A big part of the value delivered by a property manager is in the vendor relationships the manager is able to bring with them to the building. Service contracts for things like maintenance, landscaping, cleaning, and other aspects of building operations impact a building in two ways: in the quality of service and in the price point. Here are some of the strategies property managers utilize when negotiating these contracts:
- Let the vendors come to you — when a property management company reaches a certain size, vendors become interested in working with them, instead of the other way around. A property manager can put our a Request for Proposals and wait for the pitches from vendors, which greatly reduces the amount of time it takes to evaluate different offers.
- Negotiate pricing based on volume — a property manager can usually secure better pricing when hiring a contractor across multiple buildings than any individual building would be able to get on its own.
- Lock in a term — locking in an exclusivity arrangement can help the property manager get even better pricing, and also means less energy used to find new vendor contracts. The fixed term also means the costs for these services are predictable for the length of the contract.
- Never compromise on quality — managing multiple buildings can be a huge headache if things aren’t going according to plan, so, while price point is one of the major considerations when negotiating a vendor contract, assurance of quality of service is the most important factor, because it affects the smooth operation of the buildings as a whole.
As you can see, property managers use a variety of techniques to negotiate the best service for the buildings they manage. Have a question about negotiating with vendors? Get in touch with us!