Fall is but a week away, which means it’s that time of year when property managers must gear up for budget season. As tedious and frustrating as it is, this is an imperative process and one of the biggest responsibilities you hold as a property manager.
A budget tells you where you are now, where you are going, and the progress you make along the way. It also tells you how much money you have coming in and out for you or anyone who may need it, and allows you to assess your current performance and make adjustments as necessary.
We know budget season is stressful. So, here are 5 key tips to help you prepare.
1. Research industry data.
Make sure to do your homework before diving in. Check out online databases, visit the library, or just try plain old Google to look for standard metrics for your industry. Review annual reports from market research firms to find data for standard income, expenditures, profit margins, and more. This will give you a broad idea of what you should aim for with your budget.
2. Review last year’s numbers.
Pull files and notes from the previous year or two’s budgets. This will allow you to review what you did well and what you could improve upon, and ultimately will help you make better decisions for the upcoming year.
3. Forecast for 2017.
Once you have some base numbers from your research and your previous budgets, you’ll need to forecast for the coming year. Think about:
- What outside influences might affect the coming year
- Whether or not your staff needs will be the same
- Screening and training for new staff
- Any incoming or outgoing tenants
- Any updates or changes you want to make to the property
- Is rent where it should be based on market averages, demand, and supply?
- Will there be any technological updates?
There’s a ton to think about when forecasting for 2017, so it’s vital to start ASAP. Never assume that each year will be the same as the last. Times changes and as a property owner or manager, you have to keep up!
4. Don’t forget about regular maintenance & emergency situations.
While creating your budget this season, remember to consider maintenance costs. Not just your regular maintenance, like window cleaning, pressure washing, and parking garage cleaning, but also allocate funds for emergency situations. It’s all about planning ahead. In the DC metro area, the weather is incredibly unpredictable. By allocating money for emergency situations, say a major snowstorm, you are prepared for the unexpected and will keep costs down over the long-term.
5. Get multiple perspectives and inputs.
Probably the most important tip of all: talk to other property managers. You need input from other important individuals in your organization and others in the industry. They may have ideas to add, feedback on current numbers, or other input that will help you build a better budget. Allow your team time to plan and discuss and get as much input and as many perspectives as you can to build the most comprehensive budget you can.
Remember to allow enough time to review the budget multiple times before finalizing. Looking at it with brand new eyes can definitely help to create a functional, logical budget for the next year.
Budget season can be daunting, but if property managers take the time to prepare before hand, it can make the task as painless as possible. Contact KEVCO to learn more about exterior property maintenance tasks like window cleaning, pressure washing, and parking garage cleaning. We will work with you and design an exterior maintenance program to fit your needs, so you can feel comfortable and confident including them in your 2017 budget.