When you make an investment in real estate, it is implied that you want to make money. The cash can come from direct income from the property or from capital gains from a sale after an increase in value. Either way, the investment must be managed, considered, and watched at all times. If the owner and manager are taking care of business, there may be ways to increase the income, and the value.
Schedule a meeting with the professionals that are part of your investment team. Your property manager, your real estate counselor and any other professionals that you regularly use in the acquisitions or improvement of any investment properties. Meeting with these professionals at least twice a year will keep your investments on track and help achieve your goals that you have set for your real estate portfolio.
Make Notes In Advance
Planning any professional meeting in advance will make it more productive. To keep any business meeting on track and save everyone time, notes should be made in advance by the property portfolio owner. The following are some examples of questions or subjects that might be discussed at each meeting; or some at least once a year:
- In what ways can the management of my properties be improved? Can any current expenses be decreased?
- How do our rent levels compare with the others in the immediate area?
- Have there been collection problems–are all rents current at this time?
- Is the current maintenance of the properties up to the best standards?
- Has the planning department approved any zoning variances in the areas of my properties? Would it enhance the value of any property of mine to apply for a change in zoning?
- Have any new construction projects been started nearby? What are they and what effect might they have on my properties or rents in the area?
- Is the present use of my properties the highest and best use?
- What improvements could be made that would increase the income?
- Are we attracting the kind of tenants that should be in this type of property? Would anyone else be more desirable?
- Are any properties of the type we own on the market at this time in this immediate area? What is the price and how is that price justified? Has there been any buyer interest in it at that price? Should we consider adding it to my portfolio of properties? If so, how can we acquire it, either by cash purchase or exchange?
- Is my leverage position in all properties at its maximum potential? Would there be any benefit in a refinance of any of my properties at this time?
- Are any properties in this portfolio suitable for a condo or co-op conversion? If so, should we do the conversion or sell the property to an expert in that field?
- Can we offer any property for syndication? How would we handle it?
- Which of my properties has the best set of benefits for me? Which has the least benefits?
- Which of the properties in the portfolio would be the most desirable to dispose of at this time?
When each of the points in the meeting have been covered, both the property owner and his/her representatives should have a much better picture of the property portfolio and what should be accomplished. At this time, maybe each property owned should be graded in order of the most desirable to the least desirable to continue holding.
The goal should be set for the sale or exchange of the least productive property in the list of real estate owned. This result is very satisfying since the “weak” property is identified and the goal is set to use its equity to acquire a certain type of real estate that will fit better into this owner’s portfolio.
This gives a result for the owner as to which property should be held, sold or exchanged for a more suitable property. There is a definite effort being made to keep the goals set by the owner and improve his/her position.