The management of real estate assets, especially large ones, usually owned by foundations, banks, insurance companies or institutional investors, has always been of key importance in our economic history. Indeed, owning a large number of properties, perhaps even intended for all sorts of different use, and turning them into a long-term financial investment can undoubtedly be a double-edged sword: on the one hand, it is an effective and rather safe system to fix (even substantial) capital that does not entail the risks of financial speculation; on the other hand, if mismanaged, it can deplete one’s economic resources in a completely uncontrolled way.
Both economic history and daily news provide us with many cases of real estate assets having been progressively depleted by poor management, which neglected to optimise expenditure and take care of income, to the point of leaving the owners in a financial catastrophe.
With its over forty-year experience in the construction and real estate sector, AKNO is certainly able to professionally manage all types of assets, however complex and diversified the types of investments may be.
The management of real estate asset costs
Often, when thinking about real estate management, people tend to neglect the first and most serious danger to a successful investment: failure to optimise costs. Indeed, contrary to business activities, buildings do not generate ongoing costs, which can be misleading when assessing the financial burden to be borne. What needs to be taken into consideration, instead, are the ongoing costs related to owning and managing a real estate asset, and thus the earnings (i.e. rents and other sources of revenue) necessary for the investment to produce returns.
Firstly, the ordinary and extraordinary maintenance work on the property and its facilities must be programmed using statistical models and performed by trained and careful professionals. By investing little and badly in ordinary maintenance your real estate asset becomes unproductive, or may even cause you financial loss: ordinary maintenance not only preserves the value of your property over time, but it also minimises the far more expensive extraordinary maintenance tasks.
Secondly, all the systems (e.g. plumbing and heating) must be accurately optimised to significantly reduce operating costs. Indeed, regardless of property type, be it residential, commercial or industrial, the design of low-consumption lighting systems, the use of thermal break windows to reduce heat loss, the self-production of part of the required energy (e.g. through solar panels) are just few examples of how to cut property operating costs by means of a limited initial investment.
Finally, calculating finance costs and income tax expense as accurately as possible is crucial for taking into account all the expenses related to the real estate assets to manage. Although the numerous tax reforms, especially in terms of local taxes, make it difficult to predict what the expenses related to taxation will be in the long term, it should also be taken into consideration that the demand for rents depends on the taxation on real estate, which may vary according to property location and value.
Attention to revenue
Besides from cost management, it is also important to discuss the need for a correct management of the revenues, represented, typically, by the rent charged for individual residential, commercial or industrial properties. In this regard, AKNO‘s wealth of experience in property management is invaluable: revenue management is not simply a matter of managing billing and writing reports, but above all a matter of managing the human relationship with the tenants.
Tenants’ overdue payments certainly are a serious problem for the management of any type of real estate, but they become particularly difficult to manage when the rents to be received are many, as happens in the case of large residential properties. In this case, a good property manager must be able to do their job effectively and ensure timely and regular payment of rents. They must establish, with patience and experience, relationships with tenants, which, like all interpersonal relations, can be extremely difficult.
Facility and Service Management
Facility management is a specific field of real estate management concerning properties for business use, both commercial and industrial. It is represented by a set of side, yet strictly necessary activities whose aim is to guarantee the functioning of all the elements that make up a company’s core business.
In other words, facility management deals with everything that must be implemented for a company to provide goods or services. Of course, as in the management of any type of property, building maintenance and service facility management are necessary, but there are also other services to consider, such as the organisation of the canteen service, security and company vehicle fleet.
In particular, the management of corporate services (from canteen to cleaning services, from IT systems to maintenance) is a field that, due to its specificity and importance within facility management, takes its own name and is called “service management“.
AKNO has been successfully integrating all these different fields within its management services for years, making it possible to reduce costs by optimising and centralising global real estate management.
This result and its positive effect on the revenues of the assets we manage are only possible thanks to the presence in our company of a team of professionals from different fields who are supported and guided by experts with interdisciplinary skills, which they have built up through experience in the construction and real estate industry.