Property Management

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? 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?

A growing source of employment are homeowners’ associations and PUD’s.

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 manager’s responsibilities statement of owner’s purpose extent of manager’s authority extent of reporting required 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 manager’s responsibilities statement of owner’s purpose extent of manager’s authority extent of reporting required

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

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. 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.

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. 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.

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 don’t pay on time or who break other rules? 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 don’t pay on time or who break other rules?

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

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. 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.

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

liability worker’s compensation insurance casualty (theft, vandalism, etc.) surety bonds liability worker’s compensation insurance casualty (theft, vandalism, etc.) surety bonds