Family office versus managing family properties yourself
Families in generations with several private properties in their portfolio are often faced with the fact that the effort involved in administrative tasks is immense and often unmanageable, with the consequence that unnecessary and avoidable costs are generated.
Example:
The family owns a family home that the parents actually want to sell. The children want to keep the house. They spent their childhood in it and are full of fond memories of their childhood.
The children, now grown up and often with families of their own, do not feel the need to take over the former family home. They often live in a different place and live in a new home of their own that is more suited to their current life.
The parents keep it and move to the city into a penthouse that is more suited to their current stage of life. The cost of the property is minimal, giving them plenty of time for themselves, travelling and much more.
The family portfolio includes a chalet in the mountains, for example in Kitzbühel, which is shared by the families.
There is also a villa by the sea (for example on Mallorca), which is also used by all family members.
So far everything is good and organised.
Each of the four properties mentioned in this example are organised.
There are gardeners, housekeeping, domestic help, etc.
The families will find the property clean and tidy at all times.
...and who takes care of all the administrative work?
..... as for example:
Check and pay invoices
Create payroll accounting
Optimisation of staff, gardeners in the individual properties, etc.
Regularly review taxes and maintenance contracts
Electricity
Gardenmaintenance
Renovations / repairs (professional inspection and quotation from at least two different craftsmen)
On-site inspection of the property at least once a year (as required)
Renovations
Review the legal guidelines of the individual countries
Organisation of trips, flights
Vehicle maintenance
Insurance policies
System updates
and much more….
If the properties are not managed by an external family office, this work is left to a family member.
This family member, often the mother, takes care of it.
Each of these four properties is associated with a large administrative workload, which often means that the properties are very expensive to maintain and are not managed in an optimised manner.
Due to the situation that family members do not have time and/or often prioritise other commitments, this work is often left undone.
This in turn triggers immense costs, which can be solved with professional management of the individual property portfolios.
This professional administrative support for individual properties is highly recommended, as I describe in the example below and have experienced very often in my many years of experience.
Example:
Property 1, formerly the family home, is practically unused.
Costs around 10,000 per month.
The house is not rented out and is no longer lived in.
Annual costs of around 120,000.
Renovations totalling around 80,000 must be carried out within the next 5 years.
This results in an expense of 680,000 over 5 years, only a minimally small part of which is tax-deductible.
Most families, especially the next generation (children), do not realise how much money is spent every year.
A lot of money that is lost to the families / heirs.
Once families have been presented with the actual costs, they will often consider optimising the management of their portfolio.
As a mediator and independent service provider for family offices and more..., we offer all families or individuals an independent cost analysis of their property portfolio.
The cost analysis is customised to your desired property portfolio and includes a review of all expenses per property, including the annual savings potential.
I look forward to hearing from you.
Sincerely ❤️
Manuela Olmesdahl
Phone / Whatsapp: +41 76 376 61 11
E-Mail: office@manuelaolmesdahl.com
