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Property management profitable in 90's.

Property management profitable in 90's

In 1991 Taranto & Associates did more business because we do good business. I share the same goals as the owners of the property. We both want a well-maintained, efficiently-run building that will sustain a quality of life and retain its value. Since there is an enormous margin for error in an enterprise that is, itself, dependent on outside services, it is important that everything be scrutinized. I'm highly organized, attentive to detail, and conscientious in following up all matters relating to the property.

Our philosophy for the 90's is to be diligent and remain calm and flexible. It's not only a matter of my personal style, but a proven management tool. When you are dealing with varied personalities, you must be sensitive to individual requirements and capable of relating in an appropriate manner. Owners benefit from managers who can oversee building systems and accounting procedures while being responsive to the individual needs of each property and attending to the same promptly.

Assessing future needs and instituting preventive maintenance programs has led, in part, to our success because we don't just exceed the expectations of our clients...we anticipate them.

Top management performers seek and implement cost-effective strategies. At Taranto & Associates we consider these points key to profitability in the 90's: 1. Inventory Control

Purchase supplies in large quantities only if there is a substantial discount offered for the bulk purchase, and only if the supply is in demand. Overstocking may drain needed cash reserves, and makes no sense unless the savings will be dramatic over time.

An overabundance of supplies may also result in carelessness regarding the use of the supply. 2. Invoice Review

Review bills for errors and requests for overpayment. A daily log should be maintained at the building and should note the amount of time spent there by outside contractors. 3. Certiorari Proceedings

File every year, in almost all cases, to reduce real estate tax assessments. When appropriate, seeking J-51 tax abatements for capital improvements is a saund management solution. 4. Capital Expenditures

Figuring the cost/benefit ratio for capital improvements such as new windows, boilers, and water heaters is a wise management strategy. Dividing the initial cost of the new installation by the estimated annual energy cost savings gives the approximate "pay-back period"-that is, the amount of time it will take for the improvement to pay for itself.

After the pay-back period, which, in some cases, may be as little as two to three years, a substantial amount of money may be saved annually in energy costs. Knowing when to recommend a capital improvement is crucial. Frequent energy repairs can ultimately be more expensive than the installation of new, energy-efficient equipment.

Actively seeking competitive bids for any capital improvement is a must. 5. Non-Capital Improvements

Ongoing, preventive maintenance and attention to cost-saving details signal good management. Repairing steam leaks, caulking windows, insulating pipes, tuning and cleaning boilers, and maintaining HVAC systems, and installing water-saving faucets and showerheads, are all effective ways to improve the property and save on energy expenses. 6. Off-Season Repairs

Experienced managers know when the best deals are available. Windows are less costly and easier to replace in the spring and summer seasons. Boiler and heating repairs should also be made during the warm weather. Contracts for structural work are best negotiated during the winter season. Planning ahead and securing the best price is part of an effective management process. 7. Energy Audits

New policies are emerging from Con Edison and other sources to help reduce energy costs; in some cases, rebates (Apple Power Rebate) are offered to people who install fluorescent fixtures and bulbs. Smart managers conduct ongoing energy reviews and take advantage of free energy surveys to best utilize current cost-saving programs. There are companies who review paid electricity bills and whose fee is a percentage of the savings they obtain for the property. 8. Payroll Costs

Monitoring overtime is an important management responsibility. Overtime should be approved by the managing agent who will deem it necessary only in emergency situations. 9. Refinancing

Professional managers may recommend refinancing to raise capital for improvements and renovations. Timing is key in the decision to refinance. Astute managers are able to furnish information about available rates and "interest-only" mortgages that may reduce monthly payments.
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Title Annotation:Review & Forecast Section II
Author:Taranto, Marcia
Publication:Real Estate Weekly
Article Type:Company Profile
Date:Jan 29, 1992
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