Marketing and Financial – Real estate property management involves understanding of operating expenses and budgeting. From this information, appropriate rental rates are set, balanced by the current market and what it will support in the way of rents. A firm knowledge of the area and competitive rental properties is required. The property manager may recommend marketing programs, special promotions and other advertising strategies to the owner in order to maximize occupancy and rental rates. Regular financial reporting to the owners is required. Understanding financial statements, profit and loss, income taxes and budgeting are all very important for the property manager.
Tenant and Occupancy – Understanding the needs of the tenants is important for this function. Getting them to move in is only the beginning. The property manager must then respond to their requests, monitor their activities as regards the lease requirements, collect rent in a timely manner, and continually assess the tenants’ satisfaction as regards the property’s amenities versus those of competing rental properties in the area. The unwelcome task of eviction for violations or non-payment is part of this function also.
Facility Management – Property management is also physical management of the structures and outdoor areas. Landscaping, electrical, plumbing, roof, walls, appliances, and much more are all part of the physical property. The property manager must maintain relationships with contractors and repair companies, budget capital expenditures, and monitor the quality of all repairs and maintenance. This function ties in with the financial piece, as some improvements will require signifiant capital expenditures and budgeting for them. It ties in with tenant and occupancy management because it is important to tenant retention to have well-maintained properties.
Administration & Risk Management – This is the files and records part of the property management function. Federal, state and local governments all have some jurisdiction over real estate property management activities. Certain reporting requirements must be met for all of them. Meticulous records for accounting and taxes are a must. For reasons of liability, all activities and tenant interaction must be recorded and maintained for specified periods. Though also related to financial functions, there are very rigid requirements in most states for the handling of funds paid by renters for disbursement to owners.
Those considering specialization in real estate property management need to understand the requirements, and have a good feeling about being able to accomplish them all with efficiency and enjoyment. It’s not as easy as selling real estate.
