Hartman gave a keynote speech recently at the Meet the Masters event on this topic of revolutionizing the property management industry.
“Income property is the greatest investment class ever. It’s the most historically proven asset class in America if not the entire world. It has tons of tax benefits. The thing that blows it up a lot of times is the property management relationship. The reason it doesn’t work is because it’s not aligned.” Hartman says.
Historically, and even today, property managers would nickel and dime income property owners. What Hartman proposes he’s labeled as “an aligned agreement”.
Hartman continues, “My thesis is that out of alignment comes empowerment. The old idea of win-win really needs to be Win-Win-Win. There are three major parties to every deal. There’s the investor owner, the property manager and the tenant. The way the agreements are now structured it makes the property management company predatory on the tenant.”
Obviously, this is bad for and upsets tenants. Many times the property management company will take every measure to bring in fees which are not shared with the investor owner. Banks have been using what many people consider excessive fees for a few years now as a “profit center”.
People are tired of excessive fees. When property management companies hit already fee sensitive tenants with extra fees it motivates them to leave the property once their lease runs out or sometimes even before.
Hartman continues, “This structure is bad for two out of the three parties involved. When the tenant doesn’t renew their lease that’s bad for the owner. The whole thing is out of alignment. That’s why I propose ‘The Aligned Agreement’.”
Revolutionizing the property management side is one key piece of Hartman’s business. His company uses “The Aligned Agreement” with their investors.
“One of the ways we can align our agreements is to increase the percentage we pay to our property managers. At first glance this may seem unpopular to an investor. However, it’s a give and take. The managers give up the ‘garbage fees’. For example, we can increase from 8% to 12% what goes to the property manager. In exchange, when a tenant moves out there’s no lease fee. The management company gets 12% of all the income the property generates. This way the interest of all parties are better aligned.” Hartman says.
This is just one of many things Platinum Properties Investor Network does differently. Unlike many of those teaching real estate or the so-called “gurus”, Hartman’s company offers students ready-made real estate investment properties to buy. This is a surprise to many students who’ve come to expect to invest tens of thousands in educational material and strategies alone. Then much of the time they are left to fend for themselves unless they spend tens of thousands more for one-on-one mentoring.
Hartman, of Platinum Properties Investor Network, Inc., wants to turn the industry on its ear.
Hartman explains, “We operate like a financial services firm for real estate investors. We teach people how to invest and actually help them do it by providing income properties, tracking software and ongoing support. We provide a global perspective on investing. The investor-only real estate business filled a gap in the marketplace.”
Support and community are two things Hartman believes in wholeheartedly. He practices that every day and his students have been the beneficiaries of this philosophy and the Platinum Properties Investor Network, Inc. company culture.
To learn more about The Platinum Properties Investor Network, Inc. and Jason Hartman go to: http://www.JasonHartman.com/podcast or by searching “Jason Hartman” on iTunes or Stitcher Radio.