How can operational risk be mitigated in real estate?

Mitigating operational risk in real estate is best achieved through the implementation of efficient processes and conducting staff training. This approach addresses the core of operational risk, which encompasses the potential for loss arising from inadequate or failed internal processes, people, and systems.

By implementing efficient processes, a real estate organization can streamline operations, reduce the likelihood of errors, and enhance overall performance. Efficient processes help ensure that operations are standardized, which minimizes variability and increases reliability in service delivery. For instance, using best practices for maintenance requests or tenant communication can significantly reduce the chances of misunderstandings or mismanagement.

Conducting staff training is equally important, as it equips employees with the necessary skills and knowledge to perform their roles effectively. Well-trained staff are better prepared to handle daily operations and can respond appropriately to unforeseen situations, further reducing operational risks. Training also fosters a culture of compliance and attention to detail, which is crucial in maintaining standards and managing risks effectively.

In contrast, avoiding technology use, having inefficient staff hiring processes, or reducing the number of properties managed could lead to operational inefficiencies or an inability to effectively manage existing risks. Avoiding technology could hinder communication and process management, inefficient hiring can result in a lack of qualified personnel, and merely reducing the number of properties