Lease Expiration Balance – How important is it?

April 25, 2022

Table of Contents

By Operations Team. For more information, contact Robert Parmar

When your lease expirations are in balance, you can glance at your monthly report and relax.

When the report looks like the EKG of someone afraid of heights being thrown from a trapeze it’s hard to relax and the pressure is on to do something about it.

But who is supposed to do something about it?

If Mega Management company is collecting all the fees while you are collecting all the grey hair, it’s time for some straight talk about Lease Balance. The type of straight talk your grandfather dished out.

In this case, your grandfather might say bigger is not always better.

Summerfield is on the smaller side. Smaller but also nimble, like Russell Westbrook.

We recognize each owner has different lease expiration goals based on their market. But every owner wants to rely on their management company to keep things balanced and humming along. Typical owners want an equal number of leases expiring each month, which creates a stable cash flow.

Let’s look at the numbers of a typical owner scenario and how lazy management and lack of planning create a decidedly undesirable snowball effect.

The Snowball Effect 240-unit building with 3 maintenance staff 100 leases are month to month What happens if 20 move out in a month? 3-5 days per unit on a clean turn. On a bad turn, 10-15. How much can 3 guys handle + work orders and site work? If 20 Move-out your losing $ - prolonged vacancy, turn expense, etc. What if they do not get them all turned before the month is up and 10 more people move out? What now? Poop emoji We’re calling it a Snowball Effect, but can you blame us for showing it for what it is?

It’s surprising how many property management companies allow this $*%! snowball to happen.

Here’s another hard-hitting truth.

The snowball will not stop until one of two things happens:

You get a lucky break and people stop moving out at a rate you can’t keep up with, or
You put a Lease Balance plan in place and let it take effect

Which sounds better to you?

At Summerfield, we like a proactive approach, so of course, the Lease Balance plan sounds better to us.

We know you can’t change management companies on a dime.

Let’s start building the foundation for a working relationship now, and in the future, when you’re ready to make the leap, we’ll be there for you like the net under a trapeze.

Call or text us.

Robert Parmar

Southeast Region

rparmar@smfield.com

206-920-3055

Trevor Manning

Northwest Region

tmanning@smfield.com

503-867-5214

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Summerfield specializes in the management of apartment properties that are approximately 125 units or larger, and is licensed to manage in Washington, Oregon, Idaho, Florida, Georgia, & South Carolina.

If you would like to discuss additional specifics of our management program, please reach out to our Managing Director, Robert Parmar at rparmar@smfield.com or call 770-628-5943.