Real estate asset management and its investment is a valuable asset.
Real estate could be an individual buying a plot of land or a corporation investing in office buildings. Or, it could be a speculator buying undervalued homes, renovating and selling the same at an appreciation. A lot of tax and legal consequences and real estate operational factors are involved, which is where the importance of RE management services becomes paramount.
In the last couple of decades, the need for real estate asset managers and portfolio builders has increased due to various factors such as economic and market trends. This growth opened the demand for professional and skilled real estate managers, handling estate needs in varying capacities.
If you’re interested in real estate and investments, pursuing a career in the Real Estate asset management field will be a good option. Keeping this in mind, FinanceWalk has created a complete Real Estate asset management guide, taking you through its various factors:
Roles and responsibilities, getting a job, salary potential, companies, and education.
The demand for Real Estate asset management, also known as asset management or property management is unique to every country and multiple economic and investment essentials solidified its importance over the decades as a valuable profession.
Within RE asset management, the tasks of operations, administration, maintenance, financial oversights, and marketing are involved to achieve the objectives of the property owner.
There is no fixity to the job description. It entirely depends on the position, organization, and nature of assets.
Irrespective of the job requirements, the main objectives are to monitor property performance and maximize property revenue for the clients.
Tasks include developing property performance reports, government rules, and regulations compliance, incorporating and revising lease terms and so on.
As someone working in the asset management industry, adapting to emerging technology, economic trends and shifting demographics in a given job essential.
Asset management jobs are broadly classifiable into these five categories:
The tasks of an SM involve handling the day-to-day operations of the properties.
The SM is assigned condominiums, residential properties, apartments and homeowners’ associations to manage. The person forms the access medium between the property manager/owner and tenants. Typically, the SM is accountable for:
The person is entrusted with the task of managing one or more properties.
The nature of work is supervisory for residential buildings or to handle commercial buildings that don’t have SMs.
The PM serves as a liaison between the property owner and site personnel, handling both tangible and intangible assets, designing property management plans and community image building.
The PM has to create valuable properties through net operating income improvement which happens by minimizing operational expenses and optimizing rentals.
Also referred to as a supervisor or a portfolio manager, an RM is entrusted with multiple properties over an expansive geographical area and includes either residential or commercial properties or both.
The regional authority is completely accountable for property performance and has to be in charge of training, recruitment, and development of personnel.
The job profile of an RM includes:
The AM recognizes the property as an ‘investment’ and as such, any decision taken for the property impacts its financial performance.
Often the asset management functions as the representative of the property owner and is entrusted with the task of retaining third-party management companies and supervising them.
In this space, all the activities necessary to enhance the value of the property portfolio are undertaken, such as defining performance goals, operational functions, and caretaker goals.
There is no fixed job description of an asset manager; it evolves constantly and varies from one professional setting to the next. The asset person remains mindful of changing marketing conditions and related economic factors that can impact the property valuation.
The responsibility of the management executive rests more on handling the asset management company than on overseeing property management, though it is a subsidiary responsibility.
The role varies depending on the size of the asset management company – its opportunities, management team, executive ownership, talent pool, and other factors.
The management executive is often the CEO, handling the entrepreneurship part of the organization.
The executive remains abreast of market developments and analyses its impact on the vested properties, optimize available resources, plan company operations, enforce company policies, develop business infrastructure and platform, grow the organizational structure and overall, grow the business.
The responsibilities between these five categories often overlap due to the similarity between roles and responsibilities and organization size.
As an emerging and profitable sector, real estate asset management jobs exist around the world.
Job availability and growth prospects depend on a lot of factors but to begin with, the first question is: “who will hire you?” In other words, which sectors are going to hire someone who is interested or experienced asset management, and in varying degrees.
Below is a list of asset management staff seekers.
But, of course! Full-fledged companies offer a complete range of real estate management services to a selected clientele, the choice depending much on income bracket.
They are similar to real estate companies but functions more like a ‘boutique’ firm involved in offering RE management services to both institutional owners and individuals in exchange for a fee. The fee is usually a percentage of the total value of the property under management.
These are typically those companies who are involved both in the development and management of their developed RE properties. Development involves prospecting, renovating, building and restoration.
Commercial banks hire asset management staff to handle their varied RE portfolios, that is, properties owned by the bank and those held in trust with the bank.
The REIT functions like a group to secure the investments of the property investors. RE asset managers are hired to manage the REIT properties.
They also have to use financial knowledge to help property owners assess the value of their properties and enhance their portfolio.
Many corporations have a separate RE department to manage their investments, whether company-owned or owned by their clients.
They hire in-house RE asset persons to conduct various businesses like devising best uses for corporate properties, restoring properties, selling and leasing them.
Government housing and development departments retain RE asset managers in their staff to handle commercial, state housing, local housing, and other RE related government agencies.
Insurance companies often invest in RE and it is the main component of their investment portfolios.
They hire RE managers to handle the portfolios and to offer high-scale portfolio management services to pension fund owners and institutional investors.
