The first aspect to get ready to reposition the Assets is to do a complete evaluation of the Property. This will not only include the physical but the financial aspect.
There is nothing like “walking the dirt”. Using not only common sense but leaning on the Professionals that have hands on experience with the Property. The Broker, the Property Manager, the Handyman or even the Contractor. ONE OF THE MOST IMPORTANT IS THE TENANT THEMSELVES. The tenants will speak quite freely about any issues with the Property, the Property Manager (when they are not there) and even the other Tenants.
Develop the goal and the Budget to get there.
The second part is to look at the Books and Records. Be sure that the Property Manager understands the difference of Capital Expenses and Ongoing Expenses. These are commonly referred to as “above and below” the line. This is a lifesaver at Tax time.
Look at the Leases that are in place. When was the last time that rents were raised? Are there Tenants that are GOOD or do some need to GO. No one likes a vacant unit or the expenses involved to turn a unit. However, a Tenant that is detrimental to the Tenant Base needs to go.
A timely visit with the CPA is a must on a yearly basis. This is a good time to look at not only the Entity formation but perhaps to get the Estate Planner involved. Last minute ownership changes an be devastating to the Portfolio.
Lastly, look at the financing. Does or can the Loan be redone to position cash flow to a better advantage? If owned outright, is there a better use of the Equity?
Rely on the Experts but listen to yourself as well
There are so many aspects to owning Assets. There is no doubt that you need the advise of many Professionals; but you goals and needs should come first.
As with any advise, even this advise-take all in-take time-then make your decisions.
The definition of RELY is to depend on with full trust or confidence. Remember that it takes a Village to get it all done.