Looking for ways to maximize profitability?
Attracting and retaining guests and residents are important to property profitability. However, getting more guests/renters isn’t the only way to increase your profitability. Streamlining your budget to reduce unnecessary expenses and increase property efficiency can also help you maximize profitability.
Wondering how? That’s what we’ll cover in this post. Let’s start with a look at the first way to streamline your property management budget – creating a budget planning schedule.
1. Create a budget planning schedule
The first way to streamline your property management budget is to create a budget planning schedule.
Without a budget planning schedule, you have to remember every budget task, category, and deadline. This makes it easy to forget budget tasks – leading to an inaccurate budget. Not having a budget planning schedule also makes it easy to leave budgeting to the last minute. If you rush your budget planning, it can be difficult to optimize your budget to promote profitability.
Instead of trying to remember everything, you should create a budget schedule. By setting deadlines and incorporating quarterly reviews, you can make sure you and your team dedicate the time and attention required to budget, review, and reforecast. Otherwise, you may miss opportunities to cut costs, boost revenue, and maximize profitability.
2. Track and review data
Another way to streamline your property management budget is to review your tracked data throughout the budget planning and review process.
Relying on speculation to create your budget can lead to under and over budgeting, which can reduce profitability. With the right data on hand and processes in place to continuously review expenses, you can identify emerging issues before they become a recurring pattern month over month. Tracking expenses by category and class, keeping an eye on profit margins, and reviewing staff hours are just a few of the ways you can keep an eye on income and expenses, and take the guesswork out of your property management budget.
To streamline your budget, you need to track data throughout the year and aggregate it into easy-to-understand reports. The right operations platform can make data tracking a breeze by marrying the data from your property management system with vendor billing, smart device usage, and more. And, you don’t have to sacrifice hours trying to interpret the data. An operations platform can generate useful reports for you in minutes.
The accuracy of your budget is as good as the data used to build it. By keeping track of expenses and income and reviewing essential reports, you can remove the guesswork from the budgeting process and help to maximize profitability.
3. Assess vendors
Along with reviewing tracked data, you can also streamline your property management budget by reevaluating your vendors.
Many property managers stick with the same vendors year after year without any reevaluation. Instead of automatically continuing to use the same vendors, consider evaluating your vendors prior to the year-end budget process. By considering their responsiveness, quality of work, and price structure and sourcing quotes from competitors in the market, you may find that you’re overpaying for subpar work. Finding new vendors can be costly and take time, but it will increase profitability in the long run. Plus, by simply notifying current vendors that they will be evaluated annually, they will be encouraged to put forward their best work in order to retain your business.
By evaluating vendor performance annually, you can make sure you’re getting the best price for the work that continually needs to be done around your properties. Managing expenses is one of the best ways to increase profitability, and vendor billing plays a key role in this process.
4. Incorporate smart devices
You can also streamline your property management budget by using smart devices to lower utility costs.
Utilities can eat up a large chunk of your budget. But, manually managing utilities in common areas, unoccupied units, occupied units, and more can be time-consuming.
It’s also easy to forget to turn up and down your HVAC, turn on and off lights, and more to maximize energy efficiency. However, not managing your energy usage efficiency can cost your property thousands every year.
Instead of manually trying to manage energy usage, smart devices (like thermostats and lights) are needed throughout the property along with an enterprise smart device management platform. Enterprise smart device management software can automatically adjust the temperature, lighting, and even water usage to optimize utility costs without impacting the guest or resident’s experience. You can set these devices to automatically turn down the temperature or turn off lights in unoccupied property spaces.
With the right enterprise smart device management system and a suite of smart devices throughout the property, you can further streamline your budget by reducing utility expenses and boosting profitability.
5. Monitor industry trends
One last way to streamline your property management budget is to monitor industry trends and implement those that will simultaneously improve the guest or tenant experience and save on expenses in the long run.
For example, contactless check-in is now viewed as critical in the short-term rental property management space. Many guests expect contactless check-in at vacation homes and condos for easy access to the property after long days of travel by signing contracts digitally and receiving a digital key code to access the property. And for the short-term rental property manager, it reduces the cost of the in-person check-in process, which can include 24-hour staffing, keycards, printed paperwork, and more.
Similarly, self-guided tours are the new normal for viewing long-term rental properties. While potential residents view self-guided tours as extremely easy and convenient, property managers can remotely leverage smart technology to prepare the unit for viewing (lights on, comfortable temperature) and manage security (digital background checks, face verification) at the same time.
Keeping up with industry trends allows property managers to evaluate their current process and technology to ensure they don’t fall behind. Sure, implementing new technology is an added cost, but one that should be budgeted for year after year. Oftentimes newer technology and SaaS tools offer cost savings by integrating with legacy systems that would otherwise be extremely expensive to replace.
Misaligning your budget with the changing property management landscape can lead to poor guest or resident retention. Plus, technology can save property managers thousands of dollars annually when leveraged in ways that help to reduce utilities, increase guest or resident retention, and streamline outdated processes.
Wrapping it up
Creating an accurate property management budget is within reach by putting a few checkpoints and processes in place. First, create an annual budget planning schedule. In advance of planning meetings, review your operational reports and assess vendor performance—you’ll want to take your findings into account as you budget for the coming year. And, make sure you’re incorporating investments in new technology each year (like smart devices with enterprise management tools and industry-shaping technology, like contactless check-in) so you don’t fall behind the competition.
An operations platform can help you not only streamline your day-to-day operations, but also streamline your budget planning process. By aggregating information from your property management system with vendor reports, digital contracts, and more, a best-in-class operations platform can make reporting and decision making a breeze. If you’re looking for the best unified operations platform for residential and hospitality properties, BeHome247 is the way to go.
BeHome247 has robust analytics and reporting that allows you to track expenses, revenue, vendor performance, energy management, guest/tenant trends, and more. This helps you create an accurate budget based on data instead of guesswork.
Additionally, BeHome247 helps you manage smart devices to save on utilities. As a device agnostic platform, BeHome247 works with almost any smart device – regardless of connectivity (like WiFi or Bluetooth) or protocol (like Z-Wave or Zigbee). With BeHome247 you have the flexibility to choose the right devices for your property and maximize utility savings.
Along with features to streamline your property management budget, BeHome247 is also a complete property and device management platform. It helps you manage every aspect of communication, operations, and guest management. Plus, BeHome247 can automate all of your day-to-day operations – like maintenance, work orders, inspections, vendor invoicing, digital rental agreements, housekeeping scheduling, and more.
Whether you’re looking for only budget-focused features or a complete unified operations platform, BeHome247 has what you need.
Book your BeHome247 demo today to get started streamlining your budget and maximizing profitability.
