CRE investors, what are some examples of ways you've saved money by cutting costs in areas you were overspending?
We've struggled to get the property in stable condition, and 100% occupied for years, but now we've finally reached our goal. The only thing is, after expenses, we're making around the same amount of net Income as we did when we were only 70% occupied. And we haven't had to make any major repairs, or pay and lawyers thousands of dollars for the first time in a while either. 

I'm cleary doing something wrong, figuring out where expenses can be reduced is a fundamental part of owning property, and that's something I've been heavily lacking in. I've just been letting my commercial management team use their own, full discretion on the expenses, and I realize they probably aren't keen on figuring out ways to cut expenses because thats just more work, and right now it's been easy. 

So I came here for some Inspiration, I want to hear your experience in ways you realized you could save money by cutting expenses. 

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[{"id": "hylgx5d", "text": "Why did going from 70% to 100% occupancy cause your OPEX to increase enough to eat all that marginal rent? Do you have some TI/CAPEX from leasing that last 30% misallocated as OPEX? Did you undercharge rent vs the marginal cost of operating that space?\n\nAre your tenants on gross lease or paying for CAM? I'd work to get them all paying CAM (including management) and then compare your CAM against local market. You can pencil that out regardless and see if you're actually off or not.\n\nI don't know the type or quality of your building, but I occasionally shave corners by stretching the landscaping. I've also figured out that I can get away with doing the water backflow tests every-other year and the city never shuts me off. Stuff like this is really marginal tho, and depending on your proximity to the building AND the building class, first step might be taking on management yourself? I wouldn't ask 3rd party management to cut corners like that.\n\nA little more info on the property type might bring out relevant ideas.", "replies": [{"id": "hyx0b4x", "text": "Do you mind provide a little more detail on the water back flow test?", "replies": [], "depth": 2}], "depth": 1}, {"id": "hym7i2d", "text": "*I've just been letting my commercial management team use their own, full discretion on the expenses...*\n\nAudit their expenses.  Go over every line.  Look at every receipt. Make sure they're doing what they say they're doing.  Make sure what they are paying for services and/or supplies is the going rate.\n\nConsider managing the property yourself, at least for a while.  You'll have a better idea whether your management company is overcharging or mismanaging things.  It may seem daunting, but once you get the hang of it, it's not that hard.  \n\nIf you manage the building yourself, find \"the guy.\"  The guy who can do minor plumbing, electrical and HVAC.  You may have to go through a few guys before you find \"the guy.\"  Pay him or her well and treat them with respect.  They'll prioritize you over clients that don't.\n\nAs the other poster noted, having a modified gross lease with tenants paying for CAM is the way to go.  Increased costs are passed on to the tenant.\n\nPeople are often wasteful if things are free.  If you only have one electric meter for the building, consider metering each unit so they pay for their own electricity. It's expensive up front, but you'll come out ahead in the long run.\n\nIf water is a big expense, consider sub-metering so that each tenant pays their fair share.  \n\nObviously some of these changes will have to wait until the leases are renewed or you get new tenants.\n\nSwitch to LED lights if you haven't already done so.\n\nAre there simple repairs or maintenance you can do yourself?  \n\n*What percent of the rent goes to the management company?\n\n*What expenses specifically have increased since your occupancy rate went up?  \n\n*What are your top five biggest expenses?  \n\n*What type of tenants do you have---retail, industrial, professional offices?\n\n*Have you checked comps to make sure you're charging market rate?\n\n*How many tenants do you have?  How many square feet of space per tenant?", "replies": [], "depth": 1}]