What do Property Management Companies Do?
Property management refers to the operation of commercial, residential, or industrial real estate. The role of a property management company is akin to the role of management in most forms of business. In addition to the aforementioned industries or sectors, property management also refers to the active management of personal property, equipment, and physical capital assets that are used to construct, repair, and maintain deliverable goods.
Property management companies will deliver the processes, manpower, and systematically-based means to manage the life cycle of all property that is acquired, controlled, utilized, or maintained by a corporation or entity.
In essence, property management companies are middle-men. They act as the liaison between individual consumers, governments, and commercial developers to streamline the acquisition and maintenance of property and capital goods.
Roles of Property Management Companies
There are a number of facets that comprise the property management industry. The most fundamental of which is the liaison between a landlord or property owner and the management firm operating on the tenant’s behalf. In this relationship, the property management company will accept rent, respond and address maintenance issues that arise, and provide a buffer for the landlord in regards to tenant constituencies.
Property management companies will also manage the accounts and finances of real estate properties, as well as participate in the litigation with tenants, insurance companies, and contractors.
The roles of property management companies, although varied, all focus on streamlining the relationship between property owner or developer and renter or builder. Through the delivery of resources and human capital, a property management company will ensure the acquisition of a maintained property.
The licensing requirements for property management workers are regulated through state interpretation. In the United States, the majority of states require property management companies to be licensed as real estate brokers, although this licensing requirement is widely based on the assumption that the worker would be responsible for collecting rent or listing properties for negotiated transactions.
A property manager may or may not be a licensed real estate salesperson, but in general, all property managers must be working under a licensed real estate broker. Maine and Idaho are two examples of states that do not require property managers to obtain a real estate license.
If licensed, a property manager can lease apartments, evict tenants, collect rent, garnish wages, and manage multiple properties at once. As stated before, the requirements to acquire a property manager’s license will vary from state to state. With that in mind, to obtain a property manager’s license an individual must determine their specific state’s requirements for a property license.
Once you have observed your specific state’s requirements for a property manager’s license, you must complete a State-approved property management course. Following the completion of this course, you will be required to submit two forms of identification and fingerprint cards which will be used for a background check.
You must complete coursework that is aligned to your prospective role. For example, buying practices, listing practices, and developing ethical practices is a fundamental course load for a property manager. Upon completion, you must pass the real estate property management exam to obtain a property manager’s license. In addition, depending on the state in which you are operating, you may be required to obtain a broker’s license.