By Matthew Engel: One of the best things a real estate owner can do for his property is to engage a property management firm

What is the most important thing that a real estate owner can do for his property to improve its overall operations and financial success? A new insurance policy? A conversion from oil to gas? The installation of energy cost saving procedures? While all may be good options, the most important thing one can do is to engage the services of a professional property management firm. A property management firm can help an owner improve the overall physical and financial nature of the owner's asset, and help the owner achieve any other goals that he may have. While most owners control only a handful of properties (if not just a single one), a successful property management firm will often oversee the operation of dozens, if not hundreds, of apartment houses in the surrounding area. Through these economies of scale, a management company can help an owner achieve substantial savings through bulk purchasing. These savings are likely to be achieved in the purchasing of fuel, and janitorial and building supplies. In addition, bulk "purchasing" will even help reduce costs for insurance policies and maintenance work from outside contractors. These savings are likely to be nearly 25% of the costs for these goods and services. In addition to the cost savings which can be achieved, the ever-increasing and ever-changing regulations in the New York City real estate industry make it nearly impossible for a small property owner to comply with all necessary regulations unless he makes real estate management a second career. Property managers who work day and night in the industry are constantly learning about and dealing with the new regulations. Compliance with such laws will save one's property hundreds or thousands of dollars in penalties or fines. Many property owners also find it difficult to distance themselves from the tenants that they know quite well or may even live in the same building with. By hiring a property management firm, an owner can distance himself from the day-to-day, somewhat routine problems and the late night phone calls resulting from maintenance troubles of irate tenants. Management firms have also generally developed relationships with local law enforcement officers, district attorneys, marshals and lawmakers. These relationships can often be used to help "clean up" buildings from problems relating to drugs and other criminal activity. Many programs which will benefit a building (such as the addition of satellite antennae and the subscription of a property into various marketing programs for the local phone and cable companies) will only work with professional management firms who have control over a large number of properties. They might not entertain working with single property owners since they cannot provide the same quantity of tenants and properties for these programs. These services can often provide ancillary income or "found money" which these buildings would have never otherwise seen. Given that an owner should engage a property manager, how can he find such a firm and know that he is choosing the right one? The easiest way to compile a short-list of accredited management firms is to consult the Institute of Real Estate Management (IREM) for a list of all such firms in the area which have achieved the exclusive designation of Accredited Management Organization (AMO). An AMO is a management firm which has achieved a certain level of performance, experience, and financial stability and has a Certified Property Manager (CPM) in the executive position. An AMO also has subscribed to a professional code of ethics and has certain professional insurance requirements in place. One can easily find such a list of AMOs through IREM's website, www.irem.org. Once one has found such firms, he should interview each company, asking for references of current clients. Only through discussions with other owners who engage such services can an owner truly get a sense of the professionalism of the management firm. A tour of the firm's office should not be overlooked, as it will give the owner a brief glimpse into the firm's recordkeeping and organization. Matthew Engel, CPM, is the vice president of Langsam Property Services Corp., New York, N.Y.