Property Management vs. Asset Management in Commercial Real Estate
When it comes to commercial real estate investing, property managers and asset managers may have similar titles, but they have distinctly different roles. A property manager generally focuses on a property’s everyday operations, like maintenance, rent collection, and managing staff. Property managers often work onsite, but not always. In contrast, asset managers are more involved in the financial management of an investment property, including managing tax and legal issues, negotiating with lenders, and managing both the acquisition and disposition of a property in order to maximize long-term profitability.
Capital Gains Taxes in Commercial Real Estate
When an individual profits from selling an asset, such as stock in a company, commercial real estate, or other investments, a capital gain has occurred. Instead of paying ordinary income tax, an individual generally must pay a special tax rate on these gains, known as the capital gains tax. However, this depends on how long the asset has been held. If you’re a commercial real estate investor, understanding the impact of capital gains taxes-- and how to minimize that impact, is essential if you want to maximize the profitability of your investment.