Does Blood Turn to Water in the Face of Money? [Kim Yongnam's Real Estate Asset Management]

There is a saying, "Blood turns to water in the face of money." However, this should be regarded as a cautionary warning rather than an accepted reality. Recently, disputes among family members arising from real estate inheritance have surged. In particular, consultations related to managing inherited real estate account for a growing proportion of real estate management inquiries, becoming potential triggers that can permanently damage family relationships. A case of sibling conflict over a small-to-medium-sized building in Seocho-dong starkly illustrates this reality. Professor P inherited a building with a total floor area of 2,200 square meters along with his mother and younger brother following their father’s sudden passing. Since the late father had managed the property alone during his lifetime, they were unaware even of the current lease agreements. After experiencing a business failure, the younger brother volunteered to manage the building, and the family accepted this arrangement. Despite generating rental income of 30 million KRW per month, no dividends were distributed for two years, deepening mistrust among the siblings. A similar example can be found in the family of Mr. L in Mapo-gu. The father’s commercial building was jointly inherited by four children, with the youngest taking on management responsibilities. However, opaque operations surrounding rent collection and management expense disbursements led to heightened conflicts among the siblings. Ultimately, by engaging a specialized small-to-medium-sized building asset management firm to transparently disclose monthly income and expenditure and ensure regular profit distribution, family relations were restored. Real estate asset management experts recommend entrusting property management to professional firms immediately after inheritance. These firms provide comprehensive one-stop services, including lease contract management, facility maintenance, tax invoice issuance, rent collection, and fire insurance administration. Notably, managing rent arrears, marketing to reduce vacancies, and conducting regular facility inspections help prevent asset value decline and maximize returns. When selecting a professional management firm, it is crucial to carefully examine at least ten years of track record, management scale, and whether dedicated personnel are assigned. In the Seocho-dong building case, outsourcing to specialists reduced vacancy rates from 15% to below 5% and increased rental income by over 20%. Appropriate facility investments were made, such as replacing outdated elevators and improving parking, and market surveys helped adjust rents to realistic levels. Through frequent reports from asset managers and regular monthly statements verifying rent receipts, management expenses, and repair histories, more transparent management became possible. As aging populations increase, inheritance issues involving real estate are expected to grow. To preserve family harmony while enhancing asset value, objective and professional outsourced management offers a viable solution rather than emotional approaches. The traditional wisdom of our ancestors that “Where there is affection, there is money” remains valid today. Managing property transparently with professional assistance is a wise choice for safeguarding family bonds and increasing asset value.

<Korea Economic The Moneyist> Kim Yongnam, CEO and President of GlobalPMC Co., Ltd.