1. Introduction to Property Management
Lecture 1
Department of Real Estate Management
Faculty of Technology Management and Business
(Semester1 2012/2013)
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2. Lecture outlines History of property management
Property management today
Where property managers work
Different property management jobs
Property management as a career
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3. History of property management
In its earliest day, the property manager had only one job,
TO COLLECT THE RENT
In the 1930s, economic depressions, where people out of job, the stock market crash, mortgage default that end up with the banks kept many of properties.
But bankers have no knowledge to manage property.
Thus the property manager was born.
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4. Property management today
For the last 25 years, most people became property managers by unintentionly.
In the 21st century, the growth of real estate investment by the investors and companies that manage large properties, demand for property management is indeed a full-time career.
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5. Where property managers work
Third-party managers
Work for the property owners of the property they manage
Real estate investment trusts (REITs)
Employee of the company
Institutional owners
Work for group of building owners: banks, large limited partnerships, foreign investors, etc.
Corporate real estate management
Work for corporations to manage their income producing real estate
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6. Different property management jobs
On-site manager
Day to day operation: collecting rent, preparing reports, supervising maintenance, cleaning works
Leasing agents
Leasing broker: locating & signing new tenants to occupy space in building
Tenant representative
Mostly for commercial property: assisting tenants in locating space and negotiating lease
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7. Different property management jobs
Property manager
Responsible for the operation of several properties, overseeing on-site manager, involve in planning and budget for property management activities, and usually report to asset manager
Portfolio (asset) manager
Executive responsible for large no of properties, evaluate the properties performance, act as a substitute to owner, approve policies and financial, act as advisor to owner.
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8. Property management as a career
Board of valuers, appraisers, estate agents (BOVAEA)
Role of property managers can be found in
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9. Property management as a career
The Board was set up in 1981 under the purview of the Ministry of Finance, Malaysia.
The setup and operation of this Board is governed by the provision of Valuers, Appraisers and Estate Agents Act 1981.
Its primary function is to regulate the Valuers, Appraisers and Estate Agents practising in Malaysia
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10. Property management as a career
The Functions of The Board are
To keep and maintain the Register of Valuers, Appraisers and Estate Agents, Probationary Valuers and Probationary Estate Agents and firms of Valuers, Appraisers and Estate Agents.
To approve and reject applications for registration.
To hold disciplinary proceedings.
To conduct examinations.
To prescribe Scale of Fees.
To regulate the professional Conduct/Ethics of Valuers, Appraisers and Estate Agents.
To award scholarships
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11. Property management as a career
Role of Property Manager
Currently only a registered valuer can practice as a Property Manager.
The property manager ensures that the owner gets the best returns of his property investment.
He also ensures that the building is well maintained, the building services well looked after and all expenses paid.
He is able to optimise usage and enhance the investment in property.
He advises on lease renewals, selection of quality tenants and the appropriate tenant mix.
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12. Number of Firms & Registred Members & Probationary Members (Active)
Firm Type
Firms
Valuer & Estate Agent (VE)
300
Valuers (V) 80
Appraisers & Estate Agent (AE) 9
Estate Agents (E)
900
Estate Agent & Property Management (EPM) 7
Property Management (PM) 35
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13. Number of Firms & Registred Members & Probationary Members (Active)
Registered Members
Licence Type
Members
Registered Valuers (V)
840
Registered Appraisers (A) 17
Registered Estate Agents (E)
1650
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14. Number of Firms & Registred Members & Probationary Members (Active)
Licence Type
Members
Probationary Valuers (PV)
520
Probationary Estate Agents (PEA)
243
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15. Payment to Property Managers
An annual fee based on:
5% of the gross annual rent on the first RM30,000
3% of the gross annual rent on the residue up to RM 100,000
2% of the gross annual rent on the residue over RM 100,000
The fee is applicable to each holding.
The expression ‘holding’ as used here has the same meaning as defined in Section 2 of the Local Government Act 1976.
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16. Section 2 of the Local Government Act 1976
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17. Payment to Property Managers
The expression ‘gross annual rent means the rents reserved or deemed to be reserved by the lease or lettings plus any incidental receipts collected accounted for or both in the course of management.
Minimum fee :
As above but may be subject to a maximum discount of 30% and a minimum fee of RM50 per month.
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18. Discussion
Would you prefer to work as an employee manager or a third-party manager?
Why?
What are the advantages or disadvantages of each?
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19. Answer Employee manager Advantages Disadvantages
The security of a paycheck
The freedom from having to solicit clients and properties to manage
Disadvantages
Being confined to working for someone else
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20. Answer Third party manager Advantages Disadvantages
The freedom of running one’s own business (although the property owner’s goals must always be fulfilled)
Disadvantages
The work (and insecurity) of finding new clients and new buildings to manage
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21. References
Evans, M, (2007), Opportunities in Property Management Careers, McGrawHill.
Kyle, R, (2000), Property Management, 6th Edition, Dearborn.
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