Property management is a professional service conducted by a person or company hired to maintain and manage property on behalf of property owners. The scope of the work the property manager performs is spelled out in the management agreement. Property management typically involves leasing, managing, marketing, and maintenance of property. Property management is much more involved than being a rental agent. Rental agents typically find a tenant for property and collect a fee. Property managers continue to manage the property once a tenant is secured.
A property manager is the local representative of the property's owner. The property manager is responsible for maintaining the property and managing the expenses. The property manager's primary task is to protect the owner's investment and to maximize the return on the investment, thereby producing the greatest possible net income over the longest possible time.
Many investors desiring to participate in the growth of income-producing property have become absentee owners. An absentee owner is a property owner who does not reside on the property and who often relies on a professional property manager to manage the investment. The field of property management has experienced rapid growth and specialization, primarily because of the increase in absentee ownership. As agents of absentee owners, property managers are typically responsible for rent collection, improving tenant relations, and advertising and merchandising the space. Investors normally hire qualified property managers because the investors have neither the time nor the desire to become involved in the complexities of property management.
Property managers are compensated in a number of ways. Some work for a guaranteed base amount plus a small percentage of effective gross income (total income collected after taking into account vacancies). The method of compensation is detailed in the management agreement.
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