Post-License Ch.15 Summary Notes
The duties of a property manager:
- Preserving the integrity of the property.
- Preserving the income stream from the property.
Duties will fall into the following areas:
- Administrative – Managing files and records.
- Fiscal – Financial management.
- Physical – Maintaining the property itself.
Aside from the owner that is away and not able to manage the property, potential sources of business include:
- Banks, trust departments and syndications.
- Corporate owners
- Apartment buildings
Florida grants a specialty license for a Community Association Manager (CAM). There are two types of agency that may be established: special or general agent.
Regardless of the agency, the scope of authority is determined by a contract known as The Management Agreement.
There are exemptions from licensing:
- Any employee of a public utility for which no compensation in addition to the salary is paid to rent or lease any real property for the use of his employer.
- Any salaried employee of an owner of an apartment community who works in an onsite rental office of the apartment community in a leasing capacity.
Expenditures paid from the operating budget fall into two areas:
A manager may separate management duties from that of leasing duties.
It is the job of the leasing agent to deal with tenants and keep the units occupied. The appraisal theory most important in pricing the space is supply and demand.
Factors that may contribute to high vacancy in the residential market:
- Lack of amenities
- Poor location
- Poor security or lighting
Retail and office space is priced per square foot.
Tenant selection is critical in commercial leasing.
Earnings of a Property Manager
- On a commission basis.
- On a per door fee.
- A Flat Fee.
- The annual salary is a method of payment when an individual is hired by an entity to manage property owned by the entity.
Four types of maintenance that should be built into the budget and long-term goals.
1. Preventative Maintenance
- Corrective Maintenance
- Routine Maintenance
- Construction Maintenance
Referral business from satisfied tenants is one of the least expensive and best sources of advertising available. Sources of advertising available:
- The Internet
- Apartment Magazines
- Display ads – large ads like billboards, benches
The name of the brokerage must be included with the advertising. Failure to include the name of the brokerage is considered a blind ad.
No tracking, follow-up or accounting is as important as a tenant’s money deposited with a broker.
A valid, enforceable lease should comply with the basic terms of contract law: Consideration, Offer and Acceptance, In Writing and Signed (if the lease is for more than one year) and both parties must have Capacity.
The proof and worth of a given property is found in the following three reports that relate to investment property.
- Operating Budget,
- Cash Flow Report
- Profit and Loss Statement
The operating budget helps an owner understand two important items:
- A projection of the future operation of the property
- A history of the property’s past performance.
The calculations in the budget consist of:
- Net Operating Income before financing
- Cash flow
A property manager should prepare a monthly budget and track the figures to determine if the amount allocated meets the budgeted amount.
Profit and Loss Statement (P and L) would list only total gross receipts and only total expenses compared to itemized lists of receipts and expenses.
· Insurance/Risk Crisis
- Liability Requirements
- Environmental Concerns
Property Management Specialization:
- Certified Property Manager (CPM)
- Real Property Administrator (RPA)
- Certified Shopping Center Manager (CSM)
- CAM – Community Association Manager
Florida Landlord and Tenant law defines reasonable as 12 hours prior and between the hours of 7:30 a.m. and 8 p.m.
The listing agent is managing the repairs. The funds should be deposited and held until there is a bill and authorization to release.