Operating costs consume a large portion of your monthly expense budget, and they’re likely to only go up, especially if you do nothing. Rising energy costs and inflation make managing the day-to-day necessities of property ownership in Columbus challenging. That’s why it’s imperative to find ways to control your spending while still ensuring you have a quality product to offer your tenants.
Moreover, when it comes to a commercial real estate property’s market value, worth is highly tied to the property’s net operating income (or NOI). NOI consists of all the revenue from your rental property minus any of your operating expenses. To improve this metric, you can either:
- Increase your revenue, and/or
- Decrease your expenses
A good property management company can boost your investment property’s market value by improving a property’s NOI. Here are some ways we’ve helped our clients improve their NOI. In terms of controlling your operating costs, here are some other areas to focus on.
Where to Cut Costs (and Where Not to)
Before making any rash spending decisions, first look at your data. Where are your greatest expenses, and how have those expenses fluctuated over the months and years of property ownership?
Next, consider smart investment opportunities. Now that you know what the data says, how can you make informed decisions to reduce costs over time?
At RL Property Management, we strategize our spending in terms of decades, not years. For example, while a more durable HVAC unit is going to cost more upfront, over the long term, we should end up saving money by having fewer breakdowns and repair expenses over the lifespan of the equipment. Additionally, we should grow money as a reason for good tenants to move out is when the HVAC system breaks in winter.
If you have questions about managing operating costs at your rental properties, please don’t hesitate to get in touch with us at RL Property Management. We take great pride in being able to help our clients improve their returns and look forward to helping you, too.