How to Reduce Running Costs for Your Residential Block in 2020
As any block manager knows, it can be very tricky getting the best value for your serv...
As any block manager knows, it can be very tricky getting the best value for your service charge. Running costs, especially in old residential blocks, can quickly be depleted leaving you with less service charge to operate with throughout the year. The savvy block manager will always be looking at ways to reduce the running costs in a residential block.
But finding the compromise between what your residents expect and how you can save costs can be an art form. You don’t want to cut corners, of course, and you still want to give your estate residents a top tier service. On top of this, leaseholders often want more for less, and as a block manager, you’re usually under constant pressure to justify your service costs.
Reducing overheads and running costs in your residential management company can be done, but sometimes thinking outside of the box is what’s needed.
Many block managers have the same contractors in to do a job for many years. It might be a trusted gardener or a maintenance firm who have been with you since the company was formed.
It’s often worth taking a look at your service agreements and even shopping around to see if you can get a better deal. Take a look at the contracts for each of your suppliers to see if there are any outdated charges or opportunities for streamlining the service provision.
Of course, having insurance is a necessity. But many block management firms are guilty of having an insurance cover that goes above and beyond what is needed, and paying the difference. For example, some risks are covered under the communal charge, and also by adjusting the excess on some risks you can really get more for your money with insurance.
Next time your business and buildings insurance is up for renewal, consider using an independent insurance broker to get you the best deal.
As with any business, the biggest costs for residential management companies are often in staffing. But, with the improvements in technology available for block management, it is becoming easier to streamline many of the processes and enable effective management by smaller teams.
For example, with organising your concierge team, planning your next property inspection or filing your paperwork, using property management software can really streamline the whole process. The cost of setting up and operating software is always much cheaper and more cost-effective than hiring a new member of staff, and can even make your current staff more effective at their jobs.
Falling under the banner of overheads, looking at your utility providers can also be a great way to reduce the day to day running costs in your residential block. It’s been widely proven that shopping around for utility providers on an annual basis can be a great way to save a substantial percentage of your service charge.
Timely response to issues
Making sure you respond as efficiently as possible to maintenance issues can be a huge part of minimising your running costs. For example, water leaks or external damage can cause bigger problems to the structure of the property that can quickly escalate. A simple lightbulb that is out of action on a staircase can result in a trip or fall and a whole mountain of additional problems later on.
Logging and responding to issues that are reported is part and parcel of the block managers remit.
Project management costs
Most residential blocks will have a major renovation project at least every couple of years. From roofing, painting or cladding, to upgrading boilers or wiring; these projects can obviously be one of the bigger outlays for the residential management company to facilitate.
With big projects, the costs can be managed by choosing the best team for the job. And, this isn’t always the lowest bid. Research companies to see if they have a track record of going over budget or poor management before you commit.
Of course, you’ll need to follow Section 20 processes correctly, which also involves informing the residential leaseholders and tenants. A great way to automate this is by using property management software, which ensures that lessees and residents receive information in a timely fashion. Bear in mind that failure to do so means that the landlord or the property management company can only recover £250 for works to the building and £100 per leaseholder per year in respect of long term contract, meaning that there could be a huge financial implication if that falls short of the project cost
Managing paperwork and data
The paper trail created as part of managing a residential property can be quite long. And with the advent of GDPR, keeping information secure is no longer a luxury, but something that is the right of every resident and contractor.
The best solution for managing the mountains of paperwork generated is to use a property management software solution. It’s also a good way to ensure that all members of your team can find what they need without needing to look through folders on a computer or flicking through a filing cabinet.
Using cloud-based software also means that information is available to all members of your team, without needing to come back to the office. This can be invaluable when out on an inspection, or when conducting a residents meeting.
Modern solutions to common problems
Residential property management software is usually created by people who understand the needs of block management with unique solutions to common problems. Keeping track of everything from visitors or package deliveries, or logging maintenance issues are all part of a day's work for most residential block managers.
Lobital is software made for residential management companies. We understand what it takes to run property and we know that delivering value for your service charge is what will help you keep and win more business.
- Date- 09 January, 2020
- Author- Oli Lynch
- View all Blogs