Buyers, sellers, investors, welcome back to another installment of Real Estate Jargon, aka, simple explanations of real estate terms normally not found in nature.
Although the term interim management is easy to understand, applying the concept to real estate is something that many brokers fly right by as far as offering it as a service. Since this is something we do in my business every day, I'll offer some real-life examples of how interim management can be of service to investment property owners and others.
Like many real estate firms, we offer property sales and property management services. Our management contracts may be for a specified period of time, perhaps one year, or could run until either the property owner terminates the contract or sells the property. As is standard in our industry, we typically seek long term contracts that allow us to manage the property effectively each month (derive the maximum profit possible), while also providing the opportunity to develop the property over time to increase its value to its tenants and to the owner.
Interim management, however, is a short-term engagement for which the need has been created by special circumstances. The scope of services provided may be modified to meet specific needs, but the goal remains to maximum profits during the term of service. Here are some typical applications of interim management services.
Estates In Probate: This is our most common engagement, as we provide interim management and additional administrative support services for estates that hold investment properties. Probates may last from one year to several years, creating the need for interim care of previously owner-managed properties until those properties are distributed to the estate's beneficiaries (new owners).
Management In Transition: Sometimes, owners may terminate a management contract abruptly for a variety of reasons or may find that their management company has suddenly gone out of business. In these situations, the owner may wish to hire interim management to care for the property until a permanent replacement has been found.
Vacations or Emergency Absences: Owner/managers may want to relax on the beach in Hawaii from time to time. They may also need to travel across the country to celebrate the birth of a grandchild or say goodbye to a family member or old friend. During these relatively brief absences, interim management can be used to collect/deposit rents, handle emergencies, and generally keep an eye on the property.
New Owner/Manager Assistance: Investors making their first purchase sometimes request interim management support as they "get their feet wet" in property management systems and processes. Interim management assists with systems development and manager training.
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If you have questions about real estate jargon or buy/sell/invest strategies, drop me a line! john@jsrealproperty.com
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