By Ismail Kamel
(The writer is the founder and CEO of Integrated Real Estate Services LLC in Oman)
Many property management firms overlook the importance of the property life and focuses more on the occupancy levels and related paperwork that comes with it. We cannot generalize, but most property management firms’ general mindset relaxes after achieving their desired occupancy levels.
Although it is important to have an occupied building with a steady long-term income to the landlord as to meet the financial goals or obligations. But most of the property managers do not focus on increasing the asset life and maintaining the property in a manner that allows a stable rent and a well-maintained asset that does not consume the income generated over the long-term.
The companies attending maintenance calls as a reactive measure to an incident do not actually keep a maintained building for a long period.
What should they do?
A property manager has a duty to the landlord to maximise profits, financial accounting of the operations and to ensure that the operations are within the constraints of objectives of the owner and in line with the governing law, market, and the lease agreements provision. The property manager also has a duty to the tenants to ensure that they have a safe, secured stay along with ease of terms of the lease or rental agreements that are carried out.
Property managers must manage operations efficiently and focus on increasing the return-on-investment of the asset with primary goal to improve the asset value. Tracking the performance of the property sites is a key element to performance while making sure that anticipated revenues are achieved through the set operational procedure. They should focus on maximising potential values of the sites/assets while maintaining a long-term relation with both owners and tenants.
Lastly, property managers should ensure that rents remain steady/competitive between other competing buildings while managing the cost of maintenance and improving the expenditure frequency and severity.
Facilities operations managers are responsible for ensuring periodic planned maintenance and repairs on equipment within a facility, and that the facility is always clean and orderly. They also oversee renovation or remodeling efforts and, in some positions, the maintenance of yards, gardens, walkways, and other outdoor spaces.
Facility managers in most companies focus more on routine work of maintenance i.e care or upkeep of a property and all its components rather than focusing on implementing a risk management programme that aims in controlling or reducing risk to acceptable levels which reflects on the asset life.
Facility managers focus more on implementing a reactive/corrective maintenance programme rather than implementing a planned preventive/predictive programme which by default results in the short life of an asset.
Failure to manage facilities properly increases the overall cost ownership of facilities and assets. This results in lower profit margins, which compensates for the lack of profit by increasing commodity prices.
Tenants look for comfort
Customers’ convenience is everything. If maintenance such as plumbing, HVAC, lighting system or electrical equipment fail, tenants will not be happy. Your facility should allow tenants to stay longer and encourage them to have long-term relation being in your asset i.e., their homes. Poor management of facilities will lead to malfunctioning, forcing the clients out of their door and into their competitors’ arms.
Either new or existing tenants are attracted by their experience in facilities. Managers must understand why the customer experience affects the management of properties and how customer interactions may be used to enhance these properties.
Poor service and cleanliness and inefficiency are associated with the greatest levels of customer dissatisfaction. In addition, poorly managed maintenance decreases the tenant’s satisfaction and increases overall maintenance expenses on the longer period.
The demand for maintenance is becoming increasingly significant and as well difficult due to poorer conditions resulting from negligence in following a proper maintenance plan.
Direct effect on asset
Over the life cycle of a building, maintenance of properties are necessary to preserve and enhance the usefulness of the building. Lack of proper funding by landlords and poor services provided by property management firms can be related to a major factor of improper management of facilities, services include financial and human capital as well.
There are also other causes for the bad management across firms, as well as budget limitations on maintenance expenditures, lack of information on the maintenance of a property by the facility manager and delayed maintenance by the facility owners or managers.
Building performance is a behavior of a product in use. Cost performance is one of the key principles that reflects the overall performance of the property or construction project.
The expense factor
The life cycle of a property is like the human life cycle. Affected by age, properties may suffer physical deterioration, leading to functional and external obsolescence which then affect a building’s usability. Therefore, long-term planning and maintenance management are quite important.
The more systems and planning programmes are in place, the less expenses will be incurred throughout each year. Maintenance plans are not in place to get things fixed, they are in place to monitor, evaluate and maintain each asset within the property and overcome the costly reactive or corrective approach.
The functions for which a facility has been developed and created include an array of services, capabilities, procedures, and instruments required to ensure the built environment remains for a longer life.
Property management and maintenance typically include the day-to-day activities necessary for the building/built structure, its systems and equipment, and occupants/users to perform their intended function. Property management and maintenance cannot operate at peak efficiency without being maintained; therefore, the two are discussed as one.
(The views and opinions expressed in this column are solely those of the author and do not necessarily represent those of Muscat Daily or Apex Press & Publishing)