Whether a property management business has two or 2,000 investors, real estate investment portfolios are known for being difficult to manage. The property manager must account for all losses and returns, optimize investment strategies to maximize returns, justify calls for capital and accurately calculate all distributions. Matters are only made more difficult by tricky tax-related structures and complex accounting.
That’s hard enough, but today’s investors are also looking for real-time reports that they can access from anywhere, at any time. To do all this, property managers must adapt. Attracting investors means having the right fundamentals, the right technology and even the right mindset going in. Let’s look at what real estate investors want and how property managers can make it happen for them.
In real estate investing, money isn’t everything: it’s the only thing
Once an investment is made in real estate, the property manager is in charge of it on a day-to-day basis. And when we look at the investment landscape, a lot of organizations are still managing portfolios in spreadsheets. Communications are done via email, and some organizations are still printing out information and sending it through the mail.
This results in a lot of back and forth in the subscription agreement process (e.g., getting signatures, capturing information), which is a problem because investors now expect instant access to information. They want checking their investment portfolio to be as easy as checking their stock portfolio (online, 24-hour access, mobile friendly, etc.).
Without this level of transparency and real-time access to information, a property manager’s portfolio will not appear as a viable, trusted avenue for investors to increase their wealth. If your plan isn’t maximizing investor returns, simplifying communications and offering transparency, you aren’t effectively attracting and retaining investors. And they will certainly not be lining up to work with a business that doesn’t offer the latest technological resources.
Don’t change what investors do, improve how they do it
At its core, real estate investing is the same as it’s always been. The legal requirements, accounting, capital calls and distributions haven’t changed. What’s new is that investors want to be notified immediately (aka electronically). Not just at the end of the month or during tax season. It goes without saying that they also want immediate distributions in the form of electronic payments.
Investors want to share all this information with their advisors, employers, accountants, investment partners, etc. They want to be able to access historical information, contributions, transactions, notices they may need for other reporting or tax purposes, etc.
To do that, investors need to be able to see operational details, meaning everything that’s happening at the property. They’re also going to look at the markets and what’s happening in the news because these developments impact their investments and potential risk exposure.
Investors are more tech savvy than ever. Across the board, they are managing a variety of asset classes online through investor portals. Real estate investments have lagged a bit in this regard, but the expectation for better tech is there. We know this because investors are asking for deeper insights about what’s happening to their assets at the operational level. They want to understand their risk in the context of current events and market activity and see how their investments might be impacted.
It’s our job, as software providers, to give you the tools that let investors be proactive and stay engaged with their portfolios in real time.
The bottom line is this: Investors want to collect a lot of information as quickly as possible. They don’t want to see it in arrears. Their expectations are changing. In many ways, the bar is raised for transparency, communication and the speed with which everything happens.
One investment management solution fits all
Yardi Investment Manager is an intuitive, elegant tool that property management businesses of all sizes can put to good use. The brilliance of the design comes from the way it integrates with Yardi Breeze Premier or Yardi Voyager. It can also be used as a standalone product. There is no other software provider that offers both an investment management and property management solution that operate as one seamlessly combined product.
There are plenty of software solutions that offer third-party integrations. It’s just so much better for you and your investors to have everything in one place.
Let’s talk cost. The price you pay for Yardi Investment Manager scales with the number of units being managed. There’s no limit to how many investors you can add per property or overall. Because of the way the tool is designed, it appeals to organizations of all sizes, not just large institutional investment structures. After all, we know small organizations can have complex ownership structures with thousands of distributions that need to be handled.
The right technology platform increases investor confidence, helps maximize returns, reduces risk, boosts transparency and ensures unrestricted access to pertinent investor data. If you have outside investors, you need a modern investment management solution. It’s that simple.
This article is based on an address to C-suite executives by Chris Barbier, senior director of sales at Yardi.