Tip of the Month - January, 2021


Source: Property Management & Managing Risk
By: Robert C. Kyle Floyd M. Baird, RPA/SMA

To present the Owner with a stronger picture of the property’s income potential, the Manager should prepare a five-year forecast. This is a long term projection of estimated expenditures and income based on predictable market changes. The Manager should scrutinize all income sources and study the market trends affecting them.  He or she must take into consideration the currant rate of rental increases in the area, the potential for growth or decline in the area and rent increases stemming from any projected improvements to the property.

Operating expenses for the five-year period must
be realistically estimated, based on observable trends. The major influences to take into account are the rate of inflation, increases in the cost of labor and supplies, tax hikes and raises in insurance premiums.

This web page was updated on 12/31/2020.