Page 122 - Rich Dad's Increase Your Financial IQ: Get Smarter with Your Money

apartment. For example, the moment a tenant informs the management
company that he or she is leaving, an ad is run advertising the apartment’s

availability. Once vacated, the cleaning crew comes in that day, and the
apartment is ready to show to a potential new tenant that night. And in
many cases, an apartment is rented before the existing tenant even moves
out.

Obviously, many incompetent investors fail to reduce expenses and
actually increase them, making the property a bad investment—for them.
Often, they fail to manage the quality of tenants and the attractiveness of
the property because they are trying to save money. In most cases, the

property goes down in value. It’s these poorly run properties that we like to
buy because we can turn them into good investments through good property
management. In other words, we make good money from bad investors.

Property Management Is a Key Control

As you know, property management is one of the keys to profitability of
real estate. Property management is a key control. Like most investors, I
hate property management. That is why I have Ken McElroy, author of The
ABC’s of Real Estate Investing, as a partner. His company is absolutely the

best. If you would like more information on property management or how
to increase the value of real estate through property management, The Rich
Dad Company offers several books and audio products created by my friend
and investment partner Ken, whose company is a leading property

management company in the southwestern United States.

One of the reasons why I stay clear of most stocks and mutual funds is
because I have no control over expenses—especially management salaries,
bonuses, and fees. It makes me sick to read about a greedy CEO’s increase
in pay, even as shareholder value drops. For example, Robert Nardelli, CEO

of Home Depot, was being paid $38 million a year in salary, plus a