In this concise video, Mendell Gosnell, CPM, clarifies a common misunderstanding in real‑estate investing: the difference between property management (PM) and asset management (AM). He explains that most PMs handle day‑to‑day operations—leasing, tenant screening, maintenance, and basic reporting—while true AM is an executive‑level discipline focused on strategic decisions such as insurance strategy, buy‑vs‑sell modeling, refinance analysis, tax coordination, long‑term capital planning, and portfolio optimization. Gosnell stresses that unless an investor hires a dedicated AM firm, the owner effectively serves as the asset manager. He notes that AM services are typically billed separately and can be costly, but some PM firms (e.g., Centurion) attempt to provide high‑ownership, asset‑management‑style insights to add value. Ultimately, he advises owners to recognize the separate nature of these roles, ensure any hired AM acts in their best interest, and be prepared to pay for strategic services if they want consistent, expert oversight beyond daily operations.
Chapters
I want to share really quick about a little bit of a misunderstanding in the property management industry, and that's kind of the difference between property management versus asset management. And so most property managers, they, you know, they do the leasing, the tenant screening, oversee the property, handle the maintenance, do the reporting. But when it comes to asset management, good property managers do probably do a lot of the asset management, and some don't do any. But the reality is asset management is another specific discipline. I always like to say if you haven't hired specifically an asset management company, you're the asset manager. And I think that's important to understand as an investor. And so, you know, here's the common misconception. Owners assume that paying 8 to 10% for property management includes those other things, the operations and strategic planning. In reality, true asset management is executive-level work. And it can include insurance strategy, buy versus sell modeling, things like refinance analysis and, you know, tax planning coordination, long-term capital planning, portfolio optimization. And those are things that a good property manager is aware of and knows and will give some feedback on. But that's a huge and different discipline from just the day-to-day operations. And a lot of, if you know, those asset managers charge a lot of money for those things. And so if you have a property management company like Centurion, you're getting huge value if they're giving you some information like that, or you have access to somebody that knows what they're talking about to give you that. But normally that is a separate thing that you pay for. And if you're not paying for that, that's your job as the owner to make those strategic decisions and to think that, to handle those things. So, that level of thinking is again a separate discipline. And if you want someone else to do it consistently, you should expect to pay for it. Now, again, there are property management companies that kind of behave like asset managers. And at Centurion, we take a high ownership approach. So, we are trying to bring a level of asset management as much as we can because it's significantly cost prohibitive. It takes a lot of work to really analyze a property at that level. And it's different from the day-to-day operations. But Even with a great property manager, no one will ever think more clearly about your long-term goals or care more about them than you. So even if you did have an asset manager, it's really good to make sure that they're making decisions that are best in your best interest. I hope that helps. And again, just want to encourage everybody. Thanks for watching.
