Should you engage a professional real estate asset management group?

by | Mar 24, 2013 | Real Estate

A wise investment strategy includes a portfolio that is balanced between cash, bonds, common stock, precious metal, and property.  Managing the soft assets is radically different from managing investment property.

Equity management is based upon company research and the execution of a strategy.  Whereas, managing real estate requires execution of property-based strategies.  Real estate asset management requires optimizing the value of properties through transaction and execution management.  Profit from paper investments comes in the form of capital gains, and profit from real estate comes from income, which is very different indeed.
There are very few successful investors who do not utilize the skills of professionals in managing their various assets.  Property management is not only different from any other form of asset management, but it is also much more time consuming.  Real estate asset management covers the whole spectrum from keeping the property filled with quality tenants, to financial management, repair, maintenance, and personnel.

Getting a great return on your investment

For any asset to return a yield, it has to perform.  Stocks return a yield when the company shows a profit, but property performs well when income is maximized and expenses are minimized.  If the unit is empty, there is no rent due which means there is no income.  Therefore, it is critical for a company to have a highly effective marketing strategy backed up with advertising.  It is also vital the tenant applicants be screened for credibility, reliability, employment, and a clean record.  When a property is occupied by a responsible tenant, the cost-benefit ratio tips in favor of the owner.  This type of tenant pays their rent on time, usually resides on the property longer, and is careful in the way they treat the property.

Of course, it is understandable a qualified property manager will not employ discriminatory tactics when selecting tenants, nor will they break any laws that have to do with tenant and landlord relations.

Once the property is occupied, it is the responsibility of your real estate asset management group to minimize the expenses associated with owning the building.  Through constant awareness of the building, the grounds, and the infrastructure, the costs can be minimized.  Effective preventative maintenance is always less costly than full repairs or replacement of equipment.  To guarantee the building is well-maintained, the management enters into arrangements with contractors who can provide the necessary services.  These services may include but are not limited to garbage collection, garden maintenance, or plumbing repair.
Professional real estate property managers also prepare statements on the financial performance of the property.  The statement includes all rents and disbursements for tax, mortgage, insurance repair, and maintenance services provided.  In multi-family units, often the management is responsible for paying the utilities and then assigning the proper proportion to each tenant.

Real estate asset management must be done by those who have a full understanding of how to maximize on rental property.  Property owners have come to rely on the professional services offered by Real Property Management.

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