What is Property Management?

Real estate objects are created or purchased to meet personal or social needs. In accordance with this, both the tasks of real estate management and the ways of their solution have own peculiarities. The term management of real estate can be interpreted in a narrow and broad sense.

It can be carried out both by the owner himself and by the hired worker. The approach will also be completely different. In the first case, the property management companies will need to evaluate the property, agree with the owner of all the details, set a price and find customers for housing. For such operations, a single commission is provided.

When working with legal entities or influential businessmen, an additional task may also fall on the shoulders of the certain company as part of bringing the premises up to readiness. It can be an initial arrangement of any office or warehouse, and full repair in coordination.

So, a property manager is a legal or natural person who, under a contract with the proprietor of a real estate object and in his/her interests, within a certain time period, on its own behalf, commits any legal and factual actions with this object, unless they are prohibited by law or a trust management agreement.

The profitability (or loss-making) of the object directly depends on the quality of the property management. The ability of a professional team to find the optimal ratio of costs and revenues, determine the real expenses of operation, attract users, and reliably predict the development of real estate management on the brink of art.

The process of property managing includes:

  • the prevention of any malfunctions of communication systems due to regular diagnosing and carrying out of repair and restoration works;
  • constant modernization of engineering systems;
  • quality control and professional development of specialists;
  • expedient spending of resources for obtaining the maximum economic benefit from owning real estate;
  • a system of legislative and regulatory regulation of the behavior of all real estate market entities carried out by state bodies.

Real estate property management is carried out in three directions. Economic one is a continuous analysis and improvement of the structure of income and expenses directly related to the use and maintenance of real estate.

Legal management is the registration of all documents, fixing the ownership of the objects. Engineering (technical) direction is a whole complex of works aimed at maintaining the state of both the object itself and all communications that ensure its full functional status.

Real estate management could also be internal and external. The first is the activity of a real estate market subject, regulated by its own documents (code, statute, rules, contracts, instructions, etc.). The external one is aimed at creating a regulatory framework, and monitoring compliance with all subjects of the real estate market of established norms and rules.

Facility, Administration & Risk Management

The moment of starting the property management is the commissioning of the facility. Facility management involves:

  1. Maintenance of structural elements, engineering systems, and dispatching;
  2. The content of the object means a sanitary condition, cleaning of the territory, removal of household waste, disinfestation, as well as the maintenance of the adjacent land;
  3. Repair works are divided into current, capital, and cosmetic ones.

Working with a real estate object is a rather complex process, consisting of several stages.

  1. Relations with owners of real estate objects play a key role in the success. The activities of the manager should be legitimate and transparent.
  2. Formation of the purpose and strategy of commercial use. In most cases, the goal is to increase revenues, reduce costs and enlarge the liquidity of the property. For these purposes, the manager identifies inefficient information and cash flows during the development of the project management.
  3. Situation analysis. When starting to work, the manager should involve the facility personnel who at the initial stage may not be interested in his/her actions. Methods could be different: from explanation to the application of monetary reward systems. As the practice of real estate development shows, at the first stage of commercial use of real estate all income must be invested in the objects themselves, on the second - they can be distributed between the owner and investments in the real estate object.
  4. The content of the property. It is necessary to have a clear understanding of the operating conditions: the maximum loads and their nature, the permitted and forbidden actions of the user. Serving the same facility specialized organizations that perform certain types of work.

Thus, in order to work with commercial real estate requires much more knowledge and investments, in comparison with residential one. At the same time, on the shoulders of the management company lies work, both with the owner and with the maintenance personnel of the buildings. Due to such a large-scale approach to the issue, professional managers are trying to achieve truly effective use of the serviced property.

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