Not all properties are shining gems. Some are diamonds in the rough and need a little polishing. Unlike many property managers, we like these assets. In fact, this is how we got our start. We typically buy properties that are run-down and in need of major repairs and renovate them: Interiors, exteriors, tenant problems, legal problems or just about any other condition short of structural collapse interest us.
So it is in this vein that we approach the management of older assets. We are willing to manage the asset as long as the owner invests the capital necessary to bring the property up to current standards. We will work with the owner, architects, contractors and sub-contractors to refurbish and reposition the property in order to attract a more affluent rental clientele and in so doing improve the revenue and operational performance of the property.
Condition Assessment, Reserve Budgeting and Implementation Schedule
For every project we take on we evaluate the overall condition of the property, otherwise known as a Physical Analysis. This involves a walk-through with our various contractors to assess condition, safety violations, and necessary repairs. From this we can develop what is commonly known as a Reserve Study. The Reserve Study assesses the condition of the functional components of the property, estimates their remaining life as well as the replacement costs, and puts forth an implementation plan along with the required capital to be allocated, otherwise known as a Funding Analysis. The physical components of the reserve study include the roof, siding, exterior wood members, asphalt and concrete, landscaping, plumbing, electrical systems, unit interiors, hallways & walkways, pool area, common areas, play areas, refuse areas, and more.
The implementation plan is critical in maintaining the ongoing appeal of the asset to renters and in maximizing the value. This plan enables us to project costs and work with the owner to fund the improvements through earned revenue or capital infusion either from the owner or financing of the property.