Nowadays, people are often interested in investing — money should be in motion and not just lying in a safe. And when a new investor doubts his abilities, asset management companies come to the rescue.
Asset management is a service that manages the client’s investment portfolio. Both firms and individual financial managers do it. They can offer various capital investments — in stocks, real estate, partnerships, bonds, and private equity. In this article, we will talk about real estate investment.
Asset management in real estate
Asset management in real estate maximizes profits by increasing real estate prices, rent, and return on investment. Most investors do this independently, but the more massive the investments become, the more skills and abilities are needed. That is why people turn to asset management professionals.
There are several types of real estate for investment:
- residential premises (houses, apartments);
- commercial (offices, shopping centers);
- mixed-use buildings (houses with playgrounds for sports and children, shops and offices);
- vacation rentals (hotels, apartments).
Investors put up money in housing, rent it out, or sell it at a higher price (for example, making repairs there or waiting for a certain amount of time for housing prices to rise). There are a lot of management strategies in this area.
How it works
Real estate asset management is based on 4 pillars that everyone should know about:
- Search for the highest and most stable sources of income: the more significant the inflow of regular high income from the investment, the better.
- Permanent cost reduction: this type of investment is characterized by the fact that houses tend to collapse, crack, and deteriorate every day. It will require responsible contractors, loans with reasonable rates, and constant monitoring of the situation with reduced costs.
- Risk control: look for less risky elements of investing money; there are fewer of them — choose those in places with less possibility of failure or look for strategic ways to reduce it. Tokenization of assets also reduces risks — read more about this in our article — https://technorely.com/asset-tokenization-gets-real-on-blockchain/
- Creating and maintaining a portfolio: this is what strategic asset management is designed for. Contact specialists and firms that will help you expand and diversify your investment portfolio.
Given how diverse and risky this market is, there are real estate asset managers. Their responsibilities include managing cash flows, finding lenders, helping with transactions, negotiating, marketing real estate, and developing budgets and forecasts.
Why asset management is essential nowadays
The importance of asset management is difficult to overestimate; here are just a few points:
1. Control of business processes. It is easier for companies to track their assets, how they are used, how profitable they are, and how their condition changes over time. Control allows you to keep your finger on the pulse and benefit from practical responses to changes in the market.
2. Financial statements. With the help of asset management, you can check their condition in real-time, perform accurate depreciation and properly prepare reports.
3. No ghost assets. In the financial portfolio or accounting book, you get assets that are not there or are lost and damaged. Management allows you to identify such errors and dispose of the assets immediately.
Asset management becomes the construction of a long-term financial investment strategy. You may need the help of specialists or special software that will simplify the whole process many times over.
Asset management software
What can help in asset management? Software created specially for a specific type of activity. Cloud storage or messengers are good, but not in this case — effective asset management, negotiations, and information leakage must be monitored.
Will the software that is created for ordinary management be suitable? Hardly. Here it is essential to take into account the specifics of the work. As an investor, you need asset management, minimum and maximum thresholds, depreciation reports, owner cards, and real estate information.
The asset management software created to meet your requirements will help you make effective management and strategic decisions, sensibly assessing the situation. There are ready-made, valuable tools — they simplify the work and reporting. The best to date are:
- the pCloud service;
- the Adobe Experience Manager application;
- HyperCMS system.
Asset management software in real estate is often a cloud-based tool where managers share and store their information. For example, pCloud, Adobe Experience Manager, HyperCMS, which were mentioned above, provide a wide range of features. Among them:
- data encryption,
- sharing, editing, and storing documents;
- setting access levels to individual files;
- integration with various useful platforms;
- monitoring activity;
- mobile and desktop versions.
Ready-made solutions exist for every business, and it can be tough to find what is right for you. Now you know what functions and features you need to pay attention to when choosing the right software.
To sum it all up
The global and most crucial goal of asset management is to maximize the real estate value and make a profit on the investment. It includes many factors: maintaining the property in good condition and further improvement, reducing risk and costs, and finding new types of income.
There is a lot of risk in this business, and there are constant negotiations and exchanges of documentation. That is why, as mentioned earlier, it is also worth investing in software. Technorely is ready to help you with convenient and functional software development or creation.
The more automated and well-thought-out your business is, the fewer risks there will be, and the more extensive your investment portfolio will be.