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In basic terms, an asset manager manages assets. When the term is related to real estate, the asset manager is responsible for managing someone’s real estate assets. That means making decisions about the real estate portfolio to help it gain value and to manage risk. An effective real estate asset manager will need to understand the market, keeping current with research, including financial, political, and economic events. Note that an asset manager is not a property manager who manages an investment property's physical and financial operations.
If you need information about 26 U.S. Code § 1031, also known as “Exchange of Real Property Held for Productive Use or Investment,” also known as the 1031 exchange or like-kind exchange, you can learn a great deal from blogs on our website. This is our mission—we help clients manage investment property wealth through the use of this exchange.
Unsystematic risk is the flip side of the two primary risks investors face. The other risk is called systematic risk. Understanding the difference between these two risks means understanding why some risks can’t be reduced/eliminated from a portfolio while other risks can.
Investing in real estate can be a boon to your investment portfolio, but we believe one should perform extensive analysis on any potential investments. If you're looking to purchase an investment property, there are many strategies you can use to complete this purchase, one of which is a 1031 Exchange. Here is some information on 1031 Exchange buyers and how to become one.
Managing wealth, investing, retirement planning and other important financial decisions can be extremely complicated even for highly experienced financial professionals. For novice or retail investors, these important investment financial decisions can be especially daunting, since any serious missteps could lead to a significant loss of capital.
Event risk is the risk of a negative effect on a company’s value that results from an unexpected event. The event may threaten its ability to operate or its financial well-being. Events can be internally instigated, like a restructuring, an acquisition, or a product launch. Events can be externally caused, like a computer virus or a natural disaster. The event may affect just the specific organization or may be far-reaching.
Previous Realized blogs have outlined capital gains, what they are, and how they’re taxed. Then there are capital gains distributions. In concept, these are similar to capital gains, in that both are defined as profit generated from the sale of capital assets. They differ, however, in that capital gains distributions arise from investments in mutual funds and exchange-traded funds.
Investing is always linked to the risk of losing your investment capital – the cryptocurrency crash of May 2022 and ensuing collapse of the Luna coin from $119 in early April to a mere eighth of a penny just over a month later is a painfully clear example of how billions of dollars of investment capital can be vaporized.¹
Unlike some other famous maxims in real estate investing (like the seventy percent rule, for example), the two percent rule is widely discredited in most U.S. metropolitan areas. The rule holds that the rental amount should equal two percent of the property's purchase price. By that calculation, if you purchase a house for $100,000, the monthly rent should be $2,000. That seems unrealistic at first glance and becomes even less likely the deeper you dig in.
Gains and losses are part of life, certainly an inevitable aspect of investing in real estate (or anything else). How investors manage those gains and losses is part of the strategy. When an asset is worth more than you paid for it (your basis), you have a gain, and when it is worth less than your basis, you have a loss. However, that gain or loss is unrealized unless you dispose of the asset. Also, gains and losses are categorized by the IRS as short- or long-term.