Our company started as an asset management company managing real estate assets nationally. While we were focused on increasing the value of our assets, we relied heavily on outside property management companies to collect the rent, show vacant units, enforce the leases, inspect and maintain the properties.
Property management is a very time-consuming task and there is no time left for the property manager to think about the market forces and business strategies that will maximize the long-term value of an asset. That is the asset manager's job. The asset manager regularly conducts market research, works on refinancing, repositioning, and dispositioning assignments. The Asset manager oversees the property manager through regular reporting and communication to ensure that the property performs according to the approved budget. The asset manager approves and oversees the property manager on all major capital improvement and repair work. The asset manager is the one who has the market intelligence and skill set to maximize cash flow and real estate value over the holding period based on a broader understanding of real estate and financial markets.
By combining asset management and property management services under one roof management companies can deliver better results for their clients. Property managers work as part of the owner and asset manager team, vs being just an outside service provider that collects the rent and pays the bills. The property managers get involved in capital improvement projects, repositioning or refinancing plays early on, and provide their valuable input to the team. And that synergy between the asset and property managers results in higher financial returns for the owners.