The Rental Property Investment Model
NEW PROPERTY MANAGEMENT BUSINESS MODEL GARY GEIST
Figure 1 Rental Property Controls
The Rental Property Investment Model
Successful rental businesses require a competent team to support your operation where each members knows their responsibilities . Rental operations are largely controlled by the management company ' s business rules as well as the goals of the investor . Sometimes the investor may not communicate his requirements well nor does he monitor current operations closely . Therefore the information provided by the property manager on a monthly basis must be of sufficient detail to gage the property ' s performance .
The diagram in Figure 1 shows the controls that can be exerted on rental property - external expenses you have little control over or those expenses you can control with good financial practices . External expenses are usually the hardest to predict and therefore the hardest to control , but these costs must be factored into the investor ' s business model when deciding to buy the property . The smart investor acquires special tools to aid in this process to prevent him from buying a " Money Pit ". Solid financial controls over the day-to-day operations are critical to making consistent cash flow each month .