Property management is the day-to-day monitoring of residential, commercial, or industrial real estate by an outside contractor. Property managers typically take responsibility for the daily repairs and ongoing maintenance, security, and care of the properties. They typically work for owners of investment properties, such as apartment and condominium complexes, private home communities, shopping malls, and industrial parks.
Their main functions are to manage the routine tasks delegated to them by the owners and to preserve the value of the properties they manage while generating income.
Understanding of property management
Real estate developers generally want to move on to the next project as soon as each one is completed. Even if they continue to have 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:
-Detection of potential tenants
-Drafting, signing and renewal of lease contracts on behalf of the owners.
-Rent collection
-Property maintenance, including landscaping and snow removal.
-Arrange for necessary repairs to properties
-Establish and comply with budgets for the maintenance of the property.
-Businesses must comply with state and local laws and regulations for landlords and tenants.
Landlords pay property managers a fee or a percentage of the rent generated by a property while it is under their management.
Who Needs a Property Manager?
Homeowners hire property management companies for a variety of reasons. Some may have multiple rental properties in their portfolios and do not have the time or experience to maintain the properties and deal with individual tenants. Some landlords only have an interest in owning rental properties and making a profit from them. When this is the case, they hire professional property managers.
Absent owners also make use of property management services. Some rental property management companies cater to individual owners who rent a single property, such as a vacation home.
Homeowners who participate in affordable housing programs tend to use property management services because their rental properties are from this source subject to complex federal guidelines that require specialized knowledge.
Some 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 Memphis services. When this is the case, the real estate broker lists, displays, rents, and maintains vacation rentals for multiple owners.
Special Considerations
Property management license requirements vary by state. Most states require property management companies to be licensed by the local real estate board, so homeowners should ensure that businesses that they hire have the proper license.
For example, property managers in Florida must have real estate broker licenses to operate in their states. This is because some of their responsibilities are considered real estate activities. Having a real estate broker license allows property managers to list rental properties on the Multiple Listing Service (MLS) and market the properties using standard real estate marketing methods. Having a real estate broker license also allows the property management company to place a real estate dashboard safe on the door of a property so that other licensed agents can display the property.
Florida also requires property managers to have a broker's license if they deal with rentals or leases and receive a commission for their services. However, property managers who manage the properties they own in the state do not need a license to do it.
Managers do not require a broker's license. This is because certain tasks considered real estate activities, such as listing and leasing properties, can be secondary to the main tasks performed by the property manager.