As real estate professionals, property managers know single-family rentals can be a great investment vehicle to help clients meet their retirement goals or other financial dreams. The role of asset managers is to help owners do it right.
Do they 1031 exchange? Use their equity to buy another rental? Could the rent rate and valuation be improved with a few upgrades to the property? Property managers are the experts who can evaluate the owner’s current situation and answer those high-stakes questions.
But those aren’t the only questions that property managers should be asking when advising owners. For some, the first question should be if they’re fit to be a landlord at all.
Doing what’s best for the client
Every property manager has a few clients that cause more headaches than all the others combined. They seem to always be complaining, worried, or angry about something. Yes, sometimes owners act this way because it’s just their personality type. But I’d say more often they act this way out of anxiety.
Some owners are not built for the uncertainty that comes with investing in single-family rentals. They don’t have the patience, risk-tolerance, or coping skills needed to handle the ups and downs that come with owning real estate. You know the type if you’ve ever had an owner fly off the handle over a normal repair bill.
Sometimes, these owners just need a little coaching and reassurance. But others? Owning a single-family rental will always make them miserable, and they’d be better off with a lower-risk, less volatile investment option.
This may seem like a self-defeating strategy. Why would you give advice that could result in losing a client? The answer is simple 👉 Because it’s the best thing for the client.
Sometimes helping owners “do it right” means helping them get out of the game entirely. Unexpected as it is, this is part of the role of asset managers.
Don’t take my word for it
The inspiration for this edition came from a recent substack post from Todd Ortscheid. In it, Todd makes the same point I make above, but much more eloquently 😅:
“People who have high anxiety, or low risk tolerance, need to be steered to investments that are more fitting for their personality. Index funds, treasuries, CDs, high yield money market funds, etc. are all fine investments for someone who needs a truly passive investment vehicle that will not cause their anxiety to spike. And you, as the real estate expert, should be the person to let them know that they are going down the wrong path if you sense that they can’t handle the stress.”
Todd goes on to say that advising owners on what is truly best for them, even when it doesn’t financially benefit you, will have a huge positive impact on your property management company’s reputation. I couldn’t agree more!
About Blanket
Blanket is transforming the property management industry with its innovative platform that helps property managers grow their portfolios and retain owners. By combining AI-powered insights, automated lead generation, and seamless integration with existing property management software, Blanket provides property managers with the tools they need to succeed. Blanket is backed by leading Venture Capital Funds like Foundation Capital, Symbol, Operator Partners, RE Angels, and industry-leading Angel investors. Together, we’re shaping the future of property management.
