Traditional Property Management vs. Project-based Property Management
During the lifetime of a managed property, the owner experiences many phases. In summary, if the unit is new, it must still be ‘made-ready’ for the occupant. Once occupied, traditional management of rent collection and managing the property create ongoing responsibilities. When the tenant vacates, a secondary or exit inspection occurs. After that, owners refund or charge the tenant amounts due.
A professional property manager performs all of these tasks on behalf of the owner.
However, this model assumes the owner wishes to hand over 100% of the responsibility to the expertise of the manager. It works most of the time.
However, It also assumes that the wishes of the owner are identical to the desires of the property manager. It restricts and often prohibits the owner from visiting the property, contacting tenants or intervening in remodeling decisions about the property — unless the property manager agrees, or acquiesces to allowing the owner to do so during their term.
Project-based property management differs from traditional management by specifying which tasks will be done by the manager and the owner.
For example, if the owner desires merely to delegate the tenant selection task to the manager and after that manage the property themselves, she/he may do so under a project-based property management model. The manager’s role would be limited to locating and placing the tenant under this arrangement. (*Most property managers would prefer not to do this, as their interest is often to secure a percentage of the monthly rent, instead of focusing on finding the best overall value for the owner).
How Technology Helps Project-Based Property Management
Technology has simplified the role of property management. Online services allow owners to evaluate rental amounts, perform tenant screenings, instantly collect rent via peer-to-peer networks, secure their premises through a variety of methods, enable entry access, and sign official documents. The smartphones which we are all attached to, allow for instant photos and messaging between owners, tenants and service providers — eliminating the need for a middleman. Social media yields a wealth of information about tenants (as well as owners and properties). Viewing and evaluating this info takes mere seconds. Finally, new online services replace the property manager entirely in that they book rentals, collect rent, inspect and manage the cleanup and send owners their funds more efficiently.
So will property managers be out of their jobs soon? Probably not. The majority of long-term rentals still involve property management basics. However, for owners, more options exist, which will make the process more efficient.
In continuing posts, I’ll expand on some of these ideas and provide more detailed examples of how project-based property management is a better solution for owners.
I’d be interested in your views on this. Is this your experience?