Residential buildings in new district. Fragment of contemporary architecture. Residential area in the city, modern apartment buildings
No matter the number of buildings you manage, even a portfolio of real estate holdings, it is critical to establish the proper management of your real property. It starts with establishing an effective asset management plan as part of your capital planning process.
The intricacies of capital planning would be too much for this quick article, but the components and building blocks of an effective asset management program can be summarized into a simple, four-step process:
Step I — Identification: A physical inventory is required of all assets that include the identification and recording of the information associated with each item. The identification process includes developing asset tagging and tracking programs and reports.
Step II—Evaluation: Each asset must be evaluated for its current condition to determine immediate and future needs. The evaluation process requires implementing facility condition assessment programs and regular reporting procedures.
Step III—Planning: After the evaluation phase is complete, the next step is to establish plans to address immediate and future needs. This stage requires identifying the costs associated with each item and developing budgets for immediate needs and life-term replacement reserves.
Step IV—Preservation: This is the most complex component because it incorporates day-to-day maintenance and protection of the assets. Preservation requires the implementation of an effective maintenance program to maintain and safeguard the assets, provide security, and mitigate risk.
Although each of the steps can be tackled independently, it is best to accomplish them in sequential order. The overarching goal of creating an effective asset management program is “to achieve the highest possible service level for the lowest possible cost while maintaining the lowest practical level of risk.” Achieving this important business goal requires the full implementation of each of the four steps.
Want to Learn More About Asset Management for Real Property?
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9 Best Practices for Real Estate Asset Management
This comprehensive white paper outlines best practices for the successful asset management of real property including buildings, grounds, furnishings and equipment.
Our helpful guide covers best practices for: Management of Fixed & Moveable Assets, Replacement Planning & Budgeting, Physical Maintenance & Preventative Maintenance Programs, Preventative Maintenance Program Software, In-House Maintenance vs Service Contractors, Key Components of a Service Contract, Key Elements of Building Security, Compliance with the Occupational Safety and Health Administration (OSHA) and Properly Insuring Your Assets.
About the Author:
Rob Milam is Owner and CEO of zumBrunnen, a company with 35 years of experience in helping facility owners and operators plan for the future with a thorough Capital Reserve Audit that leads to a thoughtful forecast of capital needs. As we say, We Solve Problems By Preventing Them.
