Property management
Property management is the operation, control, maintenance, and oversight of real estate and physical property. This can include residential, commercial, industrial, public capital, and land real estate. Management indicates the need for real estate to be cared for and monitored, with accountability for and attention to its useful life and condition. This is much akin to the role of management in any business. The subdisciplines of property management that deal with the physical infrastructure of the property, are known as facilities management and building services.
Property management is the administration of personal property, equipment, tooling, and physical capital assets acquired and used to build, repair, and maintain end-item deliverables. Property management involves the processes, systems, and workforce required to manage the life cycle of all acquired property as defined above, including acquisition, control, accountability, responsibility, maintenance, utilization, and disposition.
An owner of a single-family home, condominium, or multi-family building may engage the services of a professional property management company. The company will then advertise the rental property, handle tenant inquiries, screen applicants, select suitable candidates, draw up a lease agreement, conduct a move-in inspection, move the tenant into the property and collect rental income. The company will then coordinate any maintenance issues, supply the owner with financial statements and any relevant information regarding the property, etc.
Roles and Responsibilities
Property management involves a wide range of tasks and responsibilities carried out by property managers, management companies, or individual landlords. Property managers serve as the operational backbone of real estate ownership, balancing the financial interests of the owner with the comfort and satisfaction of tenants while maintaining the property’s long-term value.The specific roles depend on the type of property—residential, commercial, or industrial—but generally include:
Tenant Relations
Property managers act as intermediaries between property owners and tenants. They handle tenant inquiries, process applications, conduct screenings, negotiate lease agreements, and coordinate move-in and move-out procedures. In most settings, property management companies also operate the mailroom of the buildings in which they lease to tenants or manage on behalf of the landlord client; Mailroom Operations is a component of property management.Rent Collection and Financial Management
Managers are responsible for collecting rent, enforcing payment terms, issuing late notices, and managing security deposits. Many also prepare financial statements, budgets, and reports for property owners, ensuring compliance with local and national regulations.Maintenance and Repairs
A key role of property management is the maintenance of the property. This includes scheduling regular inspections, coordinating repairs, overseeing contractors, and ensuring that the property meets safety and habitability standards.Facilities management is a professional discipline within property management, focused on coordinating the use of space, infrastructure, people, and organizational resources to ensure that physical assets and environments are managed effectively to meet the needs of their users.
- Building services or building services engineering, strives to achieve a safe and comfortable indoor environment while minimizing the environmental impact of a building; it, as a part of facilities management and property management, plays a part in the operation and management of physical infrastructure in the built environment.
Legal and Regulatory Compliance
Marketing and Leasing
In residential and commercial contexts, managers are often responsible for advertising vacancies, setting rental rates based on market conditions, and maintaining high occupancy levels through effective marketing strategies.Administrative Duties
Administrative responsibilities may include record-keeping, contract management, insurance coordination, and maintaining communication with property owners and vendors.Property Management Business Pricing Models
Percentage of rent
The percentage of rent model is the most common property management model, typically used by companies managing multi-unit residential buildings and single-family homes. In this arrangement, the property owner enters into a management agreement granting the company the authority to lease the house or property to new tenants and collect rent on the owner’s behalf. Property owners are generally not directly involved with tenants and may not even know their identities. The management company usually retains between 8% and 12% of the rental income as a management fee, remitting the remainder to the property owner.Flat-fee / Fixed-fee
A fixed-fee property management model, also known as a flat-fee model, is an alternative to the traditional percentage-based structure. In this arrangement, the property management company charges a predetermined monthly or annual fee for its services, regardless of the property’s rental income. This model is often preferred by property owners seeking predictable management costs, especially for higher-rent properties where a percentage-based fee could result in higher expenses.Under a fixed-fee agreement, the scope of services—such as tenant placement, rent collection, maintenance coordination, and property inspections—is typically defined in advance. Some companies offer tiered or customizable service packages to accommodate different owner needs. The fixed-fee model has gained popularity in recent years due to its transparency, cost stability, and appeal to investors managing multiple rental units.
The flat-fee model is also popular among vacation property owners who do not wish to rent out their properties but want a management company to oversee maintenance, inspections, and general upkeep.
Hybrid Pricing Model
A growing trend in property management, is the hybrid pricing model, which combines elements of both percentage-based and fixed-fee structures. Under this approach, property management companies charge a reduced percentage of the monthly rent along with a flat administrative fee. This model aims to balance affordability and service flexibility, providing property owners with predictable costs while ensuring management companies maintain sustainable revenue for operational expenses.Guaranteed rent
This model is also used in the residential space, but mostly for small units in high-demand locations. Here, the company signs a rental agreement with the owner and pays them a fixed rent. As per the agreement, the company is given the right to sublet the property for a higher rent. The company's income is the difference between the two rents. As is evident, in this case, the company minimizes the rent paid to the owner, which is usually lower than market rates.Revenue share / Percentage Lease
A percentage lease is a type of commercial lease commonly used in retail environments, particularly in shopping centers and other high-traffic locations. Under this arrangement, the tenant pays a fixed base rent in addition to a percentage of their gross sales that exceed a specified amount, known as the breakpoint. This structure aligns the interests of the landlord and tenant by allowing rent to fluctuate based on the tenant’s sales performance.Software & Property Technology Solutions
The property management services market has increasingly emphasized technological innovation, largely driven by the adoption of software such as property management systems, hotel operating systems, and property technology solutions. The global property management software market was valued at approximately USD 5.51 billion in 2023 and is expected to grow to around USD 9.68 billion by 2030.Many property management firms now utilize artificial intelligence, Internet of Things –enabled maintenance systems, mobile applications, and cloud-based platforms to improve operational efficiency and tenant engagement. These technologies facilitate functions such as predictive maintenance, automated rent collection, digital leasing processes, and data analytics for real-time decision-making. As tenant expectations continue to evolve, PropTech has become an integral component of contemporary property management practices.
Property Management Licensing
Licensing requirements for property managers vary widely depending on the jurisdiction and type of property but generally aim to ensure professional standards, consumer protection, and ethical business practices within the real estate industry. As a result, Property management is a regulated profession in many countries with licensing requirements designed to protect property owners and tenants alike. The specific requirements vary by country, region, state, etc but in many cases, property managers must hold a real estate broker’s license or a specialized property management license to legally manage rental properties on behalf of others.To obtain a license, applicants are typically required to complete pre-licensing education, pass a state examination, and undergo a background check. Once licensed, property managers must follow state and/or local laws that govern leasing practices, trust accounting, fair housing compliance, and tenant-landlord relations.
In some places, unlicensed individuals may manage properties they personally own, but cannot legally collect rent, negotiate leases, or represent other property owners without proper licensure. Some places offer exceptions or separate licensing paths for managing community associations, vacation rentals, or commercial properties.
Even in areas without strict licensing laws, many professional property managers voluntarily pursue certification through national organizations such as the Institute of Real Estate Management or the National Association of Residential Property Managers. These credentials help demonstrate knowledge, professionalism, and a commitment to ethical standards in the industry.