asset management communication is the focus of this guide for passive real estate investors. First, it highlights the main idea behind the topic. It also outlines the risks and questions worth reviewing. As a result, you can approach the discussion with a clearer framework.
What to know about asset management communication
One of the most important activities to ensure our business plan is being met and ideally exceeded is asset management. While we hire a third-party management company to oversee the onsite day-to-day operations, it’s still our responsibility as the general partner (GP) to ensure success.
Our asset management approach involves people, process, and technology to help us achieve the results we expect. The people component begins each week with an individual property call that includes onsite staff, the regional property manager, and our team to discuss physical performance (i.e., renovations or required repairs), financial performance, and other key topics.
Before our weekly call, the property manager sends a key performance indicator (KPI) report that includes stats like occupancy, the number of tours, prospective leads, new leases, declined leases and why, property reviews, maintenance requests, completed and upcoming resident events, and any market changes. Bringing everyone together on a regular basis allows us to stay up to date on performance and be proactive. Throughout the week, our management teams communicate with us over the phone and email if there are any deviations from the budget or property performance so we can make real-time adjustments and avoid any month-end surprises.
What this means for investors
In order to track our discussions and action items, we use Microsoft Teams. This technology allows our PassiveInvesting.com team to enter tasks, follow-ups, or questions that we need answers to and allows other team members to make comments and collaborate on topics together. With Teams, we can track and store all activities in one place, so everyone is knowledgeable of what’s happened in the past, what’s being discussed, and what’s occurring at each property.
A recent example of how this process has been successful is from an actual resident review at Braxton at Woods Lake. Based on our asset management approach and working diligently with our management team to make property upgrades, we’ve been able to create an improved community for residents. See example in figure 1. The residents are really enjoying the capital improvements at this property. This resident lived at the property before we acquired it and was unhappy with previous management, but updated their review recently based on our new management/ownership.
Key takeaways for asset management communication
- Start with the goal and timeline that fit your wider financial plan.
- Next, review the assumptions, risks, fees, and possible outcomes.
- Finally, compare the opportunity with other ways to use your capital.
Put asset management communication in context
Core ideas for asset management communication
Every investment decision depends on the investor, the deal, and the market. Therefore, use the ideas above as a starting point for deeper due diligence. Review source documents, ask direct questions, and seek qualified advice when needed. For more guidance, explore our passive real estate investing education.
A clear review of asset management communication
asset management communication deserves a clear and practical review. These short checks can support a more informed decision.
- Start with a clear goal.
- Next, define the time horizon.
- Review each key assumption.
- Compare the likely outcomes.
- Test a less favorable case.
- Ask who controls each decision.
- Confirm the fees and incentives.
- Study the market and the deal.
- Check the supporting documents.
- Look for clear communication.
- Compare other choices.
- Keep the full plan in view.
- Write down the main risks.
- Review the source of returns.
- Check the exit assumptions.
- Understand the tax questions.
- Consider the need for liquidity.
- Match the choice to your goals.
- Ask direct follow-up questions.
- Confirm the reporting process.
- Review the operating plan.
- Check the team’s experience.
- Compare the best and worst cases.
- Keep expectations realistic.
- Use qualified advice when needed.
- Document the final decision.
- Review the decision over time.
- Watch for changing conditions.
- Stay focused on the long term.
- Finally, act with a clear reason.
A practical review of The Importance of Asset Management and Communication
First, define the goal for this decision. Next, write down the result you expect. Then, identify the facts that support that result. Finally, note any facts that could change your view.
For example, compare the likely return with the main risks. In addition, check the timeline and the amount of control you will have. However, do not rely on one attractive number. Instead, review the assumptions behind every estimate.
Before you act, ask who will manage the work. Also, confirm how that team will report progress. If conditions change, decide how the plan can adapt. As a result, you can judge the opportunity with more confidence.
Moreover, compare this choice with realistic alternatives. For instance, consider liquidity, taxes, fees, and timing. Likewise, review the downside as closely as the upside. Therefore, your final decision can reflect both your goals and your limits.
In short, use a clear process. First, gather the facts. Next, test the plan. Then, ask direct questions. Finally, choose only when the answers support your strategy.