Archive for March, 2010

An easy way to add instant value to apartment properties? You may be surprised!

March 15, 2010

The recession has had a devastating effect on property prices – both residential and commercial. Estimates of price declines in some coastal markets are as much as 50% or more. And considering that many individual apartment investors are counting on selling these properties to fund retirement accounts some day, suddenly the erosion of the value of these buildings has many investors more than just a little worried. Corporate owners and managers are just as beat up. Rent reductions to attract (and even retain!) tenants have resulted in lower gross rental income, which means smaller or no raises for the staff, and possibly layoffs. Capital improvements are at a virtual standstill.

While the worst seems to be behind us, it’s still going to be an uphill battle to prop up prices to where they were in the mid-2000s. Operating expenses have already been cut to the bone. Or have they?? One expense that every apartment incurs, but that always seems to be overlooked, is trash and recyclable removal. Paring this expense while maintaining, if not improving, the efficiency of the current waste and recyclable hauler can instantly add value to an apartment portfolio while improving net operating income.

As an example, let’s say a 58-unit aprtment building is valued at $1.7 million, has a cap rate of 10%, and net operating income of $170,000. Assuming the building is 66% occupied (it’s been a rough economy!), the 38 units will each produce about 1.5 cubic yards of trash and recyclables per month. Let’s say that those 57 cubic yards are being collected by a reputable hauler in two 8-cubic-yard Dumpsters once a week at a rate of $550 per month, which is not an outlandish price, but certainly not where it should be!

Let’s assume that a reputable solid waste management consulting company (such as Waste Auduting Consultants!) is hired to help increase efficiencies, thereby lowering costs. And let’s assume that the costs can be lowered by 40% to $330 for the exact same service (WAC usually reduces costs to clients by about 30 to 50% without having to change waste haulers). What is the net effect? NOI has been increased by $220 per month ($2640 annually). The value of the property has gone up a little more than 1.55%, or $26,400, instantly (the price of an apartment equals the NOI divided by the cap rate).

What does this cost the owner? We simply share the savings generated by our work. So really, the value of the property went up about 0.775%, or $13,200. Still not bad for not having to lay out any cash at all, and for not having to make any capital improvements. And if this is just one building in a portfolio, the same results can be accomplished simultaneously at all locations – both here in the Greater Cincinnati area, and throughout North America!

If you’d like to see if we can accomplish the same, or even better results, with your properties, feel free to contact Waste Auditing Consultants. We would be happy to speak with you and answer any questions you may have about how our services can help you reach your goals.

Trip Topken is the president of Waste Auditing Consultants, the premiere solid waste management consultants in the Greater Cincinnati area. An affiliate of Environmental Waste Solutions, WAC can help any company spending $400 to $375,000 per month on waste and recycling. Savings of 30 to 50 percent are normal, but not guaranteed. WAC, in collaberation with EWS, can simultaneously produce results at all locations across North America. No up-front fees are ever due, and WAC simply shares the savings its work generates. Learn more about Waste Auditing Consultants here. You can contact Trip at 513-398-2117 or email trip@wasteac.com.

So just how can a solid waste management consultant help my company?

March 8, 2010

In my previous blog I wrote about what exactly a solid waste management consultant is, and what we do. In this blog, I want to explore exactly how we’re able to help our clients reduce costs.

First, a couple of things we don’t do. We aren’t waste haulers. And we aren’t recyclers. We work with our clients’ existing hauling providers to streamline and maximize efficiency for this necessary expense.

The first thing we do when meeting with a client is listen. Listen to what the client hopes to acheive with his or her company’s waste and recycling system. Listen to what hurdles the client is currently experiencing in this area. Even listen to why he or she doesn’t think that my company can help reduce costs (yes, that’s happened! And yes, we succeeded in reducing costs anyway!).

The next step is to collect information. Specifically, we look at previous invoices from the current waste and recyclables hauler, as well as the existing service contract, and make sure the client is being serviced with the exact equipment and pickup schedule that the contract calls for. The waste hauling business is a very reputable industry. But mistakes can happen. We look for any past billing errors and correct them.

We also examine the waste stream to check for items that can be resold to other companies, or recycled, thereby reducing the volume of trash. We also check the volume of the waste and recycling containers just prior to pickup. If a client is being charged by the pickup instead of by the weight of the pickup, we want to ensure that the containers are around 95% full before they’re emptied, or else we feel that our client is paying for a lot of air to be hauled to the dumpsite.

We then take the collected information and formulate recommendations to improve waste-hauling efficiency, and submit those to the client for approval. When the client gives the OK we implement the approved ideas and follow up to make sure the recommendations have the desired results.

