Definition of a Property Manager
A property manager is defined as a person or organization that is responsible for operating and maintaining real estate property for a fee, when the owner of the property has no interest in managing it themselves. The property manager must play the liaison between the owner of the property and the tenants that occupy the property. This can be a balancing act as the property manager must walk a tight line in ensuring that the property is always rented to capacity for the sake of the owner & maintained appropriately to keep the satisfaction level of the tenant as high as possible. Most types of properties that a property manager will manage on behalf of an owner fall into one of 5 categories: Residential, Multi-Family, Association, Commercial, or Resort.
The day-to-day responsibilities of a property manager typically consist of dealing with tenant issues, property repair, property maintenance, listing properties for rent, marketing properties available for rent, and brokering lease agreements between owner and tenant. At times the property manager may even have to play the role of rent collection when the tenant falls behind on payments, putting together reporting for the owner on the status of the property, or the delegation of tasks to 3rd party vendors based on the owners wishes.
Dependent on the contractual arrangement between owner and property manager, the property manager may need to be engaged with managing the outsourcing of all maintenance tasks associated with the property. This includes vetting out approved property service companies that are trustworthy and reliable and that will charge a fair rate in exchange for their services. This is a crucial skill for the property manager to be able to master in order to protect the owner’s investment in the property by mitigating any additional costs that aren’t necessary.
Property Manager’s Responsibility to Owner
The owner of a real estate property expects a property manager to carry out several core responsibilities, of which the most important is that of keeping the property occupied with tenants. In order to maximize the owners return on investment from the property, the property manager must maintain a high level of tenant occupancy at all times. Therefore, a property manager with a high degree of occupancy in his or her portfolio must have the necessary marketing skills to keep properties from sitting vacant for extended periods of time where lost revenue opportunity is at risk for the owner.
The second critical responsibility to the owner is that of assessing the rental rates that should be charged to the tenants. A property manager has responsibility to that of the owner to maximize the income being generated from each property in the portfolio by conducting a comparison analysis. A good comparison analysis should assess similar information on all competing properties in the area. The purpose of the analysis, is to not only identify the physical differences in the subject property vs. that of its competitors , but to determine the value of each feature so that the property manager can make the necessary adjustments to the subject property’s rental rate, up or down, based on the result. For example, a competitive residential property includes a swimming pool in the backyard of the home. The swimming pool feature of the home is estimated to be that of $100 per month. To remain competitive, the subject property, which has no swimming pool, should have its’ rents be reduced by $100 per month to remain competitive (assuming all other features of the two properties are equal).
Property Manager’s Responsibility to Tenant
On the tenant side, the property manager has a certain level of expectation setting that must be met in order to keep the tenant satisfied with occupying the property. The assurance that the tenant will have “quiet enjoyment” of the premises – a level of understanding from the tenant that the property will be used for the intended purposes laid out in the lease agreement and free from outside influence (i.e. owner, property manager, other tenants). Comfort is also an important expectation that must be met, a living environment that is controlled from the elements and that has all of the amenities that were agreed upon in the lease is key to keeping tenants satisfied. The safety of the tenant, or the tenants’ perception of safety and security, is another primary responsibility of the property manager where the tenants are able to live or work in an environment that is free from any structural defects or conditions that may be hazardous to personal health or property. Finally, social status will often times affect the property manager/tenant relationship where the tenant needs to feel that the property meets socio-economic and cultural standards for themselves and their guests.
In closing, Property Managers perform the valuable function of operating and maintaining real estate property on behalf of a property owner. They usually work for larger entities, such as property management companies, and earn their living by maintaining the relationship between property owner and tenant.
Written By Dustin Holbrook
Image By Flickr CC, Philip Taylor PT; 'PTMoney.com"