Asset owners, investors, and property managers should all share one common goal, and that is the maximization on the return of the investment; today, tomorrow and in the future. The acronym ROI is commonly kicked around, and it simply means the "return", however you may define the word return, on the investment placed in the asset. There are so many factors which come into play when thinking about, planning for, and ensuring a healthy return on investment when it comes to real estate assets. Among the top considerations are as follows.
1 Location, location, and location. Self explanatory, and in most all cases, the number one consideration of any owner or investor. Whether a regional shopping mall, a long-term rental home, or a MHC community, the location will heavily dictate the ROI for the asset. A seasoned, experienced property manager partner can readily assist the client in choosing the best locations, based on a number of variables.
2 Proximity to amenities, resources, housing, raw materials, schools, etc. The needs of the owner of an industrial property differ drastically from that of a vacation rental owner. The savvy, educated owner completes tireless research, understanding the specific needs for the piece or real estate they are purchasing.
3 Condition of the property, relative to its competition. The goal of the purchase is acquiring the best possible piece of property, at the most competitive rate. Again, the best property managers can quickly assist the client, especially those who are not from a particular geographic area, and require the assistance of a professional, who has a "boots on the ground" presence in that area.
There are plenty of other considerations in planning for the best purchase locations, but for the purpose of this blog, we will list the above as our top 3, based on that which our prospective clients seek.
We thought that would be your next question.....So now what? Now we look at two aspects of investment property ownership, both geared specifically toward maximizing your rental income as an asset owner.
First: Optimizing Pricing Strategies. The key word here is optimizing, but without a specific strategy, you have no clue where to begin optimizing. Here, the experienced property manager is your best friend. They are already managing similar properties in the locations you seek, and should be fully abreast on the local and regional comps of comparable properties. They should also be well versed in optimizing pricing strategies for the asset you seek. Ask specific questions here. What is the specific pricing strategy, to maximize my ROI if I entrust my asset under your care? What part will I play in developing and reviewing these strategies? Do I have the immediate ability to make changes to my pricing structure, and associated fees, or is there a mountain of red tape to cut through in making proactive changes? We use the old truth in virtually every writing that, "failing to plan is planning to fail." Make sure that the plan you have in place for the maximizing of your rental income, regardless the asset is rock solid, measurable, specific, and most importantly, that you are kept abreast as to how this strategy is moving forward.
Second: Adding Value to Your Property. There is a familiar poem which contains the words, "let me count the ways." There are countless ways to add value to your property. Without being property specific, as they all have commonalities, we present the top 3 ways to add value to your property below.
1 Enhance curb appeal.
a. If there is landscaping required on an on-going basis, ensure that you or your property manager have a proactive plan in place for weekly care of the landscaping needs of the area. This will include grass cutting, blowing, edging, weeding, planting, watering and irrigation considerations, fertilization, and other considerations. Equally important here are public parking areas, and the condition of the asphalt, keeping parking space lines painted regularly, ensuring all exterior lighting is functioning, without bulbs being burned out. If there are tenants signs, street signs, or signage of any type on your building, it is imperative that all lighting is functioning properly, and there are no missing letters, numbers, etc. You only have ONE opportunity to make a great impression on a prospective tenant or client, and curb appeal is the most important aspect of placing your best foot forward.
2 Frequent, detailed property inspections.
a. The best property managers are the best at completing detailed inspections of the asset, on a regular basis, are detailed in their inspections, and most importantly, are proactive in addressing issues with inspections. The importance of these inspections cannot be understated. Carpet will soil and wear, paint will fade, and become poor in appearance from scuffs. Elevators and stairwells will require constant attention, from thorough cleaning, to inspections. Interior lighting will need to be replaced periodically.
b. The process cannot simply stop with inspections however. Every inspection must be seen as an opportunity to increase the "perceived" or real value of the unit. This can be as simple as the replacement of a washing machine knob in a vacation rental or long-term rental unit, or as complex as a complete new lighting system for your commercial building. This process can be as in depth as requiring your MHC owners or renters to install skirts on their units, or as simple as restriping the handicap parking spaces at your multifamily community. The bottom line is that if you intend to remain competitive in your asset sphere, you must constantly spend money to maintain that which your lessee's demand. There is no getting around it. The proper, planned, and coordinated beginning point for planning and completing preventative maintenance and cosmetic repairs.
We hope you have enjoyed this brief discussion of maximizing the rental revenue for your assets. There is much planning, education, the making of some sound business decisions which must exist to achieve the results we know you desire.
Of course, the partnership of an amazing property manager partner, such as Integrity Management Systems is an awesome first step in ensuring that you may live worry free, knowing your partner has your back, and is overseeing and caring for your invaluable real estate asset. If you would like to learn more, please visit us at www.integritymgmtsystems.com, or call us at (888) 810-9184.
コメント