property management. overview property managers have three major responsibilities: financial...

Property Management

OverviewOverviewProperty managers have three major

responsibilities:financial managementphysical managementadministrative management

What do you think the primary differences would be between residential property management and commercial property management?

A growing source of employment are homeowners’ associations and PUD’s.

The Management The Management AgreementAgreementThe property manager is usually a

general agent of the client.The agreement should cover:

description of the propertytime period the agreement coversdescription of manager’s responsibilitiesstatement of owner’s purposeextent of manager’s authorityextent of reporting required

compensation of managementallocation of management costs

between manager and ownerequal opportunity statement (protects

both manager and owner)

Management FunctionsManagement FunctionsBudgeting expenses

fixed operating expensesvariable operating expensescash reserve fundany desired capital expenditures

Renting the propertythe property manager does not

necessarily act as the leasing agent and may have different goals than a straight leasing agent.

Rental income must:cover fixed charges and expensesprovide a fair return to the ownermust be competitive

A primary indicator of property health is the vacancy rate. Too high or too low could indicate a problem.

Selecting TenantsSelecting Tenants It is crucial that new tenants be

compatible with existing tenants!Tenants have to be creditworthyWhat are some ways to maintain

good relations with tenants?What might happen if you are too

lenient on tenants that don’t pay on time or who break other rules?

Maintain the propertyMaintain the propertyMaintain the property

preventiverepair or correctiveroutineconstruction – primarily for new tenants

Americans with Disabilities Americans with Disabilities ActActThe law recommends the owners of

existing buildings to make reasonably achievable accommodations to provide access to facilities and services.

Existing barriers must be removed when this can be accomplished in a readily achievable manner.

See book for most common modifications.

Risk ManagementRisk ManagementFour choices:

avoid itcontrol ittransfer itretain it

Types of insurance:fire and hazardbusiness interruption contents and personal property

liabilityliabilityliability

worker’s compensation insurancecasualty (theft, vandalism, etc.)surety bonds