ANALYSIS OF OWNER'S OBJECTIVES
Source: Property Management & Managing Risk
Robert C. Kyle & Floyd M. Baird-RPA/SMA
The
Manager must discover and analyze the goals of the Owner. These plans
may not include the continued operation of the property in its present
mode. The property manager may determine that an alternative use
would be more productive. Alternative uses, as well as
rehabilitation , alteration and modernization should be explored with
the Owner to define his or her objectives.
The management and
improvement plan is shaped by the Owner’s attitude toward the
investment. The Owner may want to authorize all suggested
expenditures in order to increase the property’s long-term income
potential, or to decrease taxes. On the other hand, the Owner may
prefer to make no changes, treating the property as a short-term
investment from which the maximum possible income should be derived
quickly. Other Owners may permit expenditures to be funded out of
the property’s income but be unwilling to invest additional capital.
The Owner’s
objectives will be the deciding factor in the adoption of the
management plan. If the Manager cannot successfully execute a
particular plan as outlined by the Owner, the two should try to
renegotiate. One of the most challenging aspects of property
management is that there is more than one answer to any given
problem. When the Owner and the Manager agree on a workable
management plan for the property, it must be put into a contract form
so that management of the property can proceed.