What is the difference between property management and asset management?
Managing a rental is a game of tenants and toilets. Investing should be about ease and profit, through strong asset management. Other people have rentals. You have investments.
| Property management | Asset management |
|---|---|
| Marketing vacancies | Seeks to maximize short and long-term property value |
| Screening tenants | Maximizes operating income, which sets your future property value |
| Lease signing | Tracks property value over time |
| Rent collection | Plans capital investments such as roofing and hot water heaters |
| Handling tenant issues | Includes tax effects of depreciation, interest and other deductions |
| Maintenance and repairs | Minimizes tenant turnover and unneeded expense |
| Move-in and move-out | Tracks growth in property equity |
| Evictions | Gives a whole-picture view to optimize your wealth |
| Accounting |
How do you line up with my investment goals?
Our Wealth Optimizer service builds a plan that helps you and your Real Property Management Gold office reach your investment goals. We focus on short-term and long-term value, so we understand your goals and can act on them.
We help you see the key variables that affect revenue and expenses now and later. With planning, you can anticipate and smooth the cost of vacancies and capital improvements, and follow your investment’s appreciation. The main benefits are better investment performance, clear data and better revenue and expense management.
What is the Wealth Optimizer process?
- We start with a full analysis of your property’s revenue, expenses, equity changes, tax deductions, vacancy and occupancy rate, balance sheet and reserves.
- Our Wealth Optimizer tool produces a complete, easy-to-read report.
- We meet with you to review the first analysis and set goals for the next year, five years and beyond.
- We can test different assumptions to see their effect on your investment.
- Each month you receive a report with cash flow, rent roll, occupancy and vacancy rate, balance sheet, variance report and reserve status.
- In the fourth quarter each year, we update assumptions together and you get a projected year-end report.
- At the start of each year, we meet in person to review a new analysis and proforma and set goals for the year.
What does the Wealth Optimizer track?
We compile the information into useful reports so we can see revenue and expense variances and act to improve results. We can budget for expenses such as a roof or HVAC replacement, based on age and standard life spans, so there are fewer surprises. We can also model how different assumptions affect performance. The calculator uses these inputs. Some come from your consultant and some from you.
| Group | Inputs |
|---|---|
| Rent revenue | Monthly rent revenue, vacancy rate, annual rent increase, deferred maintenance costs |
| Operating expenses | Insurance, utilities, HOA fees, maintenance, property management fees, interest |
| Taxes and depreciation | Effective tax rate (federal, state and local), land percentage for depreciation, depreciation term |
| Investment capital | Total purchase cost, mortgaged amount, cash required to purchase |
You receive a full view of the financials, from cash flow analysis to tax benefits to return on equity. The report includes an executive summary, a property cash flow analysis, metrics and ratio analysis, a property sale price estimate (using operating income and gross rent multiplier methods), a loan summary and a loan amortization schedule. For more on the terms, see net operating income, cash flow and cap rate.
Who is Wealth Optimizer right for?
Wealth Optimizer is best for discerning property investors. It is for investors who want to build long-term value, and especially those with or planning multiple investment properties. It suits owners who treat property as an investment for the future, not only a short-term cash generator. It is for those who want to plan for capital costs and vacancies instead of being surprised by them, and who want a complete financial picture. We understand property management and property investments, and we have become the largest property management franchise in North America. Our corporate Franchise Support provides oversight to local performance, compliance with high standards, ongoing training, and access to proprietary systems and processes to deliver professional service. Local Real Property Management offices are knowledgeable of neighborhood and city real estate market conditions, practices, and regulations. Together, we provide clients with the best property investment management services available. That’s why we are The Nation’s Local Property Manager.
Every office participates in extensive ongoing property management training, uses sophisticated processes and data management, and provides competitive pricing to our customers. Join The Trusted Leader in Property Management. Contact your local Real Property Management office to learn more.
Managing a rental and managing an investment are different. Managing a property involves transactional work such as marketing vacancies, screening tenants, collecting rent and handling tenant activity. Managing an investment includes that work and adds deeper financial analysis. Insights, understanding, and planning drive better investment decisions. Contact us to discuss our proprietary Wealth Optimizer, which will provide you immense insight into your properties and help you make long-term investment decisions. Download our introductory brochure on Wealth Optimizer and join those who know the difference between a professional money manager and all the rest. Be one of the select real estate investors who truly understand your investment’s performance and can explain your success to others.
Next step
See the Wealth Optimizer page, or request a free assessment at Contact us or call (301) 392-2172. Learn what the published fees cover as well.
Frequently asked questions
What is the difference between property management and asset management?
Property management handles the work: marketing, screening, leasing, rent, tenant issues, repairs, move-in and move-out, evictions and accounting. Asset management adds a view of the investment: long-term value, operating income, equity growth, capital planning and tax effects.
What does the Wealth Optimizer process look like?
We analyze revenue, expenses, equity changes, tax deductions, vacancy rate, balance sheet and reserves, then meet to review the report and set goals. You get monthly reports, a joint update in the fourth quarter, and a new analysis and proforma each January.
Who is Wealth Optimizer for?
Investors who want long-term value from their property, especially those with or planning multiple investment properties. It suits owners who want to plan for capital costs and vacancies and want a complete financial picture.
Do I provide any of the information?
Yes. Some of the inputs come from your Real Property Management consultant and some must come from you, such as taxes, loan and purchase details.
