Poor property management often brings significant hidden costs, ones that go unnoticed by property owners until it is too late. At first glance, maintaining a high level of care and bringing on a team of expert property managers might seem like an unnecessary expense, but cutting corners can lead to long-term financial burdens, see diminished property value, and turn a property with high potential into a perpetual time and money sink.
Latitude Commercial, a full-service commercial real estate firm, regularly meets with property owners who have grown frustrated with cascading expenses after poor management by other companies left them with a mountain of challenges to climb – ones avoidable with well-planned, high-quality management.
“Our job is to be honest with property owners, even when they don’t want to hear it,’” Veronica Turek, property manager at Latitude Commercial said. “They might want to make something happen cheaply, but when you do things cheaply it can cost you far more at the end.”
New owners often start out by attempting to manage their properties on their own. On the surface, it seems like an easy enough proposition, but the responsibilities quickly pile up, and without expertise and years of experience, it can leave them overwhelmed by a line of frustrated tenants.
Maintenance issues ranging from leaky roofs to untamed landscaping, deadlines on important documentation passing by, compliance issues with local municipalities, unanswered voicemails and uncollected rent. All of these problems can quickly add up, driving away tenants and driving down property values.
“Let’s say you’re not addressing roof leaks, plumbing problems, or any other kind of maintenance issue – tenants are not going to be happy,” Turek said. “They feel like they’re paying rent and meeting their end of the lease but you’re not meeting yours. It’ll give you a bad reputation and push your tenants to find somewhere else to go.”
Dedicated experts like those at Latitude Commercial prevent these problems from happening, eliminating the costly risk of losing tenants.
“We recently started managing a property and got so much feedback from tenants. They were thrilled that a professional management company was coming in,” Ryne Pishkur, director of property management for Latitude, said. “There are cases where landlords try and manage a property themselves, but they don’t answer their phones, they’ll send out incorrect documentation, and they just let things fall behind because they have other priorities. This is our sole job – it behooves us to do it as well as we can so that tenants can feel heard.”
Most owners who Latitude work with have full-time jobs, or large responsibilities other than their properties. When they try to manage a property on their own, even the more successful owners quickly find themselves running out of the most valuable currency of all – time.
“When I think of hidden costs, the one that first comes to mind is time,” Turek said. “Most owners don’t want to handle the emergency calls at 8 p.m. at night or 6 a.m. in the morning, they don’t want to be picking up their phones for work on the weekends. We take all of the responsibility off their plates. Owners can do their own thing and have their own lives, relax, and leave their properties to us.”
When Latitude takes on a new client, the team often finds that the owners have been paying to resolve maintenance issues that are not its responsibility under the signed lease. Some leases might require an owner to pay for things such as roof repairs, but leave the tenant responsible for issues like a faulty sink or broken light. Latitude identifies these cases and works to save their clients money without alienating tenants.
“We’ll check the lease and see that it’s actually a problem for the tenant to pay for,” Pishkur said. “That said, we’re not going to leave the tenants high and dry. We’re not going to just say, ‘Tough luck, you’re on your own!’ We’ll offer some advice and recommend them a plumber we trust to do right by them.”
Latitude is also equipped to keep track of a lease’s minutiae. Many property owners working on their own miss items baked into leases, such as year-by-year rent escalations. A typical five-year lease might see rent increase by a small percentage each year, and Latitude makes sure that opportunity is not missed.
“We’ve seen stories where a tenant has been paying the same amount for four years, when their rent according to the lease should’ve increased three times by then,” Pishkur said. “There are even times where bad managers simply don’t collect rent, or they do incorrect calculations which means additional costs for the landlord. If something was agreed to in a lease, it’s our job to make sure it’s enforced.”
To learn more about Latitude Commercial and its full array of services, visit latitudeco.com.
