3 February 2021

Costs and benefits in Property Management

Property management can be an economic problemif the management costs outweigh the benefitstaxes (such as IMU and TASI), maintenance costs (for ordinary care and extraordinary repairs), the resolution of conflicts (such as those with tenants in arrears or with neighbours, for a variety of reasons), and other cost items may seem disproportionate if a Congregation does not use a property or uses it below its potential.

However, it is clear that the same identical costs acquire a different meaning if a property is used profitably, that is, if the benefits to the Congregation outweigh the costs. Therefore, the solution to the problem of property management is to be found not only in lower operating costs but above all in the proper use of the properties.

But deciding how best to use a property often depends on an overall view of one’s charisma, because the use of a property depends on the planning of specific activities, functional to the mission of a Congregation. In short: a property management issue implies a problem of identity and a problem of decision-making.

The burden of a badly used property is like the burden on a person’s shoulders: the passage of time, sooner or later, will make the person bend, depending on his or her ability to resist. However, that person, if he or she can adapt to change, can stand upright without difficulty!

Those who have to manage real estate must have specific and pragmatic skills because they have to face some amount of complexity: properties are concrete things, but management is a fluid process; properties are static assets, but managing them implies the ability to transform them over time; properties perform economic functions, meet specific needs, but only if the needs are clear and functional. In short: management goes beyond the mere administration of a budget and cash flow, because it involves strategic decision-making processes and implies the ability to communicate decisions to everyone including those who might criticise them without having understood their deeper meaning in the interests of the community.

The management of a property implies knowledge of the needs and interests of the community, which has its point of reference in that property; and this implies knowledge of the people who are part of that community.

Nonetheless, property management also requires technical expertise: you need to know whether a property is compliant with all the relevant regulations, otherwise its commercial value deteriorates dramatically (how much would you pay for a building that is beautiful, but full of zoning irregularities and burdened with building code violations?); it is necessary to know the possible realistic uses of a property (what is the point of planning a hospital activity, if the structure of the property prevents it from being used for that purpose?); it is necessary to plan the ordinary and extraordinary maintenance in advance (would a series of small interventions cost less, diluted over time, than a large construction site for many complicated jobs, carried out at the same time?).

Is it better to speak to a consultant after making a risky decision or before making a decision?

Contact us at info@dikaios.international  if you wish to discuss with us any property management issues.

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