What Is Property Management?

Property management is the daily oversight of residential, commercial, or industrial real estate by a third-party contractor. Generally, property managers take responsibility for day-to-day repairs and ongoing maintenance, security, and upkeep of properties. They usually work for the owners of investment properties such as apartment and condominium complexes, private home communities, shopping centers, and industrial parks.

Their main roles are to manage routine tasks delegated to them by the owners and to preserve the value of the properties that they manage while generating income.

 

Understanding Property Management

Property developers generally want to move on to the next project as soon as each one is completed. Even if they continue to hold title to the property, they prefer to delegate the day-to-day operations to an outside company.

The responsibilities of a property manager generally involve the following:

  • Screening potential tenants
  • Drafting, signing, and renewing leases on behalf of property owners
  • Collecting rent
  • Maintenance of properties, including landscaping and snow removal
  • Arranging for necessary repairs to properties
  • Setting up and adhering to budgets for property maintenance
  • Understanding state and national landlord-tenant laws and regulations
  • Marketing properties
  • Supervising other employees
  • Handling taxes

 

Who Needs a Property Manager?

Several types of property owners can benefit from the services that property managers offer.

Landlords, for example, hire property management firms for a variety of reasons. Some may have multiple rental properties in their portfolios and lack the time or expertise to maintain the properties and deal with individual tenants. Some owners only have an interest in owning rental properties and earning profits from them. When this is the case, they hire professional property managers. Absentee landlords also make use of property management services. Some property management companies cater to individual landlords who rent out a single property such as a vacation home.

Property owners who participate in affordable housing programs tend to use property management services because their rental properties are subject to complex federal guidelines that require specialized expertise. Certain real estate brokers also operate as property managers. For example, a broker in a resort town may provide buyer and seller agent services as well as property management services. When this is the case, the real estate broker lists, shows, leases, and maintains vacation rentals for a number of property owners.

Property managers are different from community managers, who deal with common areas rather than individual units and don’t necessarily deal directly with landlords.