Property Management For REITs
REITs, or real estate investment trusts, traditionally use an internal property management team to manage their investment properties. However, when an REIT owns property that is out of state or too far to property manage, they may call on the help of a property management company. There have been many studies, including a report from David Fick, a professor at Johns Hopkins University and former head of REIT Research at Legg Mason Real Estate Group, whose findings say that hiring an outside property management company can be beneficial. In Mr Fick’s report, he mentions that choosing an external property management company may be “an option that can be both functionally and financially superior to internal property management.”
One reason that steers consideration towards an external property management is the ability to save money. When switching over to a professional company that specializes in managing properties, the REIT may actually reduce costs since the property management company already has efficiencies in place. Additionally, smaller REITs may want to change over to an external property management company because they may be unable to spread their costs across enough square feet. On top of all the benefits listed above, an REIT who transitions to an externally managed portfolio will now have more flexibility in moving their capital across different types of property and locations.
Another great advantage of switching to a property management company, like ours at Realicore Property Management, is that the REIT will no longer have to worry about staying up to date with all the newest software that is vital to managing properties efficiently. Property management is no easy task, which is why it might be best to leave it to the people who specialize in it. This frees up time for the REIT to now put all of its focus into its primary objectives, which is investing. If this sounds like the direction you’d like to move forward in, please give us a call at (909) 810-2108 to discuss how Realicore Property Management can handle your properties with ease.
