Ruth has been involved in property management since she first invested in real property in Lansing Michigan in the early 1970’s. Her passion for real estate has helped her facilitate many people in enhancing their properties and recreating them for elevating net worth and cash flows. Her ability to create the the exiting strategy from inception to begin to create wealth along the path of ownernship is her forte. This scenario not only preserves the value of the building but creates wealth over time. The principals behind great property management is not just to maintain the status quo but to find creative ways to transform ones property to something that will stand the test of time and attracting far better tenants thereby elevating the status and financial standing of the building.
Focusing on the basics of reducing expenses and increasing income, Ruth has been extremely successful. Take this elementary business model and expand into a case study and we find the Ute City Building, in Aspen. Built in 1890, this iconic building enjoys the occupancy of Valentino and a long standing local gallery specializing in western art, Wind River Galley, a Juse Bar and several other high end and office tenants. The Ute City Building possessed a large interior atrium, rare in Aspen, with four interior spaces limited by its low ceilings and adjacent to some building storage. One of the spaces has 3 windows to the street facing the most popular retail corridor in Aspen, Galena Street. This afforded an opportunity to enhance the space by creating an entrance directly to the street removing the “barrier to entry” which previously required access to the space only through the main door and through the arcade area. Ms. Kruger created value by combining 2 small spaces into one and finally she was able to expand the space into the atrium by 5 feet creating additional value and cash flow to the building.
It is important to realize that a good property management takes into consideration that increasing value does not only happen in a good market. Creating magic can transpire in a recession, as well. Anticipation of the up and down cycles of the market are necessary to the success of a building and a requirement of a good property manager. Planning these projects in the down cycle prepares the building to take the highest advantage of the up swings.
Acting in the best interest of the owner to maintain the property, keep it fully occupied, collect rents, budget improvements and maintain records, a good property manager fully understands the details of these principals and can anticipate the ups and downs and will formulate a plan to respond to the fluctuations. Balancing the market is an art form practiced by one who is flexible and can adapt to the changing market trends. Firm knowledge of real and competitive rental properties is required. Understanding financial statements, profit and loss, income taxes and budgeting are all very important for the property manager.
Properties that fall into obsolescence will experience lower rents and a less attractive return on investment as the property ages. A long-term budget for capital improvements should be developed for best success. Renovation, remodeling, and a more modern look and feel with energy efficiency in mind is necessary to keep the bills in check and the tenants happy. Tax advantage programs and rebates can be included in the pro forma.
Another essential task of a good property manager is to maintain the physical management of the structure and the outdoor areas of the property.; landscaping, electrical, plumbing, roofs, walls, mechanical and much more. The PM must develop and maintain relationships with the contractors and mechanical companies, budget capital expenditures, and monitor the quality of all repairs and maintenance, This function is interrelated to the financial piece as some improvements will require significant capital expenditures and budgeting. This ties in with great tenancy and occupancy as superior management leads directly to tenant retention and desirability for a well maintained property.
Staying ahead of and on top of preventative and ongoing maintenance requires sound construction management skills.
Maintaining relationships with city officials and vendors is imperative as well for smooth operations. A real estate property manager can be very skilled at all the other functions of management, but if they drop the ball when it comes to facility maintenance, the property will experience a degradation of condition, loss of tenants and declining rents. This specialization of property management is the less glamorous but most essential member of the asset management team! Call Kruger and Company to analyze your property for higher yields and lower vacancy.