We've all heard the adage, "What gets measured gets done." Now put a spin on that: "What gets monitored will increase your revenue." This may sound far-fetched, but think about it for a moment: Whether you’re a property manager, owner-operator or third-party management company, auditing (monitoring) can make the difference between a bad year and a good year, or a good year and a great year.
This article will walk you through four areas where auditing must occur, helping increase your revenue and minimizing the amount of money left on the table or walking out the door. You may think you have all your bases covered, but are you sure?
This is the most common form of auditing with operators, but it either isn’t done properly or completed frequently enough. In order to conduct an accurate audit, you must first have accounting software capable of giving you up-to-date, real-time occupancy information to include units that are delinquent and should be overlocked. This information is crucial in performing an unannounced detailed and accurate space audit. I would recommend using a rent-roll or a unit-status report of the facility.
Once you have this in hand, you need to physically check every single door and space on your property—by foot. This allows you to see issues you may miss while on a golf cart or in a car. When performing the audit, you should not have anyone present with you. Oftentimes, managers like to tag along. This creates a distraction for the auditor and also gives the manager the opportunity to divert the auditor’s attention from any problem areas on the property.
When auditing, the auditor should make notes of any discrepancies on the preferred auditing report, and note any observed property deficiencies. All vacant units should be open to make certain the units are rent-ready and indeed empty. Sometimes, tenants (even managers) will occupy units without your knowledge, so pay attention to the details and don’t cut corners. If someone is occupying the unit and it shows vacant, you are leaving money on the table.
After you have completed a thorough audit of the property, you should return to the office and research any discrepancies. If you have units that show vacant but have a tenant lock, you need to pull the file and/or review the dead files. You also need to review account notes and the gate-activity log.