One of the most difficult challenges for organizations that are asset-intensive is how to effectively manage all of the different types of assets. However, asset management and the overall management of properties isn’t just about real estate, it’s also about relationships.
It’s crucial that you track conversations and statuses across multiple landlords, tenants, and applicants in addition to the day-to-day management of the properties themselves. It’s high-stress work that involves touch points in many places, often with high urgency.
Using an asset management software that helps create organization and clarity without creating an onerous backload of management tasks is beneficial to the overall asset management for a property manager. Every asset has a lifecycle and the key to effectively managing these assets is knowing where that asset is in its lifecycle and most importantly whether it is providing value to your business.
Property management firms are beginning to place a greater focus on improving business efficiency and with good reason. Increased efficiency enables property managers to deliver superior service to their clients.
Additionally, findings by Research N Reports shows that the increasing need for accurate process documentation is a key driver of property management software adoption.
The Key Components to Running Asset Management Smoothly
As the property manager, there are two major components to ensuring that your property or properties are running smoothly.
The first is property management. Property management is the day-to-day tasks that are taken on a one-by-one basis and usually – though not always – have short-term fixes to them.
The second component is asset management. Asset management is the acquisition to disposition tasks that are more long-term and are typically dealt with one-at-a-time.
What are the Tasks of Asset Management?
Typically, the tasks of asset management involve things like creating deal books, overseeing management agents, monitoring financials and operating performance of all the properties, monitoring owner fees, internal and external stakeholders’ relationships such as regulators, investors, and board of directors, and property workouts and dispositions. There’s also the creating and overseeing of daily tasks such as:
- Key dates
- Operating and capital budgets
- Capital needs and reserve fund management
- Real estate agreements and taxes
The Ultimate Property Manager Checklist on Asset Management
The first step in asset management is knowing the current state of all of your assets. If your organization has multiple people managing a single asset it can be difficult to track down all of this information.
Before you make decisions, define the mission for your portfolio. Only once you have a goal in mind can you begin to move forward.
Once you have your mission, here are the assets you’ll want to check up on, and continually monitor:
Operating Budget Variance Review
Evaluate performance against benchmarks set in revenues and expenses. This is important to keep track of to make sure that everything is moving either as it has in the past, or how you would like it to move forward in the future. Based on this data you can make recommendations on major revenue and cost drivers.
Balance Sheet Review
Review the balance sheets to notice changes in the size of documents such as:
- Cash balances
- Accounts receivable
- Accounts payable
- And reserve balances
This can also include looking at the ratios of things in accordance with working capital, current ratios, owners’ equity and debt to equity ratios.
Review of the Property
Reviews of your property or properties should be done as an evaluation based on the annual management plan and budget. As a good general rule of thumb, you should have a standing time of when to evaluate the property management side of your business in specific areas such as financial, compliance, physical and social.
Review Your Assets
This should be a continually ongoing process. Meet with your team to discuss how the property is doing and where there are areas of improvement or where properties are excelling. Important things to discuss in these meetings include:
- Analyzing the property and portfolio against the goals set annually by the board, stakeholders and/or owners
- Note the economic performance of the property
- Analyze the impact of the property on the organization and how much money is coming from it
- Review the overall performance of the property managers
- Take note and possibly implement what are current trends in the industry
Evaluate New Projects
If it’s a part of your overall growth strategy, then keep a lookout for realistic opportunities that could boost your portfolio and gain more revenue.
Gather and Interpret Key Data
It’s vital to know what is happening in the industry and how it could possibly affect the future of your properties costs. Be sure to annually collect key data such as public laws, regulations and programs, real estate market conditions and opportunities, adequacy of insurance etc.
Initiate Work Out Plans
Once you have gone through all the steps and compiled all of the key data, the most important part of the whole process is to make sure that you have a plan to move forward. This plan should identify key players, what their tasks are, key milestones, follow up meetings and ways of monitoring progress.
Effective asset management can be one of the most challenging things for a property manager in an organization. Setting up a property manager’s checklist for your asset management can be an effective way to manage this process.
Looking for more information? SmartProperty is capital reserve planning in the cloud that saves time and hassle of putting your budget together.
With SmartProperty, you can track your work history and store photos and files securely in the cloud for better record-keeping. You can also easily create customizable “what-if” scenarios so you can develop the right reserve funding strategy for your needs. Lastly, you can manage and update components on your mobile device whenever you need to for better component tracking.
Contact us today to learn more.