Scattered Site Rental Toolkit:
Business Planning for Development & Management
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VII.C. Asset Management

It can be difficult to differentiate between the property management and asset management roles. Asset management assures that established standards and expectations about financial and physical condition, compliance and reporting are being met. Property management is the day-to-day management of the project.

In truth, good asset management includes strong property management, but asset management takes a step back from day-to-day operations and examines the strategic objectives of the property: Is the property achieving its project mission, is it advancing the organization’s overall mission? Are there risks or problems that have arisen that were not initially anticipated? What trends can be discerned from performance indicators over time?

There are three basic questions an organization’s asset manager addresses: [i]

1. Is the project financially healthy? If not, what are the problems or risks to its financial stability and how can these be addressed?

2. Is the project being properly maintained to provide decent, safe and sanitary housing for its occupants and to enhance the neighborhood in which it is located? If not, what are the problems and how can they be corrected?

3. Is the project operating in accord with all funders’ regulatory requirements and all applicable local, state and federal requirements? If not, what are the problems and how can they be resolved?

Advice from the Field: Scattered Site Asset Management

Good asset management begins early and is continuous. In the predevelopment phase, organizations must think of the long-term asset when targeting neighborhoods, determining construction quality, developing the financial proforma.
Systematic asset management is crucial for scattered units! You must have clear plans and systems in place.
The amount of time needed for ongoing asset management is substantial and grows as the portfolio grows. This is a factor you should include in the project’s annual operating budget. How much can and should you build in as asset management fees, separate from property management fees?
Scattered sites also make it difficult to control the physical environment around your units. You cannot easily control access, as you can with larger multifamily developments. Unless you have a large concentration of properties in a single neighborhood, you are vulnerable to decisions made by other property owners and neighborhood residents.
Monitoring property management (and maintenance) performance is far more challenging with scattered units. It is harder to regularly inspect units and talk with tenants when properties are widely scattered.

Next: VII.D. A Mission-Based Approach to Property and Asset Management