Property Management vs Asset Management

The difference and the value of having both on the team.

The position of a Real Estate Asset Manager is focused more on the long-run financial aspect of a portfolio of properties, where the main scope is to scale and increase the overall wealth and income of the portfolio as a whole.

The Property Manager position, on the other hand, is focused on the daily operations of a property, and this includes the maintenance of the property but also items related to vacancy, leasing, and marketing; more on this in a bit.

An argument can be made that a small portfolio that may be just starting out with up to two properties, may not require an Asset Manager, and at this stage, the owner could manage instead with one or two Property Managers. And it is a fair argument. However, if the owner is focused on growing and scaling their portfolio efficiently, having an Asset Manager on the team is very valuable.

Let’s do a deeper dive into each role and talk about the specific tasks that each are responsible for, with each adding value to the portfolio in their respective ways.

Asset Management

As we mentioned earlier, an Asset Manager is focused on the long-term strategy of the portfolio, with the goal to scale and maximize the value of the total portfolio, generating the highest return on investment for the owner.

The return is not necessarily made from buying and then selling the asset when it appreciates in value, but rather from the potential higher rental income stream that the asset can generate over the long run. This financial projection is part of the portfolio strategy that the Asset Manager is responsible to put together prior to an asset being purchased and added to the portfolio.

Part of this strategy is also considering the types of improvements that can be made to the asset in order to generate a higher rental income. Improvements come in multiple forms, from physical improvements via capital projects and renovations, to operational improvements through staff changes (ie. hiring property managers) and incorporating new processes for managing each property.

In summary, the Asset Manager has the responsibility to create an overall portfolio strategy for each property in the portfolio and portfolio overall, tactically lower expenses and increase rental income, hire staff including a property manager, and develop ways to track and report on the financial status of the portfolio on behalf of the owner.

As an owner or investor, you may consider an Asset Manager like Kennedy Wilson for portfolios with a presence in both US and Europe, Maximus Real Estate Partners if you’re looking for the western region of the US, or Old Three Hundred Capital if you’re looking to expand your portfolio in the south and southwest. These three companies are among the top that provide stellar multifamily asset management services and add a huge value for owners and their portfolios.

Property Management

We touched on Property Managers a bit earlier and it is obvious now that Property Managers are a variable in the Asset Manager equation, given that Asset Managers have the responsibility to hire Property Managers.

Property Managers, once hired, deal with the day-to-day requirements for managing one or multiple properties within the portfolio. This includes managing the marketing campaigns to attract tenants, figuring out ways to keep the vacancy rate low and holding on to quality tenants, executing leases, collecting rents, maintaining the property and its curb appeal, working with service providers and vendors, and providing the owner with reporting on the status and health of the properties that they manage.

A Property Manager is definitely another role that is very valuable to the team and the portfolio. A great Property Manager like FPI Management, which manages properties nationwide, or a BLVD Residential, which is more focused on the western side of the US, could have a huge impact on not only the overall value of your portfolio but also on maximizing the monthly rental income of the portfolio.

If you have a portfolio that you’re looking to grow check out the Asset Managers we mentioned, or if you need your properties managed, reach out to the Property Managers above.

And, if you need a Project Management platform to easily keep track of all those CapEX and renovation projects that increase your portfolio value, give Skillhop a test run; we built Skillhop precisely for the Asset, Facility, and Property Managers of the world!

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