Have you ever been to any development scheme in which building services such as lifts are not working or working but inefficiently? Can you imagine the surroundings not being upkept accordingly while its maintenance and repairs are not done on a timely manner?
In general, property value is derived from many aspects ranging from the condition of the property, design, functionality, location and so on. Though property management is not the only factor here – it certainly is one important aspect as part of the value creation chain. In terms of property management, we as property managers always must think of our contribution to the value chain for property owners. While properties are fixed asset, it needs active management. In this article, we are particularly referring to the management of stratified development schemes such as office towers, condominiums, apartments and stratified landed houses.
A professional strata property manager basically does a few things ranging from strata management, building management, account & finance management as well as administration management. There are a few ways good property managers can establish value for the property. While there is a cost to engage any professional firm to manage their properties, there is also the advantage of value creation in terms of efficiency, productivity, expertise, compliance, the handling of risk management and so on.
Resource Management & Productivity
Professional property managers need to be resource managers. With property and strata management forming their core operations, they should be more efficient and effective in managing the resources. They should be able to better identify vendors in terms of delivery and costs. At the same time, the professional property management firm, run through property management processes every day to ensure this repetitive process helps to improve their competency and efficiency. Furthermore, the operation is supervised to minimise leakages which free up the resources for other more important usage.
In addition to this, in terms of economies of scale – these management firms normally manage a few properties that give them the advantage to deal and manage vendors/ service providers with better bargaining position in terms of costs and delivery of services. Hence generally, the property managers help to utilise the resources with better productivity and least leakages under the firm’s supervision.
Expertise and Networking
We as professional managers, have more available access to industry resources ranging from recruitment and talent retention, technical support as well as training and learning. Many who have been involved in this property management operations even for a short period of time, would have known by now that networking and “proximity” reaching out to many resources are an important factor to carry out the operations more productively.
Risk Management and Compliance
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A licensed property manager is required to comply to all the relevant rules and regulations such as the Strata Management Act 2013, Strata Management (Maintenance and Management) Regulations 2015, Strata Management (Strata Management Tribunal) Regulations 2015, etc. Any incompliance may be subject to risk of fines and liability for the development. In Malaysia, property managers are governed by the Board of Valuers, Appraisers, Estate Agents and Property Managers, which ensure professionals are more competent and more accountable. Bear in mind that risk management cost is one of the unaccounted for costs until the risk turns into disaster.
Up to date Administration
Being a property manager, it is his duty to ensure that all information and details are fully updated on a timely manner. While many times, good and proper administration are not being look up to as being important, it can turn into a disaster when timely information is required. For example, we still see many strata schemes failing to keep property documents and approved building plans in their offices. All these are important to ensure the management makes the right decisions and upgrading works by the time this is required. Reporting to the committee is always on a fixed periodical basis for the committee to make informed decision.
In conclusion, property management is always a behind-the-scenes operation which sometimes to a certain extent, is being forgotten. However, we always believe it has an important role to play in value creation for any property. A poorly maintained and managed property will inevitably fetch lower value as compared to its neighbour – be it rental value or capital value which both are interrelated. I would like to reiterate that, though it is not the most glamorous job, we as property managers, are glad to provide management service – forming part of the value chain system to property owners.
Sr. Kit, Au-Yong is a registered Property Manager, Valuer and Estate Agent registered with the Board of Valuers, Appraisers, Estate Agents and Property Managers Malaysia. Kit is currently heading a boutique property management and consultancy firm – Asiacap Valuers & Property Consultants Sdn. Bhd. Log on to: www.asiacapvpc.com