real estate assets
real estate assets

 When referring to real estate , we refer to a property such as a flat, a house, a building plot or a commercial premises. Therefore, when talking about managing real estate assets correctly, you have to know that you can generate passive income.

Properties do not produce immediate money, unless we rent them, but they can produce it in the medium and long term if we sell them. For this reason, it is very important to know how to manage and administer real estate if we want to get the most out of these assets. Real estate asset management is understood as the diligent and effective administration of a real estate portfolio or real estate to maximize its value.

To carry out this correct management it is necessary to be up to date with the state of the real estate market at all times . In this way we can, for example, update rental income, set reasonable sales prices, etc. Knowledge of the real estate market allows us to know how, when and to whom to sell or even buy.

To manage real estate assets correctly , the main thing is to have the right advice. For this, it is essential that we put ourselves in the hands of professional experts in the sector who can offer us valuation services, legal and financial advice, real estate loans (mortgages) or official appraisal,

Key points of real estate asset management

As we have just seen, knowledge is one of the most important points in real estate asset management, closely followed by experience in the sector. Let’s see below what are the key points that must be handled perfectly to carry out a correct management of real estate assets:

  • Financial education . It is one of the pillars of success in real estate asset management, since thanks to it, clients learn to identify for themselves the factors that determine the profitability of their assets. Having a more global vision of the market and its risks helps to make the decisions that best suit your objectives.
  • Market study. It is an investigation focused on exploring the commercial viability of a certain economic activity, in this case the sale, rental or investment in real estate. A market study helps us know where and when to invest despite the risks.
  • Property maintenance . Properties located in well-off or crowded areas have a lot of value, but a privileged location is not enough, since the state of conservation of the property must also be considered when managing real estate assets.
  • Adequate advice . Having a good real estate advisor who knows in depth the fiscal aspects of the sector is essential, since it is very changeable and dependent on changes in the tastes and preferences of consumers, who through their demand make a certain area or type of real estate is quoted more or less. An advisor can help keep us up to date and support our decision making.

How to manage real estate assets

real estate portfolio can be made up of one or more homes, buildings or premises, or a combination of both . For this reason, it is important to analyze your performance to identify the different business opportunities . It is essential to know our objectives and work to achieve them through proper management of our portfolio and for this we must have a series of skills :

  • Focus on detail , being critical, flexible and open to new ideas.
  • Have analytical and financial capacity to assess and reject, or not, offers that do not interest us.
  • Have bargaining power .
  • Know how to communicate correctly.
  • Be organized and have clear time management .

Having these skills is very important when it comes to knowing how to negotiate, validate, sell and manage a real estate asset or heritage . For this reason, managing and administering real estate assets is a complex task that takes a long time.

How can we approach management to maximize the value of a property?

There are three different visions when approaching the management of real estate assets:

  • Bet or risky vision : Find the sources of income that give more revenue and that are more solid from the economic point of view.
  • Conservative vision : It consists of minimizing expenses.
  • Midpoint : Located between the conservative and the risky vision, that is, it manages the risk of the portfolio but without complications.

We must, therefore, think about our way of being (conservative, risky or midpoint) and in this way have an idea of ​​the approach that suits us best.

Manage risk

There is always risk in all types of investing, including real estate. However, there are some properties that are riskier than others. For this reason, it is important to know how to mitigate the risk in case an investment fails.

Cost reduction

The maintenance of a home can cost a lot of money, especially if we have just renovated it and we have not found tenants for months that meet certain guarantees 

To minimize the cost of investment properties we can choose fast rentals and tenants as students even though their risk of turnover is higher.

Create a portfolio

The more you invest, the more benefits you get . Knowing how to correctly manage a portfolio of real estate assets implies knowing how to diversify strategically to achieve maximum profit. For this we must know the different types of investment properties that exist:

  • Seasonal or vacation rental.
  • Residential and housing for long periods.
  • For commercial use, usually premises and garages.
  • Mixed use, mixing commercial and private use.

Real estate investors looking for short-term profits might, for example, look for opportunities to buy rental properties or fix them up. If the objective is the long term, we should buy properties that appreciate significantly after a few years. Both investment strategies are totally valid, but require knowledge of market research and risk management.