Telephone calls
and actual visits to
businesses are vital,
allowing more direct
communication.
with the following question in mind:
“Is this a cost-effective expense?”
Start with the property and personal
taxes. Are your insurance premiums
competitive for the coverage you
need? A management company can
significantly reduce costs by simply
changing its insurance carrier. One
Nevada company, for example, cut
its workers’ compensation costs from
$55,000 a year to $26,000 a year by
switching insurance.
You also need to look at your utility costs. Find out if there are any
local programs from the utility companies that will allow you to reduce
your expenses. Nevada Energy, for
example, has a program that helps
owners and tenants save on electricity costs. They install a very sophisticated thermostat with setbacks that
allow the utility company to adjust
the consumption of electricity during peak hours. Your water district
may have a similar program to better
control water consumption.
In addition to analyzing opera-
tions for potential insurance and
energy savings, management com-
panies should also search for ways to
streamline office costs. One manage-
ment company made a major invest-
ment in a new computer accounting
system for both their management
company and their clients. The new
system allowed them to reduce their office staff, and lower office supplies and
postage. They now e-mail almost all documents to their clients, from bank
statements to financial reports, to board of director packages. The new sys-
tem has also increased productivity for every employee and has provided the
district managers with instant information, allowing them to make better and
faster decisions that benefit their clients.
