Apartments: Observations & Tips On Vendor Relations

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For the multifamily housing market (apartments) there are a lot of considerations that need to be taken into account with carpeting, specifically. Especially when it comes to replacement or restoration.
1st – Because property managers need to deal with drywall and paint issues, fixtures, cabinets, appliances, and so many other things, it is difficult to become as knowledgeable about a given trade as a high quality vendor.
2nd – Because of #1, a property manager needs to do some serious research into the vendors hired to make sure they are, in fact, a knowledgeable vendor.
3rd – Is the focus on cash flow for the property owners, or is the focus on asset development for a future sale? If the first, then restoration is probably worth serious consideration at 30-50% of replacement costs. If the latter, then new carpet which can be depreciated over a nominal life of 3-7 years depending on the class of the property and historical trends at the property may be the best choice even if the carpet looks good (assuming it has already been depreciated out).

In a thread on this topic on another website, someone suggest that if property managers want to learn about customer service, check out the Ritz-Carlton. Unfortunately, investment properties with a primary focus of earning profits is not likely to (and probably shouldn’t) look for the equivalent when it comes to service providers. Why not? Because that level of service comes with a price. Granted the quality is great and the experience is great, but a management company running a portfolio of properties looking to put some managers up for a 2 day training session in Memphis is probably not going to put everyone up in the Peabody for a couple of reasons. Business lodging is expected, not luxury lodging, in the same way that most business class passengers aren’t carted around the country with 1st class air fair, but instead fly business class. It’s a waste of money for what they’re trying to do. Keep things efficient, cost effective, and either meet or, in some few cases with some restrictions, exceed expectations.

Find the expert, listen to them, when something seems ridiculous in terms of price, ask them and if you don’t believe them, you hired the wrong company. If you understand everything just as well as the contractor you’ve hired and you don’t have a background in the field, then you’ve probably hired a contractor with little more experience than you have in the field. Look around, but understand that just because something has the appearance of being a commodity, like oranges or beef, some segments of the market are worth more than others (when you can compare two samples side by side). Even commodities of the same type can and will vary in value.

Always compare the benefits. Everything in the multifamily housing/investment property world has to be put through at least a rudimentary cost vs. benefit analysis. Keep a trusted vendor in the loop and make sure they know where you’re trying to go, how you would like to get there, and use them as a consultant.

Three Tips For Property Managers:

1 – Get them on the same page. They need to know what your specific requirements and desires are when it comes to their level of service. Every property and property manager will be a little different and you can’t expect that your property needs the same level of service as the Ritz-Carlton does, or the same level of service requested by the low-end “slum-lord” type of rental unit.

2 – Make sure that the vendor will document their particular processes/procedures for addressing your specific needs and requirements. If you need to be notified that a given apartment will need $X in services to get rentable based on the vendor’s pricing structure, so you can re-evaluate, they have to know that. When you say, “do whatever it takes,” they might take you at your word and if they do, it really is YOUR fault that you told them to go all-out, so don’t be upset at their bill.

3 – Deal with all the problems you know could come up (because they likely have in the past) on the front end, and in writing. The company that will put it ALL in writing will cost you more $, but they’ll save you time and headaches in the long run. This can only be done through serious, mutually beneficial negotiation on the front end.

By the way, Professional Carpet Systems of Memphis WILL work with you to customize just the right plan for your property/properties, and PUT IT IN WRITING.

Just my 2 cents after spending over 25 years serving the multifamily market as a carpet cleaning and restoration contractor.

Author: Bob Huddleston
Position: Director-Marketing & Media Relations / Certifications: Certified Restorer #00464

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