Real estate management and property management are two different domains altogether although they are often mixed up. The probable reason for the mix up is both deals with housing and some sort of asset management. However, there are many key differences between the two.
So, what is meant by real estate?
Real estate can be any piece of land with buildings and attachments to it. Real estate assets can be divided broadly into residential real estate which is meant for the housing of single or multiple families. It can be leased or owned by individuals. However, residential real estate usually refers to leased properties. Then the next category is commercial real estate. These are real estate properties meant for commercial usage. This includes commercial buildings like offices, restaurants, malls, etc. It also includes industrial real estate that includes factories, warehouses, manufacturing units, etc.
What is real property?
Although it is a less used term, it means the land and an attachment to it which can be a building or other improvement. There are also certain usage rights attached to it. There are usually four different rights attributed to the property owner. These include:
- The right to possess
- The right to exclude
- The right to dispose
- The right to enjoy
What is property and asset management?
Property management is a contractual business while asset management is similar to what financial asset management is. In property management, there is a contract between the property owner and the property manager where the property manager is paid a fixed sum to take care of the maintenance and repair of the property.
What is asset management in real estate?
Real estates are investment assets too. individuals, organizations, or governments invest in real estate as a part of their investment strategy. Real estate assets can include residential properties, commercial properties like office buildings and malls, retail properties like stores, vacation properties like vacation rentals, mixed-use properties that can be used both by residential tenants as well as for business purposes. One needs to also remember that the real estate market is complicated and sees a lot of ups and downs. The real estate market is not immune to the economic fluctuations and hence the asset management can become tricky. Further, a property can face several challenges like damage, deteriorate over time, etc. Buying and selling real estate properties are complex too.
The key difference between asset management and property management is the right of usage. While the real estate consists only of physical objects, the real property includes both common law rights as well as physical objects.
Property management Vs real estate asset management
As mentioned earlier, the property manager takes care of the property on behalf of the property owner. Property managers can work onsite or offsite depending on the nature of the job requirement. While onsite property managers stay at the property premises and look after it, offsite property managers usually have an office and travel around visiting all the properties and taking care of them. Some of their key responsibilities include resolving issues with renters, ensuring rent is paid on time, scheduling repairs if needed, preparing rental contracts, and meeting with potential renters.
On the other hand, real estate asset managers work similarly to what asset managers do in the financial industry. Real estate asset managers’ work is to focus on maximizing the asset value of the property. They work completely on investment purposes and should not be confused with property managers who look after day-to-day operations like buying and selling a house, finding tenants, advertising, etc.
Real estate asset management might get tricky especially if you don’t have any prior experience in handling it. Just like financial assets, one needs to build a portfolio of real estate assets so that you minimize the risk of loss should there be a major fluctuation in the market. After all, you shouldn’t be putting all your eggs in one basket, right? Having a trusted asset management service provider like GW Partners of Texas by your side can help you overcome all your worries. Our asset management services are designed keeping in mind your need of maximizing the performance and value of the assets.
