Cost savings and better predictability: how we developed our property management model
Costs down and service level up – sounds too good to be true. But this was indeed the result when we began to develop and harmonise our real estate management model for rental housing.
Realia Management began developing a model for the property maintenance of rental apartments owned by its customers in 2014. These efforts resulted in a coherent approach that has resulted in cost savings for the property owners, better predictability of costs and a higher quality of maintenance services. The model covers cleaning and property management services, as well as, where appropriate, maintenance services for security and building technology equipment, and roof service services. And the resale value of properties can now be better maintained over the long run.
Maintenance costs down, with harmonised cleaning and property maintenance practices
Building maintenance and cleaning are the things that are most present in residents’ everyday lives, and play an important role in a good experience for residents. It was therefore most natural to start developing the model with these areas.
“We have harmonised the maintenance and cleaning contracts for several of our locations, which has significantly reduced the number of service providers. By choosing local service providers, we can guarantee fast availability and easy contact if needed,” explains Realia Management director of maintenance Matti Himmanen.
“During the development of the model, we were in close dialogue with property owners and service providers, as the arrangement must be satisfactory for everyone,” Himmanen continues.
The reorganisation of the model has resulted in a better understanding of the overall fair price level for Realia. Thanks to this, it is possible, for example, to exclude excessively low bids at the tender stage, as these would be unlikely to result in the required standard of service.
The reorganisation of the property management and cleaning services has also brought cost savings. These savings are in the region of hundreds of thousands of euros for property owners annually in the form of reduced maintenance costs.
Better foreseeable cost of property management
In developing a real estate management model, better anticipation of costs was one of the key aims. Including the largest possible proportion of property management services in fixed-price contracts considerably improved the predictability of costs.
Naturally, not all maintenance costs can be included at a fixed-price – for example, the demand for snow clearing in the winter is impossible to predict. The number of on-call jobs also varies.
However, when fixed-price contracts include as much of the maintenance work as possible, it is ensured that this work is actually carried out.
“For instance, the washing of full-height glass walls in stairwells and window washing in communal areas are tasks that are easily forgotten for years. As part of fixed contracts, this work is handled as agreed, keeping the buildings clean and presentable,” says Himmanen.
Prospective tenants are left with a good impression when the yard, facade and stairwells of buildings are clean and tidy.
Reorganisation brings building and security technology services up to present-day standards
Building technology is developing constantly, especially in new locations. Realia Management felt the need for a specialised nationwide partner in the maintenance of building technology.
“When the service is already initiated in the warranty period, it can be ensured that the building systems are implemented as required by the plans.”
A professional-standard of security technology requires that adjacent buildings are blocked together, and sprinklers, for example, are quickly becoming the norm in parking halls. Consistent practices and close collaboration with a smaller number of service providers ensure that security technology works well.
For property owners, it is important that building and security technology systems have been implemented in accordance with plans and contracts. Working with selected professionals ensures this.
Timely repair and maintenance work maintains property value cost-effectively
The practices agreed with familiar partners ensure that property owners receive valuable lifecycle analysis from the Realia Management technical manager, and that a longer-term maintenance plan is made. It is also important to continue making the scheduling of maintenance measures increasingly timely.
“Our next step in developing the model is to develop a quality audit of property maintenance and cleaning,” explains Himmanen.
Close communication with property owners and service providers ensures that Realia experts maintain a clear view of how to schedule maintenance and repair operations. This will help keep the value and comfort of properties at the optimum level.
Benefits of property management reorganisation for rental apartment property owners:
- A decrease in property maintenance and cleaning costs
- Better predictability of property management costs
- Building, security and roofing technology services provided by top professionals
- Long-term life cycle analysis of properties and correct timing of maintenance work
- Maintaining optimal property value and comfort