Scattered Site Rental Toolkit:

Business Planning for Development & Management

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Introduction

Mission/Goals

Neighborhood

People

Product

Financing

Management

 

VII.A. The Work To Be Done

Once you’ve developed your Scattered Site Rental (SSR) units, the real work begins: ongoing management of the portfolio to meet your organization’s goals. Property and Asset Management should be viewed as new or expanded products for your organization and as vital services to your neighborhood. Organizations rarely draw attention to their ongoing management services as contributing to stabilization of families and communities, though most have witnessed the ill effects of poor rental management.  We encourage you to elevate these roles both within your organization an in the eyes of residents and funders.

However, property and asset management of SSR units brings unique challenges that have the potential to financially ruin unprepared organizations. Organizations serious about operating SSR portfolios must honestly assess their ability to expand existing capacity or develop new competency around ongoing management.[i]   

 

Defining Management Roles

  1. Development Management: Planning, acquisition, feasibility analysis, financial packaging and construction/rehabilitation of units on-time and on-budget. In short, getting units ready to lease.
  2. Property Management: Day-to-day professional operation of rental property as a business in accord with the owner’s objectives and the rules and regulations of the community and financial investors. Responsibilities typically include marketing/leasing, rent collection, maintenance, income verification/recertification and reporting to the owner and asset manager.
  3. Asset Management: Ongoing oversight of post-construction ownership to insure the portfolio of properties continues to be an asset for owner(s) and investors. Asset management insures those staff responsible for financial management, project reporting, compliance, maintaining operating and capital reserve funds, physical maintenance, capital improvements and general property management are performing in an effective, coordinated manner.
  4. Executive Management: Leadership and oversight from initial planning through long-term management. Executive management must keep all work consistent with the organization’s mission, assemble capable development and management teams, marshal resources to execute plans, oversee the creation of management systems, tools and templates and implement regular reviews of performance, fiscal soundness and risks.
  5. Fiscal Management: This role may be integrated in part or in total in the above roles. Fiscal Management includes tracking, reporting and analyzing key financial information in order to evaluate a portfolio’s performance, sustainability and looming liabilities. Tasks include creating anticipated and actual budgets and operating cash flows, identifying cost overruns, projecting future deficits and tracking rent collection and reserve balances.
  6. Smaller organizations will not have a staff position for each of management roles above. Nonprofits rarely have a staff member with the title of Asset Manager. Executive management must insure all critical roles are delegated clearly and that management plans and systems are in place.
  7. Even if you contract with a third party provider for one or more of the above functions, this will not absolve you from needing to perform oversight.

Next: VII.B. In-House or Third Party Property Management?

 


[i] Stabilizing Neighborhoods Impacted by Concentrated Foreclosures: SSR Housing Challenges and Opportunities (2009) by Ivan Levi; published by the Joint Center for Housing Studies of Harvard University and NeighborWorks America.