Mortgage brokerage firms employ RE asset managers to provide management services for marketing to investors and their financial management.
These organizations often deal in no-cost or low-cost housing schemes and as such, they require RE managers who are interested in social services and management.
How do you become a part of the investment industry? What kind of educational and professional qualifications are needed? We will discuss them here.
Sometimes people just stumble into an asset manager's career after years spent in investment banking or private equity.
A lot depends on industry contacts and networking but if you’re someone who wants to be an intrinsic part of the industry from the beginning, you need to acquire adequate professional and educational qualifications.
RE management is a complicated and complex field. If we talk about the United States, the last three decades have seen many RE management specific professional qualifications come up and pursued by many.
Earlier, real estate management was something learned “on the job” but now employers seek specialization, preferably with a degree in real estate.
It is tough to find educational institutions offering property management degrees. Otherwise, opting for a bachelor’s and/or master's degree in finance or business administration can provide a meaningful base for the real estate management industry.
Some courses which you can think about could be management courses for developing strong management skills, finance courses for developing analytical knowledge and knowing basic accounting principles, business courses for organizational and critical thinking skills, communication courses for learning effective and strong oral and written communication skills, business law courses to understand legalities and of course, real estate courses or real estate law for specific knowledge of the industry.
Once you’re armed educationally, how do you go about beginning a career path in property investment?
The first step is:
To sign up for an internship with a reputed real estate organization. You’ll get a first-hand experience of how working in the industry will turn out.
As an intern, there are chances to learn skills and gain experience and begin with professional networking experience, which will prove to be beneficial in years to come.
As an intern, you have excellent opportunities to learn from experienced managers, learn various aspects of the job and have fun too! A successful internship often converts into full-time job offers.
How to get internship opportunities? Depending on the educational institution you’re enrolled in, internship opportunities are often arranged from their side. You can also find internships searching on job portals and professional networking sites like LinkedIn and Quora.
While doing an internship, sign up for an informational interview.
An informational interview is a strategy where the interview is conducted with the sole purpose to learn more about a company or an industry.
In this case, your informational industry will be with a real estate asset manager and the objective will be to get actionable insights into the experience and knowledge required to succeed in this field, and the person will also help with various career paths and options.
An informational interview is similar to gathering “intelligence” and understanding whether real estate management is really the right career for you or not!
The informational interview will help you prepare for the ‘real’ interview, get information about job openings and help build a professional network.
Along with experimenting with an informational interview, practice job shadowing too.
Job shadowing is an activity spanning a day or two where you explore career options by ‘shadowing’ a real estate asset manager.
It’s like being an assistant for a day or two and experiencing how the real estate management works happen, and not only this, you also get the chance to pose a lot of careers and job-related questions to the manager.
These three activities will clear a lot of doubts and queries. Getting listed with Industry Associations and gaining real estate licensing is what remains.
Building Owners and Managers Association (BOMA) International is a globally renowned organization offering certification training to real estate staff, in varying degrees. Some of them are:
Depending on the country's laws and regulations, you need to have accredited real estate licensing to function, either as an employee or an independent contractor. Further, each industry has some kind of association. Find out what that is in your country and get listed.
At this stage, experiences from internships, job shadowing and/or informational interviews have informed you to a certain extent what entails as a real estate asset manager, and association listings and licensing give added credibility.
Armed with both these experiences, you can move ahead and search for real estate jobs in any of the ten organizations listed previously. Always try to build a strong professional network for better work opportunities.
According to the US Bureau of Labor Statistics, the demands for real estate asset managers will grow at 8% between 2018 and 2028.
In other words, there are a lot of opportunities. In the US alone, there will be 322,300 openings by 2022. So, how can you get that desirable job?
Most aspirants get wrong in the basic step – an error-free, typo-free, impact-oriented informative resume.
Tailor the resume to the job opening.
Append the resume with a cover letter and use it to highlight your personality and enthusiasm towards real estate industry. Talk about achievements and accomplishments (if any). The resume and cover letter should reflect integrity.
Your next real estate job could very well be lurking in someone’s social media update!
Employers are increasingly showing an inclination towards social media hiring.
LinkedIn, Quora and Facebook are popular destinations.
Some ways to target employers on social media are:
The idea is to show your interest, clearly and succinctly.
Online job boards make searching simple and effective due to their filtering capacities. Use of online job boards will enable you to:
Find relevant job boards and become their active member.
Since networking is a major component of career growth, becoming a part of active real estate clubs will be immensely beneficial.
Become part of real estate clubs and communities, and network with them. A lot of job openings will come from there.
Being a performance-oriented industry, there is no fixed salary bar which we can refer to.
Real estate asset managers who show continuous performance, excellence and high service level often earn more than their counterparts.
As we discussed previously, the job prospects are high and wide and thus, the asset management salary depends on the position, employer, credentials, education, experience, and location.
Usually, companies offer additional benefits like healthcare plans, flexible timing, education and training, housing allowances and other perks.
Since real estate is a prime investment proposition, the demand for real estate asset management will never go out of vogue. It is a good career to pursue.