5 Dangerous NYC Property Management Mistakes to Avoid in 2019
5 Dangerous NYC Property Management Mistakes to Avoid in 2019
As the New York City multifamily market evolves, management evolves with it. This month, I have asked Rob Morgenstern of Canvas Property Group to provide insights on third-party management for multifamily owners. Over the last decade, Morgenstern has owned, operated and managed 50 properties and 1,000 units in Manhattan and Brooklyn. Together with Jonathan Vayner, Morgenstern launched Canvas Property Group — a third-party management firm serving multifamily owners in New York City. Let’s hear from Rob …
Rob launched Canvas Property Group because there’s a lack of property managers who have owned and operated units and who genuinely understand the perspective of the owner. Without experience and perspective, it’s easy to fall into common management mistakes. Here’s a look at 5 of the most common mistakes that multifamily managers should avoid in 2019.
Mistake No. 1: Ignoring Coming Changes
Understanding the nuances of rent stabilization from an owner’s perspective is critical. The landscape has changed in the past 5 years, and it will likely shift again this June in ways that will impact the terminal value of assets.
We may see changes to the 421-a Tax Abatement Program, timelines for registrations, lease renewals or even papering construction and IAI documents. Owner-operators and managers need to start preparing now for changes in the way rents are calculated and leases are drafted. It will be important for them to act and react in regard to their portfolios after the current laws expire on June 30.
Mistake No. 2: Choosing the Lowest Bidding Vendors
Nothing goes perfectly. That’s why managers need a thorough understanding of potential challenges — plus knowledge of how to execute repairs while both limiting expenses and meeting quality standards.
At the same time, a manager must keep tenants and owners updated and satisfied at each step of the repair process — which is difficult. An excellent third-party management firm juggles multiple tasks at once while building strong relationships with quality, affordable vendors.
Some managers hire the least expensive vendors. What they really need, though, are vendors that make their lives easier. It may cost a little bit more for a vendor that can get the job done quickly and effectively. But paying a little more for the right vendor can deliver a huge return on investment later on.
Mistake No. 3: Failing to Organize
The property management business often feels hard — but it doesn’t have to. At Canvas Property Group, we use established workflows and a proprietary model to schedule tenant, building and regulatory events. Our workflows and model allow us to scale comfortably.
Without the right workflows, it’s hard to respond to urgent needs at a property. For example, water issues need immediate attention, or else there’s a risk of more damage and future insurance claims. Having the right workflows (and the right amount of automation built into the system) allows a manager to respond quickly and in a way that limits those risks.
Mistakes No. 4: Taking a Hands-Off Approach to Packages
UPS shipped an estimated 750 million packages during the 2018 holiday season. This onslaught of brown boxes will be an ongoing issue.
We use a package room built as close to the building’s main entrance as possible. We also have a relationship with Carson, whose app notifies tenants when packages have arrived. Carson’s app also allows tenants to receive communications from management and to pay their rent online, thanks to integrations with ClickPay, Yardi and other platforms.
In most limited-service buildings, there’s no one to sign for packages and deliveries. Boxes pile up in vestibules and hallways, and there’s a risk of theft. By using a cost-effective technology solution (as described above), managers of limited-service buildings can take a hands-on approach to the wave of packages without investing too many resources.
Mistake No. 5: Passing on Technology Opportunities
When an owner is going through significant capital improvements, we recommend adding new technology to the property. For example, it’s a good idea to swap out traditional door locks for digital keys that allow virtual access to any unit.
Digital keys allow tenants to enter the building and units with just their phones, or tenants can use rubber bracelets as digital readers — which is ideal when they are going for a run or otherwise traveling light. Digital keys also allow leasing coordinators to leave keys in a unit the morning of a move-in, which improves the new-resident experience.
All players in the industry are very aware of the changes that are occurring in operations, investing, and future projections when owning New York City rental housing. I hope you found this look into property management in helpful his month, as we believe operations will move further to the forefront of important factors to successfully invest in New York City.
If you have any questions about third-party management and the services offered by Canvas Property Group you can reach them at https://canvaspg.com/.
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