Making your building's bottom line a top priority: Running a building is running a business

It never occurred to a new client that individual owners might be benefiting from improper wiring and that the building was paying for their electricity. We made that discovery when we took over their management assignment and went over every dollar of their spending with a fine-tooth comb. We corrected the wiring and retrieved the money—all ten years worth. Cutting an annual uniform dry cleaning bill from $7,500 to $3,500 was an important savings to another new building that came into our fold. For them, it meant not having to wait a year to afford a new awning. The point is to practice awareness in all financial matters. It's the steady attentiveness to a property that determines the effectiveness of a managing agent. Helping to insure financial security is a crucial part of our job. This is achieved in a number of ways. Cutting costs you are already incurring. Saving money when the expenses are for new projects. Stimulating income. Finding dollars one never imagined. Cutting costs you are already incurring Salaries. Taxes. Mortgage. Fuel. Insurance. Maintenance contracts. All the steady, monthly nuts that must relentlessly be met. Although they are fixed expenses, for some of these costs there are margins of flexibility if you know where to look and are committed to exploring new opportunities. When a management company controls a sizable portfolio of buildings, it is possible to negotiate the best possible rates. Mortgage, fuel, insurance and maintenance contracts certainly fall into this category. Every building should be aware that they might be due a tax rebate. Or, a tax credit. Saving money when the expenses are for new projects Roofs. Elevators. Boilers. Balconies. Garages. Potential money-pit repairs. If you're spending hundreds of thousands of dollars you'd better have a managing agent that knows what they are doing. At Lawrence Properties we have our own in-house operations expert. This is invaluable for our clients. They can help you evaluate the scope of work. Help protect in the pricing process. Come up with cost saving ideas. For example, we were able to discount the installation costs of two professional air conditioning units for two of our buildings by 20% when we coordinated the two jobs simultaneously. Stimulating income Lawrence Properties' financial department analyzes every building's financial status, assesses whether they are taking advantage of every financial opportunity and makes sure that they do. We will recommend and assist in proven revenue sustaining and earning strategies such as converting an empty basement into productive, fee generating storage space. Creating health and fitness centers. Installing water meters. Recommending flip taxes and sublet fees. Found money It is always imperative for a managing agent to keep one's financial eyes wide open. It is extraordinary what results when you do. Personal initiative and an 'extra-mile' concern for our clients had never been more evident than when one of our bookkeepers discovered a $113,000 bank mistake. Alerted by the fact that one of the buildings in her charge (every building of ours is assigned their own bookkeeper) had received a refund from their bank due to an overage in their real estate tax escrow account, this bookkeeper questioned whether or not another of her buildings, affiliated with the same bank, should also have received such a refund. She was right! This error, missed by both the co-op's accountants and the board treasurer, probably never would have been detected had it not been for our bookkeeper's astuteness and action. Running a building is running a business. It is an asset. And, as such it is a managing agent's responsibility to help a client see the big picture as well as the smallest details. From five year plans to the brass polish used on the front door. It takes experience and imagination to keep costs down. Keep the asset prospering. A good managing agent knows how. Andrew Hirsch is director of operations and general counsel for Lawrence Properties, New York, N.Y.