What is an Asset Manager in Real Estate?

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Purchasing an investment property is just the beginning.

Notably, real estate syndicators must consider the responsibility of maintaining and managing properties to ensure the performance and profitability of an asset.

Since many syndicators acquire multiple assets it is not uncommon for their real estate portfolio to grow to the point where it’s too large to be able to effectively operate the assets alone.

As such, many syndicators may require the help of an asset manager and third-party property management company for assistance in managing their complexes.

 

Property manager vs. Asset Manager

When expanding your team, it is important to recognize the distinction between real estate property management and asset management.

Property management is the aspect of handling the day to day operations of your apartment complex. These roles will include activities such as leasing apartment units, maintenance on the property, etc.

As a syndicator, you may outsource property management to a third party or may decide to take property management in-house and hire on your own staff to manage the operations of your asset.

Unlike a property manager, who manages the everyday operations, an asset manager is accountable for the “big picture.”

The asset manager oversees all facets of the management, financial, procedures, and resources of a property to ensure the business plan is being executed effectively.

What is the role of an asset manager?

Real estate asset management describes the process of optimizing the value and return on investment (ROI) of a property.

This process consists of discovering the highest possible and most consistent sources of income, minimizing expenses whenever feasible, and risk management, just to name a few.

Real estate asset managers act as fiduciaries for their clients.  They are required to keep an eye on the property and to always have the owner’s best interests at heart.

Asset managers are required to have strong knowledge of what is always going in the market, so they can communicate with clients to make the best decision at hand.

What are the duties of an asset manager?

A real estate asset manager’s responsibility includes but is not limited to the following tasks:

  • Finding lenders and working with them
  • Negotiating property leases on behalf of investors
  • Performing due diligence for the purchase or the disposition of property
  • Finding ways to increase the value of a property
  • Marketing an asset to increase revenue
  • Working with the leasing team to minimize vacancies
  • Preparing and predicting long-term financial projections
  • Managing the cash flow of a property
  • Conducting Market Research
  • Data analysis
  • Hiring and managing property managers
  • Developing capital and operating expenditure budgets
  • Evaluating, monitoring, and revising property financing strategy

 

Asset Manager Summary

Asset management is a crucial function of any successful real estate portfolio.

Having an individual or group that has strong experience and market knowledge for your specific portfolio will allow for real estate syndicators to achieve much stronger returns to their investors.

Video Transcription

Meet Daniel
Daniel is passively investing in multifamily and wants to be more informed on the processes involved…
he begins to wonder what an asset manager does??
Daniel is informed by Tim that unlike a property manager who oversees the day to day operations, an asset manager is responsible for the big picture. The asset manager is involved in the underwriting to disposition and their primary role is to assist in ALL aspects of the administrative, financial, operations and capital of a property!
Daniel asks what kind of tasks these will be?
Tim explains that an asset manager will execute property level strategies and make well-timed investment decisions for their clients!
They must ensure that property managers are meeting the goals and objectives set by the owners, approve the properties annual budgets and consistently monitor the properties performance!
Tim says that an asset manager must maintain a very consistent relationship with the property management team to keep track of a properties maintenance, compliance, project budget, rent collections and other various factors! That way the asset manager can investigate any variances and take the necessary action to improve performance of an asset!
Tim explains that an asset manager has a very important role and the position ensures that the property is on track to perform well…
so ultimately investors will obtain a great return!!
Daniels is happy to be more educated on the role of an asset manager and how they help his investment!

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