Here is the transcript from our quick training video on property asset management, with slides available here:
Here’s a quick training video explaining what is asset management for properties, which will help you see the greatest returns in property as an investment. In short, asset management looks at the property’s market value and how things can be actioned to see greater value longer term.
It focuses on the property interest as a pure investment and therefore what rental or capital values it can generate as a reward for holding this interest. This often sees reduced costs but not necessarily straight away, as an additional cost now may provide a larger return in the future. It’s also more popular with commercial properties, but sill applicable for residential schemes, particular those with mixed uses.
In terms of how it relates to normal property management, it’s best to look at an example, let’s say a retail shop with two flats above it under one commercial lease to a newsagent. Normal property management focuses on the nuts and bolts and daily issues like correct maintenance and services charges, insurance cover and rent payments, and lease renewals and sub letting of the upper floor flats.
Asset management though goes a stage further and considers other angles to see a greater return on the owner’s investment longer term. So this might involve re-gearing the lease and agreeing a new one earlier than it’s renewal date, or agreeing the flats to come out of the main newsagent’s lease for the landlord to separately rent or sell these after certain project works.
Ideally you need these two elements of property management and asset management working together, with an effective longer-term asset strategy and plan to adhere to. These can be by the same person or company, although you can have a different asset manager’s job role and asset management company to specialise just in this particular area.
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