Welcome to the introduction of how to start a profitable property management company. I am your mentor trainer and instructor evany Caldwell. So, in this introduction, we are actually going to talk about property manager versus an asset manager. What's the difference? Why is that more important than understanding ers? property management one on one?

Well, the reason is important is because a good property manager should understand everything about asset management. So, we're going to start off and take a deep dive. What is asset management? What does a property manager does? is extremely important to know that investors landlords, property managers and realtors should know the difference between property management and asset management Before getting into the profession, I've taken control of one's asset. And the asset is basically the real estate property, the community that the investor may own, that you as an potential realtor who's becoming a property manager, or property manager who's getting into this business don't understand why is it important to understand what the asset is and why you are hired to be responsible for that asset.

Property Management and asset management are two different professions. However, to be successful, as a property manager, a landlord, realtor or real estate investor, you must understand asset management. Now, why do I say even as a landlord, or realtor was a landlord if you're purchasing properties, you should understand is not just about collecting rent is not just about maintaining the property, making it look cute on outside the landscaping the curb appeal. It's not even just about that, even as the realtor is not about finding a property for your investor, or for that landlord is about understanding everything that goes into it. As far as budgeting, as far as analytical reports, this is the most important thing when it comes to understanding Asset Management if you are going to be successful as a property manager, maybe because you're a realtor or realtor who's working with a lot of investors or if you're an investor who's trying to get the best property and a good return on your investment.

Property managers concentrate on the day to day operation of a property. People who work at particular properties are typically fulfill with property management responsibilities. Now these responsibilities may include things such as maintenance of the property and facilities, renting dwelling size rooms, etc. collecting rent and other charges. Working with staff and contract is what it is subcontractors dealing with residence tenants and guess issues. If forcing rules such as evictions, regulations, the covenants, just the understanding the nuisance abatement guidelines, risk management and also includes insurance, you know, and what I mean by insurance.

I don't mean life insurance or health insurance. I mean, the responsibility of a certificate of insurance, meaning if you have a contract or they're on site, doing property as a contractor, and you're a property manager, even a realtor, you need to make sure that they have the proper Insurance, whether they have the proper certificate insurance, whether they have liability insurance, whether they have workman's comp insurance. And the reason this is important to you, if your investor, remember this is their asset. And with this being their asset, you have to make sure that if anybody is working on their property, doing any type of repairs to beautify the property or enhance the property, no one gets injured on the property in which this asset now can become a negative situation because now the investor and or owner or even property management company has gotten sued. So it's very important to understand the overall risk management of property management as well as asset management.

Now, property management has evolved in the last two decades, whereas back In a day, property managers only felt that they responsibility was to collect rent. You know, like I said, making the landscaping look nice to curb appeal look nice. Do any evictions you know some property managers feel? Oh because I've done multiple evictions on successful evictions that make you a good property manager. No, in actuality, you should have to worry about eviction because if you're good property manager, you know how to select the correct inappropriate tenants accordingly. And this brings me back to understanding asset management is not just about filling the property.

It's about maintaining the assets. Now, a good property manager. One of the things that you are going to should know how to do is prepare an annual budget and work towards improving the inner line which is the net operating income of the property, but to be honest with you Just so you know this does not make you an asset manager. Asset Management is centered on financial matters, maximizing the ROI, which is the return of investment, as well as a cap rate, as known as the capitalist capitalization rate and value of the property. They are in a way whereas the operation repositions itself to help reduce costs and increase the income. So, the ultimate goal as a property manager is should be to help your investor increase their income, increase their capitalization rate, increase their rate of return.

That is the ultimate goal of what property managers should do. Now, asset managers understand real estate as an investment. It's not a job to maintain the property by collecting rents vision and beautification. Asset Management includes the tasks such as, prepare long term financial forecasts and perform cash flow analysis and compute the internal Return of the determined properties financial performance, which is the return of the investment, performed a due diligence for acquisition or disposition of a property and provide recommendations. Now, don't get me wrong as a property manager, would you be responsible for helping them acquire the property more than likely not However, if you are a realtor who is operating as a property manager, and you are a realtor who's operating as a property manager for your investors, it is extremely important for you to understand the purpose and the due diligence of the acquisition. Reason being is because you were probably the one is picking out this property.

So don't pick out properties where you don't understand The overall acquisition of it and you haven't done your due diligence, such as understanding what are the current rents that have been brought in? What is the vacancy rate? These are the things that you need to understand as an asset manager, who is really a property manager or realtor who's working on behalf of investors for the purpose of maintaining or actually increasing their rate of return their return on their investment, determining value of a property and what can be done to increase the value. Find and work with lenders negotiate on behalf of the owners market an asset to increase the revenue. Now, that is the goal of the asset manager. However, as a property manager, you should understand this because if you don't understand how to market the property accordingly to increase the asset of the asset of the property, then you are definitely not going to make money in this business, you definitely going to fail as a property manager.

And unfortunately, you're going to put yourself and your investor in a situation whereas they can fail. Now, there are asset managers who are very involved at the property management level. But there are also some we're not, this is much depends on the company environment in which they work. Most real estate managers are either a property manager or they are an asset manager. The best real estate managers know how to perform both jobs. Very seldom will you find a property manager or real tool or an investor who has made the transition to understand asset management and why it is successful in the success of property management and increasing the asset rate of return.

The difference between a property manager and an asset manager would make you much more successful when it comes to increasing your clients ROI, which is your return of income, your return of that investment. So, we're going to go into the next module, the next course and go over in depth. What exactly is a property manager itself? How to Start the property management company. We're going to go there next and make sure you're prepared to take notes.