Reduce Multi-family Spend With These Tools
Top Apartment Management Spend Categories and How to Reduce Them
4 MIN. READ
While working on your budget, you'll quickly notice that certain purchases make up a majority of your budget. In apartment management, these would most likely be items like air conditioners, appliances, water heaters and the like. Here are some actionable ideas for you to optimize this matter for your properties.
Top apartment management spend categories
Property managers focus on budgets and NOI for good reason. These areas show how well their properties are performing. Certain categories have a greater impact on the bottom line, and therefore these areas should be scrutinized to ensure that there is no bloat or waste.
So, here are some top spend categories in apartment management:
- HVAC equipment: HVAC units have a lifespan, and they need regular upkeep and maintenance. Replacing and upgrading cooling or heating units is a significant hit to a budget - but also a necessary one. Heat pumps and furnaces can be a few thousand dollars each, and when you multiply that by several units - it adds up. As prices continue to rise, it is more important than ever to try and get the best offers available.
- HVAC consumables: Tying directly into the above, HVAC units need supplies to function properly. Filters, belts, compressors, thermostats, tools - all of these necessary items cost money. Managers should factor them in (plus inflation) when preparing budgets. These items are crucial to the operation of the property, and getting quality products at the best price should be the goal of any apartment management team.
- Utilities: Utilities are a constant that you cannot avoid. Energy prices are forecasted to increase by 1-2% in 2022, so understanding the impact this could have on performance is critical. Measures to reduce energy consumption are in the control of property managers. Upgrade to LED lighting in common areas. Install smart meters. Use low flow fixtures, and only buy energy-efficient
- General supplies: Prices for everyday supplies like electrical wiring, tools, refrigerant and PPE will continue to rise next year, with the exception of PPE items. Prudent managers should forecast accordingly and be flexible when market conditions change.
There is a lot to think about when budgeting. Stay dialed in to your property and plug into resources that can help you save money on the routine items that you purchase.
How to control spending for routine items
Rogue spending can hurt your bottom line. Do not let it derail a well-planned budget. Instead, put processes in place that will ensure you have control over your spending and that will give you the best possible pricing for your apartment management:
- Optimize supplier management: Supplier management is a tedious endeavor. But with the right system in place, such as Raiven’s online platform, you can keep tabs on all suppliers to make sure they stay compliant. Measure supplier performance and centralize all documentation in one place. This saves time for busy property managers like you, so you can focus on other areas of business.
- Increase the longevity of specific items: Get the most value from your supplies. This means choosing the ones that are at the best price and that will last the longest. It makes sense to upgrade wiring if that will last several years, which saves money over the long haul - including labor costs. The same holds true for upgrading to energy-efficient appliances wherever possible.
- Improve budgeting: Producing a proper budget is a skill learned through experience. Managers can separate themselves from the pack if they can submit a well-thought-out budget. Factor in cost savings from supplies that you gained by using software. Forecast your capital expenditures based on your research and knowledge, and your budget will be your best friend.
Consolidate purchasing on one online platform to control expenses
Having access to all your suppliers on an online platform is efficient. This is what Raiven offers.
We aggregate suppliers and supplies from all across your network and offer products at negotiated rates. In fact, you can shop for a new furnace and cleaning supplies all from one universal cart.
Additionally, the system will quickly show alternative products and pricing to ensure you are getting the best deal (from a preferred supplier). Apartment management requires a thoughtful approach with a priority given to increasing revenue and reducing expenses. You can do that with Raiven’s software.
Understand your spending habits, plug into Raiven Marketplace and source your routine items at the best possible rates. Doing this will improve your bottom line and NOI. Reach out for more information today.