Long-Term Planning Is Essential for Co-ops and Condos

Many co-ops and condos take a narrow approach to long-term planning in an effort to keep a lid on maintenance or common charges, says Ira Meister, president and CEO Matthew Adam Properties, a leading New York property management firm.

“Boards fail to maintain adequate reserve funds and delay or give short shrift to preventive maintenance and neglect making repairs when necessary, or doing just the minimum,” Meister says. 

Boards often smaller ignore repairs resulting in much bigger repairs in the future

He believes this approach can cause the slow deterioration of a property and create more expensive major repairs down the road. When that occurs, the reserve fund is usually too small and a major assessment or significant double-digit increase in monthly charges is necessary.

“This situation can be avoided if the property is forward thinking and develops a long-term capital improvement plan,” Meister says. “In most cases, this is a five-year program that identifies projects that will be required, prioritizes them and identifies funding sources. In fact, the American Institute of Certified Public Accountants has recommended that co-ops and condos include information on the useful life and replacement costs of the building’s infrastructure in financial statements.”

The property manager and team must coordinate to create a long-term plan of repairs and projects.

Preparing a long-term plan requires the coordinated efforts of the property manager, an accountant, the superintendent or resident manager and an engineer. The first step is gathering as much information about the physical plant and systems as possible. Effective superintendents know their building and can pinpoint areas that would require work; in many instances, small matters that could lead to larger projects unless attended to. The engineer would perform a complete inspection of the building including the exterior, the roof, public areas, and systems such as the boiler, HVAC if the building has central heating and cooling, etc. Once this information is gathered, the team needs to prioritize the work based on need and spreading out the cost over a period to lessen the impact in any given year.

Once projects are identified and a cost estimate is determined, the accountant working with the property manager and the board can determine a financing plan. .

“Sound planning with an eye to the future and making the most of the opportunity find improved ways of providing services not only keeps costs down for shareholders and unit-owners, but makes the building more desirable and increases the value of apartments.” Meister says.

Characteristics of a Good Property Manager

I am often asked what boards should expect from a property manager,” says Ira Meister President and CEO, Matthew Adam Properties, Inc.

Meister says that at first glance the question seems obvious.  The board wants a person available 24/7 who can oversee the staff so the building is maintained in top-flight condition and provides excellent services. Someone who can help control costs and supervise capital improvement projects. 

Professionalism and having communication with tenants are key in property management

“All management companies will say they do this,” Meister says.  “But to truly

understand what a board and its residents should expect, the answer must be more specific

Meister says that probably the most important quality is professionalism. This means a manager who conducts themselves in a professional manner, who is courteous and patient with board members and residents and who is a good manager of staffs.  Communications and the ability to deal with and work with others is a key ingredient.

“While a manager oversees a multi-million budget, management is very much a people business and those with good people skills and professionalism are excellent managers,” Meister says.

A good manager is organized and keeps detailed records and reports

Another area, he says, is having someone with experience. Other characteristics include  being prompt when attending meetings and making certain anything with a timeframe is delivered on schedule, whether a report or project.  A good manager is organized and keeps detailed records and reports.

A bane of many boards is a lack of responsiveness.  A board should expect that all calls or emails are returned within 24 hours, if not sooner, and that questions are answered directly and accurately.  The board should also expect that the company has a manager available 24/7 in case of emergencies.

“While knowledge of building systems and construction are important, the people aspect and developing a trusting working relationship is the key to good management,” Meister says.

Asset Managers Play Vital Role in a Property’s Finances

“A property manager deals with many issues in the course of managing a residential property, but probably the most important area is finances,” says Ira Meister, President and CEO, Matthew Adam Properties.   A partner in an accounting firm that works with numerous co-ops and condominiums and who has a good perspective on what to expect regarding finances discussed this with Meister.

“Probably the most important responsibility is making certain the financial records are complete and there is sufficient information for the accountant and the board,” the accountant says.

Complete and accurate financial records are central for projecting expenditures

Meister says the accountant also told him he values asset managers who get the information to him in a timely manner. This includes the monthly financial reports and as well as preparation of the annual budget. In some buildings, the board does the initial budget, in others it is the managing agent or the accounting firm, or most often a combination.  But, the accountant says, when the accounting firm reviews the budget it is important that the managing agent provides accurate historical information on usage of fuel, water, and electricity, both year-to-date figures as well as past numbers. This is central to projecting expenditures.

Coupled with this is having good financial software. The accountant points out that there are numerous software programs on the market for the financials of co-ops and condos and some management companies, particularly smaller ones, try to save money by buying inferior programs. The building is the loser in these instances.

This brings up an interesting point. A firm’s commitment to quality service extends to the technology it uses and the commitment to getting and using up-to-date systems.  “At Matthew Adam Properties, we continuously look at the latest technology and invest in those we believe will improve services,” Meister says.

