Real estate assets management is an important thing whether you have an apartment, or you want to buy one, and you have doubts about its financial management. Al Rafay Consultancy is always there to tell you what you need to know about how to manage real estate assets, without exposing yourself to avoidable risks.
Whether you have inherited, are planning to buy, or simply want to improve your management skills, we will try to answer your questions about the delicate management of real estate assets.
WHAT IS REAL ESTATE ASSET MANAGEMENT?
Generally speaking, a current asset, or short-term asset, can consist of cash, accounts receivable, inventory, marketable securities, prepaid debts, and other liquid assets.
By real estate, we obviously mean property such as an apartment, a house, or commercial premises. These properties do not necessarily have to produce money immediately unless you rent them out. However, they must produce some in the medium or long term if you plan to sell them.
That is why it is important to know how to manage them if you want to obtain the maximum return from these assets. In this sense, in the real estate sector, management of real estate solutions should be understood as everything related to the review and management of a real estate portfolio in order to increase its value.
Many people do the management of their assets themselves. However, large organizations and large investors often leave the management of their portfolios in the hands of experts and real estate companies.
The reason is clear: it is not an easy task. The proof is that this activity is considered by many to be a full-time job and involves many responsibilities and occupations if the wallet is well-stocked.
The owners have a lot of worries and decisions to make. This should not discourage you. But you should be aware that while managing one property is already difficult, managing several can quickly overwhelm you.
In any case, you have to know how to carry out the management to maximize the value of a property and the return on all your investments.
First, you should know that there are several different ways to conduct real estate management:
- A prudent and conservative vision, which consists in minimizing expenses.
- The enterprising and active vision, where it is a question of finding the sources of income which bring in the most and which are the most solid economically.
- An intermediate vision, which is a middle term between the two, and where you manage the risk of the portfolio without complicating your life.
We will now explain how these approaches work and how they relate closely to your goals.
If you’re in doubt about what you want to achieve, think about how you fit in with those visions, so you’ll have an idea of which approach works best for you.
REDUCE EXPENSES RELATED TO ANCILLARY INVESTMENTS
Remember that maintaining a property can be very expensive, especially if you have just renovated it and have not been able to find tenants who meet certain guarantees for months.
Fortunately, there are ways to remedy this situation and one of them is to minimize the cost of investments.
A diversified portfolio increases the chances of profit
Ideally, the more you invest, the more profit you make. Knowing how to manage a portfolio of real estate assets means knowing how to diversify strategically in order to obtain maximum profit.
That is why we must know the different types of investment goods, among which we find the following:
- Residential housing and long-term housing.
- Seasonal or vacation rentals.
- Premises for commercial use.
- Mixed investment, which includes commercial premises and private housing.
Real estate investors looking for short-term returns may look for opportunities to buy rental properties or rehabilitate them.
In this case, real estate asset management would focus more on reducing operating costs and increasing rental returns.
If you are focusing on the long term, you should look for opportunities to buy properties that will appreciate in value considerably after a few years or more.
In this case, property management would focus on making improvements to increase the value of the property.
Both of these investment strategies are quite valid, but they require knowledge of market research and risk management.
A real estate portfolio manager should take care of the following tasks:
- Sell and market the most interesting properties.
- Negotiate purchases and rentals.
- Budgeting and market research for possible future investments.
- Improving and increasing the value of assets: a good manager must know the value and the advantages of his portfolio.
- Manage the financial aspect of the business.
- Research and obtain financing to buy or improve properties.
As you can see, managing a real estate portfolio is not an easy task, even for large companies. The companies take help from the experts such as Al Rafay Consulting (ARC). We have an experienced and expert team of real estate asset management on Office 365 online.