July 27, 2020 Last updated December 28th, 2020 853 Reads share

Business Assets: Managing Your Real Estate Portfolio

Image Credit: DepositPhotos

Asset management is a key part of any business, whether for your own business or managing another company’s assets. Knowing what a particular asset is worth and the way it fits into the business can be a time-consuming task.

This is particularly true when it comes to managing a property. Real estate investors may specialize in multifamily units, rental houses, vacation homes, office buildings, industrial space, warehouses, retail, or restaurants. Commercial real estate companies often own a combination of properties. 

Property Management Software

Streamlining the management process of real estate assets begins with cataloging their location and worth. It’s also important to understand how much revenue each property brings in, and their maintenance costs. If a property’s bleeding money – either because the income it produces is too low or its maintenance too high – it may be time to consider selling. 

While there are as many methods of tracking this data to measure the income and expenses each property is bringing in, 

It’s best to have all your data in one place. A spreadsheet program like Microsoft Excel is enough to give you a basic idea of where you stand, and it may be enough for most smaller real estate investors. If you’re a bigger company with diversified assets, paying for a customized program developed that manages assets specifically designed for your purposes may make more sense. 

There are also many software applications that help track assets, with specific ones specifically for real estate

  • 360Workplace for Commercial Real Estate by Accruent
  • Appfolio Property Manager by Appfolio
  • Planon Real Estate Management by Planon
  • Property Operations Workspeed by MRI Software
  • Rentec Direct
  • TRIRIGA Real Estate Manager by IBM

Each has its pros and cons, geared towards specific kinds of real estate investors. Some even have templates for rental agreements. 

What you don’t want is a haphazard system with information spread around for each property. You want the data in one place so that you can easily analyze the entire portfolio. A good real estate asset management system allows you to view all the data quickly and allows users to filter for specific criteria. 

Depending on the scope of the company’s property portfolio, you may even find ghost assets. These are assets that are listed, but which produce no income or have no value, as they’re no longer usable. It could include a warehouse destroyed by fire, a seaside vacation home ruined in a hurricane, or an apartment building that’s been condemned and deemed uninhabitable. Paying taxes or otherwise paying to keep them up makes little sense, and it’s important to either write them off or note their depreciation for tax purposes. 

Systems for Valuation

You should call out a real estate agent to help you with real estate valuations for your properties but, depending on the agent, there’s always a bit of thumb-sucking involved. Granted, they’ll base their valuations on other properties in the area, but an agent will have a bias, so it’s also good to check on valuation websites as well. 

For residential properties, there are numerous sites that help with valuations and show property prices of surrounding properties, with Zillow being the most used for residential properties. If your whole portfolio consists of single-family homes, their platform shows everything you need, including comparisons to nearby properties. Besides Zillow, residential valuation sites include Trulia, Redfin, Realtor.com, Real Estate ABC, and there are a few others. 

You need to take Zillow’s algorithm – or that of other real estate sites – with a grain of salt, however. Comparing it to an agent’s valuation is highly recommended. 

There are similar sites for commercial property, including Digsy, RealMassive, 42Floors, Rofo.com, and OfficeSpace.com. You can even find a property that’s off-market, which is exactly what it sounds like, where owners don’t have the property on the market but may be willing to sell. 

The Digital Mortgage

The business of real estate revolves around financing to purchase more property to add to your portfolio. And in today’s world, digital is becoming increasingly common. Given the pandemic, even more, real estate investors are turning to digital as a way to finalize mortgage financing. 

Digital mortgages actually make the process more transparent. Additionally, the process is quicker, more accurate, and the data is more trustworthy than with traditional mortgages. The increased use of digital mortgages will only make the process easier for investors.

Companies like eOriginal, who was at the forefront of the electronic signature revolution, offer a digital mortgage platform for investors that includes: 

  • An environmentally-friendly signing option that requires no paper. 
  • Approval by Mortgage Electronic Registration System (MERS), Fannie Mae, and Freddie Mac. 
  • An application programming interface that allows deep system integration. 
  • Trust of the financial services industry. 

Originators and their partners in the secondary market can take advantage of these eMortgage benefits to greatly expand their real estate portfolios. 

Signing eNotes

Following on eMortgages are eNotes. Essentially, an eNote is just an electronic version of a promissory note in a mortgage agreement. It’s basically an agreement signed electronically by a borrower that states their acknowledgment of a debt, for which the property is collateral.

With eNotes, specific guidelines are necessary for creating, signing, and managing the electronic document so that it’s enforceable in the same way as a paper document. This document is used by those involved in the trading of mortgages – the lenders, originators, custodians, investors, warehouse lenders, and services – to buy and sell it as a commodity on the secondary market. 

Digitization of the management, sale, and purchase of property has become increasingly common, and the use of eMortgages and eNotes is likely only to increase in the future.

real estate agent on computer -DepositPhotos

D.A. Rupprecht

D.A. Rupprecht

Read Full Bio