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The Property Manager’s responsibility

Lecture 2Department of Real Estate Management

Faculty of Technology Management

(Semester 1 2012/2013)

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Lecture outlines

• Defining Property Management • Leasing and marketing• Overseeing financial operations• Operating the property• Supervising personnel• One title, many skills

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Defining Property Management (BOVAEA)

• "Property Management" means – the management and control of any land, building

and any interest therein, excluding the management of property-based business on behalf of the owner for a fee and includes but is not limited to the following responsibilities:

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Property Management responsibilities as listed by BOVAEA

• monitoring outgoings for the property and making payments out of the income from the property;

• preparing budgets and maintaining the financial records for the property;

• enforcing the terms of leases and other agreements pertaining to the property; .

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Property Management responsibilities as listed by BOVAEA

• advising on sale and purchase decisions; • advising on insurance matter; • advising on the opportunities for the

realisation of development or investment potential of the property; and

• advising on the necessity for upgrading the property or for the merging of interest.

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Property Management responsibilities as listed by BOVAEA

• The Board would require all properties which are not "property based business" to be managed by a Property Manager who shall be a registered valuer.

• Therefore, property owners of retail centres, shopping complexes, etc who engage external managers, and who do not manage this own buildings, are advised to engage only the services of registered valuers for property management

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Property Management responsibilities as listed by BOVAEA

• Owners of such complexes are advised to approach the Board for directions and guidelines in instances where they find any difficulty in appointing property managers.

• In any case property owners are advised that property management does not include leasing or letting of space in a shopping complex, etc.

• If the property manager does this work he cannot charge a separate fee unless he is a registered estate agent. This will also apply to in house property managers.

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PMs General Responsibilities

• Creating promotional materials for properties• Showing vacant space to prospective tenants• Negotiating leases with tenants and their attorneys• Keeping in contact with current tenants to ensure that

they are happy with the property• Hiring and supervising a staff that may include other

property managers and maintenance personnel

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PMs General Responsibilities

• Working with vendors to acquire the goods and services a property needs to operate

• Developing a budget estimating possible income and expenses

• Keeping financial records for rent collected and money spent

• Analysing competing properties to better understand the best way to market the property

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PMs General Responsibilities

• Working with lawyers to evict tenants who do not pay their rent or who violate other requirements of their leases

• Getting bids for and purchasing insurance, environmental consulting, security and other services needed for building operations

• Advising the owner when major repairs or renovations of the property are needed

• Assisting the owner in deciding when to sell the property

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Leasing and marketing

• Market research– Finding potential tenants

• Showing the space– Qualifying the prospect

• Negotiating leases– For the best terms and the most reasonable rent

• Leasing and marketing on the internet– Multinational properties

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Overseeing financial operations

• Record keeping– Even though the actual record keeping is handled

by bookkeepers or clerical personnel, the property manager must keep an accurate, detailed account of all income and expenses.

• Budgeting– Developing an annual budget for a property that

based on both past experience and anticipated future performance

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Operating the property

• Tenant relations– Sustainable relations with tenants

• Ongoing relations– A tenant newsletter– Tenant events– Organising needed services– Regular visits with tenants

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Operating the property

• Problem solving– Handling complaints

• Maintenance tasks– Effective maintenance work

• Purchasing– Exploring alternative for quality and price

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Supervising personnel

• Employees must be willing to work long hours as the main role of property managers are:– To serve needs of the tenants– To handle all problems that arise– To put the concerns of their tenants before their

own needs• Employees are also required for travel ( site

visits & regular inspections)

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One title, many skills

• Property managers must have a wide range of skills;– From finance to legal issues and from working

with people to setting up and managing complex computerised systems.

– Eg tasks such as lease negotiation and tenant relations require good people skills and ongoing personality

– Financial record keeping and market analysis require a factual, detail-oriented mind.

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Conclusion

• It is the rare property manager who performs all of the tasks described in this lecture –particularly today, when there is increasing trend toward specialization in the industry.

• Nonetheless, the property manager must still be a generalist who is good at many things. That, for many, is the hardest and the most exciting part of property management

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References

• Evans, M, (2007), Opportunities in Property Management Careers, McGrawHill.

• Kyle, R, (2000), Property Management, 6th Edition, Dearborn.