1. Chapter 12 Property Management

2.  The role of the property manager is to manage the property with the objective of securing the highest net return for the property owner over the property’s useful life

3. Management Agreement  establishes the relationship between the owner and the manager.  The agreement should address the powers of the manager relating to Rent setting Lease signings Rent collections Power to spend money on behalf of the property Authority to hire, fire, and supervise personnel

4. Management Agreement (cont’d)  The agreement should specify the compensation to the manager Percentage of gross income Fixed amount Fee schedule for certain tasks Hourly rate

5. Figure 12.1

6. Figure 12.1 (continued)

8. Functions of a Property Manager  administration  marketing and advertising  tenant selection  lease negotiation  property maintenance  rent collection  security deposit management.

9. Case Study - ORIX  ORIX Property Management Service loans for lenders After default, ORIX manages property for lender ORIX contracts with large firms to manage properties  Short term 2-3 years max  Limits set by certain gov’t regs. Goal is sale

10. End Chapter 12