There is no doubt that the UK Built to Rent sector has some valuable lessons to learn from practices in the USA. It should be noted, however, that the UK has some pearls of wisdom of its own to offer. In fact, when it comes to Project Management, the UK may be in the lead. This article focuses on the commercial-turned-residential property management practices and value-adding concierge services that make the UK PM industry cost-efficient and highly functional. Here are three points I’ve picked up in my time over here; US Property Managers, take notice!
Rooted in Commercial Building Management
- Impressive Project Managers
The first explanation for the enhanced management of UK properties is simply that the roots of this service lie in Commercial Office Building Management. This commercial space requires a high level of professionality, and more importantly, competency.
Thus, the UK BTR sector operates such that every small change requires a project team/project manager. The management culture bred from Commercial Building Management means that every company, supplier, and service provider has a team of professional project managers complete with method statement, action plans, hard timelines and risk registers to keep the smallest project on budget and on time.
- Focus on Asset Preservation
Property owners and managers in the UK recognise the importance of asset preservation and focus on it much more than US Multifamily. Testing and servicing assets more frequently is a priority here, thereby extending longevity and ensuring maximum value. The timely service of assets is facilitated by a high level of organisation at each property. The management team will almost always have an updated Asset Register and condition report at their disposal, with projected replacement dates helping to ensure future year budget certainty.
Another way in which the UK benefits from enhanced property management is thanks to better scopes of work. The UK uses a tool called SFG20; a standard maintenance specification for all kinds of planned maintenance. SFG20 is quintessential to the work of facilities managers, building owners, contractors and consultants, allowing them to remain legislatively compliant whilst simultaneously saving time, money and energy. This definitive standard for planned maintenance provides access to over 500 schedules covering 60 equipment types. In short, it standardizes the bid process and builds the optimum maintenance checklist.
- Hotel style services
All the above observations are important for Americans in the Multifamily Industry to consider. But I’d argue that the greatest advantage that UK BTR owners and managers have here in Britain is the opportunity for ancillary income. Ancillary income is essentially any profit made outside of receiving rental payments. This can be anything from a unit clean to a car wash, and it’s a great way to cater to the needs and desires of our residents, whilst making a bit of extra income.
Although Ancillary Services driving other income is very mature in the US, the rules of engagement are limited. Service ideas are subject to the REIT ordinary and customary rule of the property management can make them available to tenants, therefore excluding concierge services like room cleaning and dog walking. In the UK, those rules are not here yet; in fact, there seems to be a strong push to add as much service as possible to differentiate BTR from the current low-standard rent model. In short, property owners are well within their right to offer services that save their residents time and make their lives a little easier. These hotel-style concierge services not only bring extra income but can also help your reputation and image as a business.
So, get creative UK and let’s create some amazing value for our investors. I know I will!
Contact Fjeld Consulting
Need help in maximising your NOI? Here at Fjeld Consulting, we can help you do exactly that. We will work with you to identify ways in which you can save money and earn ancillary income under a no risk model. Get in touch with us to talk through your options.