Most owners sort their expenses into two buckets: the ones they can control and the ones they cannot. Ron Kutas, CEO of OneWall Communities, rejects the premise. “Nothing is fixed,” he says. “People divide things into fixed and not-fixed expenses, but even your property taxes, you can appeal. Your property’s not doing well? You appeal to it.”
Insurance, the line most owners treat as untouchable, is his clearest example. “You’re selling a set of risks to your insurance company,” Kutas explains. “If you can show why you’re a better manager of risk, your costs go down. But if you have three or four claims for things that could have been avoided by managing the property correctly, your pricing goes up.” The number on the renewal is a reflection of operations, not a fact of life.
Service contracts are the quiet drain. These are the automatic, renewing agreements for things like landscaping, and Kutas says they are exactly where many 3rd party managers stop pushing.
“They’re trying to limit the friction with vendors and the amount of work they have to do, so your landscaping isn’t necessarily getting negotiated hard.” Scale helps, but it is not a substitute for the work. “Every line item on the expense side is negotiable. That’s the way we look at it.”
The one genuine exception he names is a fixed-rate loan: the interest rate is the only thing truly locked.
So when an owner calls after seeing a stat like the 89-cent number, where does he look first? Revenue, then expenses. “We’d look at concessions, occupancy versus the actual submarket, where they’re priced,” then run a full expense analysis across marketing, service contracts, and insurance, where owners often overpay by over-covering against a misread lender requirement.
His summary of the whole discipline is the most quotable line of all: “The story between an 11-cent margin and a 15-cent margin is almost always a hundred small decisions that no one’s focusing on.” That is the value-add a vertically integrated operator brings to multifamily property management.
Property management is complex, and the best solutions come from shared incentives. Whether you’re exploring new approaches or facing specific challenges, we’re here to talk.
Visit us at onewallcommunities.com or call us at (646) 596-7068.