Real estate is property that has been developed or improved on. It is also referred to as an asset through its intrinsic value and benefits derived from it. Real estate investors own these properties with the intent of making money from the income it can produce or the appreciation of the asset upon resale.
Real estate investors utilize property managers to oversee the day-to-day maintenance and operations of the properties.
Read on to gain a better understanding of the two concepts.
What Is Asset Management?
Real estate asset management is a the process of maximizing your returns on investment.
An asset manager will oversee how your investment is doing.
They will analyze your current performance and create strategies to maximize profit and reduce risk. Asset managers can decide if each asset is running optimally or if there are ways to make more money without taking on too much risk.
A real estate asset manager also monitors the market, ensuring that your investment is safe, and helps you make more money in the process.
They will cultivate market value, ensuring that ownership increases and maximizes their returns, ultimately protecting your investment.
Great Real Estate Managers Understand the Various Phases of Real Estate Management
The best real estate managers understand the needs of each client. Investors are all different, so it’s important to know what they want. Data is crucial, but understanding what an investor needs is equally as important.
Real estate investment has three main phases – acquisition, holding and disposition. The acquisition phase is utilized to project rent and vacancies, seek out financing terms based on available interest rates, strategize income streams and yield to real estate trends.
The holding phase is simply the real estate management phase – property operations are addressed and assessed, while improving and managing the assets. Disposition incorporates market trends to maximize profits on selling the property – that is, if selling is the best option.
Below, the three phases of investment are explained in more detail.
Phase One: Acquisition
The real estate manager helps perform the due diligence needed to assess the property, both financials and its condition through specialized inspections by licensed contractors.
We create consistent plans based on the investor’s goals to help determine what is right for you and when.
Some factors may include:
The interest rate and the cost of capital,
The market rent rate of similar property in a particular geographical location,
Additional opportunities to increase your sources of rental income, and
Inform you on real estate market trends and cycles.
Phase Two: Holding Phase
During the holding phase, the real estate asset manager oversees the daily activity of the property manager while monitoring asset performance to maximize profits and income flow.
The asset manager also communicates regularly with ownership to make sure that the performance of each rental property is meeting the standards and expectation of the investor and their goals.
Regardless of their specific investment strategy – whether long-term (steady cash flow, improved returns, market value appreciation) or short-term (fast return, rapid property appreciation, shortened holding period), the real estate manager must monitor the market and analyze on the best time to sell or continue to hold.
Phase 3: Disposition
During the disposition phase, the goal is to resell the property for more than you invested in it. The asset manager must consider the necessary factors needed to determine the ideal time to sell, or whether or not they must continue to hold.
Some other reasons for disposing of property:
Future net cash flow is expected to decrease due to the need for upcoming capital improvements such as a new roof or HVAC system.
Unrealized equity has accrued to such a high level that the investor may be able to sell, conduct a 1031 tax deferred exchange, and invest in a diversified portfolio of other income producing properties.
Interest rates are expected to rise that may make cash-out refinancing more difficult and potentially more expensive.
What is Property Management?
Property management is about managing the day-to-day activities of a rental property and its tenancy. It is something that is possible to do yourself, but ideally, having an outside company manage the day-to-day is a more efficient use of your resources.
Other responsibilities of a property manager include:
- Screen tenants, maintain tenant contracts, evictions and turnover;
- Lease the property to new tenants;
- Handle complaints and coordinate repairs and preventative maintenance and
- Collect rent, enforce lease terms.
Why Would You Need a Property Manager?
Property management is a good idea for landlords who are busy professionals and do not have time, knowledge and resources to manage day-to-day activities of their income producting property.
Some people choose to manage their property themselves, but there are benefits to using a professional service – such as knowledge of property code, having their own networks of suppliers, contractors at preferential rates, etc.
The Cost of Hiring a Property Manager
Property management companies charge a monthly fee. It varies for different companies and markets. It is often in the range from 8% to 12% of the total monthly rent. They might also charge you other fees like leasing or evictions, especially if they do more than just take care of your property while you are away.
How Do You Find a Property or Asset Manager?
If you are looking for a new property or asset manager, ask your friends who own real estate investments and ask other real estate professionals. You can talk to your financial advisor, lawyer and colleagues to see if they know of any notable property and/or asset managers.
You want to find the right person who knows about your type of property and market. For example, if you need someone to take care of a commercial property, then you would ideally want someone with commercial real estate experience.
