Property Management vs Asset Management Split
Outsource the day-to-day; never outsource the decisions only you can see the whole board for.
- Difficulty
- Easy
- Time to result
- ~months to results
- Steps
- 4
- Confidence
- 88%
Meyer splits the operational side of real estate into two distinct jobs. Property management is the day-to-day: identifying and screening tenants, leases, turnover, maintenance requests, and maintaining the physical structure. Asset management is the investor's job: deciding when to refinance, when to sell, whether to add a bathroom — the questions that only make sense with a view of your entire portfolio, net worth, and financial plan. Property managers can advise on asset decisions, but they can't see your whole board, so Meyer insists investors stay active in asset management whether or not they hire a manager. For most people he recommends self-managing for a couple of months first to learn what to look for — though if you already run a business, hiring and overseeing a property manager is comparatively easy.
Origin
Meyer self-managed his first Denver four-unit for seven or eight years, at 10 hours a week initially, using the 8-10% management fee he saved to pay off a secondary loan. Having done both jobs himself, he draws a sharp line between the execution he now buys out entirely (he uses full-service management) and the judgment he never delegates.
Core principles
- 01Property management is day-to-day execution; asset management is making best use of the asset over time.
- 02A property manager can advise on asset decisions but has no view into your portfolio, net worth, or financial plan.
- 03Delegation of execution is healthy; delegation of judgment is abdication.
- 04Learn the job for a couple of months before you hire someone to do it — unless you already run a business.
How to run it
- 1
Get your hands dirty briefly
Manage a property yourself for a couple of months to learn what to look for. If you already have managerial or entrepreneurial experience, you can skip straight to hiring.
Pro tip Compared to running a large business, selecting and overseeing a property manager is quite easy.
Watch out With no operations experience, you won't know how to evaluate a manager's answers.
- 2
Interview several property managers in person
Not all property managers are great. Meet a few face to face, using free question lists, even if it means a trip to an out-of-area market.
Pro tip The trip is worth it — this is the person your returns run through.
- 3
Draw the line explicitly
Hand over tenant identification and screening, leases, turnover, tenant communication, maintenance and repairs, and structural upkeep. Keep refinance, sale, and improvement decisions.
Pro tip Full-service management is a valid choice if your vision is maximum passivity — you're trading profit for hours on purpose.
- 4
Run asset management on a cadence
Review the portfolio weekly or monthly against your financial plan: refinance windows, sale timing, capital improvements, and mix.
Watch out Nobody else — not your manager, not your GP — has a view into your entire net worth and overarching plan.
In the wild
Meyer explicitly says 'I do full service property management. I don't want to do anything' — handing over tenant identification, screening, leases, turnover, tenant comms, and physical maintenance.
→ He still stays active in asset management, and his portfolio consumes under 20 hours a month while spanning multiple asset classes and markets.
Common mistakes
Letting the property manager set asset strategy
They can advise, but they see one property, not your portfolio, net worth, or plan. Their optimal answer and yours diverge.
Assuming all property managers are good
Meyer has great managers, but says plainly that not all managers are great. Skipping the in-person interviews is how you find out expensively.
Is it for you?
Best for
Investors with capital and limited time who want passivity without losing control of returns
Not ideal for
People with zero managerial or entrepreneurial experience who haven't yet learned what good looks like
From the transcript
“I always split up the operational part of the real estate entrepreneurship game business into property management and then asset management.”
“The investor, I believe their job is to figure out how to make best use of this asset over time. So, like when do you…”
“They don't have a view into your entire portfolio, into your entire net worth, into your overarching financial plan. And so, I still recommend to…”
From the episode
Dave Meyer: Build Your Real Estate Empire with Smart Investing
Dave Meyer