The Role of the Asset Manager
July 28, 15
Many commercial real estate investors make the error of equating property management service with asset management services. Leaving investment property in complete control of the property manager can cost investors thousands of dollars in lost cash flow and property value.
The property manager's focus is on day-to-day operation of the property. The asset manager focuses on maximizing the investment return of the property. These are very different concentrations. Property managers essentially never focus on the essentials of building value. Asset managers have their eyes on increasing income, reducing expenses, building value and investment return.
Asset managers ask questions like
How can we increase rents?
Are the rents charged at market value or below?
Can we designate preferred units based on location or features and charge more for them?
Can we protest the assessed value of the property to reduce the taxes?
Can we find an insurance company that offers better value?
Can we find incremental reductions in line item expenses?
While asset management is a vital part of business growth, the work of the property manager should never be neglected. It is possible to make the mistake of putting all your attention on asset management while neglect lowers the actual market value of the property. It is a balancing act. While asset management does its job, property management must continue to concentrate on
marketing rental units,
enforcing property rules and procedures.
The asset manager is the mid-range of real estate portfolio management. It is the portfolio manager who focuses on the strategies to minimize investment risk and maximize returns. The asset manager focuses on tactics regarding particular properties. Property managers are on the firing line, keeping the lights on.