How to MinimizeImprove Revenue Shrinkage
By The Operations Team, Summerfield Management
Revenue shrinkage an unfortunate subject but a real one and something Ownership should think about. The fact is most if not all apartment properties experience some loss of revenue due to questionable On-site activities. Properties experience negative pressure on NOI from anything from not getting a fair return on labor to actual theft that goes unaddressed.
In our discussions with people in the business, we find most people are honest and upstanding but a few just cannot help taking advantage. Here are some examples of how someone may try to benefit themselves to the detriment of the property:
- Collects the pro-rated portion of a tenant’s first-month rent in cash, pockets it, and reports the unit occupied at the beginning of the following month.
- Conducts off-site personal business while billing labor time to the property.
- Makes personal purchases on property accounts.
- Hires friends and family to conduct site work at elevated pricing.
We make an effort to minimize revenue shrinkage by making regular site visits to walk vacant units, utilizing a purchase order approval system for materials, maintaining supply inventory records, implementing a timekeeping system that requires staff to be on-site to clock in or out, utilizing a compliance service to qualify vendors, and in some cases where Ownership either asks or approves we install cameras that can be monitored remotely via a PC or smartphone.
Contact us if you would like to discuss your concerns or other revenue shrinkage examples we have discovered and our recommended solution.
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Summerfield specializes in the management of apartment properties that are approximately 125 units or larger, and is licensed to manage in Washington, Oregon, Idaho, Florida, Georgia, & South Carolina.