New year, new budget - are you ready? The intricate landscape of property management is constantly changing and your budget needs to reflect that. With these tips, you can streamline the financial planning process and prepare for any potential changes, ultimately setting you up for a successful year.

Review Last Year’s Data

Understanding how you performed financially in the previous year will help you prepare for your current budget. Analyze where you overspent, underspent or broke even, keeping in mind each individual expense. This will help you understand the reasoning as to why things worked out the way you did and where you could potentially cut costs. With this knowledge, you can better shape your budget for this year.

Create a Detailed Expenses List

As you start creating your budget for the year, break down your expenses into different categories. This could be insurance, taxes, management fees, utilities, maintenance and more. You can refer to this throughout the year to understand where your money is going. Make sure to budget an appropriate amount for all these expenses, remembering that some are ongoing charges and others are one-time payments.

If you find that your contracts are taking up too much of the budget, see if you can renegotiate them. Meet with your landscapers, maintenance companies and utility providers to discuss lowering the wages. You can also shop around for competitive prices to help reduce your operating costs.

Prepare An Emergency Fund

Things can happen unexpectedly, so prepare an emergency fund. Contribute to this account regularly if possible to help build a money reserve. This should only be used when unexpected expenses arise like repairs, vacancies, legal disputes and other unforeseen circumstances.

Make Investments

While it may be costly upfront, there are some investments that you can make that will benefit you long-term. Look into products, like smart devices or accounting softwares, that will help streamline operation of your properties. Apps and other assistive technology will help improve the efficiency of your work and business.

Things To Keep in Mind

There are a lot of changes that can occur throughout the year, so create a general plan that can prepare you for any instances. For example, new laws or regulations can impact your property, so be prepared to adjust the budget to stay compliant. Trends in the market can also impact your business, so stay informed and anticipate either upward or downward trajectories that could lead to potential vacancies and rent impacts. These will help you set realistic goals for your budget.

Also, tenant satisfaction can help with retention. Keeping existing residents in your properties will help avoid costly turnover fees or lost revenue due to vacancy. To avoid this, assist residents through clear and quick communication as well as fast resolutions to any issues or grievances.