Managing A Diverse Real Estate Portfolio

September 1, 2022

Owning property is every investor’s dream; yet the simple act of purchasing it, while complicated and requiring much analysis and consideration, is just the starting point. As one develops a diverse portfolio, management of these properties must be increasingly strategic to maximize profit. The investor must understand the scope of skills needed when selecting a seasoned professional and deciding who they are going to have manage their properties.

So, what goes into managing a property? On a broad scale, property management includes the day-to-day tasks needed to manage a property, including collecting rents, tenant relations, maintaining and keeping the property in good condition, and project/construction management as needed. However, the skills needed to handle these tasks depend on the type, and development stage, of the property. Is the property a health care facility or spec industrial warehouse; is it under construction or is it established; is it a fully leased or half vacant retail center; or perhaps it is a multi-unit condo association or a multi-family residential complex or mixed-use building? A very broad skill set is needed to understand how to best handle the vast difference between commercial property assets.

There are best practices that apply to all property management. These include managing expenses and understanding proper accounting, timely and clear communication, an efficient ongoing maintenance plan, ability to attract and keep quality tenants, a reliable network of service providers amongst the various trades, the ability to plan for capital improvement projects, understanding innovative advances in building technology and prioritization of building updates and upgrades.

Managing a diverse portfolio means excelling at best practices for multiple asset classes and property stages. The purpose of investing across multiple asset groups is that it conceptually allows for gains while protecting against the ups and downs of an individual asset class because the investor has diversified their portfolio. However, it increases the need for a property manager who is proficient at maximizing the profitability of the various asset types.  Adaptability is one of the greatest strengths of a quality property manager, and this comes with years of experience in analyzing and quickly assessing a situation, and then having the technical expertise to act. It also means understanding the differences in circumstances that may appear to be similar to something faced in the past but have very different solutions based upon the goals of the investor. When investing in a diverse portfolio, it is imperative to engage a professional team that is proficient in handling many scenarios.  A team that has refined their property management skills over years of commercial property management and deliver effective solutions with the investor’s goals in mind at all times.

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