In our previous blog we wrote about the soft skills that a property manager needs and this blog focuses on the technical skills that are imperative to good property management.
Getting to grips with finance
In our last blog we talked about the need to have good written and spoken English what we didn’t say was the need to have a good grasp of maths. We are not suggesting that you need to have a masters in maths, indeed you don’t even need to have a GCSE in some cases as you are unlikely to need to know the square root of 144, algebra or what the sides a isosceles triangle means but you do need to know about numbers and more specifically money.
So, while you may not be able to recite your 12 times table you should be able to understand what the VAT rate is and how this is going to affect the annual service charge budget or for that matter major works. After all, in everyday life you don’t spend time calculating the VAT when you are purchasing essentials.
For MIH, and our management ethos of looking at a comprehensive and all-encompassing plan for your property from the start, you also need to be able to understand how the collection of funds (or non-collection) as the case may be can affect the progress of the property.
After having spent some time training our more junior members of staff on how to prepare a budget, we wrote a blog on perfecting the preparation of a budget however these budgets can only be effective if everyone is paying towards these.
A good property manager should be able to calculate how the budget will affect those contributing towards it and how the property will be affected if all funds are not received. They should also be able to identify the consequences on the long-term plan i.e. if items of works have to be deferred or further funds have to be collected. As a property manager, you are managing funds and you should have the ability to explain fully at any point time what funds are held and be able to provide details of the expenditure.
We would point out that this understanding of maths and what is effectively accounting is enhanced by comprehension and reasoning skills. In order to be able to explain the numbers, you need to be able to comprehend what the finances are for and also be able to make reasonable assumptions – the most common being what increases are going to be on basic services such as the supply of electricity, cleaning services etc.
You should also be able to understand what your client needs to know- it is amazing how much easier a budget can be to explain to a client when you consider it in terms of your own budget whether this be saving up for a dress, a car or a house.
Another skill that sets a good property manager apart is their knowledge of the legal framework that a property manager has to work within. Although you do not need to know the Landlord and Tenant Act or the ICAEW Tech release chapter and verse, you do need to have a very good understanding of both and perhaps more importantly understand the rationale behind it.
Unfortunately, this means a basic grasp of history is very useful in order to shed light on why we do what we do. This is perhaps where the importance of a good memory comes in as there is nothing like being able to explain to a client why Section 20 came about.
That is of course on the basis that you can understand Section 20 which to our minds, continues to be one of the biggest challenges facing Property Managers today. We recently had to provide advice on a Long-Term Qualifying Agreement and the risks if they did not follow this.
As you can imagine on the basis that the company could have been responsible for any excess funds if any flat objected to the contract, this advice was invaluable. We would however say that a good property manager will always consider the legislation and how it will affect the issue. For example, where all owners are in agreement about works to be undertaken and the funds are in place, then a good property manager may discuss the possibility of going ahead without Section 20 if all confirm the same.
We have referred to two of the most important technical skills as we see them. However, we would say that most of the soft skills are inherent and can’t be taught. However, as technical skills can be, we at MIH are committed to ensuring all “MIHers” take the IRPM Qualifications so that they are the full package and in turn MIH clients, both old and new can benefit from the double whammy.
In one of our previous blogs we were asked to comment on Knowledge vs Experience. As then, we come down on the side of experience and in the same vein we come down on the side of soft skills vs technical skills as both can’t be taught. We do however acknowledge that the technical skills most definitely supplement the soft skills that helps a property manager and particularly those at MIH manage property so well.