How Important is Property Management in Real Estate?

Buying, selling, and managing any piece of real estate is a long-term investment game. It comes with several challenges as well as rewards, provided it is handled with the right expertise.

A growing practice in the real estate sector is to hire professionals to handle the entire function of property management end-to-end. The property management system in real estate brings sustained value to real estate businesses.

Let’s understand more about what this entails, as well as its benefits. 

Importance of Property Management 

Once you purchase a piece of real estate – it could be an affordable housing project, luxury apartment building, a mall, business complex, or a high rise in the city, the work does not end. It marks the start of enabling that piece of real estate to work for you and provide sustained returns. 

Professional management services firms handle the full spectrum of issues and functions, from maintaining the property to vetting renters and potential buyers, as well as equipping you with financial data to make smart investment decisions. 

Managing vs Maintenance – The Difference

While property maintenance is a key aspect of what real estate property management firms do, there are several other functions they also perform.

These could be of a legal and financial nature, being responsible on a day-to-day basis for tenancy challenges, as well as ensuring the safety and security of the property and its residents.

Marketing the property when required may also fall under the purview of a property management expert. 

Core Functions of Property Management

Legal

Today, property management for real estate comes with a complex framework of laws and regulations.

Property management experts are well-equipped with the knowledge of the law, which especially comes in handy during conflicts between renters, buyers, and owners. 

Financial

Real estate is a prime financial asset. However, optimising returns requires strategy and planning.

Drawing up annual budgets and making market recommendations are key aspects of helping property owners optimise their returns and continue to earn a profit on the investment.

Today, professional real estate managers leverage property management software to ensure transparency, accountability, and scalability of their operations. 

Managing Tenants

Professional property managers also leverage technology to manage a tenancy, which may run into 100s and thousands in terms of the numbers.

They ensure that tenants pay rent on time, that their concerns are addressed on time, and that they follow the rules set for all residents. 

Marketing

Real estate owners are always looking to attract the right profile of tenants who can abide by the rules, pay rent on time, and live by the law.

Property managers look at the entire cycle of marketing to tenants, vetting them thoroughly, signing agreements, and finding replacements when they leave. 

Maintenance

This function entails everything from ensuring parking, a top-notch security system, and building repairs to cleanliness, garbage collection, and landscaping of the property. 

Real estate property management is a job for professionals due to the multiple stakeholders, challenges and scale involved.

Leveraging technology and smart tools helps reduce paperwork, brings superior communication and transparency, and speeds up transactions.

This enables real estate owners to focus on their own business, as opposed to the everyday functioning of their properties. 

The Takeaway

The rest estate sector will continue to see regulations evolve. It will also get increasingly competitive as more players enter this space, and vie for the best tenants for their properties.

Partnering with a professional management services firm early on can help real estate businesses optimise their investments, ensure that they are maintained well, and continue to stay profitable on a sustained basis.  

About Us

OHI is a fifteen-year-old real estate services company working with 50+ commercial and residential real estate developers, funds and property management companies across USA. Our deep expertise in real estate accounting, financial analysis, lease administration and asset management has helped clients cut associated costs by 40-50%. We now provide these services to a portfolio of 75000 units across clients.

We invite you to experience finance and accounting outsourcing through us.

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