You've Covered Your Day-to-Day, But How Do You Protect Your Pay?
September 06, 16
Many people who invest in real estate have either considered or employed the services of a property management company. This is a common practice, familiar to many, but what some may not realize is that there's more to managing an investment than just the day-to-day operations. It is important to understand how the concepts of property management and asset management differ and why it is essential to put both to work for you.
Property Management deals primarily with the physical aspects of real estate, including such things as rent collection, maintenance issues, and rule enforcement. Asset management services, on the other hand, deals with the financial side. The job of an asset manager is to guide you in making sound financial decisions to help you get the most return on your real estate investment. Some of the areas he or she might focus on would be:
• Insurance: This can be one of the biggest expenses faced by property owners. An asset manager can assist you in reviewing and placing your insurance to make sure that you are getting the best possible deal for your money.
• Rent: Although rent can vary some from place to place, it is important to be in line with the current market. As a lessor, you do not want to lease at a significantly higher or lower rate than comparable rental space in your area. Asset managers are very familiar with the market and will be able to guide you in determining the best rental rates for your property.
• Cash vs. Credit: When purchasing real estate, there may be tax benefits or other incentives when financing your property as opposed to paying out-of-pocket. Your asset manager can look over your options to help you decide which way is the most beneficial in your particular situation.
• Best Times to Buy or Sell: An asset manager will have a strong knowledge of the hard and soft real estate markets and can save you thousands by advising you when to buy and when to sell property.
While it is very important to make sure that the day-to-day aspects of your property management are well-taken care of, it is just as important to make sure that your financial investment is protected as well. Please, contact us to find out how we can help you make the most of your real estate investment.