Professional rental management is key to increasing profitability

Henry Gallego and Luis Martín Guirado, CEOs of Ktesios Socimi and RKS Asset Management respectively, believe that the professionalization of leasing is essential to provide a good service to the tenant and, consequently, help clients maximize the profitability of their residential portfolios.

In an interview with Observatorio Inmobiliario, the CEOs of Ktesios Socimi and RKS Asset ManagementHenry Gallego and Luis Martín Guirado, address two issues that represent a real crossroads for the real estate sector. On the one hand, affordable housing and the challenges and opportunities it offers to professionals and investors, and on the other, the professional management of rentals, especially the most affordable ones, and what are the keys to combining tenant loyalty and high returns for the client.

The affordable housing is a product that’s here to stay, and in the institutional institutional world It has become a necessity,” begins Henry Gallego. Although it is an issue that has been talked about for a long time, and social and protected housing programs already existed, it has now become clear that the impulse of public administrations is not enough.

We have seen the need for the need for investment from the private sector, from thethe institutional investor. There is an immense need, a huge gap in the affordable housing market. Prices are rising steadily, but wages are not rising at the same level, and working people need affordable housing,” remarks the CEO of Ktesios Socimi.

In Gallego’s opinion, it is not enough to seek profitability alone. “We must, as institutional investorsWe must, as institutional investors, fulfill this social vision, We have to do our bit for society.“he qualifies. Although, of course, this does not mean that the economic aspect has to be left aside. In this sense, the Ktesios executive considers that“in terms of investmentinvestment, it is necessary to look for interesting returns and different products that are decorrelated products that are decorrelated to the sector. And this is where we have focused our attention, through Ktesios Socimi and the management of RKS Asset Managementwhich is to go to these peripheral towns, which are not in the large urban centers, where there are still great opportunities to generate very interesting IRRs of more than 20% and with gross yields of 10% to 12%. gross yields of 10% – 12%, and that is whatand that is what investors are looking for“.

This being the case, we can state that the product that is the object of the investment exists, and that it coincides with the product demanded by society: affordable rental housing. But what does it take for this product to become a successful business model? The CEOs of Ktesios and RKS are clear: professionalizing rental management. As Luis Martín Guirado says, “professional management of rental assets is the key to success.professional management of affordable rental assets is the key to increasing client profitability.“. However,“this profitability is not based solely on economic efficiency,” says the CEO of RKS AM. It also has to do with proximity to the tenant and offering him “a very professional service.a very professional service in places where they wouldn’t normally have it.

Martín Guirado considers that“this proximity, even in complex processes complex processes of non-paymentrecovery processes, or when there is a need to renegotiate renegotiation of contractsis an absolutely key aspect in making tenants’ loyalty to the loyalty of tenants, who are satisfied with thesatisfied with the service they have received, and to turn it into very high occupancy levels. very high occupancy levels which, in turn, result in a high return on investment. high yields“.

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