Imagine going into your doctor’s office and hearing medical jargon when they are giving you test results. Instead of asking questions, you simply get up and walk out of the office, not fully comprehending what you were just told.
“When you’re reading your reports and management summary, it’s just like getting a checkup and reading or hearing the results,” says Carol Mixon, president of SkilCheck Services Inc. in Tucson, Ariz. “You have to know all the terms and understand them to make an informed decision.”
Mixon, who audits facilities, continues, “I wish more owners would learn what they are reading; it can make so much difference in their cash flow.”
In one example, a facility owner thought they were doing great because the occupancy rate on the management summary showed 95.4 percent occupied. However, when studying the summary further, it also showed the Effective Rate After Concessions was $70,826 and 57.9 percent. As well, there were over $300,000 in concessions and 14 tenants needed to be auctioned.
“This may be an extreme example, but these are the clogger of the arteries when it comes to income potential,” says Mixon. “The owner thought the property was doing well because of occupancy, when in fact the store was doing poorly.”
Key points of your management summary include:
“The most important part is understanding all of the numbers on the summary,” says Mixon. “Owners, as well as managers, should be learning the software and doing webinars.”
Mixon recommends taking webinars through Sitelink. “They don’t explain how to read the reports, but there are tutorials you can find on YouTube.”
When setting up the software, it’s important for managers to have access, but there are different levels of access; only owners should have “owner” access, which allows them to change unit numbers, etc. “In one example, I had a store I audited that was missing five units,” says Mixon. “The units disappeared from the software and the tenants were paying cash. The units weren’t showing up and the cash didn’t show up as income. The manager was stealing.”
Another step Gibson’s managers do is review the rents at least once a month to make sure all specials are up to date. “We also review these at corporate to ensure no one is giving sweetheart deals,” she says.
With regard to delinquencies, her managers also review the past-due reports at least once a week. “These are the three things we look at regularly to make a determination on how a property can make more money,” says Gibson. “The exception report makes sure managers aren’t writing off late fees and are also increasing rents as they should.”
Additionally, they send emails to each manager monthly. “We tell them where they stand in regard to goals and expectations,” says Gibson. “These emails also outline our support in helping them improve, if necessary.”