“Everyone wants to be a hero. In real estate, being a hero means solving problems, getting stuff done and making sure the building functions property. We have to eliminate as much risk as we can. Only then can we focus on building a better experience for tenants."
In my years as a property manager (and later as an asset manager), this thought often came a moment too late. It sounds silly, but It’s based on one of the best lesson I learned about managing risk in a portfolio.
Proactive vs Reactive Portfolio Risk Management
It’s such a boring topic, I know. But when you are responsible for a property portfolio, dealing with risk is a big part of the job.
One story in particular comes to mind:
I was at a 190 unit community who’s roof constantly flooded. The gutter system was poorly designed. It easily clogged with leaves during the rainy fall seasons. I was driving back from a property inspection when it started to pour.
“Oh man, I forgot to check the roof”
I pulled over to look at my phone, praying no leak complaints had come in.
I already had 3. This was bad. Right when I was getting back in my car, the phone rang:
“Did you check the gutters before you left?”
I was tempted to lie. I was embarrassed I forgot.
“No, I forgot“
There was a brutal silence. I’m sure you’re familiar: you know you messed; the other person knows you messed up, and silence ensues.
"I know checking roofs isn’t fun. It’s not in your job description. But your job is to solve problems. If it means checking the gutter because maintenance sometimes forget, than you check the gutters."
I love this lesson. Asset managers are often the most powerful people in a real estate organization. They are responsible for every aspect of operations, and report directly to the owners and Executives. Some asset managers I worked with barely visit the buildings. This asset manager visited buildings at least once a quarter, if not once a month. He always checked critical building systems. He was always willing to get his hands dirty. He was always, ALWAYS to get on a building roof to assess a potentially dire situation.