Property Management — Running Income Properties

Property managers operate real estate on behalf of owners for a fee.

Property manager responsibilities:

Marketing vacancies and screening tenants

Collecting rent and enforcing leases

Maintaining the property

Handling repairs and vendors

Keeping financial records

Ensuring legal compliance (fair housing, building codes)

Management agreement: Contract between owner and property manager. Specifies authority, compensation, term, and reporting requirements.

Management fee: Typically 8–12% of collected rent for residential. Commercial may be a flat fee or lower percentage.

Trust account (escrow account): Security deposits and owner funds must be kept in separate trust accounts — cannot be commingled with property manager's funds. Violation is grounds for license revocation.

Operating budget: Annual plan for income and expenses. Includes vacancy rate assumption (typical: 5–10%), operating expenses, and capital expenditure reserves.

Net Operating Income (NOI) = Gross Income - Vacancy - Operating Expenses

Reference:

Wikipedia: Property Management

https://en.wikipedia.org/wiki/Property_management