleaning or courier services. In a world where more and more people are working from home, tenants might pay more for upgrades like high-speed internet hookups, cable, or add-on tech options. Most tenants have clothes to wash, and some have cars to park, so a coin-operated laundry or paid parking is another money-maker. An on-site ATM might not be a bad idea while you’re at it.
In addition to increasing income through your offerings to tenants, you can offer more services to owners. Many property managers have separate construction, landscaping, or even pool care entities to provide owners with responsive, inexpensive maintenance and repairs. Others offer due diligence service, reviewing property as part of a lease audit to inspect, set up HVAC, arrange specialty vendors, and ensure there are no surprises before closing.
5. Lower Rent + Higher Concessions = Higher Profit
It may seem counterintuitive, but lower rent can mean 100% occupancy, particularly if compared to well-maintained competitors. Higher occupancy means fewer listing costs and less time wasted meeting potential renters. Research comparable properties to ensure you aren’t leaving money on the table and losing more than you gain from full-occupancy.
Concessions don’t necessarily mean reduced rent but can include waived fees, updated decor, extended or flexible lease terms, moving costs, storage, or even some of the above amenities like gym or pool access. Be careful: concessions (free laundry or parking) may be difficult to take away, or tenants may not want to pay full rent after a discounted period ends.
6. Screen for Quality Tenants and Avoid “Professional Tenants”
For the sake of your bottom line and peace of mind, you’ll want to find and retain the right tenants, i.e., responsible folks who pay on time and respect the property. Screening upfront for quality tenants saves thousands in lost revenue, court costs, and fees.
The right tenants have high expectations and are attracted to properties that display professionalism and organization. The wrong tenants are discouraged by a tightly run operation, and sharp, professional marketing sends that message loud and clear. Invest in crisp, clean ads with prices, floor plans, and maybe even a video tour. Be upfront with the rigor of the screening process to dissuade bad tenants.
“Professional tenants” are a property management nightmare. These people game the system to live as long as possible without paying rent because they know how complicated evictions can be to enact. These tenants often have evictions or other red flags on their record, so scrutinize background checks and rental history carefully. Property management software like Buildium and Appfolio already have built-in tenant screening functionality.
Trust your gut! An interview is a great way to get the measure of a tenant before offering lease terms. And while intuition isn’t the main criteria by which you should make leasing decisions, basic questions like “Why are you moving” or “Do you meet the income requirements” can be enough to decide whether to continue with the application and screening process. Don’t forget to confirm references and employment directly.
7. Choose the Right Tech to Save Time
As the maxim goes: time is money. You can save both and increase controls by automating rent collection, eviction, work orders, or communications. People-hours saved by the right tech solutions can be reallocated to profit-maximizing, growth, and tenant needs. The right software not only tracks expenses but keeps matters organized and in compliance, with controls to eliminate costly mistakes.
On the other hand, the wrong software solution can hurt more than it helps with expensive ill-fitting features that don’t meet your needs, limited reporting, or lack of scalability. If this happens, the time and expense of working around software shortcomings or fixing pricey mistakes cost more in long-term revenue and headaches. Consider your software needs for features like automated reminders, late charges, access across devices, or auto-pay. Expert bookkeepers for property managers can advise you in choosing the right solution for your business.
8. Hand-Off the Accounting to the Experts
For property managers, developers, owners, and investors alike, efficient accounting is essential to keeping your business afloat and imperative if you plan to grow. Property management bookkeeping is a niche, specialized field. Without the right team of experts at your back, you may find growth and profit halted. A well-run, responsive accounting team allows you to make better business decisions more quickly and confidently.
Delays in financial statements and bank reconciliations frustrate owners and stakeholders, leading to ill-informed and impulsive —rather than thoughtful and strategic— decisions. Without automated processes, your team is operating in perpetual catch-up mode. You may have the right software in place, like Appfolio or Yardi, but without the internal expertise of bookkeepers for property managers to set it up for optimization, you might not be getting the most out of the investment.
Choosing the best bookkeeping services for property managers will eliminate the need to find, hire, train and acquaint experienced accountants. An outside accountant also makes it simple to accurately predict overhead costs and saves time setting up new properties, carefully closing books, and generating reports. Here’s the catch: qualified real estate accountants are few and far between.
Keeping tight margins to avoid losses takes planning and expertise. Still, with the correct controls in place, and the support of responsive, reliable specialists (we know a few), property managers can keep spending lean and revenue healthy. The ROI from an outside property bookkeeper is quantifiable: on average, Proper clients save 30% with more controls and fewer headaches. So if bookkeeping for property management is one of the ways your operation can save money, let’s talk!