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Investors’ Property Management Book Thoughts | International Residential Real Estate Investors Association
Monday January 22nd 2018

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Investors’ Property Management Book Thoughts

Lately, I’ve been working at the idea and content for an Investors’ Property Management Book. I’ve read a number and reviewed a lot more books on the subject. Unfortunately, they all (that I’ve identified) end up being books for property management by career property managers. Or on the contrary, the end up focusing on how to make millions buying rental housing. To me, both cases miss the point. Investors need a property management volume that focuses on their issues. From my perspective the key investor issues are:

  1. Protecting the asset and invested capital,
  2. Maintaining the asset value and condition,
  3. Maximizing equity value,
  4. Minimizing ownership risk for liability, tax, and financing
  5. Maximizing cash flow and income.

I imagine the main reason volumes have not taken this course is in the end the writers have decided that managers’ interest should be parallel to the owner. While I agree in concept, the reality is events do not transpire in this way. As owners, we need to consider and plan management around our investment interests and not allow manager’s focuse to undermine this.

Why will a manager diverge from the investors’ position? The driving factors are actually straight forward. Managers and maintenance staff work on the property everyday. Necessarily, they begin to identify with the residents and they begin to focus on their view of how the property “should” be managed. While the difference is relatively subtle the effect is expenses tend to inflate and capital needs and costs rise quickly in line with this change. Further, an issue around asset value or risk may take a backseat to this interest position unneccesarily placing investors’ capital and income in a poor position.

On the other hand, the investor and owner will certaily focus on protecting the asset first. This means that paying taxes, paying insurance, and making critical capital improvements will come first. Improvements that maintain or increase occupancy will come next. Costs that prevent customer turnover and otherwise improve performance will follow immediately behind these.

Because of the difference between these two views a volume focusing on these issues can be a real value to the industry and especially to investors in the industry. Such a book could go far to increase investors ability to realize their income goals, could prevent foreclosures and law suits, could increase asset value increases and sales results. If well prepared, this book will signficantly improve readers ability to achieve their total investment goals and minimize their investment risks.

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