Real estate investments are assets like any other and investors often hire an asset manager in order to create value and profit in a property portfolio. An asset manager in real estate will have specific knowledge about various property markets and uses that knowledge to make investment decisions on behalf of the investor to maximize returns. They will stay on top of trends in the real estate market (as well as political, financial, and economic events) in order to manage risk to the investment portfolio. Asset management and real estate operating in the same way asset management is undertaken for stocks or the financial market.

While most smaller real estate investors perform their own asset management, it becomes critical in larger real estate portfolios. Asset managers provide four main functions for real estate investors:

• Identify Consistent Revenue Sources – while capital gains increases are important in real estate, consistent revenue is a significant benefit of holding property and asset managers need to find properties that offer good rental returns – both residential and commercial.

• Reduce Expenditure – a good asset manager will find ways to reduce costs of maintaining properties through economies of scale and finding the best service providers.

• Provide Risk Management – managing risk in real estate has specific requirements such as tracking the property market in specific geographic areas as well as evaluating the impact of economic and natural events.

• Build the Portfolio – a real estate portfolio needs to be built strategically with a good mix of different types of properties so that a downturn in one market (for example, commercial) is offset by others (such as residential). An asset manager will look to diversify a portfolio and offer a good mix of property types.

Asset management and real estate class is often more complicated than other assets such as shares, for example. With shares, investors buy at a certain price with the expectation that the price will rise and they will make a profit without having to be concerned with external factors. In property, however, there are many events that can occur that, if not properly managed, can significantly reduce the value of an investment. These can include buying a bad property, not being able to find tenants, having poor tenants that do not pay rent, buying into the market at the wrong time, and not being able to find buyers when it is time to exit the investment, among many others. Asset management helps deal with these issues by investing in property.