Transcript Document

Property Management
Overview

Property managers have three major
responsibilities:
financial management
 physical management
 administrative 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 Agreement
The property manager is usually a general
agent of the client.
 The agreement should cover:

description of the property
 time period the agreement covers
 description of manager’s responsibilities
 statement of owner’s purpose
 extent of manager’s authority
 extent of reporting required

compensation of management
 allocation of management costs between
manager and owner
 equal opportunity statement (protects both
manager and owner)

Management Functions

Budgeting expenses
fixed operating expenses
 variable operating expenses
 cash reserve fund
 any desired capital expenditures


Renting the property

the 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 expenses
 provide a fair return to the owner
 must be competitive


A primary indicator of property health is
the vacancy rate. Too high or too low
could indicate a problem.
Selecting Tenants
It is crucial that new tenants be
compatible with existing tenants!
 Tenants have to be creditworthy
 What 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 property
 Maintain the property
 Maintain the property

preventive
 repair or corrective
 routine
 construction – primarily for new tenants

Americans with Disabilities Act
The 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 Management

Four choices:
avoid it
 control it
 transfer it
 retain it


Types of insurance:
fire and hazard
 business interruption
 contents and personal property

liability
 liability
 liability

 worker’s
compensation insurance
casualty (theft, vandalism, etc.)
 surety bonds
