The old way of managing an investment property stinks (we'll call it Passive Property Management): buy home, get it ready to rent, hire a property manager, hopefully find a good tenant, collect money, get a move out notice, get it ready to rent, rinse, repeat.  It's a tried and true method, but it doesn't allow for opportunities of greater revenue potential.  .

Revenue potential is the name of the game with investment properties.  As always, you want your piece of real estate to be operating within it's highest and best use to ensure that you're getting maximum return on your investment.  But please don't confuse "maximum return" with charging a high amount for a daily rate or monthly rent.  You can have the highest daily rate on a vacant Airbnb, likewise you can have the most expense lease on your street.  But after you've calculated your expenses from renting to the "C" or "D" applicants you could easily wind up losing money.  You want your property to be occupied consistently, with quality "A+" guests and tenants, but how do you find them?  Dynamic Property Management.

Dynamic Property Management

Dynamic Property Management (DPM) is a consistent analysis of income opportunities that exist within the broader context of the real estate market and economy.   DMP considers all of the moving parts of the local real estate market, it's trends, it's supply, and it's demand.  This approach allows a dynamic range of use for a single property and owner to capitalize on current market whether good, bad, or otherwise.  Recognizing the greatest revenue potential for a home is the cornerstone of Dynamic Property Management. 

Here's a real life example of a current client (names changed for privacy): Susan lives in California and want's to relocate to Boise.  Unfortunately, Susan can't move right away, she has to tie up loose ends in California (perhaps retirement, completing a project at work, finishing up an MB program...who knows, not important).  Rather than miss out on great interest rates and appreciation of home values, Susan makes the ever important decision to buy a home now and wait to move to Boise.  Now what?  

With Dynamic Property Management Susan has five options:

  1. Leave the home vacant
  2. Find a long term tenant
  3. Find a short term tenant
  4. Find a short stay guest
  5. Sell the property

With Passive Property Management Susan has three options:

  1. Leave the home vacant
  2. Find a long term tenant
  3. Find a short term tenant

DPM doesn't merely add two additional option for Susan, it actively searches and finds the best option for the property based on current market conditions, not just current market rent.

After hiring Boise Property Solutions to Dynamically Manage her property, Susan has the option to find a tenant or guest and rent it out on the short term, long term, or daily rate, whichever is best.  And given the current condition, there are A+ tenants and guests for all of her options.  Why, because the Boise real estate market is currently on fire and Airbnb's are pulling in record numbers.  But what if it wasn't?  

That doesn't change anything for Susan because she still has the option to lease it long term for it's highest and best use. In a real estate downturn, short term rentals would nearly vanish.  Short stay guests through Airbnb would likely slow down in all but the best locations, but the long term market would gain tremendous activity.  Recall the most recent recession; millions of people lost their homes, but where did they go?  They went into long term rentals, and in some cases like mine, very long term.  What if the recession cost Susan the opportunity to relocate?  She could sell because Boise Property Solutions is fully licensed to sell her home for top dollar in the shortest period of time.

In conclusion, what did Susan really gain?  Financially, a lot.  The Average Daily Rate (ADR) for a home like Susan's is $110/day (current January ADR) with our Airbnb management as compared $50/day on a 12 month lease (current January long term rates) with our long term property management. She nearly gained double. 

From a practical standpoint Susan also remained nimble and didn't tie the property down.  If Susan was able to relocate early, she wouldn't be able to if she had a short term or long term lease.  But with Dynamic Property Management, Susan found the best option that maximized the revenue potential and also had the most flexibility with her life goals.  

Of course every circumstance is unique, dynamic.  Don't hire a passive property manager that works old hat.  Hire a Dynamic Property Manager that can provide you with an arsenal of services that best fit with your goals; Boise Property Solutions.

 

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