Property Asset Management

Melvin Scoville

I ran across a term the other day when doing a Google search called "Asset Property Management", and I wanted to give my definition of this phrase.

Actually my definition is more of a clarification of these three words being grouped together...  We've covered this to some degree in other areas of the site, but I feel it's vitally important to your success to understand the relationship of these words being grouped together like this.  In fact, there are two separate, mutually exclusive pieces to this term:

Asset Managment
and
Property Management

When we hire a Property Manager, we're hiring someone that should be focused on the day-to-day operations.  In the beginning this might be you, but the end-goal should be to offload this work so you can focus on higher-value activities...  More on that later. 

The To-Do List for "Property Management" is more focused on daily property and tenant-related activities, such as:
1.  Collection of Rents
2.  Repairs and Maintenance
3.  Enforcement of Property Rules
etc. 

I think you get the picture - basically focus on keeping the day-to-day operations running smooth.  Now don't get me wrong, these are very important, but not nearly as important for an owner as "Asset Management".

When I look at my real estate business, I try to "Think Like the CEO" of the company.  Granted, this is difficult, but I try to stay at this mindset as much as possible.  What I mean by this is focus on the higher-value "visionary" items on the CEO's To-Do List, such as:
1.  Increasing Revenue
2.  Decreasing Expenses
3.  Increasing Asset Value
etc.

So as an "Asset Manager," or CEO, we should be focusing on these types of activities, and not necessarily "Doing" the day-to-day items.  What happens is if we're stuck in the day-to-day stuff, we won't have time or energy to focus on the larger picture issues.

There is another piece of this, which is the emotional aspect.  The farther we can stay away from the day-to-day stuff, the better off we are from an emotional standpoint, or lack thereof.  When we remove emotion from our investing, we're almost always better off because we can focus on the numbers, or net income, which is the true measure of value in a property.

So the key is to try and stay focused on doing "Asset Management" things in our business versus doing the "Property Management" activities.  Keeping focused on the asset, and growing income and value will put us way ahead of trying to balance both of these at the same time.

For more info, check out my short video where I also cover these ideas...  Link below...