What Is Property Management?
Property management is the daily oversight of commercial real estate by a third-party contractor. Generally, property managers take responsibility for day-to-day repairs and ongoing maintenance, security, and upkeep of properties. Property management companies take on the daily stresses of commercial and investment real estate management on behalf of owners. Because different localities and property types are governed by different regulations, codes, and laws, a property management company can be essential for most landlords.
The best property management companies aim to ensure the profitability, good reputation, building upkeep, and tenant occupancy of a residential or commercial investment property. They also keep owners updated on the key performance metrics of their real estate assets. They usually work for the owners of investment properties such as apartment and condominium complexes, private home communities, shopping centers, and industrial parks.
Their main roles are to manage routine tasks delegated to them by the owners and to preserve the value of the properties that they manage while generating income.
The responsibilities of a property manager generally involve the following:
- Screening potential tenants
- Drafting, signing, and renewing leases on behalf of property owners
- Collecting rent
- Maintenance of properties, including landscaping and snow removal
- Arranging for necessary repairs to properties
- Setting up and adhering to budgets for property maintenance
- Understanding state and national landlord-tenant laws and regulations
- Marketing properties
- Supervising other employees
- Handling taxes
Commercial Property Management
Commercial property managers oversee many kinds of non-residential properties. Typically, commercial property management concerns business owners who need a rental space to work out of. Commercial Property Management has to do with direct management of buildings or land that is used to create a profit or income.
While large offices and single-unit offices make up most commercial spaces, co-working spaces, hotels, and retail properties also count as commercial properties. So, commercial property managers spend the majority of their time dealing with tenants who rent spaces long-term. However, they also interact with monthly renters in co-working spaces and even customers in retail spaces.
Commercial property owners have different needs from those who own residential property. Commercial property management can apply to:
- Public accommodations like hotels
- Retail properties like malls, restaurants, and gas stations
- Office properties like real estate brokerages, large businesses or doctors’ offices
- Co-working spaces where professionals rent work space by the day or the hour
Commercial property management can be a huge industry if there is a large number of tenants involved. Additionally, commercial property managers often double as real estate agents and work to fill vacancies. They may also entice leases to improve their contracts, provide daily maintenance, train employees, and help to gain a larger return on the investment of the property as a whole.
Commercial management solutions can vary in degree depending upon the number of tenants in a building or the specific use of the property. Professional services provide plans to fill vacancies, a way to add value to lease contracts, daily maintenance, employee training, and ultimately, a better ROI from the property.
Largest commercial property management companies
According to a survey by commercial property management platform Commercial Search, these are the top 10 commercial property management companies (based on square footage, by the millions):
- CBRE Group, Inc.
- Colliers International
- JLL
- Newmark Knight Frank
- Avison Young
- Cushman & Wakefield
- Hines
- Stream Realty Partners
- The RMR Group
- Kidder Mathews
SOURCE: Commercial Search’s survey.
As informed investors we should understand the risks associated with real estate investing and that there is no guarantee. Please do your due diligence.
What is the biggest responsibility for property management?
Property manager responsibilities include setting and collecting rent, handling maintenance requests, filling vacant units and potentially setting the budget for the property. Property managers often take care of property that real estate investors either do not live near or do not wish to personally manage.
