A property manager is normally an individual third-party professional who as agent of the owner of real estate (landlord) manages the owner/tenant relations in order to maximize cash flow, the return on the investment in the property and the property’s value. The key target indicators of property performance that property managers focus on are net yield, internal rate of return (IRR) and cash-on-cash return.
Property managers are concerned with the business side of the property. They work closely with brokers and leasing agents to achieve the targeted occupancy rates at market rent levels. They collect the rental payments and other charges and pay all expenses incurred in operating the property, where the net operating (rental) income is generally credited to the client/owner.
The various roles of a property manager include:
- Representing the property’s owner (landlord);
- Controlling the revenues and expenses for the landlords;
- Increasing the net operating income and value of the property;
- Managing the landlord-tenant relationship and balancing their respective interests; and
- Acting on the planned business cycle of the property.