Real Estate Investment Trusts have to exercise utmost care and professionalism in their operations to ensure success. The process of identifying properties, acquiring them and subsequently managing them is quite delicate especially in the current volatile real estate market. The main revenue streams for REITs are rental income and capital appreciation from property sales. It is therefore important to ensure that all properties satisfy the set out standards to guarantee fast sales and fast rentals as well. Our mission statement outlines how we can achieve our main goals with a vertically integrated real estate acquisition and management structure incorporating a disciplined acquisition criteria, seasoned personnel, extensive research and comprehensive operations on all fronts.
Let’s take a look at how his mission statement affects our day to day operation strategies to ensure success in all our investment endeavors.
Research
Before the acquisition of any property, it is necessary to conduct the necessary research on all details relating to the acquisition. Individual markets normally have distinct characteristics which determine house prices and most importantly the possibility of earning a realistic amount of rental income. This research is intended to demonstrate whether the market is attracting more residents who will be willing to rent single family properties. This means that the supply of real estate properties in this niche must be lower than the demand for the same. As such, some buyers will be more inclined to seek rental properties due to high property prices which reduce their ability to buy the properties.
Acquisition Criteria
Although it seems to be better for REITs to acquire properties in areas where home values are restrictive and residents are more inclined to rent, this is not the always the case. High home values for one may indicate that there will be minimal capital gains in the future. It is also true that high home values mean rental income may not be sufficient to make up the expected returns. Charging higher rentals to cover the high purchase cost could mean keeping the property vacant as residents would find it unattractive. This calls for a disciplined acquisition criteria as stated above.
Qualified and Seasoned Personnel
One of the main rules of finding a worthwhile REIT to invest in is the management team and organization. The real estate industry is known to be quite complicated and extensive knowledge and experience in the same is vital in ensuring successful dealings. All acquisitions need to be made in a way that maximizes the investors’ value for their money. Impressive negotiation skills, and most importantly the knowledge of the fluctuations in real estate market performance are invaluable.
Real Estate Investment Trusts are today shaping how families choose to live. By offering rental properties, individuals who are unable to secure mortgages for new home acquisitions can now be able to find accommodation for their families conveniently. Our operation is designed to fill the gap by following the mission statement to the letter in streamlining operations as well as identifying and acquiring properties which offer the best value to potential tenants.