The Importance of a Long-Term Capital Plan

Having a long-term capital plan and budget is necessary for successful management of a property, says Ira Meister, President and CEO, Matthew Adam Properties, Inc., a leading New York property management firm.

“Many buildings have a five-year capital program which identifies areas that need work and also sets up a funding plan.  By carefully spreading out the work based on need, the building can better manage its cash flow and identify how much it would need to raise for the projects,” Meister says.

Five year capital programs help avoid pitfalls in today’s strict lending environment

This type of organized planning helps avoid the pitfall of needing several major projects in one year, which put a burden on the property’s finances and the shareholders or unit-owners.  Often the failure to provide a funding plan results in special assessments, especially in today’s strict lending environment.

In preparing the long-term capital budget, a property manager should gather information about the structural condition of the building and its systems.  This, along with the repairs or upgrades required to comply with various government requirements such as Local Law 11, forms the basis of the capital plan.  Included should be estimates of costs, Meister advises.

Gathering information of the building’s condition is needed to prepare a capital budget

“Once all the information is gathered, the asset manager can set priorities and a timeframe for the work based on the information he has obtained,” Meister says.

Another area to consider is available tax incentives and rebate programs.  Some of these have deadlines and others are available on a first-come basis.  Knowledge of these can help in setting the priorities of work.

“By having all the information, the manager can get a big picture view of what is required and bundle similar projects based on the systems or work involved,” Meister says.  One example would be having work that requires scaffolding done in sequence avoiding the need to have the scaffolding put up several times at a much greater expense.

Handling Arrears in Co-ops

What has been the impact of the economy on arrears in co-ops since the fiscal crisis erupted in 2008?

While statistics are hard to come by, anecdotal evidence from lawyers and our asset managers indicate there has been little change, says Ira Meister, president and CEO of Matthew Adam Properties, a leading property management firm.


Foreclosure rates decreased every year since 2006

Perhaps one way to look at this is, Meister says, is to look at Crain’s analysis of mortgage foreclosures in Manhattan, Brooklyn and Queens from 2006 to 2012.  While there was an increase in foreclosures in Manhattan and Queens from 2008 to 2009, the overall trend has been down.  In fact, Meister points out, the foreclosure rate in 2012 is lower in every borough than in 2006.

While foreclosure differs from being in arrears on monthly payments, each obviously indicates a resident suffering financial stress and an inability to pay, so it can be argued there is a correlation, Meister says.


Shareholders in arrears causing foreclosures have not been the case in recent years

The situation since 2008 is contrary to the housing crisis in the early 1990s when many co-ops experienced severe problems with shareholders in arrears and subsequent foreclosures.  The failure to make timely payments by a handful of shareholders in a co-op put a burden on the building’s finances. The other shareholders had to make up for the revenue shortfall and put the entire property in financial hardship.  This has not been the case in recent years.

One reason, Meister explains, is that co-op boards have become more stringent in reviewing the financials of prospective buyers reviewing their income as well as liquid assets.

The issue of arrears, though, is one that should be of concern to all boards and property managers regardless of the economy as individual issues can affect a resident’s ability to pay. “It is wise for boards and managers to have procedures in place in the event the situation arises,” Meister says.

Important Tips Every Property Manager Should Know

Many individuals refrain from purchasing property even if they are in a healthy financial position to do so simply because they are not confident that they can manage the property effectively. Property management in NYC will require individuals to incur some expenses, but delaying maintenance or hiring unprofessional services will ensure that these expenses rise significantly. A property that has a poor maintenance history will be extremely difficult to sell on the market. There are some important things to keep in mind when dealing with the realty market.


Keep yourself informed about everything

As a property manager, it is your responsibility to educate yourself on the various laws and regulations that your property is subject to. You will also need to keep yourself up to date with any changes in property legislation that may affect your own property. Identify and update all the legal documentation required to prove ownership and sell your property.

Other things to keep in mind

Create systems and procedures for maintenance so that you can measure progress effectively and quickly identify deficiencies and faults in your property.

Be honest to your clients and give them a full history of the property when trying to sell. Your reputation in the market may depend on this.

Create a routine and stick to it. This not only ensures that you use your time in the best way, but will ensure that all tasks will eventually become like muscle memory.

Keep a proper track of all documentation, even if it extremely unimportant. It is often difficult to anticipate when a document may be required and for what.

Continuous Training Is Required To Maintain a Quality Staff

It’s no secret that the performance of the employees has a significant impact on the success of any company, organization or well-run building, says Ira Meister, founder and president of Matthew Adam Properties. It’s like going to a fine restaurant and having delicious food with terrible service.  The experience is not what it should be.  The arrogance, disinterest and poor training of the wait staff can ruin a wonderful evening.

