Property Management Companies and Maintenance Departments

Specialization or Division of Labor is a principle that has been around for hundreds of years.
 
Feb. 6, 2013 - PRLog -- Specialization or Division of Labor is a principle that has been around for hundreds of years.  Essentially it discusses the idea of focusing on a specific task that you are good at, and concentrating your effort on that single task.  Comparing that to today and dealing with Property Management, depending on the market or asset being managed, that would mean concentrating on leasing, providing support or service to homeowners, concentrating on budgeting and paying invoices, or many of the other Management?átasks given to the Property Management Company.

If specialization and focusing on what your good at is so important, why are so many companies touting their maintenance departments?  Many are looking out for your best interest, but make sure you do your research first.  Sometimes the maintenance department can provide a huge boost in profits for the Management Company.  Is this a good thing?  Sure there are some benefits to an in-house maintenance staff, such as a single contact (The Management Company) that you can call to get help with issues you are having.  However, there are two sides to this coin.  With every benefit there is a cost, and with an in-house maintenance department, this could be driving up the cost that is passed along to the clients.

After all if the maintenance team are staff that are constantly on the payroll, and there has to be some way that they are getting paid for that service.  Those fee’s can show up in a couple different ways; perhaps in a higher priced Management Fee, or in the cost associated with the work performed on your asset.  Either way there is some way the maintenance is being paid for.

An alternative to this method of thinking is instead of having an in-house maintenance department, allow an as needed contractor specific to the problem as a vendor that is only a cost when there is an actual problem.  The value there could be tremendous, specifically when the Management Company is sending a decent amount of business to the vendor, typically they will get better pricing.  Volume equals better pricing.

Not only does this offer the customer the ability to have a professional specifically trained in their issue, when utilized correctly this allows the Management Company to provide a better value to their customer through both lower prices, and more skilled and trained workers when issues arise.

Just because a company is advertising it’s maintenance department does not make it a bad thing, however in our travels throughout the past couple years, there has been a larger call for the maintenance side due to a possibility to make more money.  Do some research as to what both the benefits and costs of a maintenance department truly mean to you as a customer.

One of the downfalls to contracting out the maintenance can be associated with Kickbacks.  Kickbacks is a term that we will get into in our next post, but as a teaser… A kickback is sending business to a specific vendor in order to receive some form of payment on the back end for the business.

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