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Complete guide to managing your Investments

Investment Management in Real Estate

Property Investment Management

 

Property Investment Management - What is it?

Property refers to tangible and intangible assets legally owned by an individual, or company, for the purpose of generating financial returns. Property investment is the process of investing finance towards purchase of commercial or residential real estate; a piece of land, building, house, apartment, etc. Generally used for commercial purposes, property investments can earn high profits through income on rental and/or capital growth. Property Investment Management is the process of professionally managing money for investments in real estate. The process of Property Investment Management can also be described as the timely management of investor assets, asset maintenance, tracking and disposal and risk reduction. When handled with great efficiency, Property Investment Management can reap high benefits, increase sales and maximise financial assets.

Why Invest in Properties? Benefits of Property Investment Management

As a relatively safe form of investment, purchasing properties makes an individual, or company, susceptible to less financial volatility than shares. Since the value of properties rise in the long-term, investors stand to gain profits when reselling properties in the market. Also, investors are eligible for tax deductions, not available on other investments.

Intelligently conducted, Property Investment Management can help you obtain tax variations and enhance your income and increase cash flows through rentals. It can help you use your negatively geared investments to legally reduce your taxes. If your property loan is more than income from property rental, a skilled Property Investment Management professional will help you indicate the difference between interest and losses incurred to obtain deductions on tax returns.

Property Investment Management requires expertise and years of experience. By consulting qualified Property Investment Management professionals, you can maximise the benefits you earn from your investment property.

Fundamentals of Property Investment Management

An investment not only helps compensate poor wages, but also secures one’s future by promising steady incomes after retirement. Most individuals interested in future cash flows invest in tangible properties through hiring professional advice on Property Investment Management.

Investments encourage savings through wise spending of monetary resources following carefully drawn budgets. Investors will invest a substantial amount of money for the purchase of assets and properties. These assets are usually high-profit potential real estate properties, gold, silver, and other valuable items. A specialised field of investment management, Property Investment Management requires qualified, professional fund managers to place money in the best profit yielding instruments.

Property Investment Management requires:

  • An understanding of the investment needs of individuals and funds available, investor constraints and risk appetites.  
  • Evaluation of risk and growth potential of assets and their allocation.
  • Discerning an investment strategy for financial goal fulfillment.
  • Monitoring of investments for maximum gain.
  • Providing advice on areas of investment, and handling investor accounts with utmost discretion.

Real Estate Property Investment Management

Real estates are tangible assets; immovable property such as land, buildings, houses, etc. A person or company owning a real estate property acquires several rights, including the rights of possession, control and transfer of his/her property. 

Real estate is a lucrative industry. Real estate investment is the process by which funds are committed towards income generation from lease, rental or capital appreciation. Real estate is a long-term investment that involves a substantial sum of money. Because of the unpredictable nature of real estate markets, an understanding of real estate Property Investment Management is crucial.
Investors can participate in the real estate property investment market in the following ways:

Property Investment Management by making real estate investments for rent purposes

This involves purchasing real estate property with the aim of renting it out to a tenant. The owner (landlord) is promised a continuous stream of money (rent) from the tenant. He/she also benefits when the property value rises in the market (capital appreciation).
There are certain disadvantages of renting property:

  • Mortgages, property maintenance costs and taxes are to be paid by the owner.
  • Dearth of tenants; no rental can cause the landlord to suffer negative monthly expenses.
  • Demands time and effort from the landlord.

Property Investment Management by real estate investment groups

Similar to mutual funds, real estate investment groups are set up for rental properties.

Property Investment Management through real estate trading

Real estate property trades typically hold properties for less than 4 months before selling them at a profit. Referred to as ‘flipping properties’, this Property Investment Management process encourages investors to purchase ‘hot’ properties at significantly low prices, before selling them at higher rates. Landlords may or may not improve properties before selling them.

Property Investment Management through REITS (real estate investment trusts)

A REIT or real estate investment trust is an organised body that uses investor money to invest and operate real estate properties. REITs help investors in the following ways:

  • Providing regular incomes.
  • Exposing non-residential investments, like offices and malls with high gain potential, to investors.
  • They are highly liquid.
  • REITs distribute 90% of their taxable income to shareholders in the form of dividends.

Before participating in the real estate market and employing Property Investment Management services, investors must evaluate funds available and their risk capacity.


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