“You’ve got to do what you’ve got to do.”
While it’s not exactly clear where this saying originally came from – it might as well have been said by the creator of “the service charge” to fund OPEX (operating expenses). These costs are essential in the maintenance of quality and integrity of a commercial building, but are the greatest challenge for a property manager.
Consider this research conducted by the School of Real Estate and Planning at the University of Reading: “Billing and documentation, cleanliness and maintenance of [a] property, strongly influenced occupiers’ perception of receiving value for money for rent and service charge.”*
The link between tidiness and perceived value for money is obvious and easy to address. But the link between documentation and value for money is much more challenging – until recently. That’s where PropTech comes in.
Embracing Technology is the easiest way to manage service charge (OPEX)
In 2017, Unicom Teleservices ran a survey of 100 property management professionals asking them about the biggest challenges they faced in doing their jobs. By far, the most challenging aspect was a core part of service charge – managing operations staff. In this survey, 49 percent of respondents said hiring and maintaining quality staff is “challenging” or “very challenging.”**
It’s no wonder that this is the case, when the methods for managing operations have traditionally been limited by time and space. However, major developments in the PropTech sector are now giving property managers an easier way to manage these previously challenging aspects of their business.
Automate inefficient tasks
Technology also allows for the many time-expensive tasks associated with the upkeep of buildings to be automated, so to cut their expense.
Property management software such as Re-leased can automate much of the paperwork involved in the operations of a property manager. Similarly, with Forsite’s software you eliminate the need for your contractors to have a direct personal interaction with you when they check into a site. The system also identifies those contractors who fail to be compliant in the check-in process.
Other features, such as self-induction tools fully automate the induction process, thereby saving facility managers between 30 minutes to an hour per contractor of induction time.
Monitor your expenditure with software
Forsite’s online contractor management is a solution for property managers that allows you to track operational costs with close to 100% accuracy. We are able to achieve this level of contractor visibility thanks to our automated proof of presence capability. In short, this means that contractors are logged as on-site even when they take no action to sign in.
Allowing property managers to track variable service charge costs such as cleaning and maintenance costs with new levels of accuracy, providing validation that the amounts charged by your contractors match the amount of work completed.
With such a data set at your fingertips, it becomes much easier to identify inefficiencies in your operations, and so account for them in expenditure decisions.
Make educated adjustments to Service Charge
What this all adds up to is savings on service charges without skimping on quality, thanks to technology – and by analyzing the data sets available through it, property managers can then make informed decisions about how to reduce service charges without compromising tenants’ experience.
As more development within the PropTech space occurs the future will be bright. The introduction of AI and big data into this space will give property managers more assistance and material than ever before to manage the operational aspects of their business, resulting in a stress-free and profitable profession.
The bottom line – which is what minimizing service charges is all about, after all – is that embracing tech and its capabilities will gain you a competitive advantage over your competitors.
When it comes to property management, you’ve absolutely got to do what you’ve got to do to reduce service charges – and the technology now exists to help you do it.
So, what are you waiting for?