What services do property management companies provide?
Property management companies provide the following functions:
- Facility Management: Routine, seasonal and one-time maintenance scheduling and supervision, compliance with regulating agencies (fire & police department, building department, and elevator inspections). Inspecting the work performed by contractors (landscaper, janitors, security, pest control, parking lot sweeping and HVAC maintenance).
- Tenant Relations: Responding to tenant requests and questions, explaining CAM fees, working out agreements on paying delinquent rent, filing evictions through an attorney and inspection of the premises before and after tenant occupancy.
- Accounting: Providing monthly cash flow reports, preparing annual budgets, paying vendors providing services to the property, providing Common Area Maintenance (CAM) budgets with annual reconciliation. Assessing monthly CAM fee based on the CAM budget.
- Project management: Supervising the general contractor on major renovations (this would be for tenant improvements, new roof, HVAC replacements, and Common Area improvements such as new hall carpet).
- Assisting with Purchasing or Selling Commercial Properties: Property managers can assist owners in purchasing or selling properties. This does not mean property manager will earn a sales commission or referral fee from the brokers; and if they do, it must be disclosed. The motivation for the property manager is that they have the property to manage or, if assisting in a sale of existing property, the possibility that the sale proceeds will be used to purchase another property.
- Management Plan: A Management Plan provides a strategy for the direction of the property operations by looking at the existing property condition, operating procedure and financial standing. With the existing conditions understood, changes to the physical condition, leasing strategy, and operating procedures are proposed. The recommendations are made to pursue the highest net income. If a property is well maintained and tenant treated fairly the property will have a lower vacancy and be a desired commodity.
- Leasing in Commercial Properties: Your manager can review Letters of Intent (LOI) presented by a broker, make recommendations to owners and then prepare the lease. If there is no base lease specific to the property the lease can be on the Broker’s form or written by an attorney. The property can also have its own base lease, written by an attorney and approved by the owner. The leasing process can last one month or one year, depending on the size of the premises and tenant needs. Lease renewals are performed by the leasing broker or property manager.
Full Management (the primary functions) are Facility Management, Tenant Relations and Accounting and include a monthly written narrative on the activities of the property. Most owners want full management however, these functions can be handled separately and we have had accounts where we did only accounting or only maintenance.