Charlotte Property Management Weekly: The Top 3 Reasons Why Good Property Managers Matter More Now (Reason #1)

1. If this economy has taught us anything, it is cash is always king and real estate is an investment.  The ONLY decision criteria for hiring a prospective property manager should be their ability to maximize the cash flow of your investments.  Period.

A friend of mine works for a utility company.  The were recently faced with a question on whether they should spend the money to increase their customer service grade from 74% to 77%; they had calculated almost exactly what it would cost to do so.  His co-workers were fighting to spend the money.  Isn't great customer service what business is all about?

But, where was the ROI (Return on Investment)?  His co-workers didn't see that spending the money wouldn't bring in any additional revenue (people didn't have a choice but to use the utility company).  The real question that should have been asked was:

How much will our cash flow improve if we drop our customer service level from 74% to 71%?

This is the type of property manager I want working on my properties.  The answer isn't always to:

1. Put perfect looking homes on the market (though it helps...)
2. Make costly repairs
3. Wait to get upper rental rates
4. Wait for perfect tenants
5. Evict late payers

The answer IS to make the most money on your investments.  This is a result of 3 things:

1. Maximizing revenues
2. Reducing expenses (yes, this includes the holding time when properties are empty)
3. Sometimes taking on a manageable level of tenant-risk (letting some tenants be late, etc.)

Cookie-cutter approaches don't cut it anymore (no pun intended).  Just take a look at the drop in retirement portfolio values of the average American, and then look at the hedge fund manager who MADE $4B last year (yes, that's "B", as in billion).  The stunning thing is that both were investing in the financial markets...

Good property managers maximize the amount of investment dollars paid to you.  They use strategic approaches for each individual property (and, yes, the approaches are sometimes unconventional).  But they never waver in having you spend less and make more.  Period.

Brett Furniss is the President & Owner of BDF Realty ("Charlotte's Most Innovative Property Management & Investment Company"), and Rent-To-Sell Realty ("When You Need a New Solution to Sell Your Home") which  specialize in rent-to-own (lease options) and rent-to-sell homes.  For a FREE look into his new book, A Real Estate Agent's Complete Guide to Representing Rent-To-Own (Lease Option) Tenants: Delight Clients, Fill Vacant Homes, and Earn $2,250 Upfront* (*Minimum!) go to www.RentToOwnAgentGuide.com.  You can contact him directly at Brett@BDFRealty.com.