Is Your Apartment Management Company a Vendor or a Partner?

There can be stunning differences in returns when an apartment management company is vested in the outcome and tied in with asset performance as opposed to clocking in and clocking out as a vendor or service provider. Read on for tips on which approach is beneficial for your institutional apartment portfolio or investor multifamily portfolio.

How an Apartment Vendor Delivers

Vendors are defined at as a person or entity, also known as a supplier, that sells something or delivers a service. An apartment management company contracted as a vendor has no vested interested other than to deliver a service and get paid. There are many professional apartment management companies that deliver a defined set of services for a set fee. Nothing more, nothing less.

There is nothing wrong this approach. However, there is no incentive to improve net operating income (NOI) or improve the underlying asset value for investors or shareholders. The vendor property management approach is often applied to every property in a portfolio. In the same way, every day, over and over again with a cookie cutter approach. While this is a way to operate apartment properties, it may not be the best way to improve an apartment asset portfolio.

What A Operational Partner Delivers

The definition of a partnership per is:

A business operation between two or more individuals who share management and profits.

An apartment operational partner has skin in the game. They are vested in the numbers, with compensation tied to the increase in NOI and/or paid a bonus upon sale of the asset.

An operational partner is one who will go the extra mile to position a property into a whole asset class with vision and experience. While a vendor will simply show up, deliver service and go home.

Play Hard, Play Smart and Do It Together

During a Bojangles Bash in Columbia, SC, an elite high school basketball showcase, the pre-game team talk sums this up well.

1) Be ready and play as hard as you are capable as playing. Even if you are sitting on the bench.

In apartment management this means staying on the leading edge of training, legislation, community outreach, operations, refinancing opportunities, staying on top of community demographics, growing relationships. Growing community.

2) Play as smart as you are capable as playing.

You don’t make the flashy play, you make the right play.

In apartment management, this equates to doing what is right for that owner and that asset, not what is right you or the management company. Every time. Without fail. This means, not taking the easy road, phoning it in or leaving it for tomorrow.

3) Do everything together. You need to care about the other person on your team.

When managing apartment assets, an operational partner treats the multifamily asset as if it were their own. An operational partner cares about the asset, the residents, the institutional owner or apartment portfolio owner, the other people on their team and the community they live in as a whole.

Institutional Multifamily Investors

Institutional multifamily investors include public and private pension funds, insurance companies, savings institutions, closed- and open-end investment companies, endowments and foundations. These institutions are looking for higher returns fro the investors. This is where operational management shines. Rather than simply relying on net operating income (NOI), operational partners can find hidden value, bring vision to exit and expansion strategies, find creative workarounds in tertiary markets and create bigger returns on investment

Owners Switch from In-House to Outsource – A Step Up

At Better World Properties LLC, we have many apartment owners and institutional multifamily investors who are delighted to hand over the keys to the day-to-day operations of their apartment properties. They are no longer bothered with the stressors of day-to-day property management and are free to travel and seek new opportunities. When compensation is tied to performance with skin in the game, these owners and investors know that we are hard at work to maximize profits and reduce expenses while creating lasting relationships with quality residents. We also have an eye on profitable growth and exit strategies to grow their portfolios. In this way, we are true operational partners rather than simply vendors.

Is Your Apartment Portfolio Realizing Its Full Potential

Would you like a comprehensive review of your apartment property portfolio. Are there ways to improve your apartment operating procedures, add value, refinance and increase apartment NOI (net operating income) and multifamily ROI (return on investment) while attracting quality residents? You can read more about our services here.

Is it time to add apartments to round out your investment basket?

Feel free to give us a call. Better yet, come visit. We love to talk apartments.

(713) 559-6975

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