THE FUNDAMENTALS OF PROPERTY MANAGEMENT Presented by Carmen Hirciag, MBA Research Analyst

Survey Methodology to random sample of CA REALTORS® in September & October respondents conducted property management business within the 12 months prior to September/October 2013

California Rental Market 12.6 million 5.8 million 1,200 Source: U.S. Census Bureau 2012 American Community Survey

Nearly Half Impacted by 2008 Financial Crisis Q: Has your business model changed as a result of the 2008 financial crisis?

Increased Involvement in Property Management Q: What percentage of your business consisted of property management? Percentage of Business in Property Management

86% of REALTORS® have 3+Years Experience in Property Management Q: How many years have you engaged in property management? (Mean: 13, Median: 10)

Years of Experience in Property Management Q: How many years have you engaged in property management?

Most Managed Properties are Residential Q: What type of properties do you manage?

Most Manage Only Residential Properties Q: What type of properties do you manage?

Majority Manage their Own Properties Q: How many of the properties that you manage do you own? Number of Properties

Most Property Managers Reside off the Premises Q: Do you currently reside on the premises of one of the properties that you manage?

Top Functions Performed by Property Managers Q: Please check all the management functions which you perform.

Ways to Generate New Clients Q: How do you generate new clients for your property management business? Referrals 31.2% Word of mouth 17.1% Internet, marketing online, websites 11.4% Existing clients, repeat clients, investors 9.4% Ads, advertising, advertisement 4.7% Craigslist 4.7% Local paper, newspaper, newsletter 4.4% MLS 3.7%

The Internet is the Most Preferred to Market Vacancies Q: How do you market vacancies?

Craigslist is the Most Popular Website for Marketing Q: On which websites do you market your vacancies? Craigslist73.7% MLS22.5% Trulia13.0% Zillow12.6% Postlets9.2% Our own/personal website5.7% Westside rentals4.6% Hotpads4.2% Realtor.com2.7%

Print Publications for Marketing Q: In which print publications do you market your vacancies?

Marketing Expenses Q: How much do you typically spend on marketing per unit?

Technology in Property Management Business Q: How frequently do you use each of the following in your property management business?

Software Use in Property Management Business Q: How frequently do you use the following types of software in your property management business?

Mobile Apps for Property Management Business Q: Which mobile apps do you utilize in your property management business? Zillow15.8% MLS14.0% Trulia8.8% Maps, GPS7.0% Docusign5.3% Appfolio5.3% Zip forms5.3% Craigslist5.3% Texting/messaging/ 5.3%

CLIENT/AGENT RELATIONSHIP

Over ¾ Clients are Individuals Owning <5 Properties Q: Please describe your clients.

Referrals are Most Important in Finding Clients Q: How do you typically find your clients?

Nearly Half Paid by % per Property Q: Which of the following best describes your client fee structure?

Median: 8% Per Property Q: What percentage of the rent do you charge per property? Percentage Charged

Median: $125 Per Property Q: How much do you charge per property?

Median: 8% Per Unit Q: What percentage of the rent do you charge per unit?

Charge per Unit Mean: $8.8Median: $8Mode: $10

Monthly Vacancy Rates are Low Q: What is your average monthly vacancy rate? Monthly Vacancy Rate

Greatest Opportunity in Property Management Q: What is the greatest opportunity in your property management business? Extra money, income, making money17% Expansion of business/property9.9% Potential new listings/buyers/sellers8.6% Future sales and purchases6.9% Turning renters into buyers5.2% Growth, growth of renter/housing market5.2% Meeting people/clients/owners4.3% Referrals3.9% Finding good clients/tenants3.4% Establish relationships, make friends3.4%

Top Challenges in Property Management Business Q: What is the biggest challenge in your property management business? Finding good tenants16% Repairs/maintenance12% Tenant issues/problems12% Government regulations/interference5.0% Time management, finding time4.5% Tenant paying rent on time4.5% Getting more business, growing the company3.7% Finding new clients/tenants3.3% Evictions3.3% Vacancies3.3%

AGENT DEMOGRAPHICS

Most Managers are Very Experienced Q: How many years have you been licensed to sell residential real estate?

Gender Q: What is your gender?

Marital Status Q: What is your marital status?

Majority are College Educated Q: What is the highest level of education you have completed?

Annual Income Q: What is your annual income?

Ethnic Background Q: How would you describe your ethnic background?

“Understanding Today’s Home Buyer” Thursday, May 29, :00 PM - 3:00 PM To register: WWW. CAR.ORG/MARKETDATA Join us for our next webinar…