Without giving my age away, I can vividly remember the time when in order to copy a document, you had to use carbon paper. If you wanted to copy a document for distribution to building tenants, there was a strange machine called a mimeograph that required you type the document onto a special paper, install it on a machine with a large ink drum, and crank a handle that would mysteriously produce a copy of the document onto sheets of blank paper as the handle was cranked.
Skipping forward a few decades, I remember seeing the first portable phone. It took an entire briefcase to hold the equipment necessary to generate a phone call without being connected directly to a land line. It was pure magic. What about computers? Back in the day, every payment received from a tenant had to be hand posted onto a piece of paper. The more “sophisticated” amongst us actually had paper with special forms printed on it.
Obviously, times have changed and with them the ways that we live and do business. Can you imagine how difficult and strange life would be today without the use of modern technology including cellular phones, e-mail, voice mail, and computers driven by software that automatically totals figures and generates automatic notices? I’m quite sure your answer is absolutely not.
All of us know that the nation as well as our local area is in the middle of an economic decline. As property owners and managers, we are facing declining values in our rental incomes and seeing the dreaded return of rent concessions and other leasing incentives. It reminds me of the line out of the movie Jaws. Just when we thought it was safe to go back into the water. At times like this, all of our economic forecasts are not worth the paper or hard drive space we created them on. We all must react to the marketplace and reinvent what we thought was a pretty decent business model.
My personal mantra is to always learn from life. Remember, necessity is the mother of all invention! There are some things that we as professional property managers can do that will flow directly to our bottom lines to assist us through these times and come out on the other side, stronger, wiser, and more profitable. One area that is too often overlooked is technology. Just like the examples above, failure to keep up with new technology in property management will eventually eliminate people who do not make the leap. Here are a few areas for you to consider:
Credit Reports: In the past, I always viewed credit reports and the time it took to get them back as a given. The only thing that I thought mattered was the credit worthiness of the prospective tenant. If it took several days for that information to be gathered so be it. Then one day, we lost a great tenant who only had one day to identify a unit and sign a lease. I was surprised…how could anybody run and analyze a prospective tenant’s credit in anything less than twenty-four hours? Surprise….technology now allows just that. Our company has established specific credit requirements for each property we manage. The entire process takes place over the internet and tenants can fill out the application from any location that has internet access. Entire search and report time? About 3 minutes. If the tenant meets our specific requirements, there is an automatic approval issued.
Online Lease Forms: Gone are the days when our onsite managers would make copies from their last lease documents to use for future tenants. Inevitably the documents eventually became faded and difficult to read from copies of copies. All your lease forms and addenda can now be printed from the internet producing clean documents filled in with the tenant’s information. This also eliminates documents and addenda from being missed.
Utility Bill Back Equipment: New technological advances have made it easier than ever before to economically install equipment that will enable owners and managers to bill back tenants for their actual water usage. Added on to this is a prorate share of the ever increasing sewer charges and garbage. If you have not already instituted this, you will be shocked at how much your cost will go down. For some mysterious reason, units that have utility bill back equipment use a lot less water than ones that do not.
I have already exceeded the amount of words I was allotted for this article. Bottom line: Pay attention to the new technology that has and continues to be created to assist managers of commercial real estate. While the rent levels may be beyond our control, our recapture of expenses and efficiency through technology continues to have a large effect on our property income levels. The really good news is markets change and the things we do today during these tough times will still increase our returns when the good times return.
I would be glad to personally meet with you and discuss technology and other things that may be done to increase your properties performance.
Bruce Kahn, CPM, CCIM
Bruce is a managing director of The Foundation Group, a full service brokerage and property management company. He is a graduate of the University of Washington’s Commercial Real Estate program and has been awarded the designation of Certified Property Manager by the Institute of Real Estate Management, and Certified Commercial Investment Member by the Institute of Commercial Real Estate.