Del Val Real Estate and Property Management (“Del Val”) assumed property management functions for a group of 47 rental units in Philadelphia and New Jersey in 4 separate buildings effective August 2015. At the time Del Val took over, the buildings they were being managed by a single real estate agent with little to no support.

The buildings had extensive collection and deferred maintenance issues. When we took over, the buildings were 81% occupied and there was over $150,000 in unpaid rent. Additionally, it took months and even years to understand that the buildings had extensive deferred maintenance and that almost all units needed new paint, carpet/flooring, new/upgraded kitchens, and other general improvements. The common hallways also needed work to make them acceptable to tenants. The basements were full of years of garbage and in need of extensive cleaning. The exteriors were also dilapidated and the landscape needed to be reworked.

Del Val took over and began upgrading the vacant units with paint, carpet, and other upgrades. We also put a lot of time and effort into bringing all buildings up to state and local regulatory codes. We cleaned outside areas and extensively cleaned trash from bases and storage areas. This allowed tenants access to their storage areas and drastically reduced fire hazards.

we then raised the rent from $25 to $50 on any unit we rent. We also give existing tenants a new 2 year lease with rent increases every 3 months to bring the rent up to market rates. We have also increased the rent on each lease anniversary.

This process has been going on for over 3 years and here are the results.

financial year 2016 fiscal year 2017 fiscal year 2018

Income $351,000 $385,000 $400,000

Net Income $114,000 $198,000 $270,000

Occupation % 81% 98%

Average Rent $700 $780

As you can see from the above, revenue has improved each year, but the real improvement has been the bottom line. Net income has more than doubled from $114,000 to $270,000. This has been a result of the occupancy percentage going from 81% to 98% and increasing the median rent by more than $80 per unit for the last 3 years. We’ve also completed many of the deferred maintenance items and now maintenance costs have been reduced by over 50% and that money has gone to the bottom line.

The improved net profit has more than doubled the value of buildings to owners.