There are different types of investment management in real estate. Therefore, to get a better understanding of them, keep reading our blog.
What is investment management in the field of real estate?
Investment management with regards to real estate is basically taking care of the investment property. This includes a few different aspects such as day-to-day operations, administration, the financial state, managing profits, and so on. There are two ways to do that: you can hire investment management firms or you can do it yourself.
Related: Here Is How to Maximize Cash Flow From Your Investment Property
When do you need investment management for your real estate business?
- You need investment management if you are a beginner real estate investor. At this point, you lack experience, which is important for managing an investment property.
- You also need investment management if you are a part-time real estate investor. Remember, property management requires a lot of time and efforts. Therefore, if you do not have the time, go ahead and hire a firm. Just make sure to choose the right types of investment management for your real estate property.
- If you are an owner of multiple investment properties, then an investment management firm is a must. The more rental properties you own, the harder it gets to keep up with them.
Keep in mind that dealing with an investment property is no joke. Therefore, if you are not confident, you should hire real estate professionals.
Types of investment management: Portfolio management
Portfolio management is one aspect of real estate investment management. Basically, it is when real estate investors make sure that they invest in different property types in different markets. In other words, it is called diversification. This kind of investment management is important in order to mitigate the risks of an investor losing all his/her money at once.
Types of investment management: Asset management
An asset management professional is responsible for maximizing your profits. He/she is the one who will perform real estate market analysis, calculate return on investment forecast, reduce vacancies, and so on. All this is to help boost your rental property income. Their tasks usually include the following:
- negotiations.
- preparing the lease agreement.
- coming up with strategies to save up on property expenses in order to maximize the profits.
- mitigating risks where possible.
- performing predictive analysis.
- preparing financial reports.
- keeping financial records.
These, of course, are only a few of an asset manager’s duties. But all in all, they aim to benefit the real estate investor.
Types of investment management: Property management
Property management is one of the types of investment management. However, it focuses more on the rental property’s daily operations. Professional property management services usually focus on maintaining the value of the property. Therefore, their tasks include:
- Rent collections: A property manager is responsible for collecting the rent from your tenants. Not only that, he/she is also responsible for making sure the tenants pay on time.
- Maintaining the property rules: Making sure the tenants stick to the rules in the lease agreement is also their responsibility. They are supposed to deal with any irregularities.
- Dealing with your tenants: This task includes receiving tenants’ complaints.
- Dealing with evictions: This is in case your tenants fall behind on paying the rent or commit any act that requires legal procedures. The property manager is the one to deal with such procedures and evictions if needed.
- Marketing: It is one of the major roles of a property management professional as marketing is one of the success factors for real estate investments. A property manager is the one who has to come up with creative marketing strategies in order to bring in tenants.
- Maintenance: Keeping the property maintained and in good shape is part of their duties. Any repairs needed, they are the one responsible to bring professionals to deal with them.
Related: 8 Types of Tenants to Beware of When You Rent Out Your Property
Types of investment management: Airbnb property management
Recently, Airbnb has gotten into the property management field. Due to the rapid growth that Airbnb has experienced, Airbnb property management became a necessity to many Airbnb hosts. However, what Airbnb has done is a bit different. Now, you can apply to Host Assist. It is basically a partnership with other companies that are willing to take care of your Airbnb rental property. They are going to take over marketing, management, and other little tasks such as cleaning. Therefore, you will not have to spend most of your time on your short-term rental property.
What you need to know about all the different types of investment management
All the previous types of investment management are subject to fees. You have to be ready to pay the fees they require. If you are willing to do so, then go ahead and hire an investment management based on your own goals.
You can always do it yourself
Now, think about this option. You can always choose to manage your investment property yourself. However, you should only do this if you are an experienced real estate investor or at least invest in real estate full time. Do not underestimate the time and efforts investment management requires. So, if you are willing to do so, then you can manage your rental property yourself.
Keep in mind that in order for you to be able to manage your investment property on your own, you need to acquire real estate education. Learn what it takes and what tasks are included. There are plenty of resources including Mashvisor. You can also hang around real estate investors who are managing their own investment properties.
Related: Learn How to Manage Multiple Rental Properties Like a Professional Realtor
What types of investment management to go with?
When it comes to investment management, one thing is sure, it has to complement your investment goals. So, think about it this way: if your goal is getting the daily tasks done, then go with professional property management. Thus, if your goal is to make as much profit as possible, then go with asset management. Moreover, if you are an Airbnb host, then, of course, go with Airbnb property management. The choice is always yours. However, if you are still confused, then check out Mashvisor. Let it be your guide to managing your investment properties. We have a number of blogs dedicated to the matter to help you make the right decision. Furthermore, you can learn all about real estate investing and investment properties on our website.