Property Management

Property Management is a career profession. The Property Manager can work either directly for an owner of real estate properties, or for a property management company, contracted by an owner or legal entity to care for the real estate over a specific period of time.

The Property manager has a fiduciary relationship with the management company and property owner. The Property Manager is provided an owner's real estate portfolio to manage to its "highest and best use" in exchange for an employment contract or salary. Real estate assignments for the property manager includes apartment buildings, condominiums, hotels, storage facilities, shopping centers, office buildings, government subsidized properties, rooming houses, abandoned buildings and plots of vacant land, to name a few.

Managers are required to perform their work according to the laws of the land. Property Managers work on the Honor Code when they handle other people's money. By collecting rent, security deposits, laundry machine money et al, the property manager holds a fiduciary relationship with the property owner and/or management company. Lease expirations and renewals, rent increase letters, and rent invoices must be mailed on time. A skilled property manager is able to multi-task, keep site files organized, and prioritize repairs and assignments.

If everyone paid the rent on time by the fifth day of each month, the manager would not have rent collection work to do. If a property never had problems, such as toilet overflows, lost keys, or defective smoke detectors, a property manager would have little to do. A manager should at least like helping tenants with dignity, and in a responsible manager. Real estate and governmental regulations change; the manager must be willing to read up on them and stay current. Tenants depend on the manager's sense of obligation to the property and the families or professionals who live in it. Property Management is a fluid profession, in that it follows economic, governmental, industry, and societal changes that impacts how a property is managed.

The property manager will be the main point of contact between you, as the landlord, and the tenants. A good property manager will somehow get the tenant to pay the rent while a lousy one will throw a monkey on your back!
The tenants then may not renew their lease. Lease any vacant space.
A good property manager is critical in keeping your property fully occupied at the highest market rent, the tenants happy and in turn helps you achieve your investment objectives. Before choosing a property management company, you may want to:
The property managing company normally wants a contract for at least one year. Agent's Compensation: you will have to pay someone to manage and lease the property. You may have one company to manage the property and a different company to lease the property. Ideally, you want a lease in which the tenants pay for their share of property management fee.

Late fee: when a tenant pays late, he is often required by the lease to pay late fee. The property manager is allowed to keep this fee as an incentive to collect the rent.
Leasing fee: this fee compensates the property manager to lease any vacant space. In a typical lease contract, the leasing company wants 4-7% of the gross rent over the life of the lease. A good property manager will help you achieve this goal.
Monthly Report: each month the property manager should send you a report on income received, expenses incurred, and property status. Communication with property manager: in the first few months, you and the new property manager should communicate often to make sure things go smoothly.

Five Considerations of Hiring Property Managers
The property owner needs to understand the purpose of the management fee (typically 10%). The percentage management fee pays for the property manager's time. In the end, it is the owner's property and the owner's responsibility.
Working with a property manager is no different. If an owner is a high micromanager then they should hire a certain type property manager (see Property Manager categories below).

The owner's personality has to fit the property manager's systems and procedures. Sometimes owners will have difficulty with a property managers systems and procedures. Owners should understand they have to lead the property manager in how they expect the manager to manage the property.
While Property managers fall into three categories, the size of the property management company is neither better nor worse than the others. Small 1-50 units
Property managers in the small category are usually unlicensed with no training in property management. These managers will have more time for the property owner. Large management companies offer very little owner pampering and handholding.

Do your research and list questions you want to ask when interviewing prospective property management companies.
Who and how will your property be managed. Most property management companies are divided in two - selling real estate and managing real estate. Check with the property manager how long they have personally been dealing with property management. Some move into property management and the rest into sales. Other property managers have specifically chosen property management as their career.
You want to know that the property manager will give good customer service and personally take prospective tenants to inspect your property. You want to know how many properties the property manager manages personally. You want a property management company that can show your properties when it is convenient for the tenant. Does the Property Manager Check New Tenant's Credentials?
It is important to ask how the property management company checks out the credentials of short listed prospects. Does your property manager have adequate access to information for this purpose? You now have plenty of information to help you seek out the very best property manager for your growing property portfolio.

How major economic and demographic trends are creating new opportunities and challenges for property managers.
As another factor, consider that most baby boomers purchased their homes when home prices were substantially lower (as compared to household income) allowing most to pay off their principal residence mortgages early on. As baby boomers retire and are faced with an empty nest, they generally tend to downsize and move from larger single family homes to town homes or condominiums. What it means to property managers. However history shows that well selected and professionally managed, real estate is a secure and stable investment vehicle with solid income generation and capital preservation characteristics.

What it means to property managers.This phenomenon will see the flow of trillions of dollars of new capital into real estate properties that will by definition require professional property management services to maximize yield.
Large suburban lots, quiet cul-de-sacs and spacious 5-bedroom homes may have sounded like the epitome of high living to the baby boomer generation but to the typical gen Y'er the same phrases spell isolation and a maintenance nightmare. While not talked about nearly as much as baby boomers, generation Y whose leading edge turns the home buying age in 2008, constitutes a powerful market force to study, comprehend and plan for.
This generation which is an even larger demographic than baby boomers is already entering the home rental and purchase market, a trend that will be accelerating in the next few years.

Technology & Media. Real Estate Preferences. Survey after survey shows that core city living and walking urbanism are hallmarks of generation Y preferences for real estate. In his article titled Gen-Y Reshaping American Cities Rob Goodspeed quotes an important statistic: 77% of generation Y plans to live in core urban areas. According to Goodspeed the bulk of this generation will be entering the housing market around 2012.
What it means to property managers. The significance: property managers need to carefully consider how to appeal to this generation and its unique communication style.
What it means to property managers. This is another driver increasing the number of properties requiring professional management and therefore another long term contributor to the rise in demand for professional property management services.
The American dream is absolutely changing". All in all the above factors translate to further upward pressure on demand for core urban living which in turn contributes to further demand for property management services.

The demographic and economic factors discussed in this paper translate to a significantly growing demand for property management services. As droves of sophisticated, well-off and technology savvy consumers migrate to life in managed communities and as real estate becomes increasingly securitized, the standard of property management service will rise sharply. This will likely accelerate the current consolidation trend in the property management industry as quality leaders take market share. Property managers are seeing and should expect a significant influx of aging yet uncharacteristically active residents into managed communities in core urban areas. Property managers need to meet this generation on its own terms by providing powerful web presence and rich, up-to-date and interactive content about and access to their properties.

The above two trends will see communities of two distinct age groups: baby boomers and generation Y living side-by-side. Interestingly many of the property features and amenities that appeal to the boomer generation are also attractive to generation Y (e.g., hi-speed internet access, social space & fitness). Each generation has its distinct tastes, life schedule and communication preferences. There seems to be little doubt that these property managers will see tremendous increases in their occupancy and resident satisfaction rates and ultimately their market share.