We then continue to monitor our client’s invoices for billing errors, and negotiate future contracts with the waste haulers. In fact, we’ve negotiated new contracts for clients when the existing contract still had months to go before renewal. We know how much waste haulers should be charging for certain services. And we work very hard to ensure all of our clients are paying no more than these amounts.

Notice how nowhere in this description has the word “money” come up. So how are we paid? There are no up-front fees. We simply share the savings that our work generates. If we can’t find any savings? No money is due to us. It’s a win-win situation for everyone.

Waste and recycling removal isn’t a core competency for most companies outside of the waste hauling industry. Waste Auditing Consultants is the expert companies call when they want to increase revenues by reducing the costs associated with waste and reyclable hauling. We’re ready to answer any questions you may have and show you how your company can join the always-growing list of satisfied customers. Contact us any time!

Trip Topken is the president of Waste Auditing Consultants, the premiere solid waste management consultants in the Greater Cincinnati area. An affiliate of Environmental Waste Solutions, WAC can help any company spending $400 to $375,000 per month on waste and recycling. Savings of 30 to 50 percent are normal, but not guaranteed. WAC, in collaberation with EWS, can simultaneously produce results at all locations across North America. No up-front fees are ever due, and WAC simply shares the savings its work generates. Learn more about Waste Auditing Consultants here. You can contact Trip at (513) 398-2117 or email trip@wasteac.com.

So what exactly does a solid waste management consultant do?

March 1, 2010

When I first introduce myself to someone in a business setting and am asked what I do, the answer doesn’t necessarily paint a clear picture of my job. Not that I haven’t spent many nights laying in bed, many mornings in the wet think tank (otherwise known as the shower), and many Tristate Business Network meetings trying to come up with a clearer, more concise explanation. So until the big anvil in the sky lands on my head with that answer, I will respond that I’m a solid waste management consultant. And then when I’m met with the expected quizzical look, I’ll elaborate.

My company looks at our clients’ solid waste and recycling systems and finds ways to dispose of this material in a more cost-efficient manner. Anything that goes in a Dumpster, compactor, or a recycling container is costing bottom-line dollars to be removed. Sometimes companies are very good at having this stuff picked up for a low cost. But most of the time, they aren’t.

Many years ago – or if the company is brand new, a few weeks or months ago – someone at the company called one of the local waste hauling companies, told them that they needed trash service, and presto! Equipment was put into place, and a monthly invoice started arriving in the mail. A check has been getting cut every 30 days since then, and as long as there isn’t trash overflowing from the recepticals, everyone’s happy. Especially the trash hauler.

Trash haulers are terrific companies that provide jobs to the community and essential services to their clients.  I want to make it perfectly clear that I do not have an agenda to insult or belittle anyone associated with these companies or what they do. My company couldn’t exist without them. But the reason my company is in business is because an estimated 90 percent of companies overpay by an average of 30 to 50 percent what they really need to be paying to have trash and recyclables removed from their facilities. A lot of companies tolerate this (why, I don’t know). But most really don’t know this profit-leaking is taking place.

Why is this? It’s simple. Trash removal is never a core competency for any company outside of the trash hauling industry. It’s the guy on a unicycle at the circus that features a high-wire act and a trapeeze. You see him do his thing, but bring on the Wallendas!

The monthly invoice arrives, it gets paid. As long as there’s no trash on the ground by the Dumpsters and there’s money in the bank account, no questions are asked. And that’s how waste hauling has become a multi-billion dollar business. Waste Management, the largest player in the solid waste services industry, had well over 13 billion dollars of revenue alone last year. Granted, a large portion of that is residential service. But assuming that even just a quarter of that revenue is business generated (and that’s being VERY conservative), and taking the mininum overpayment average of 30 percent, businesses are overpaying for this service by about a billion dollars every year.

Waste removal is one of those things that’s kind of like breathing: everyone knows it takes place, but no one really thinks too much about it. Which is why a consultant specifically trained to help contain these costs has a very positive effect on the bottom line. And when you consider that our company only gets paid if we are able to provide cost reductions, and that we just simply share the savings that’s generated, we are a risk-free bargain!

So in what ways can my company save a client money? I will blog about that sometime next week!

Trip Topken is the president of Waste Auditing Consultants, the premiere solid waste management consultants in the Greater Cincinnati area. An affiliate of Environmental Waste Solutions, WAC can help any company spending $400 to $375,000 per month on waste and recycling. Savings of 30 to 50 percent are normal, but not guaranteed. WAC, in collaberation with EWS, can simultaneously produce results at all locations across North America. No up-front fees are ever due, and WAC simply shares the savings its work generates. Learn more about Waste Auditing Consultants here. You can contact Trip at (513) 398-2117 or email trip@wasteac.com.