Home Blog Real Estate Asset Management vs Property Management: What Is the Difference?

Real Estate Asset Management vs Property Management: What Is the Difference?

December 15, 2022
understanding real estate asset management vs property management

At first glance, the terms property management and property assets management look very similar—and in many ways, they are! However, a careful examination of real estate asset management vs. property management reveals substantial differences in the type and scope of responsibilities for real estate specialists who are looking to explore these important roles.

Learning the distinctions between the two will significantly enhance your work with real estate investments and property assets management. In this blog post, we'll explore key points regarding the difference between asset management and property management to cement your future in a lucrative real estate career.

An Overview of Real Estate Roles

Real estate property management and assets management are both vital processes that ensure and enhance the value of real estate investments. Property management, however, is tightly focused on the day-to-day operational aspects of individual properties, whereas property assets management is more broadly concerned with the entire life cycle of one or more properties.1

Generally speaking, the relationship between an organization's board of directors and its chief executive officer (CEO) offers a good analogy for understanding the differences between asset and property management. While the board of directors have an influence on the company, the CEO does the tangible, day-to-day work that the value of the company relies on. The successful relationship between both is necessary to maximize investment property profitability while generating revenue, wisely reducing expenses (if possible) and mitigating risks and liabilities.2

Let's get into some of the more specific differences of property asset management vs. property management below.

Property Assets Management

Investors, from individuals and private companies to huge corporations and even governments, often include real estate in their investment strategies. The types of real estate assets that investors hold in their portfolios can include condominium communities, apartment complexes, hotels and other vacation venues, shopping malls, warehouses and other properties for residential, retail and commercial use.2

As an investment owner's real estate portfolio grows, so does their need for a qualified real estate asset manager. Rather than overseeing all of their investments themselves, investors will hire a dedicated asset manager to be their main point of contact. Successful property asset management depends upon creating and implementing customized strategies for each asset/individual property, as well as for the entire real estate portfolio as a whole. Such strategies will vary depending upon the property, but success is directly related to the the asset manager's expertise and thorough understanding of each property's life cycle—from acquisition to holding and final disposition.1

Ultimately concerned with the investment owner's overall long-term success, property assets management focuses on achieving the highest return on investment (ROI) by maximizing the profitability of every property in the portfolio.

The following list offers a detailed look at the key tasks of a professional real estate asset manager:1,2

  • Carefully working with investment owners to define their personal financial goals over the short- and long-term
  • Recommending specific forms of investment, types of ownerships, partnerships and other investment strategies, covering the potential pros and cons of each
  • Working closely with the owner's investment partners and lenders to increase profit potential and returns
  • Advising investment owners on structuring the capital stack of equity and debt most effectively
  • Employing and directly working with key teams of real estate brokers, property managers and leasing agents
  • Determining and overseeing the key performance indicators (KPIs) defining key asset controls that impact the investment asset's return
  • Overseeing and managing each asset's cash flow across the entire portfolio
  • Allocating investment resources and capital across the portfolio for accomplishing capital improvements
  • Generating and reviewing property and portfolio financial performance reports, recommending and implementing necessary adjustments in line with the investment owner's financial goals (specifically for increasing income)

Asset Manager Salaries

With so many investments and stakeholders under their direction, asset managers can make impressively high salaries with lots of room for job growth depending on the asset types and the cities in which they work. In the U.S., the average salary for an asset manager is $99,966, with some making as much as $167,000 a year.3 In New York City, however, the average salary in asset management is around $112,414 per year.4

Property Management

While property assets management focuses on maximizing the financial returns of investment properties, the focus of property management is on maximizing a property's operational aspects. Property managers are often hired by property asset managers as key investment team members. Collaboration between asset managers and property managers helps ensure that leases or rental agreements attract good tenants, reduce vacancies, offer flexibility and limit exposure to liabilities.2

Real estate investment owners, asset managers and even individual landlords often hire property managers to ensure full legal compliance to any applicable federal, state and/or local laws and regulations, such as landlord-tenant laws and property management regulations. Additionally, property managers oversee the day-to-day tasks related to maintaining the occupancy, security, upkeep and ultimately the income of investment properties.5

The following list presents a more detailed account of the key roles and responsibilities of a property manager:1,5,6

  • Communicating regularly with the property owner and/or investment team regarding all responsibilities and concerns
  • Advertising and showing vacant properties or units
  • Finding, screening and keeping good tenants
  • Executing leases and enforcing their terms and conditions
  • Regularly collecting and depositing rents and other applicable payments
  • Resolving tenant concerns and complaints
  • Performing light cleaning and/or other handyman tasks
  • Scheduling, supervising and adhering to budgets for building maintenance and or repairs
  • Providing monthly and year end financial reports to the property owner and/or investment team

Property Manager Salaries

As the main point of contact for a building/s, the property manager focuses on keeping buildings fully functioning and profitable. Thus, the profit potential for their work directly correlates to the success of the buildings themselves, which is often quite high in urban areas like New York City. The average salary for a property manager in New York City is $75,487, with the highest end of the range falling at $119,000.7 The average salary across the U.S. is $64,473.8

Key Takeaways

As with other types of financial investments, real estate presents substantial challenges to investors. The investment owner's goals, risk tolerance and investment strategies must be respected when selecting the right property assets.2

Choosing the right investment team leader is likewise challenging. Property asset management relies significantly on entrepreneurial expertise. It requires strong analytical and negotiation skills, making financial forecasts and taking calculated risks.2 Successful asset managers research and monitor the market and follow current political, economic and financial trends. Their ultimate goal is to mitigate potential risks while reducing expenses, maximize returns on investments for owners and build stronger portfolio growth.1

Hiring great managers to oversee the day-to-day operations of asset properties is both challenging and vital, as well. Successful property managers serve as asset managers' eyes and ears. Owners and investment teams rely on property managers to care for their properties professionally, performing all responsibilities efficiently and effectively.6 As such, they only hire professionals with the right personality, interests and dedication for the job.

If there's one final take away from the discussion of asset and property management, it's this: understanding the roles and responsibilities of these key professionals is crucial for investing in the real estate market. Whether you're working with an asset manager, a property manager or both, your work and success will depend on their work and success.

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