Real Estate Technology, Asset Management
Article | June 15, 2023
Proptech, or property technology, comprises digital solutions that help facilitate buying, selling and leasing of commercial real estate. It is also called CREtech or REtech for commercial real estate technology, respectively. It usually refers to the digital tools and software used in real estate. With digitalization growing at an exponential rate across the real estate sector, proptech is evolving, here are three topmost trends in proptech that real estate solution providers must keenly follow.
1 3D House Tours
Both prospective buyers and real estate agents love this technology. 3D house tours simulate a real house tour and can be viewed either on virtual reality (VR) headsets or one’s computer screen. They simplify initial interactions by enabling users to confirm their interest in a property, saving both time and visits for buyers and agents. They also allow agents to better market their properties and schedule multiple visits from the comfort of their offices. The ensuing process ensures that agents are able to provide realistic walkthroughs of their properties and eliminate friction from the get-go, making the showing as painless as possible.
2 Automated Service Desks
Exceptional customer service is the name of the game in real estate and agents are expected to provide their clients with white glove service wherever possible. Conversational AI is one way that many real estate solution providers are achieving this. With round-the-clock contact channels to assist clients with the information they need, agents and brokers are better equipped to deal with queries and reduce their response time. The automation of menial tasks also ensures that they don’t have to be everywhere all the time.
3 Digital Transaction Management
Real estate comes with its share of sky-high paperwork. With digital transaction management, agents can now reduce the significant amount of legwork that goes into managing paperwork. It also helps in signing documents digitally, which means physical presence isn’t needed to execute agreements and registration processes, making the process smoother and faster. Real estate clients with multiple properties will no longer need to be inundated with massive amounts of paperwork and travel.
For the Record
Digitalization is transforming industries at lightning speed and real estate is a frontrunner in adopting new technologies. The impact that proptech has on RE is visibly vital. The above trends are revolutionizing the real estate technology landscape. Keep an eye out to see how these trends change the way people buy and sell property.
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Real Estate Investment, Asset Management
Article | May 5, 2023
Spring is here, and with it comes home buying season. If you’re in real estate, it’s about to get really interesting. There are also some unique challenges you and your buyers might be confronting in the market now. Let’s get to what you need to know.
The housing market has been red-hot for quite a while now. Sales for both new and existing homes have been on an absolute tear. But last month, both of these metrics took a step back.
One likely reason for this is no doubt a moderate increase in mortgage rates. However, it seems to me we talk about that enough. Today, we would like to spotlight another factor causing issues in the housing market and possibly even delaying construction of homes in some areas.
There’s a real shortage of the necessary materials for constructing and renovating homes at this point. According to a December report from the U.S. Chamber of Commerce, 71% of builders were facing a shortage of at least one material.
That means the houses that were being built in December that may just be getting ready to come on the market now may either be delayed or come with higher prices. The material most in demand was lumber, with 31% of contractors experiencing a shortage.
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Real Estate Technology
Article | July 21, 2022
Improve real estate portfolio performance by analyzing various investment optimization strategies anddiscoveringthe subtle differences between asset management and property management.
Contents
1 Introduction
2 Contrasts between Asset Management and Property Management
2.1 Key Differences based on Scope, Objectives, and Activities
2.2 Interconnectedness of Asset and Property Management
3 Asset Management Techniques
4 Property Management Techniques
5 Clarifying Misconceptions about Asset and Property Management
1. Introduction
Asset management and property management are both integral components of real estate management. Precisely, property management pertains to managing the daily operations of a particular property, which includes overseeing the property and the tasks around it. On the other hand, asset management caters to investors seeking to purchase and manage numerous investment properties. It is essential to note that property management is generally intended for property owners who want to delegate the management function to competent professionals.
An asset manager is responsible for managing various types of assets and overseeing portfolios. In contrast, a portfolio manager primarily handles the financial assets of their clients. The main objective of property managers is to manage and improve the value of a property while maximizing the return on investment for the owner. They analyze the real estate market and decide whether to continue investing in a property or divest it.
2. Asset Management Vs Property Management
When it comes to asset management versus property management, people frequently experience confusion. Although both concepts are essential to the ownership and management of real estate, they are distinct. Recognizing the difference between the two overlapping cores of real estate management and comprehending how the two interact is vital.
2.1 Key Differences Based on Scope, Objectives and Activities
Property management is operational, while asset management is strategic and focused on the big picture.
Asset management involves a broader scope of responsibilities as it encompasses the management of multiple properties within a portfolio, including analyzing and evaluating the financial performance of each property, monitoring market trends and changes, and making informed decisions about buying, selling, or holding assets. On the other hand, property management in real estate has a more limited scope and primarily focuses on managing the regular operations of a single property, including overseeing tenant relations, collecting rent, scheduling maintenance and repairs, and assuring compliance with local laws and regulations.
