Do you own a real estate asset in Portland, OR? If so, congratulations: your real estate market is among the hottest in the country!
The next step in your journey should be to create a solid real estate asset management plan. A poorly managed asset, even in a desirable location, is unlikely to become scalable. In fact, it can even become a net expense!
Want to ensure this doesn't happen to you? Here are five things you should do to protect your investment.
Don't Get Too Attached
Pride of ownership can be a tricky thing to navigate. If you fall in love with your real estate assets, it's tempting to invest in needless upgrades. This includes anything that doesn't directly lead to a rent increase.
The right upgrades are the ones that will pay you back rapidly. Every dollar you spend on improvements should bring multiple dollars in return. That said, don't go too far in the other direction and completely ignore your property.
Focus on Tenant Retention
When someone leaves your property, their unit could be vacant for a while. For every day it stays vacant, you lose out on potential investment returns. The solution: minimize these situations by retaining good tenants.
The easiest way to do that is to build a positive relationship with tenants. Try to get to know them without disrupting their privacy. Be respectful, courteous, and respond to their requests and inquiries promptly.
Negotiate Big Expenses
Being a real estate asset manager is all about making a good deal. The more units you own, the more buying power you have. Outside vendors love working with larger buyers and may offer discounts to keep you happy.
Take a look at your expenses and figure out which ones seem negotiable. This can include appliances, maintenance supplies, utility bills, and more. Always shop around for lower prices, especially if you're bulk buying.
Consider Preventative Maintenance
Every list of key asset management activities should include preventative maintenance. It allows you to keep all your high-cost appliances in good working order. This includes HVACs, boilers, dishwashers, etc.
Unfortunately, many new real estate owners didn't get this memo. They let their appliances wear out over time and have to replace them sooner. Avoid this by hiring a property management company for maintenance services.
Have a Cash Reserve
A good asset manager knows that the real estate market is a living, breathing thing. Unexpected things happen at any point. If you don't want to find yourself on the back foot, you'll need to have cash in hand at all times.
At the very least, you'll need a rainy day fund for emergencies and planned improvements. For best results, you would also have a debt service reserve account (DSRA).
Real Estate Asset Management Made Easy
Owning a Portland real estate asset is a financial advantage, but it's also a big responsibility. If you're not constantly trying to maximize profits, it's easy to fall behind. The above tips will help you get started!
Need professional help with real estate asset management? Kerr Properties, Inc. brings an institutional approach to property management at a local level! Contact us here to find out more about our services!
