You get what you pay for!
You get what you pay for!
Are there exceptions to this rule? Of course. There are exceptions to pretty much everything in life but, as a general rule, they are just that…exceptions.
My experience is that when I try to save money by cutting corners or buying that cheaper tool, I generally end-up paying for it down the road, one way or the other. I end up having to re-do the work because the quality of the materials and/or craftsmanship does not stand the test of time or the less expensive tool I purchased simply did not last. With very few, if any exceptions, it ends up costing me a lot more money in the long run!
If you drive a luxury import (whether it is new or previously owned), you pay a price for the quality and features that purchase affords you. It would be illogical to expect that you could buy an economy brand (to save money) and expect that you are going to get the same features and performance that you would get if you purchased the car that actually has those features and benefits for the simple reason that it costs more to produce the luxury import than it does to produce the “less expensive” option. To think that you can pay the price of a VW and get the performance of a BMW is quite simply illogical and defies common sense.
Curiously, it has been my observation, that, for some reason, many property owners and/or property managers often lose touch with this reality. In an effort to save money, increase cash flow, meet proforma expectations or to “look good” to a client or a boss, they forget this rather simple logic or they choose to ignore it because it is an easier “sell”.
Don’t get me wrong, I am not saying that the most expensive option is always the best option. Nothing could be farther from the truth. There are a myriad of reasons that make perfect sense to opt for a less expensive alternative, not the least of which is affordability. Another factor would be how long a property owner expects to own the property. These decisions are based on cost vs. benefit and should be factored into the decision making process.
As a property manager (a CSM with over 35 years experience in the management, leasing and repositioning of retail, office and other commercial assets), and as a landscape contractor, I have a unique perspective. What I have experienced as a landscape contractor is that a property owner or manager will approach me for a bid for their landscape maintenance contract. They use as the benchmark (in most cases) the contract price they are currently paying. Here is where common sense and logic often get ignored. In many cases the reason they are bidding out the work is that their current contractor is not performing to the level of their expectations. This is where the wheels come off the cart. Every time the contract goes out to bid, some hungry or aggressive contractor under-bids the competition and by doing so claims that they can perform to the level of expectations for a cheaper price, which they cannot do. The result is, more often than not, that they do not perform up to expectations because they underbid the contract in the first place and would be losing money if they provided the man-hours necessary to do the job right. So the cycle begins. Unhappy with the performance of the contractor, the property owner and/or property manager requests new bids for the work but uses the existing contract price as the new benchmark.
The same case could be made for selecting a property manager. All property managers are not created equal. I recently toured 35 retail centers and was amazed by the conditions that I observed at virtually every property I inspected. Graffiti, faded and tired directional signage, dead and/or dying landscape, trip and fall hazards, vacant storefronts with cobwebs and dirty mullions, the list goes on and on. These observations may be a combination of a property owner or manager trying to “save money” or it may be a simple matter of incompetence. Either way, it is going to “cost” the property owner in the long run. Not only is there the cost of fixing everything that is broken, but also includes the potential loss of existing tenants who either go out of business or relocate to a more suitable location; the costs associated with replacing those tenants; the inability to attract new tenants to fill existing vacancies; the loss of cash flow and ultimately the loss of value.
The bottom line is that with your properties, as in life, you get what you pay for!
To quote Albert Einstein, the definition of insanity is “Doing the same thing over and over again and expecting different results.”
If you feel that your property management company is performing at a level that will help you to achieve your desired results, I am happy for you.
If, on the other hand, you keep doing the same thing over and over again, expecting different results, we need to talk!
I can help you maximize the value of your investment!
Call me at 619.807.7802 or email me at BClark@CommercialPropertyServices.net and let’s schedule a meeting to discuss how we can work together to not only increase you cash flow but increase the value of your properties.
Brad Clark, CSM
Principal | Broker | Contractor
COMMERCIAL PROPERTY SERVICES
The Definition of Insanity – Albert Einstein
“Doing the same thing over and over again and expecting different results.”