Related: Why Investors Should Hire Local Property and Asset Managers
The Bottom Line
It’s uncommon for real estate brokerage to combine both property and asset management, but that is what sets HNB Realty apart from our competitors. The role of the property manager is to handle the day-to-day operations of the real estate property and the role of the real estate asset manager is to optimize the property for maximum profit. Both property managers and real estate managers provide essential services for your portfolio. However, you should be extremely vigilant when choosing the property and asset managers. It’s critical to do extensive due diligence. Our real estate asset management program encompasses excellent hands-on property management services as well as a broader, more strategic, and well-informed approach to asset and portfolio performance.
If you own any asset, it’s the best time to find highly qualified property and real estate management teams. Consult with HNB Realty when you’re ready to discuss your own asset management. With over $5 million in real estate assets under management, HNB has a clear record as a trusted partner in overseeing and maximizing client investments.
The best real estate managers understand the needs of each client. Investors are all different, so it’s important to know what they want. Data is crucial, but understanding what an investor needs is equally as important.
Real estate investment has three main phases – acquisition, holding and disposition. The acquisition phase is utilized to project rent and vacancies, seek out financing terms based on available interest rates, strategize income streams and yield to real estate trends.
The holding phase is simply the real estate management phase – property operations are addressed and assessed, while improving and managing the assets. Disposition incorporates market trends to maximize profits on selling the property – that is, if selling is the best option.
Below, the three phases of investment are explained in more detail.
Phase One: Acquisition
The real estate manager helps perform the due diligence needed to assess the property, both financials and its condition through specialized inspections by licensed contractors.
We create consistent plans based on the investor’s goals to help determine what is right for you and when.
Some factors may include:
The interest rate and the cost of capital,
The market rent rate of similar property in a particular geographical location,
Additional opportunities to increase your sources of rental income, and
Inform you on real estate market trends and cycles.
Phase Two: Holding Phase
During the holding phase, the real estate asset manager oversees the daily activity of the property manager while monitoring asset performance to maximize profits and income flow.
The asset manager also communicates regularly with ownership to make sure that the performance of each rental property is meeting the standards and expectation of the investor and their goals.
Regardless of their specific investment strategy – whether long-term (steady cash flow, improved returns, market value appreciation) or short-term (fast return, rapid property appreciation, shortened holding period), the real estate manager must monitor the market and analyze on the best time to sell or continue to hold.
Phase 3: Disposition
During the disposition phase, the goal is to resell the property for more than you invested in it. The asset manager must consider the necessary factors needed to determine the ideal time to sell, or whether or not they must continue to hold.
Some other reasons for disposing of property:
Future net cash flow is expected to decrease due to the need for upcoming capital improvements such as a new roof or HVAC system.
Unrealized equity has accrued to such a high level that the investor may be able to sell, conduct a 1031 tax deferred exchange, and invest in a diversified portfolio of other income producing properties.
Interest rates are expected to rise that may make cash-out refinancing more difficult and potentially more expensive.
What is Property Management?
Property management is about managing the day-to-day activities of a rental property and its tenancy. It is something that is possible to do yourself, but ideally, having an outside company manage the day-to-day is a more efficient use of your resources.
Other responsibilities of a property manager include:
- Screen tenants, maintain tenant contracts, evictions and turnover;
- Lease the property to new tenants;
- Handle complaints and coordinate repairs and preventative maintenance and
- Collect rent, enforce lease terms.
Why Would You Need a Property Manager?
Property management is a good idea for landlords who are busy professionals and do not have time, knowledge and resources to manage day-to-day activities of their income producting property.
Some people choose to manage their property themselves, but there are benefits to using a professional service – such as knowledge of property code, having their own networks of suppliers, contractors at preferential rates, etc.
The Cost of Hiring a Property Manager
Property management companies charge a monthly fee. It varies for different companies and markets. It is often in the range from 8% to 12% of the total monthly rent. They might also charge you other fees like leasing or evictions, especially if they do more than just take care of your property while you are away.
How Do You Find a Property or Asset Manager?
If you are looking for a new property or asset manager, ask your friends who own real estate investments and ask other real estate professionals. You can talk to your financial advisor, lawyer and colleagues to see if they know of any notable property and/or asset managers.
You want to find the right person who knows about your type of property and market. For example, if you need someone to take care of a commercial property, then you would ideally want someone with commercial real estate experience.
Related: Why Investors Should Hire Local Property and Asset Managers
The Bottom Line
It’s uncommon for real estate brokerage to combine both property and asset management, but that is what sets HNB Realty apart from our competitors. The role of the property manager is to handle the day-to-day operations of the real estate property and the role of the real estate asset manager is to optimize the property for maximum profit. Both property managers and real estate managers provide essential services for your portfolio. However, you should be extremely vigilant when choosing the property and asset managers. It’s critical to do extensive due diligence. Our real estate asset management program encompasses excellent hands-on property management services as well as a broader, more strategic, and well-informed approach to asset and portfolio performance.
