Nov 21, 2013
Property management is the operation, control, and oversight of real estate as used in its most broad terms. Management indicates a need to be cared for, monitored and accountability given for its useful life and condition. It is the administration of residential, commercial and/or industrial real estate. Property management typically involves the managing of property that is owned by another party or entity. The property manager acts on behalf of the owner to preserve the value of the property while generating income. Managed properties include residential and vacation properties, commercial retail space or industrial warehouse space. Property managers are typically paid a fee and/or a percentage of the rent brought in for the property while under management.
It also involves the management of personal property, equipment, tooling and physical capital assets that are acquired and used to build, repair and maintain end item deliverables. Property management involves the processes, systems and manpower required to manage the life cycle of all acquired property as defined above including acquisition, control, accountability, responsibility, maintenance, utilization and disposition.
Property Force.com is a rental and property management company with two locations on the San Francisco Peninsula, Santa Clara. We offer solutions allowing properties to operate efficiently and effectively, which makes both owners and renters happy.
Our basic primary tasks include the full and proper screening or testing of an applicant’s credit, criminal history, rental history and ability to pay, lease contracting or accepting rent using legal documents approved for the area in which the property is located, mitigation and remediation regarding any maintenance issues, generally within a budget, with prior or conveyed consent via a Limited Power of Attorney legally agreed to by the property owner.
Our property management system involves:
Marketing and Financial
Property management involves understanding of operating expenses and budgeting. From this information, we set appropriate rental rates, balanced by the current market and what it will support in the way of rents. A firm knowledge of the area and competitive rental properties is required. Our property manager recommends marketing programs, special promotions and other advertising strategies to the owner in order to maximize occupancy and rental rates. Regular financial reporting to the owners is required. Understanding financial statements, profit and loss, income taxes and budgeting are all very important for the property manager.
Tenant and Occupancy
Understanding the needs of the tenants is important for this function. Getting them to move in is only the beginning. Our property manager must respond to their requests, monitor their activities as regards the lease requirements, collect rent in a timely manner, and continually assess the tenants’ satisfaction as regards the property’s amenities versus those of competing rental properties in the area. The unwelcome task of eviction for violations or non-payment is part of this function also.
Property management is also physical management of the structures and outdoor areas. Landscaping, electrical, plumbing, roof, walls, appliances, and much more are all part of the physical property. Our property manager must maintain relationships with contractors and repair companies, budget capital expenditures, and monitor the quality of all repairs and maintenance. This function ties in with the financial piece, as some improvements will require significant capital expenditures and budgeting for them. It ties in with tenant and occupancy management because it is important to tenant retention to have well-maintained properties.
Administration & Risk Management
This is the files and records part of our property management function. Federal, state and local governments all have some jurisdiction over real estate property management activities. Certain reporting requirements must be met for all of them. Meticulous records for accounting and taxes are a must. For reasons of liability, we record and maintain all activities and tenant interaction for specified periods. Though also related to financial functions, there are very rigid requirements in most states for the handling of funds paid by renters for disbursement to owners.
Capital expenditures budgeting
Properties that fall into obsolescence will experience lower rents and a less attractive return on investment as the property ages. We develop a long-term budget for capital improvements. Renovation, remodeling, and more modern appliances will help to maintain and increase rental income in competition with newer properties. Capital improvements are normally not expensed in the years they are done. Our accountant helps to set up costing over their useful life. Certain tax advantages could result from financing the improvements.
The real estate property management company is the agent of the owner, and we work closely with the owner to maximize rental income and return on investment for the property. The first step in that process, and quite important, is comprehensive budgeting.
A thorough knowledge of competitive properties, their comparative features and rental rates, is imperative. Always plan for renovations and improvements and their funding
Property Force is as accurate as possible in estimating ongoing management expenses for repairs, maintenance, and administration; maximize rental prices in relation to competition and current market conditions. When all this is done, income will exceed expenses, and you’ll be managing a profitable property for the owners.