For multi-generational families owning apartment properties, there can be many difficulties, competing factors and points of view brought to the table when it comes to management of property.

At this point, for most portfolios built in the 1950s and ’60s, generation one has passed, members of generation two are in their 70s, and the third generation is in its 30s. They are trying to a create a workable system to own and manage these buildings for the next generation.

Some family members may be working in the business and others may not be involved at all. There may be members in different locations, with different priorities all being brought to the table.

What we have seen is that, in addition to property managers, having an asset manager work on behalf of all the family owners can be a beneficial arrangement.

Asset managers think like property owners

An asset manager is almost like an extension of the property owner.

They think like an owner and are focused on strategic decisions. The asset manager drives the strategy around rent levels, occupancy, upgrades, financing decisions, ESG components etc.

Their responsibility is to look ahead into the future; not just the next year, but the next three, five or seven years.

By hiring an asset manager, a multi-generational family is able to delegate some of these strategic decisions to an experienced, unbiased third party; while of course, always maintaining control of the overall outcome.

Asset managers are skilled in many areas of property ownership and can also assist with budgeting and forecasting, income tax work, completing financials, audited statements etc.

We have found the most successful asset managers are able to develop and maintain a close, trusting relationship with the owners.

A clear reporting structure

When it comes to multi-generational-owned properties, an asset manager typically reports to all owners at the same time, although there may be a smaller leadership committee which assumes this responsibility.

Typically, asset managers report on a monthly basis; or sometimes quarterly, depending on the preferences of the ownership group.

Asset managers make it a priority to understand everybody’s objectives when taking on their role with a new ownership group.

They recognize that, unlike institutions which tend to be driven solely by returns, multi-generational families often place a greater emphasis on cash flow needs.

The need to understand and work with multiple owner entities, who may have differing objectives, is something asset managers can help manage; both with family-owned real estate, or even for portfolios owned by a syndicate of institutions.

Sometimes this trust is built slowly, by assigning an asset manager to one property to start with and reporting their performance back to the ownership group.

Over time, confidence and trust builds, resulting in the asset manager taking on a more integral role in the management of the portfolio of assets.

Asset managers and property managers

The border between what a property manager and an asset manager does isn’t always a clear line. An asset manager needs to drive strategy and that will also mean guiding and directing the property manager as it relates to changes in the business.

Marketing is an example of a responsibility which could fall on either manager’s plate, depending on skillset, ability, etc.

Part of an asset manager’s role is to go out into the market with an RFP and interview potential property management companies to find the right fit for the specific property. It is important to choose a property manager that is well-suited to the building in terms of its quality, tenants, location, etc.

Once a property manager is chosen, their role is an important one from a reporting standpoint as well.

As the person on the ground, they are typically responsible for gauging the tenants’ temperatures on various issues, but at times they may not be as concerned with the temperature in the building. For example, with regard to a construction project, rent level, pushing on AGIs, etc.

Property managers are typically paid on a percentage basis, in the range of 2.5 to 3.5 per cent, depending on the size of the portfolio.

For multi-generational family owners looking to maximize their building’s profitability, while also lessening their own burden of management, asset managers can be the solution to consider.