To ensure a successful real estate investment portfolio, there are two roles and responsibilities that are crucial for all investors, especially passive ones: property management and asset management. This article outlines the advantages of both roles and what SHARE’s institutional-grade services include.
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Defining The Roles & Responsibilities
First, let’s define the 2 roles and responsibilities of property management vs. asset management:
Property Management: the daily upkeep of a property; it includes anything from leasing and collecting rent to addressing any maintenance issues. Property management requires much more hands-on attention than asset management because it deals with individual units and tenants.
Asset Management: focused on improving the overall performance of a property or portfolio. Asset managers look at trends in the market and analyze how best to invest resources and capital into each property to ensure each asset has a sound financial plan. This includes strategic decision-making around financing opportunities, portfolio expansion and optimization, repositioning of assets, and creating value-add investments for stakeholders.
Let’s Compare The Two
While both roles work towards the common goal of bettering your investment, there are key differences between the two.
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Property Management |
Asset Management |
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Focus |
Day-to-day operations of individual properties. |
Maximizing the value and performance of your real estate portfolio as a whole. |
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Scope |
Ensure the property is well-maintained, occupied, and generating rental income. |
Ensure the profitability of your investment portfolio as a whole through strategic decision-making and long-term planning. |
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Responsibilities |
Property managers are responsible for maintaining high occupancy rates and minimizing vacancy periods.
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Asset managers are responsible for the financial health and planning of the entire portfolio to enhance the overall performance of the assets.
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Decision-making Authority |
Property managers typically have limited decision-making authority within the scope of day-to-day operations. They make decisions regarding the daily upkeep of the property for the benefit of the tenant, within the predefined guidelines set by property owners. |
Asset managers work closely with investors to align the portfolio's performance with investment objectives. They have broader decision-making authority and are responsible for making strategic decisions that impact the whole portfolio. They analyze financial data, evaluate investment opportunities, negotiate contracts, manage budgets, and determine the optimal timing for property acquisitions or dispositions. |
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Key Goal |
Efficient property operations and maintenance. |
Maximize portfolio value and achieve investment objectives. |
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Who Benefits? |
Tenants |
Investors |
Want to learn more about our asset management services?
Schedule a call or email info@sharesfr.com for more information.
Why Should You Care About Asset Management?
At SHARE, we pride ourselves on our Turnkey+ service offering. We provide institutional-grade services for all our investors, regardless of your experience or how many properties you own. We acknowledge the convenience of property management and the importance of asset management because owning a cash-flowing and appreciating investment does not start nor stop after it’s purchased and tenanted. Successful investments are driven through cumbersome pre-investment and post-investment work, which is why with SHARE, you are guided and assisted through the entire journey.
The Pre-Investment Work:
This is everything that is done upfront to ensure our investors are choosing the right property. Although property managers may sometimes be able to assist with sourcing turnkey homes, it’s not typically their core service offering to do so. SHARE does all of the work upfront prior to helping investors close on their property of interest. This includes:
- Assessment of local factors that contribute to rent and home value growth
- Provide a scope and timing outlook on renovations or repairs to achieve certain value growth
- Provide a detailed financial forecast to estimate returns over a 10-year period
- Facilitate landlord insurance at a discounted rate
- Facilitate third-party property management at a discounted rate
- Assist with determining the right financing plan for the purchase, if necessary
- Assist with entity formation that mitigates liabilities and ensures you qualify for financing, especially if you have multiple business partners
The Post-Investment Work:
This is everything that happens after you close on the property. It is the ongoing performance and compliance of your property and investment portfolio. This includes:
- Ensuring the property manager is executing against all contractual obligations. Our Client Success Team is always monitoring the current state of the property and tenant conditions.
- Tracking the overall performance of the property to determine if there’s an opportunity to unlock further returns and cash flow, whether it's through rents, operating efficiencies, or financing strategy.
- Monitoring the market to identify periods of opportunity to reap large returns. For example, if there’s an opportunity to sell, SHARE assists with the 1031 exchange.
- Offering consolidated accounting for multiple properties across various geographies and property managers. We offer a centralized reporting structure and become your single point of contact for your whole portfolio.
- Providing the necessary annual tax filing documents and overall tax support to ensure you're reaping the maximum benefits.
Our team at SHARE has acquired and managed billions of dollars of rental real estate for both individual and institutional investors. At our core, we’re asset managers with decades of real estate investment experience and deep domain expertise in every step of the investing process. Our mission is to provide and uphold that level of service and strategic planning to independent investors.
In conclusion, property management and asset management are both crucial roles for successful real estate investments. Property management prioritizes tenant satisfaction and focuses on the day-to-day operations of individual properties. On the other hand, asset management takes a broader perspective to maximize the overall value and performance of a real estate portfolio. Asset managers are critical for investors who seek to build wealth through real estate. At SHARE, we pride ourselves on providing institutional-grade asset management services to independent investors. Our Turnkey+ services offer comprehensive support from property sourcing to ongoing portfolio performance. With our expertise and dedication, we strive to deliver the highest level of service to help investors succeed on their real estate journey.
