introduction to property management
DESCRIPTION
TRANSCRIPT
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 1
Introduction to Property Management
Lecture 1Department of Real Estate Management
Faculty of Technology Management and Business
(Semester1 2012/2013)
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 2
Lecture outlines
• History of property management• Property management today• Where property managers work• Different property management jobs• Property management as a career
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 3
History of property management
• In its earliest day, the property manager had only one job,– TO COLLECT THE RENT
• In the 1930s, economic depressions, where people out of job, the stock market crash, mortgage default that end up with the banks kept many of properties.
• But bankers have no knowledge to manage property.
• Thus the property manager was born.
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 4
Property management today
• For the last 25 years, most people became property managers by unintentionly.
• In the 21st century, the growth of real estate investment by the investors and companies that manage large properties, demand for property management is indeed a full-time career.
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 5
Where property managers work
• Third-party managers– Work for the property owners of the property they
manage• Real estate investment trusts (REITs)
– Employee of the company• Institutional owners
– Work for group of building owners: banks, large limited partnerships, foreign investors, etc.
• Corporate real estate management– Work for corporations to manage their income
producing real estate
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 6
Different property management jobs
• On-site manager– Day to day operation: collecting rent,
preparing reports, supervising maintenance, cleaning works
• Leasing agents– Leasing broker: locating & signing new
tenants to occupy space in building• Tenant representative
– Mostly for commercial property: assisting tenants in locating space and negotiating lease
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 7
Different property management jobs
• Property manager– Responsible for the operation of several
properties, overseeing on-site manager, involve in planning and budget for property management activities, and usually report to asset manager
• Portfolio (asset) manager– Executive responsible for large no of properties,
evaluate the properties performance, act as a substitute to owner, approve policies and financial, act as advisor to owner.
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 8
Property management as a career
• Board of valuers, appraisers, estate agents (BOVAEA)– Role of property managers can be found in
http://www.lppeh.gov.my/role.php
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 9
Property management as a career
• The Board was set up in 1981 under the purview of the Ministry of Finance, Malaysia.
• The setup and operation of this Board is governed by the provision of Valuers, Appraisers and Estate Agents Act 1981.
• Its primary function is to regulate the Valuers, Appraisers and Estate Agents practising in Malaysia
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 10
Property management as a career
• The Functions of The Board are– To keep and maintain the Register of Valuers,
Appraisers and Estate Agents, Probationary Valuers and Probationary Estate Agents and firms of Valuers, Appraisers and Estate Agents.
– To approve and reject applications for registration. – To hold disciplinary proceedings. – To conduct examinations. – To prescribe Scale of Fees. – To regulate the professional Conduct/Ethics of
Valuers, Appraisers and Estate Agents. – To award scholarships
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 11
Property management as a career
• Role of Property Manager– Currently only a registered valuer can practice as a
Property Manager. – The property manager ensures that the owner gets
the best returns of his property investment. – He also ensures that the building is well maintained,
the building services well looked after and all expenses paid.
– He is able to optimise usage and enhance the investment in property.
– He advises on lease renewals, selection of quality tenants and the appropriate tenant mix.
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 12
Number of Firms & Registred Members &
Probationary Members (Active) • Firms
Firm Type Firms
Valuer & Estate Agent (VE) 300
Valuers (V) 80
Appraisers & Estate Agent (AE) 9
Estate Agents (E) 900
Estate Agent & Property Management (EPM)
7
Property Management (PM) 35
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 13
Number of Firms & Registred Members &
Probationary Members (Active)
• Registered Members
Licence Type Member
s
Registered Valuers (V) 840
Registered Appraisers (A) 17
Registered Estate Agents (E) 1650
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 14
Number of Firms & Registred Members
& Probationary Members (Active)
• Probationary Members
Licence Type Members
Probationary Valuers (PV) 520
Probationary Estate Agents (PEA) 243
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 15
Payment to Property Managers
• An annual fee based on:– 5% of the gross annual rent on the first
RM30,000– 3% of the gross annual rent on the residue up to
RM 100,000– 2% of the gross annual rent on the residue over
RM 100,000• The fee is applicable to each holding. • The expression ‘holding’ as used here has
the same meaning as defined in Section 2 of the Local Government Act 1976.
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 16
Section 2 of the Local Government Act 1976
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 17
Payment to Property Managers
• The expression ‘gross annual rent means the rents reserved or deemed to be reserved by the lease or lettings plus any incidental receipts collected accounted for or both in the course of management.
• Minimum fee : –As above but may be subject to a
maximum discount of 30% and a minimum fee of RM50 per month.
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 18
Discussion
• Would you prefer to work as an employee manager or a third-party manager?– Why?– What are the advantages or
disadvantages of each?
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 19
Answer
• Employee manager– Advantages
• The security of a paycheck• The freedom from having to solicit clients and
properties to manage
– Disadvantages• Being confined to working for someone else
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 20
Answer
• Third party manager– Advantages
• The freedom of running one’s own business (although the property owner’s goals must always be fulfilled)
– Disadvantages• The work (and insecurity) of finding new clients
and new buildings to manage
UNIVERSITI TUN HUSSEIN ONN MALAYSIA08/04/2023 21
References
• Evans, M, (2007), Opportunities in Property Management Careers, McGrawHill.
• Kyle, R, (2000), Property Management, 6th Edition, Dearborn.
• http://www.lppeh.gov.my/role.php