Any real estate portfolio includes all the investments, properties and assets under your business that are aligned to achieve certain financial and business goals. These are well thought out and critical business decisions are taken by the strategy and leadership body. All of the properties and investments are strategic, whether residential or commercial, and REITs (Real Estate Investment Trusts) make impactful profits.
But real estate property managers and business owners have a hard time managing their portfolios. But why? Property managers already handle many different jobs under their one role, and adding portfolio management to that cocktail can take a hit on the business.
But it does not have to be something you sweat over; with the right professional help, strategic growth plans, and proper technology selection, you can ace your portfolio management plans. If you are here reading this blog, then you are already asking the right questions.
Read this blog to learn about the best strategies to help in your portfolio management. Our team at Assetsoft has had years of experience in managing client portfolios in real estate, and we have carefully curated this to guide you on the journey.
What is real estate portfolio management?
Portfolio management in real estate entails overseeing all the properties for a real estate business or client. This also includes making plans to grow the portfolio, make useful investments and make significant financial gains. A portfolio manager also has to assess the risks of investments, understand which properties have more sales potential, which count as bad assets and which can be flexible for some revamping.
7 portfolio management strategies that you need to adapt
If you are cruising through a sea of real estate properties and getting confused about you can manage your portfolio better, here are 7 industry insider tips for you to start.
Make a list of your real estate business goals
You need to take a closer look at your business process overview and make a list of your priorities, financial needs, goals, bandwidth of the team, risks involved and then make strategic plans. Approaching your portfolio management in this route will align your business process with the rest of your brand and the current conditions of your company.
Knowing the actual needs of your company and making generic plans is the thin line that will set you apart from all competition. Why do you need that? According to National Association for Realtors (NAR) reports, there are as many as 106,548 real estate brokerage firms in the USA. That is some tough competition, and you need to up your game pretty soon or become irrelevant in the market.
Assess and evaluate your portfolio periodically
Surely the number of properties and investments under your portfolio increases your credibility in the market, but the quality of every property in this portfolio is something that you need to take a closer look at. Each property should be analysed regularly and understood if it is a valuable investment. From assessing buying price, current market value, ROI, and cost of maintenance to understanding if the property has a potential for growth in value in the near future, need to be hashed out in detail. This will help you understand which properties are becoming dead investments, and you can quickly sell them and reduce your losses.
Have a separate budget for your portfolio
Of course, your business has one general budgeting and forecasting system for the whole company, but your real estate business needs a separate budget for investment in the portfolio. It is a smarter choice because property prices can scale at any time so you need to get professional help in doing this budgeting work so that it does not affect the other regular works of your company.
Identify potential growth areas
Every real estate market is not the same; there are many markets that have higher potential for growth. A real estate portfolio manager must know which market is in what condition and make investments accordingly. Like the pandemic saw a heavy increase in the demand for commercial warehouses, as was reported by the Bloomberg news. An experienced business would have taken to that opportunity and invested in warehouses, and made the most of the pandemic hit market.
Make plans for portfolio diversification
If your business is only into residential real estate or just commercial, you might want to rethink your business plan and think of diversifying your portfolio. Why? Simply because the pandemic taught us that all kinds of market predictions could go wrong at some point due to unprecedented situations, and having a diverse investment will help you grow from all sides. Even when demand for office spaces goes down due to remote work, demand for homes will go up; tapping into this market is vital.
Get a professional portfolio manager
A property manager does a lot of things, from coordinating back office work to maintaining tenant relations, doing tedious CAM reconciliation work and more; it is better to let a professional portfolio manager handle the portfolio. It will take the load off your property manager and also streamline work and get you the expert help your business needs. Do not go out of your depth and follow a DIY process; then, you will be stuck with a lot of business problems with hardly any professional solution.
Start using PropTech
There are many property management software out there in the market which comes to great use in real estate portfolio management. Even when you do use a portfolio manager, you must also use the best selection of technology in project management to speed up the process and keep you on top of all the latest trends. Using the right technology will also allow you to manage your portfolio remotely, and all other stakeholders can be updated about it from their own user dashboards.
Summing Up
Assetsoft is one of a kind real estate technology consulting firm that has years of experience in drawing up the best and most customized technology implementation plans for all our partners. We have a software solution for all your real estate needs from asset management, portfolio management, property management, and investment management.
Give us a call and let us discuss which PropTech and which strategies work best for your business and take it further. Talk soon!