Property Management Flashcards
Property Management
can be defined as the administration of rental or other property by a person or a team of people who are acting for the owner. The management of the property is done for a fee.
Property Management Tasks
collecting rent, maintaining the property, performing marketing and budgeting functions and overseeing relations with tenants
PM’s have Dual Responsibiltiy
to the owner and to the tenants of a property. He or she must understand that the owner is interested in the highest return from the property and the tenants want the best value for their money, including space that is properly maintained.
PMs are responsible for
Renting the units promptly at the highest market rent possible
Keeping operational and other costs within budget
Preserving and enhancing the physical value and prestige of the property
Types of Propertys managed
Apartments Condominiums Duplexes Industrial complexes Office complexes Shopping centers
License Requirements
If a property manager is going to lease (or list for lease) real estate, or negotiate or attempt to negotiate for the lease of real estate, or aid in locating real estate for lease, control the acceptance or deposit of rent from a resident of a single family residential property unit, or if he or she holds herself out as engaging in any of those activities, he or she will need a broker’s license. A salesperson working under a broker may engage in such activities.
Individual PM
usually a real estate broker who manages properties for one owner or a number of owners. Such a manager may be a member of a small property management firm devoted to full time property management, he or she may be a self-employed manager, or he or she may be one of several managers in a large real estate firm.
Individual Bldg manager
usually manages a single large property. This manager may be employed by a property manager or directly by an owner and may or may not have a real estate license.
Resident Manager
lives on the property and may be employed by a real estate broker, a managing agent or an owner to manage a property on a part-time or full-time basis.
Real Estate Asset manager
acts as the property owners’ agent and adviser for the property. He or she plans and directs the purchase, development, and disposition of real estate on behalf of the business and investors. A real estate asset manager focuses on long-term strategic financial planning rather than on day-to-day operations of the property.
Management proposal
A description of the property, including the land and all improvements
A list of what maintenance will be required
Information about how maintenance records will be kept
Information regarding the accounting procedures the manager will use
A schedule of property inspections
Several proposed budgets – operating budget, capital improvement budget, stabilized budget
Information about the proposed management fee
management agreement
employment contract for a property manager. The owner is the principal and the property manager is the agent in this agreement, which creates a general agency between the parties. As such, the property manager owes fiduciary duties to the owner.
management agreement details
The beginning date of the contract Identification of the parties Property description Duration of the agreement Definition of manager responsibilities Definition of owner responsibilities Extent of authority Accounting responsibilities Insurance and risk management Reporting requirements Management fee Agreement Termination
What is the difference between a management proposal and a management agreement?
A management proposal is submitted to the owner for review before any formal agreement is made.
The management agreement is the employment contract for a property manager.
How do the owner and the property manager arrive at a management fee?
The fee is a negotiated item. It often is a base fee and/or a percentage of the collected rents.
