Real Estate Asset Management

The Ins and Outs of Real Estate Asset Management: What You Need to Know

Many of us are familiar with real estate property management i.e. the management of the daily activities of a property’s operation. But, when the conversation turns to real estate asset management, things can get a little murky.

Although there are many facets to this industry, to put it simply – the goal of  real estate asset management is to maximize property value so that it can be sold, rented, and/or leased for a profit. Interested in learning more about the ins and outs of this complex, but intriguing, industry? Keep reading for a concise, but comprehensive, breakdown:

 

Investing in Real Estate

Corporations, private companies, individuals, and even governments buy real estate for investment purposes, usually for one of two reasons:

  • To renovate and resell
  • To renovate and lease or rent

 

Sounds fairly simple right? But, this is where things become a little more complex. You see, there are challenges in this industry that aren’t in the capital markets. For instance, unlike most other commodities, property can get damaged, it deteriorates over time, and the buying and selling process can get quite involved.

In order to circumvent these issues, the asset management of investment properties promotes improvements that will increase the property’s value and minimize risks. But, that’s not all – real estate asset management also concerns itself with effectively navigating the sometimes hard to understand tax and legal rules that govern the investment property industry in the US – thus effectively helping real estate investors avoid many of the potential pitfalls that can befall them.

investments
Real Estate Asset Management Goals and Objectives

Just like other types of investments, diversification is key when it comes to building a strong real estate investment portfolio. To this end, a large portion of an asset manager’s responsibilities tends to revolve around three main things:

  • Revenue forecasting
  • Data analysis
  • Market research

Furthermore, they help their clients create well-structured and attractive rental agreements and leases that will:

  • Limit liability exposure
  • Minimize vacancy rates
  • Provide their tenants with much of the flexibility they desire

This responsibility may seem strange when considering the other aspects of this industry, but  you must remember that resources have to be strategically apportioned and managed. The failure to do so will impact the portfolio’s value negatively..

portfolio

The Bottom Line  

In short, the goal of real estate asset management is to help clients increase property value and, as a consequence, their returns. Good managers, like the ones at RAM Real Estate Management in Southern Nevada know how to reduce expenditures whenever possible. In this way, we are able to help our clients find the highest and most consistent revenue sources while simultaneously mitigating risk, liability, and other factors.

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