What Is Property Management? – Importance, Applications, And More
What is property management? – This is a management service that landowners require, especially the ones who do not have time or experience to manage the business-related side of properties. To carry out property management, landowners hire property managers. In other cases, the property manager is the middleman between the renter and the owner. Apart from that, property managers also handle the property upkeep processes.
In this article, you will mainly learn about what property management is and how it works. We will also describe the jobs and responsibilities that fall under property management. In addition to that, we will also discuss the major types of property management practices. Finally, we will also share with you the role of property managers in dealing with property management. Hence, to learn more, read on through to the end of the article.
What Is Property Management?
According to Investopedia, “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.”
Property management is the process through which property managers manage and look after commercial and residential real estate properties. They take care of all the daily operations for a property, such as maintenance, collecting rent, handling tenant complaints, etc. However, the number of responsibilities of the property manager depends on the contract with the owner of the property.
What Are The Constituents of Property Management?
There are many property management firms as well, which consist of a group of property managers overseeing many properties at various locations.
According to Indeed.com, “A property management firm is an office where property managers work. Property owners can hire a firm to maintain their properties when they don’t have the time, experience, or capability to manage their properties themselves. There are several property management firms throughout the United States offering their real estate assistance.”
Here are some of the various responsibilities that property managers have to take up as a part of property management:
- Understanding landlord-tenant laws and regulations related to the property
- Marketing properties
- Handling maintenance requests and repairs
- Managing rent
- Managing tenants
- Supervising other employees
- Handling taxes
- Managing the budget
As soon as one property is developed, property managers want to move fast to the next project. To ensure the flow of daily operations of the property, the owners delegate the management processes of their property to a property manager or a property management company.
The property management companies hold compliance with the state and local landlord-tenant laws and regulations. Apart from that, these companies, when given the responsibilities, also ensure that the real estate business of their client is compliant with the rules and regulations of the state.
Types Of Property Management
With different types of properties and different responsibilities come different types of property managers. There are some property management companies that deal with the maintenance and management of only a particular type of property. There are also other property managers that offer services over different types of properties. In some cases, there are companies that manage a huge number of real estate properties.
The following are the types of property management you should know of:
1. Residential Property Management
Owners of rental properties hire residential property managers. The following are the types of properties where residential property management applies:
- Homes
- Apartments
- Townhouses
- Condominiums
- REO properties, and more.
2. Commercial Property Management
Owners of commercial properties have different property management needs as compared to the owners of residential properties. The process of commercial property management applies to:
- Retail properties like malls, stores, restaurants, and gas stations
- Public accommodations like hotels
- Co-working spaces where professionals rent workspace
- Office properties like real estate brokerages
3. Industrial Property Management
Managing industrial properties is also important, especially when the owner of the building is busy with business issues, just like commercial properties. Here are some of the industrial properties:
- Heavy manufacturing facilities such as steel mills and automotive plants
- Light manufacturing factories, such as food packaging
- Distribution facilities
- Warehouses
4. Special-Purpose Property Management
There are some property types that do not fall under the types mentioned above. However, they still need management at times of need. Some of them include:
- Sports stadiums/arenas
- Theaters
- Resorts
- Schools and Universities
- Senior care facilities
- Places of worship, and more.
What Does A Property Manager Do?
According to Investopedia, “A property manager is an individual or company that is hired to oversee the day-to-day operations of a unit of real estate. Property owners and real estate investors typically hire property managers when they are unwilling or unable to manage the properties themselves. The cost of employing a property manager is often tax-deductible against the income generated by the property.”
A property owner hires a property manager for the purpose of overseeing and monitoring the daily operations of the property or a group of properties. If you want to be a property manager, you will need to act on behalf of the owner so as to ensure that the value of the property remains intact and generates more income.
If a property owner hires a property manager for investment properties, then the hiring is tax deductible as a qualified business expense.
Wrapping Up
Hope this article was helpful for you in getting a better understanding of what is property management and how it works for businesses. By choosing property management, you are enabling the oversight of your real estate property by a third party known as a property manager. These managers are responsible for the daily operations of the real estate business.
If you want to hire property managers, you will have to pay them a fee or a percentage of the rent that you make from the property. The rules and regulations of property managers can change a bit from state to state. Do you have anything to add about property managers? Share your information with us in the comments section below.
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