Owning and running a multifamily building like a portfolio of apartment blocks comes with a lot of financial pressure. There are utilities to think about, maintenance, repairs, compliance, employees, insurance, and tenant satisfaction; all of which can impact how profitable your business is. If you’re not keeping a close eye on the costs of running your apartment block, it can be easy for things to spiral, and you’ll be left feeling the pinch.
By following the tips in this blog post, you’ll be able to take a proactive approach to money management and have a multifamily building that holds or even increases in value and has happy tenants.
Know Where Money Is Going
If you aren’t staying on top of all of your business outgoings, then it’ll be impossible to keep running costs under control. Regularly check in with your expenses to get a clear idea of how much is going out of your account for things like bills, maintenance, emergency callouts, and repairs. Doing this can help you pinpoint patterns and see where money is being drained.
If you notice that one of your buildings is using much more energy than another that’s similar, then it might be time to investigate. Similarly, if you spot that the same repairs keep happening over and over again, it might be time to think about dealing with the root cause of the problem, as repeated repair costs could add up to being more expensive in the long run. Comparing costs across your portfolio is a good way to see which ones are profitable and which need your attention.
Cut Wasted Energy from Your Multifamily Building
Wasted energy is a huge hidden cost in multifamily buildings, and it can soon drain your profits if not nipped in the bud. The energy used in shared areas like hallways, lobbies, parking lots, and outdoor spaces can all become expensive if not managed correctly. Drafty windows and doors can also lead to increased costs as your heating and cooling systems will have to work a whole lot harder.
Upgrading to motion-sensitive lights, efficient lighting, and using monitoring tools can help you reduce energy costs and spot where things aren’t running as efficiently as they should be. This will help you cut down on expensive wasted energy costs.
Use Technology To Save Money
In the same vein, investing in technology can help give you a clear view of how efficient and cost-effective your building is. Technology can help you track real-time costs instead of being left surprised by a big bill or tenant complaint, especially when it comes to your major building systems. If your buildings rely on cooling towers, as an example, they can be very expensive to run when they aren’t properly tracked or optimized. If your cooling towers are left running for too long or don’t respond well to changing conditions, then you could be paying for wasted energy without knowing.
Smart cooling tower system controls can give you a better insight into how your system is running. They can also help you cut down unnecessary running time, help you make more informed decisions about cooling, and help you spot any inefficiencies before they spiral out of control.
Don’t Put Maintenance Off with Your Multifamily Building
Maintenance costs are an inevitable part of owning a multifamily building. While it might be tempting to leave things for as long as possible if everything appears to be working properly, that’s actually a disaster waiting to happen. Waiting until something breaks down can be more expensive to fix and lead to damage that could have been avoided if maintenance checks were carried out.
Regular checks of plumbing and electrical systems, boilers, roof, HVAC equipment, elevators, and communal areas should be carried out consistently. Catching potential issues early can be cheaper to fix and keep your systems working longer.
Regularly Look At Contractor Pricing
The contractors you hire to look after your buildings are very important. After all, their work helps keep tenants happy and everything running as it should. To make sure that you are being charged fairly, it’s a good idea to review contracts regularly so you can make sure you’re getting a good service for what you’re paying.
It’s worth mentioning that the cheapest option isn’t always the best one. Substandard work can end up with you having to pay for repeat repairs and dealing with disgruntled tenants. To provide the best service, you need to make sure your contractors are experienced, responsive, and honest about the work they can take on.
Key Takeaways
Keeping the running costs of multifamily buildings under control all starts with knowing where your money is going. Understanding this can then help you make changes to reduce unnecessary costs and maintain or even improve profitability. Other things, like using technology to keep an eye on energy consumption and costs, being proactive with building maintenance, and checking your contractor prices, can all help you make better decisions for the longevity of your business.
It’s important to note that your focus shouldn’t be on spending as little as possible; it should be about making smart choices that will improve your business in the long-run and keep your tenants happy.
FAQs
What Are The Biggest Running Costs For Multifamily Building Owners?
Running costs tend to depend on the age, size, and condition of the building you own. However, maintenance, utilities, repairs, staffing, and insurance are usually the highest costs that multifamily building owners face.
Can The Right Building Technology Help Reduce Costs?
Yes, it can. Technology can give you insights into how your systems are performing in line with energy usage. This can help you spot any inefficiencies and help you make the right decisions to avoid waste and costs.
The Cheapest Contractor Is Tempting, Should I Go With Them?
Not always. Cheap doesn’t always mean better. If someone is quoting you an amount that feels too good to be true, then it probably is. A low price might mean poor work or repeat repairs and breakdowns in the future. Going with a contractor that charges a little more could be better in the long-run if they are reliable, experienced, and trustworthy.
