Many property managers claim they “think like an owner” or “manage the property like it’s my own.” When you think about it though, is this really what a savvy owner is looking for?
As a real estate asset manager, I think of a property as an asset. I’m not there only to maintain the property, but to increase its value as well. I look at every action I take in terms of the investment value over time, both in the short term and the long term – or perhaps somewhere in between. However, I can’t manage all assets the same way because individual owners have different goals.
So let me make a change to what a real estate manager should claim. I strive to think like “The Owner,” not “an owner” or “it’s my own.” That means with every investment client I have, I find out what their individual goals are so I know what they’re most concerned about. One of the first things I learned in the property management business is that the first priority is to learn what an owner’s goals and objectives are and then make every effort to meet those goals and objectives. It’s Property Management 101.
Knowing an owner’s goals is crucial to determining what actions are taken at a given time. The objectives, the actual steps taken to meet each goal, will vary depending on the goal. Here are a few examples of goals owners may have:
- Own one or two properties that will provide a supplemental personal income of $15,000/month.
- Own more commercial space than any other owner in the state.
- Purchase the first investment property and another every year.
- Distribute a 12% return to investors annually.
- Sell the property in three years at a 35% net profit.
There are, of course, other types of owner scenarios, but these are a few that give you a feeling for how different owners have different motivations in owning investment properties. If the real estate manager is thinking like an owner, which owner is it?
- The owner who is strictly concerned with long term monthly cash flow and will probably own the property for life.
- The owner who wants to buy and buy, or the owner just starting out who needs increased value to leverage existing properties to buy more.
- The owner who only cares about the return on investment that sometimes requires thinking outside the box for solutions to achieve the goal.
- The owner who is going to sell, which could require increased value at the detriment of the physical plant?
All these owners want to make money. That is a given, since each has purchased an investment property. The goals are different though and so will be the objectives. To think like “The Owner” it takes time to find out what motivates each owner to begin with. Each owner needs to be able to trust their real estate manager to make good, informed decisions and achieve the established objectives. That manager needs to think like “The Owner.”