At The Top - November 2008

Understanding the True Value of Property Management

by Frank Gatski

Managing property is an exacting and complex enterprise. While many people assume it’s simply a matter of paying bills on time and collecting rent, in actuality the duties are far more involved and challenging.

By hiring professionals, property owners can save time, energy and money. Plus, by leaving the management duties to the experts, property owners and investors can engage in more productive revenue generating activities and much preferred pastimes.

Property management firms have a vast portfolio of experience in handling tenant and lease issues, investments and more. They’ve compiled years of knowledge and can readily apply it to issues that arise, be they simple or complex.

Property managers focus on the day-to-day operations, but they’re also involved in planning for the future. By working with the owner and the owner’s investment team, the property manager will help create a list of goals, and ensure that the property owner accomplishes those goals. Considering the many variables in the market today, a property management team can assess what’s most important, whether it’s a short-term sale, long-term investment or an opportunity to refinance.

One of the most important aspects of a property management firm is the liability protection it offers property owners. Thanks to the firm’s experience with conflict resolution, managers are often able to mediate and protect the property owner from potentially costly litigation. Additionally, one of the firm’s priorities is to ensure that tenants and the property owner are fulfilling the obligations of the lease.

What’s often most surprising is the actual cost savings that property management firms are able to offer their clients. The firms have spent years building relationships with suppliers, vendors and contractors. Because of their buying power, management firms receive discounted rates, and are able to pass the savings (and improved services) on to the property owners.

They’re also able to save property owners money by looking at the big picture. Spending a little more money upfront on preventative maintenance can be an enormous payoff. Property management firms can consult with property owners on how to lengthen the lives of mechanical systems, roofs, plumbing and more.

When it comes to managing property, the future is of the utmost importance. Management companies will work with the owner to develop a long-term investment plan that will ensure optimal returns. Managers pride themselves on staying on top of industry news and trends, and help property owners to make the most informed decision possible. By merely involving a third party, the property owner is adding value to his investment. A property management firm acts as an unbiased liaison between the owner and investors, and that’s important to all parties. Lenders often require third-party management services. Those who don’t officially require it agree that they prefer to see property managers in place when considering a commercial real estate loan.

Professional property managers help to simplify the life of the property owner while keeping tenants happy. It is a win-win situation all around.

Frank Gatski
Frank Gatski, CPM, CCIM is president of Gatski Commercial Real Estate Service.