The primary objective of asset management is to develop and implement a strategy to maximize the return on investment, including identifying and acquiring properties that align with the owner's investment objectives, and developing long-term strategies to improve the performance of the portfolio as a whole. On the primary objective of property management in real estate is to ensure that a particular property is profitable and maintained to a high standard, create and implement effective marketing strategies to reach potential clients, and also handle the screening and selection process to ensure that clients are reliable and trustworthy.
Asset managers are responsible for creating and implementing long-term strategies to improve portfolio performance and hiring the personnel on an investor's team, including real estate agents, property managers, and leasing agents. Property managers are responsible for maintaining property value, ensuring it remains profitable for the owner, and hiring employees like cleaners, security guards, and contractors.
2.2 Interconnectedness of Asset and Property Management
Asset management and property management are closely interconnected, despite their different scopes and objectives. Effective communication and collaboration between asset and property managers are essential for a successful real estate investment portfolio. Asset managers rely on property managers to ensure individual properties are well-maintained and profitable. Property managers depend on asset managers to monitor investment strategy, market analysis, and portfolio optimization. The two roles combined can identify opportunities to increase the value of properties and achieve greater returns for investors.
3. Asset Management Techniques
Asset management is a highly technical position involving finances and investments to a significant degree. In the real estate industry, clients place a great deal of trust in asset managers to purchase and sell valuable properties.
Cash Flow Analysis: The real estate asset management technique, cash flow analysis is used to analyze cash transactions generated by a property to determine its profitability and potential returns. It helps asset managers assess its profitability and potential returns, guiding decision-making in investment, asset maintenance, and renovation.
Debt and Equity Financing: The technique of financing debt and equity is about understanding and utilizing various financing options to fund real estate investments. Asset managers can choose the best financing strategy for their real estate investments using this technique.
Property Valuation: The process of determining the value of a property based on factors like its location, condition, and potential rental income is simplified by property valuation techniques. Determining the property's current market value, setting a sale price or rental rate, and negotiating with potential buyers or tenants benefit an asset manager to identify the property value effectively.
Financial Modeling: Developing the future cash flow projection and understanding the investment returns for future decision-making is vital. Using economic modeling for asset management, real estate asset managers can identify potential risks and opportunities and make informed decisions about investment strategies.
4. Property Management Techniques
Property management is a service-oriented profession that involves hands-on knowledge of a property's operational aspects. Most of a property manager's duties revolve around techniques that ensure smooth property management and meeting the residents' needs and expectations.
Budgeting and Financial Planning: Monitoring expenses related to real estate property management, such as utilities, insurance & maintenance, and finding ways to reduce costs without sacrificing quality using the budgeting and financial planning technique will help property managers make informed decisions about property investments and identify areas for cost-saving measures.
Lease Negotiations: Maintaining accurate and up-to-date lease agreements, renewals, and terminations, enforcing lease terms, and resolving any disputes that may arise using the lease negotiation skills result in favorable lease terms for property owners, ultimately leading to better profitability.
Tenant Screening and Retention: Conducting comprehensive background checks on prospective tenants to ensure trustworthiness, accountability, and implementing retention techniques to hold current tenants can help reduce vacancies and turnover, and ultimately increase profits.
Effective Marketing and Advertising: To attract new tenants and help maintain high occupancy rates implementing effective real estate marketing and advertising techniques, including listing, signage, and social media, helps property managers with improved visibility and attractiveness of a property, leading to high rental income.
5. Clarifying Misconceptions about Asset and Property Management
Real estate asset management and property management are two distinct roles that are often misunderstood. One common misunderstanding is that asset management is solely for prominent investors, whereas property management is exclusively for small-scale landlords. However, it is crucial to recognize that both roles are intertwined and can benefit from techniques utilized in both areas. Real estate decision-makers should comprehensively understand asset and property management techniques to make well-informed decisions that can optimize profitability and value. Real estate professionals can create an efficient and effective management approach for their properties by dispelling misconceptions and capitalizing on the strengths of both roles.
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Article | April 27, 2020
Self-directed IRAs are the less offered and lesser known of the IRA options. That’s simply because they’re seen as needing too much effort to utilize correctly. The truth is that self-directed IRAs aren’t as complicated as they’re made out to be. Especially if you have the right custodian who offers the services you need to successfully run your account. Similar to other IRA accounts, owners can still invest in stocks, bonds, and mutual funds. They can also invest in things like small businesses, boat slips, storage units, parking lots, land, and homes. Interested investors should seek legal advice, as well as input from an accountant and real estate agent for a well-rounded picture. They should also be familiar with the rules for the type of retirement account they’re using. Whether it is a Simple IRA, Roth or Traditional IRA, SEP IRA or Solo 401K, contribution limits still apply, and there are penalties for early withdrawals.
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