From CFO to real estate management: what business knows about costs that the housing market still doesn’t understand
The real estate management market has entered a phase in which existing operating models are no longer sufficient. On the one hand, we have skyrocketing building maintenance costs, and on the other hand, we have increasingly aware and demanding residents who do not agree to further, unjustified increases.
The margin for error in managing real estate budgets has shrunk dramatically. Maintaining profitability and residents’ trust today requires absolute cost discipline and tools that will enable this discipline.
He has been closely observing these market tensions for years Joanna Ziemska-Tomaszewska – an expert combining the experience of a Financial Director with in-depth knowledge of the housing market. Looking at the industry from the perspective of the CFO, she is used to a strict controlling standard. In business, every penny has its owner, costs must be justified, and the budget is used to create value. The collision with the residential real estate market was like entering a completely different reality. She saw an industry with enormous capital potential, which still lacks basic standards, and losses resulting from operational inefficiency are quietly passed on to residents.
Where does money go in real estate?
The CFO’s perspective exposes the housing sector’s shortcomings in terms of management. Instead of continuous optimization, the market is dominated by “historical budgeting” – passive rewriting of last year’s costs plus inflation, and without systems such as Weles3, which monitor budget implementation on an ongoing basis and detect anomalies, there is no transparency. The main sins of this model are long-term, unaudited cleaning and maintenance contracts, treating the renovation fund as a regular expense instead of an investment that reduces future expenses, and the general failure to assign management responsibility for the financial result of a specific building, which results in a completely uncontrolled increase in fees.
–If housing communities, housing associations and cooperatives were managed like modern companies, most owners would pay less today. Not because the market itself would suddenly become cheaper, but because someone would finally be responsible for the financial result of each building – points out Joanna Ziemska-Tomaszewska
Anatomy of inefficiency from the inside
Traditional real estate managers still operate in an ad hoc model of solving current problems, drowning in paperwork and reducing their role to passive administration. The lack of standardization means that simple decisions often take weeks, and community management boards lack tools for ongoing financial control – this deadlock is only broken by integrated systems such as Weles3, which automate accounting processes and free up time for business management of the property.
– Today, real money is lost through a leaky management system that lacks analytics and decision-making. Minor inefficiencies that accumulate over the years in one housing estate amount to hundreds of thousands of zlotys in losses, ultimately paid for in advances that grow year by year. – explains the expert.
Simple decisions and the power of modern tools
Meanwhile, management can be based on sound foundations without complicated revolutions. Collective energy purchase, insurance audit or verification of cleaning schedules are real savings that can be quickly achieved with responsible, effective teams. A good system supporting the manager means transparency, visibility and ongoing control.
The entire real estate market is currently undergoing a massive technological change, the main drive of which is data and automation. The implementation and widespread adaptation to KSeF (National e-Invoice System) is now becoming a test of effective digitization of document circulation, which is a big challenge, but also an opportunity for simplification and greater transparency of processes.
– Maintaining manual calculations in Excel and passive administration is simply becoming more and more expensive and risky, because digitization exposes the weaknesses of such models. The future belongs to companies working on integrated systems, such as Weles3, which automate accounting and give managers space for what is crucial: business consulting and cost optimization. It is high time to introduce standards and good practices from CFO offices to communities – sums up Joanna Ziemska-Tomaszewska.
