Any wise property owner goes to great lengths to protect their property. If you are an entrepreneur, you know full well that you don’t set up a company, and then sit back and let it do the work for you. You have to stay one step ahead of the competition.
This line of thinking is especially true if you own or are responsible for real estate. Odds are, you have a property manager at your properties. That’s a good step in seeing to it that those individual properties are well managed.
But, that property manager does not look at the big picture—how all of your properties are contributing to your bottom line. And more importantly, property managers have no way of knowing how all of your assets can work to grow your net worth.
So, you want to know why you need a real estate asset manager in lieu of or in addition to a property manager? Here are six reasons why.
- Property Managers Look at the Day-to-Day Operations
A lot of property owners are content if they are getting their check every month. After all, they have to chase people for money, they have to manage the books, and they have to see to it that property meets inspections and is kept up. They have a lot to do to make sure that the property itself is running well.
They don’t look long term. They are busy people who have to work the day to day. And, that’s what you hired them to do because they do many important jobs that need to be done—daily. It’s safe to bet that your property manager is pulled in 10 different directions each day.
- Protects Your Properties’ Reputations
In addition to someone who manages the day to day, you need someone to look at the big picture.
- What capital improvement projects will best serve the property?
- Are any of your properties inviting the wrong type of tenants?
- How can you protect your property’s reputation?
Where a person lives, does business, or worship’s says a lot about who they are. You need to make sure your properties are not gaining a reputation that could cost you. A real estate asset manager can find ways to invite tenants who will give your property a reputation that will invite high dollar tenants.
The fact of the matter is—if your property does not service its clientele, they will go elsewhere.
- Stay Abreast on Local Trends for Acquisition and Disposition
Additionally, a real estate asset manager studies the real estate market in your area. So, he knows which competitive properties are doing well, and what ones are in danger of going under.
What that means to you as an investor and as an entrepreneur is an inside line on acquisition and disposition. Perhaps an area of town where you own property is on the verge of going belly up. Your real estate asset manger can advise you to sell before you end up in the red. And, he will show you real data and numbers to support such advice.
The same line of thinking can ring true about acquiring new properties. New businesses negotiate rents and then bring jobs. This brings tenants. A real estate asset manger—especially one who pays close attention to the local market—will know and have you buying property in the right locations.
Again, someone who is looking out for your bottom line is more than a property manager who simply protects one of your investments. Asset managers protect your net worth.
- Guide Managers to Making Solid Capital Improvement Choices
There’s no doubt that if you own property there is something that needs fixed at each location—every, single, day! How do you decide what to repair and what to remodel?
A property manager will most likely want to fix the problems and keep the cash coming in—remodels bring head aches for him. So, a quick fix means less work. An asset manager will be able to look at the big picture and determine your ROI with regard to improvements.
When major remodels can yield profit, he will advise and then negotiate with contractors to put them in place.
Owning property means working closely with third party contractors and subcontractors. Where a property manager is used to working with set fees in terms of leases and fees, an asset manager is skilled in negations.
When you have someone who can negotiate the lowest fees for upgrades, it’s beneficial to your bottom line. Remember those upgrades are going to attract tenants to your properties.
Furthermore, they are going to increase the value of renting one of your properties as well. That means increased fees for you in the long run.
Simply put, skilled negotiators can get more improvements done at a lower cost, and then in return use those improvements to invite tenants who will pay a premium rate to live at your property. It’s money well spent.
Extra: Communicate Investment Decisions with Investors
Investors are always happy to see that their money is being put to good use—making more money. Without someone to look at the big picture, you are simply repairing properties to collect the same rent.
With a real estate asset manager, you have someone who is looking at your cash flow and managing it on a global scale. He’s not looking at things through a single property lens.
This approach will keep investors in the black, and it will keep your properties up to date and attractive to tenants.
Furthermore, your asset manager will regularly communicate gains to investors so that they are not afraid to invest with in your properties in the future. Securing your relationship with investors—especially by using someone who knows the ins and outs of your properties to do so—is sure to keep those who are helping to front the bill happy.
You may feel that you can manage all of these nuances of your real estate investments on your own. And, if you think you have a handle on it, that’s wonderful. You are clearly personally invested in your company’s growth.
But, if you are unable to handle even one of these small growth factors in your investments, you are losing money and your net worth has room to grow. Entrepreneurs should be looking for the next big thing—that’s what they do. They shouldn’t be juggling too much.
It’s wise to hire someone who can be dedicated to looking at your real estate investments and managing them on a larger more profitable scale. After all, that’s why you bought the properties to begin with. It just makes sense to run them the most efficiently and effectively so that you can make the most money.
Angel Cuevas is the Managing Partner at Butler Equities, a Real Estate Asset Management & P3 Development firm based in New York City. For further inquiries or speaking engagements please contact him at: email@example.com