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January 21-February 3, 2015 — COLORADO REAL ESTATE JOURNAL — Page 21
Property Management
I nvesting in real estate
remains one of the finest
methodsof buildingwealth
and sustaining financial stability.
The most unfortunate by-prod-
uct of this has been the rise of
seminars and websites with “get-
rich-quick” and “do-it-yourself”
schemes that leave many of those
eager to take advantage with
a sour taste. Careful planning,
researching and hiring of people
who will help accomplish your
investment goals will turn that
sour taste to a pleasant sensation
of satisfaction.
Identifying and purchasing the
right type of property to accom-
plish your overall goals is just
the opening chapter of your real
estate investment journey. Work-
ing with a real estate profession-
al from the beginning is your
most advantageous asset. If you
already own property, your best
investment protection will be
working with real estate profes-
sionals who possess the expertise
to assist you with ongoing man-
agement to achieve the highest
financial returns.
The two greatest contribut-
ing factors that result in either a
mediocre return on investment
or a great return on investment
are:
1. Controlling the maintenance
and repair costs; and
2. Continually increasing the
income potential.
To build significant wealth
through investment assets
requires a mind-set of deliber-
ate design and specific actions,
mixed with the ability to imple-
ment those actions that result in
desired outcomes.
Hiring a property manage-
ment professional is the best first
step to achieving these outcomes.
This would be akin to hiring
a portfolio manager to handle
stock assets for increasing gains
while minimizing losses. In the
same way, an excellent property
management firm will over-
see real estate assets, keeping a
sharp eye on opportunities for
gain while avoiding unnecessary
losses.
A seasoned investor will tell
you that one of the greatest
advantages of hiring a manage-
ment company is freeing up your
time to pursue other interests
you are involved with, including
focusing on family and personal
pursuits. Property management
is a time-consuming business
that requires 24/7 diligence to
effectively protect the full real
estate investment potential.
M a n a g i n g
a property
well requires
control over
tenant, staff,
maintenance
and repair
management.
A manage-
ment firm
should estab-
lish relation-
ships with the
professional
v e n d o r s
required on
a day-to-day
basis, as well
as offer a layer of protection in
direct tenant relations.
One major area of concern in
property management, accord-
ing to Ed Boyle, real estate expert
and owner of Katchen Co., is
repair expenses increasing sub-
stantially when a property is not
properly maintained.
“This occurs from being reac-
tive rather than proactive in the
primary maintenance plan,” said
Boyle. “This includes any com-
placency about which providers
are on the approved vendor list,
as standards of care can easily
fall below par, causing increases
in the repair dollars spent. Every
dollar saved in the expense col-
umn becomes a dollar added to
the bottom line of the profit col-
umn.”
The best way to save dollars on
expenses is to have maintenance
plans in place in advance of any
needed repairs because this will
cost less in the long run, he said.
The level of objectivity an
outside management company
brings to the table is another eas-
ily overlooked asset to the suc-
cessful return on a real estate
investment. While vetting ten-
ants prior to signing lease agree-
ments is a main aspect of the
management process, it is only
the first item on a list of impor-
tant duties to be carried out if
property value is to be increased
along with the overall return on
investment.
A professional property man-
agement company recognizes
the duty to act as asset manager
while considering the future of
the asset performance as well.
Just like a stock portfolio man-
ager, the professional expertise,
knowledge and ability of the
property manager affects many
things, including the budgeting,
day-to-day oversight, all aspects
of tenant relations and manage-
ment of onsite staffing, as well as
with outside vendors hired for
specific assignments.
There are distinctly different
approaches tomanagingdifferent
types of property, such as indus-
trial over retail and multifamily
complexes over office complexes,
Boyle said. “Although there are
elements of property manage-
ment that remain the same, the
methods used to manage each
property type will depend on a
number of factors,” he said. “In
retail, for instance, you would
consider if it is a strip, street,
neighborhood, community, spe-
cialty or lifestyle center. A pro-
fessional property management
company must have the knowl-
edge and resources to customize
their basket of services to meet
the specific needs of the indi-
vidual property while consider-
ing the desired outcome of the
client.”
There are certainly myriad
details to examine when con-
templating the purchase and
maintenance of real estate as an
income-producing investment. A
little research and the assistance
of an agent experienced in this
specialty can set you on a suc-
cessful and financially lucrative
journey in the real estate invest-
ment field.s
Marie
Youngblood-
Krebs
Writer,
account balances of $100,000 or
less will not cause the disabled
individual to lose eligibility for
other benefits such as Supple-
mental Security Income.
While the extender legisla-
tion provides relief for 2014,
these tax provisions expired at
the end of 2014. Moving for-
ward, Congress may choose to
address tax provisions as part of
tax reform, deciding at that time
which temporary provisions
should become permanent.
Congress also could choose to
develop yet another tax extend-
er package, extending some or
all of the provisions expired at
the end of 2014.
Business and individual tax-
payers should contact their tax
adviser to discuss the effect of
these provisions on their tax
plan.
This article is for general
information purposes only and
is not to be considered as legal
advice. s