A lot of people get confused between the terms “asset management” and “property management.” While both are important aspects of owning and managing property, they are two very different things.
In this ultimate asset management vs property management guide, we’ll outline the basics of both roles, plus five key differences between the two to help clarify things.
Asset Management vs Property Management Basics
What is asset management in real estate?
A real estate asset manager manages real estate portfolios, on behalf of investors. This can include anything from large institutional investors, to small family offices or private individuals.
The aim of asset management is to generate the highest possible return on investment (ROI) for their clients, through a combination of active and passive strategies. This might involve renovating properties, letting them out to tenants, or selling them when the time is right.
Asset managers will also often be responsible for financial reporting and performance measurement, to show their clients how their portfolio is performing.
What is property management?
A professional property manager, on the other hand, manages the day-to-day operations and maintenance of a property. This can be anything from a small residential property, to a large commercial development.
In property management, the property manager’s primary aim is to make sure the property is well-maintained and running smoothly, so that it can achieve its maximum potential. This might involve carrying out repairs, collecting rent, or dealing with tenant queries.
What is the difference between an asset manager and a property manager?
In short, the main difference between an asset manager and a property manager is that real estate asset managers focus on maximizing a property’s value for investment purposes, whereas property managers take care of the day-to-day activities related to a property’s physical structure and operations. As such, asset management is more strategic, while property management is more operational.
The 5 Main Differences Between Asset Management and Property Management
Here are five key differences between asset management vs property management in real estate:
1. The Role & Responsibilities
When it comes to real estate asset management vs property management, the roles and responsibilities of each are quite different. As we’ve seen, an asset manager’s primary focus is on generating the highest possible return on investment for their clients. A property manager’s primary focus, on the other hand, is on maintaining a property and dealing with its day-to-day operations.
Asset managers will often be responsible for financial reporting and performance measurement, whereas property management responsibilities will include tasks such as repairs and rent collection.
2. Their Goals & Budget
Property asset managers main goals are to manage and improve the value of a property, with a focus on ROI for the owner. They decide whether to continue investing in a property, or whether to sell, in relation to the real estate market.
A property management company, on the other hand, maintains and improve a properties value by maintaining the state of the property efficiently. Their goals are to help property owners, tenants and landlords find cost-effective solutions to managing their properties.
While asset managers make key financial decisions relating to the property ownership, property managers are often given a budget to work within or a fixed monthly fee.
3. The Professional Industry
While real estate asset management is still naturally a part of the real estate industry, asset managers are investment specialists that manage parts of an investment portfolio, rather than individual property managers.
It’s also important to remember that asset management is not limited to real estate investing and refers to any type of asset. As such, many asset managers come from a financial background and are trained in financial analysis, the real estate market, and managing real estate investments, not maintaining residential properties.
Conversely, property management is a branch of the real estate industry that specifically deals with the maintenance and operation of residential and commercial properties. Many property managers have a real estate license and are trained in various aspects of property management, from marketing and leasing to repair and maintenance.
4. Who Needs Them
Asset managers deal with the property owners and real estate agents directly to manage a specific real estate portfolio. This means they will be hired by either an individual or a company to manage their property investment.
In short, if you own investment property or are thinking of buying an investment property, you may need to hire an asset manager.
Professional property managers, on the other hand, typically deal directly with building residents and owners. They are contacted by landlords, tenants or collective enfranchisements to help with the day-to-day management of their property.
While some property owners may opt to manage their own blocks and buildings, most will eventually need to hire a property manager to deal with the time-consuming tasks and repairs that come with owning residential property.
5. Who They Hire
Property managers often hire building staff. This can include maintenance workers, front desk personnel, and various other contractors. They may also hire vendors to provide services such as landscaping, snow removal, or trash collection.
Asset managers, on the other hand, will typically hire real estate agents to help them buy or sell property. They may also use the services of appraisers, home inspectors, and closing attorneys.
While both asset managers and property managers need to be familiar with the real estate industry, they have different focuses and hire different types of professionals to help them do their job.
How Can a Block Property Manager Support You?
At Scanlans Property Management, we aim to provide full-service solutions for our clients. This includes everything from finding the right block tenants and managing repairs to collecting rent and dealing with legal issues.
We understand that block management is a complex and time-consuming task, which is why we offer a comprehensive range of services to take the stress out of residential block ownership.
Our professional property managers are experienced in all aspects of block management, from marketing and leasing to repair and maintenance. Whether you need help finding the right tenants or dealing with a repair issue, we can provide the support you need to manage your property effectively.