Property management is the process by which the property owner and/or a third-party service provider maintains and creates value in the property consistent with the owner’s objectives. Property management is generally performed in order to:
- Efficiently operate and maintain the property;
- Maximize income from operations;
- Increase in the value of the property; and
- Maintain tenant relations to help maximize occupancy and cash flow.
Property management must balance the profit motive of property investors and owners with the need of the tenants for optimal workplace and productivity gains. However, the interests of the property investors are quite often in conflict with those of the tenants, where:
- Tenants typically want longer-term leases, while owners prefer shorter-term tenancy due to changing real estate market return rates and lease levels; and
- Tenants generally want the owner to invest sufficient capital into maintaining and improving the property to differentiate and position it and themselves against competitors, while investors wish to keep operating costs as low as possible.