“We Need Supplies.”

Maintenance Supply is often the expense account where there always seems to be more month than dollars in the budget.

Given this is an area of operations that is reactive to the volume and variety of the requests of the residents; is it possible to effectively plan and budget for maintenance spending?

It starts with an overview of the schedule for the property for the upcoming month.

How many apartment homes will be prepared for move in?

Generally there are ten to fifteen items that are purchased for every  apartment being prepped.

-replace the sanitary items in the bathroom.
-caulk for the countertops in the kitchen, vanity top and shower area in the bath.
-drip pans for the cook top.

The list of items with pricing information is going to outline the anticipated expense for apartment turns.  This amount applied to the number of apartments currently vacant will provide an estimate of potential expense for apartment turns. (This assumes items such as floor covering and appliance replacement are expensed to a capital improvement account code.)

Next on the workflow agenda is preventive maintenance.  Is this the month to check smoke detectors or change furnace filters? How many apartments are scheduled and what is the cost of the supplies?
Furnace filters for 100 apartments, $300.

Lastly, the never ending flow of service requests. Again, the property record keeping will help determine an average number of work orders that are received each week/month. For a property with 50 service orders per month (which is actually 2.5 work orders for the 20 work days in a month.)

Twenty percent of these requests generally require no supplies or replacement parts. These are requests to adjust doors, windows or appliances, or provide resident education.

Sixty percent of the service requests will probably involve replacement parts that cost $20 or less. The remaining 20% will require more costly supplies averaging $50 per request.

To summarize the service requests,
-20% no expense
-60% (30 requests) will average $20 or less. Total $600.
-20% (10 service requests) will average $50 or more. Anticipated expense $500.
-Potential Expense for Service Requests. $1100.

With the list identified for turnover expenses, a property might have $75 as required expenses for each turnover. If there are four vacant apartments, $300 of the monthly budget will need to be allocated toward the turnover expense.

Totally each task
-Turnover $300
-Preventive Maintenance $300
-Service Requests $1100.
Total $1700.

If the property budget does not support this expense, and this is a typical month, the property is always going to be at the end of the funds allocated for maintenance before the actual end of the month.

To develop a monthly plan, or prepare the annual budget,  the evaluation of  historical data will provide the foundation. Track and trend move outs will also assist in developing this expense area.

Data needed to build and support a budget:
Average Expense for Turnover
Average Number of Move outs
Average Expense for Service Requests
Average number of work orders
Expense for preventive maintenance (monthly or annual)

Working from a plan will allow a manager or maintenance supervisor to identify potential shortfalls in the monthly budget. This might allow for spending adjustments, to assist in expense management. Working from a maintenance plan can provide structure to maintenance spending.