Asset management is an integral part of owning real estate or any physical asset. Asset managers are responsible for cultivating the property’s market value so that the owner can achieve maximum returns. Property asset management is not similar to real estate management, which pertains to handling the daily activities and operation of a building or structure.
Business owners recognise that real estate is another form of investment where a property that is bought can be improved and sold for a significant profit. Gerald Eve Property Consultants are among many of the companies that specialise in asset management for the benefit of their clients.
Challenges of investing in real estate
Although the market remains lucrative, investing in physical properties and real estate has unique challenges. Real estate deteriorates and is prone to damage, which are risks that an investor needs to be aware of. Additionally, selling physical property can be tricky at times as the market fluctuates.
The advantage of hiring an expert asset manager is to ensure that the risks are mitigated, and only valuable improvements are considered. Asset managers are also responsible for taking care of complex legal matters involving investment property in whatever country it is located in.
How asset management operates
Most firms that offer asset management services typically specialise in managing specific types of properties and regions around the world. In general, the role of an asset manager is summed up in three sections:
- Property market research
- Forecasting revenue
- Data analysis
Asset managers need to structure lease agreements in a way that provides tenants with flexible and attractive terms. Part of what makes an asset manager successful is by limiting the client’s exposure to liability and reducing property vacancies. Since the job of the asset manager is to take care of essential financial matters, it is often necessary to hire another individual who will work as the property manager. The relationship between the asset manager and the property manager is crucial to apportioning resources to minimise the possible negative effect on the client’s property portfolio. However, if asset managers are unable to bear the load of their work, they can always contact firms that can provide them with consulting services and other necessary support. For example, Lionpoint Group can offer asset managers the tools to aid their growth. A cloud-based application offered by them, for instance, could be Anaplan, which can combine the flexibility of a spreadsheet, the scalability of a database, and rapid calculation speed (if you want to learn more about this solution, you can see here now). Imagine, when asset managers integrate this technology into their work. Won’t that be helpful?
Objectives of real estate asset management
To summarise, property owners tend to hire asset managers who can maximize investment returns and property value. Suppose, if the house owner has a large patio, well-maintained indoors, or even a dwelling unit (like the ones manufactured by United Dwelling), the process of selling the property becomes easier for the asset manager. It also becomes necessary for the asset manager to reduce expenses while at the same time focusing on finding consistent revenue streams. In a way, asset managers are also considered entrepreneurs because they make crucial financial decisions. They need to handle negotiations, analyze and approve lease agreements, and make forecasts on potential risks.
Success in the field of asset management largely depends on the capability to make significant business decisions with the available capital. Managers that can realise the highest profits and biggest portfolio value for clients are also rewarded with greater trust from the industry in general.
Choosing the right asset management firm is critical to every company that invests in real estate. Expertise, experience, and a compelling portfolio are only a few of the things you need to look out for when hiring an asset manager to help you achieve your real estate investment goals.