What is Asset Management and Why is Asset Management Important?
“Asset Management, in a nutshell, is the process of overseeing a property’s financial performance, physical condition and compliance with applicable regulations to help investors, lenders, state agencies and other capital providers receive expected benefits and management their risk.”, as originally published in the Tax Credit Advisor, Low-Income Housing Tax Credit Asset Management.
The primary objectives of Asset Management are to protect the value and insure the long term sustainability of a real estate asset while maximizing the owner/investor benefits and returns. Without adequate Asset Management the value and sustainability are diminished, benefits can be lost or recaptured, and returns may go unrealized. If the primary objectives are achieved than the apartment complexes not only remain in good physical and fiscal condition but also provide high quality, yet affordable, housing for residents.
How is this achieved?
The objectives are achieved through continual monitoring and evaluation of property performance, inclusive of, but not limited to:
- Devising annual budgets;
- Review and analysis of fiscal and operating statements;
- Review of monthly occupancy
- Regular site visits and thorough field inspections
- Timely reporting to partners and investors
- Implementing strategies to address projected impacts to sustainability or benefits;
- Cash flow management;
- Maintaining symbiotic relationships with all parties involved in a project
How can Mosaic assist your organization?
- Train personnel on how to review and analyze fiscal and operating statements;
- Provide referrals to third party management teams, and/or assist in devising request for proposals for third party management services;
- Provide referrals to CPA firms for annual audit and tax services for your portfolio;
- Analysis of Operating Agreements to advise on benchmarks related to budget requirements, insurance coverage, and cash flow waterfall;
- Conduct property inspections;
- Technical assistance in transition of partnership interests.