If you own any asset, it’s the best time to find highly qualified property and real estate management teams. Consult with HNB Realty when you’re ready to discuss your own asset management. With over $5 million in real estate assets under management, HNB has a clear record as a trusted partner in overseeing and maximizing client investments.
The best real estate managers understand the needs of each client. Investors are all different, so it’s important to know what they want. Data is crucial, but understanding what an investor needs is equally as important.
Real estate investment has three main phases – acquisition, holding and disposition. The acquisition phase is utilized to project rent and vacancies, seek out financing terms based on available interest rates, stategize income streams and yield to real estate trends. The holding phase is simply the real estate management phase – property operations are addressed and assessed, while improving and managing the assets. Disposition incorporates market trends to maximize profits on selling the property – that is, if selling is the best option.
Below, the three phases of investment are explained in more detail.
Phase One: Acquisition
The real estate manager helps perform the due diligence needed to assess the property, both fiancials and its condition through specialized inspections by licensed contractors. We create consistent plans based on the investor’s goals to help determine what is right for you and when. Some factors may include:
- The interest rate and the cost of capital,
- The market rent rate of similar property in a particular geographical location,
- Additional opportunities to increase your sources of rental income and
- Inform you on real estate market trends and cycles.
Phase Two: Holding Phase
During the holding phase, the real estate asset manager oversees the daily activity of the property manager while monitoring asset performance to maximize profits and income flow. The asset manager also communicates regularly with ownership to make sure that the performance of each rental property is meeting the standards and expectation of the investor and their goals.
Regardless of their specific investment strategy – whether long-term (steady cash flow, improved returns, market value appreciation) or short-term (fast return, rapid property appreciation, shortened holding period), the real estate manager must monitor the market and analyze on the best time to sell or continue to hold.
Phase 3: Disposition
During the disposition phase, the goal is to resell the property for more than you invested in it. The asset manager must consider the necessary factors needed to determine the ideal time to sell, or whether or not they must continue to hold.
Some other reasons for disposing of property:
- Future net cash flow is expected to decrease due to the need for upcoming capital improvements such as a new roof or HVAC system.
- Unrealized equity has accrued to such a high level that the investor may be able to sell, conduct a 1031 tax deferred exchange, and invest in a diversified portfolio of other income producing properties.
- Interest rates are expected to rise that may make cash-out refinancing more difficult and potentially more expensive.
What is Property Management?
Property management is about managing the day-to-day activities of a rental property and its tenancy. It is something that is possible to do yourself, but ideally, having an outside company manage the day-to-day is a more efficient use of your resources.
Other responsibilities of a property manager include:
- Screen tenants, maintain tenant contracts, evictions and turnover;
- Lease the property to new tenants;
- Handle complaints and coordinate repairs and preventative maintenance and
- Collect rent, enforce lease terms.
Why Would You Need a Property Manager?
Property management is a good idea for landlords who are busy professionals and do not have time, knowledge and resources to manage day-to-day activities of their income producting property.
Some people choose to manage their property themselves, but there are benefits to using a professional service – such as knowledge of property code, having their own networks of suppliers, contractors at preferential rates, etc.
The Cost of Hiring a Property Manager
Property management companies charge a monthly fee. It varies for different companies and markets. It is often in the range from 8% to 12% of the total monthly rent. They might also charge you other fees like leasing or evictions, especially if they do more than just take care of your property while you are away.
How Do You Find a Property or Asset Manager?
If you are looking for a new property or asset manager, ask your friends who own real estate investments and ask other real estate professionals. You can talk to your financial advisor, lawyer and colleagues to see if they know of any notable property and/or asset managers.
You want to find the right person who knows about your type of property and market. For example, if you need someone to take care of a commercial property, then you would ideally want someone with commercial real estate experience.
Related: Why Investors Should Hire Local Property and Asset Managers
The Bottom Line
It’s uncommon for real estate brokerage to combine both property and asset management, but that is what sets HNB Realty apart from our competitors. The role of the property manager is to handle the day-to-day operations of the real estate property and the role of the real estate asset manager is to optimize the property for maximum profit. Both property managers and real estate managers provide essential services for your portfolio. However, you should be extremely vigilant when choosing the property and asset managers. It’s critical to do extensive due diligence. Our real estate asset management program encompasses excellent hands-on property management services as well as a broader, more strategic, and well-informed approach to asset and portfolio performance.
If you own any asset, it’s the best time to find highly qualified property and real estate management teams. Consult with HNB Realty when you’re ready to discuss your own asset management. With over $5 million in real estate assets under management, HNB has a clear record as a trusted partner in overseeing and maximizing client investments.