Matthew Adam Properties understands this, Meister says, and puts significant emphasis on the quality and training of building staffs.  “On each visit our asset managers engage with the staff, observe how they are performing and look to see how well they are maintaining the property and serving the residents,” Meister says.


New updates in technology require staff to be continually trained


But it doesn’t stop there.  In addition to meeting with the superintendent and employees, both in formal and informal meetings, the company conducts learning sessions to focus on the building’s priorities and provide updates on the latest technology and on new methods of maintenance.

“Driven by technology and the need to have the staff be as efficient as possible to keep costs down, we need to continually train and educate employees,” Meister says.

“We also spend time with the doorman and concierge going over the do’s and don’ts of greeting residents and announcing visitors as well as accepting packages, providing security as well as taking messages,” Meister says. “We look at everything in a building and make recommendations when we see fit.”

The company discusses keeping uniforms clean, whether for maintenance people or doormen.  Some buildings prefer the doormen to wear their hats at all times, while others don’t and the doormen need to be reminded what the standards are for their building.

Meister says his company is very aware that each building is its own entity with its own culture, procedures and individual needs. “The staff must be sensitive to that and those who have worked in other properties must understand that what was acceptable or a practice in one building does not necessarily follow through to be effective in another building.”

Setting Guest Guidelines for Rental Properties

Rules involving guest registration must be strict around your property. Tenants must be requested to register their guests with you. As a property manager, you will have to decide whether you want the registration to be strict with long-term visitors only, or if overnight guests also require to be registered. In either case, the criteria must be mentioned in the lease so that it is transparent and your tenants will know what to do when they have visitors.


Limited Visits

Your tenants obviously have the right to engage visitors. While some guests stay for a short while, other may stay for long. Since you can’t really tell how long a particular visit may last, setting a limit on guest visits can help you control potential situations effectively. Mention the number of days that a visitor is allowed in your property in the lease agreement so that there are no problems in the future.


Shared Responsibility

You must inform your tenants that they bear responsibility for the actions of their guests. Any damage to your property caused by the guests will have to be attended to by the tenant. Even the smallest of problems have the potential to escalate, and if the guests leave before you have detected the problems created by them, you will be left with no choice but to fix it yourself. So keeping your tenant aware of small matters will help you effectively manage your property and all amenities within it.

How to Hire a Resident Manager

If you are the property owner of a large apartment building or multiple properties around New York City, you may require a resident manager to assist you. However, you should take extra care when hiring a manager and follow necessary protocol to get the right man on the job. The best way to start looking for the right resident manager is to list down their duties and functions. You should also decide on how much you are willing to pay and what their schedule looks like.


Finding the right professional

After you have listed down the manager’s responsibilities, pay, schedule and hours, you can send out an ad looking for prospective managers. When you are contacted about the job, be honest about your expectations and start the process with a phone screening. After you have gathered adequate details, you can call them for a personal interview. If you find any potential candidates, start with a thorough background check for their employment history and other essential details. It is also a good idea to check for their credit score and how they handle money and debts.


After you have chosen the right resident manager, you can prepare a written agreement between the property owner and the manager and list all the terms and conditions. You can also prepare a separate rental agreement. Speak with your lawyer to ensure that all paperwork is in order and you are sufficiently protected from any mishaps in the future. Ensure that you also read up on the laws on hiring resident managers in your state and follow them to the word to prevent legal complications later on.

Top 5 iPhone and iPad Apps for Property Managers

With the increasing competition in the real estate market as well as the ever-escalating prices in NYC, it is important to stay on top of the changing trends. One easy way to keep abreast with the latest developments as a property manager is to use to the right apps. If you are using an iPhone or iPad to carry out everyday tasks for work, installing a few free apps can go a long way in ensuring that you stay ahead of the curve.


Free real estate apps for your Apple device

One of the most popular apps designed for an iPad or iPhone is called Homesnap Real Estate. With this app, you can find everything you need to know about a property by clicking a picture. Scan the image through the app you can download the current value as well the price of the last sale. You can also get essential information including number of bathrooms, bedrooms, locality, schools etc.  If you are interested in local real estate, you can try Smarter Agent’s Real Estate app that helps you enhance your search for residential property. It offers information with 40 POIs including local establishments, ATMs, entertainment and restaurants.


Get all necessary information with a single image

Property Capsule is an app designed to create a commercial property portfolio in cities like NYC with a few easy clicks. You can present your commercial portfolio in real time to potential tenants with your Apple device. Cartavi is another simple app that allows real estate professionals and property managers to share and manage essential documents through their iPad, iPhone and iPod Touch. You can also try other Apple apps like MagicPlan, Happy Inspector, and Ten Eight 2.0