Property Management

1
Property Management
2
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?

3

• A growing source of employment are homeowners
  associations and PUDs.

4
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 managers responsibilities
• statement of owners purpose
• extent of managers authority
• extent of reporting required

5

• compensation of management
• allocation of management costs between manager
  and owner
• equal opportunity statement (protects both
  manager and owner)

6
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.

7

• 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.

8
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 dont pay on time or who break other
  rules?

9

• Maintain the property
• Maintain the property
• Maintain the property
• preventive
• repair or corrective
• routine
• construction primarily for new tenants

10
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.

11
Risk Management

• Four choices
• avoid it
• control it
• transfer it
• retain it
• Types of insurance
• fire and hazard
• business interruption
• contents and personal property

12

• liability
• liability
• liability
• workers compensation insurance
• casualty (theft, vandalism, etc.)
• surety bonds