This is the fourth episode in our new weekly video series covering property management principles. This episode covers the attributes of a successful property manager. 

The prior episode examines the duties of a resident manager at an apartment complex with 16 or more units.

Requisite competence to manage

Property management is an economically viable and personally rewarding real estate service permitted for real estate licensees. Serious brokers and agents often turn their attention from an interest in residential sales to the specialized and more disciplined industry of property management.

A broker’s primary objective as a property manager operating a rental property is to:

  • fill vacancies with suitable tenants;
  • collect rent;
  • incur and pay expenses; and
  • account to the landlord.

Thus, a property manager needs to have spent time accumulating experience by actively overseeing and operating like-type rental properties before being entrusted to their management.

Recall that in California, an individual who acts as a property manager on behalf of another for a fee needs to hold a valid Department of Real Estate (DRE) broker license. Any licensed agent or broker associate employed by the broker acts on behalf of their broker, not independent of their broker. [Calif. Business and Professions Code §§10130, 10131(b)]

The duty of care a property manager owes a landlord is the same duty of care and protection a broker in real estate sales owes their sellers and buyers. As a property manager, the broker is an agent acting in capacity of a trustee on behalf of the landlord. Agents acting on behalf of the broker perform property management services as authorized by the broker.

A property manager’s real estate broker license may be revoked or suspended when the property manager demonstrates negligence or incompetence in performing their management tasks. This includes negligent supervision of their employees, be they licensed or unlicensed employees. [Bus & P C §§10177(g), 10177(h)]

To be successful in the property management field, a broker initially acquires the minimum knowledge and experience through training sufficient to adequately perform their tasks.

A broker acquires property management expertise through:

  • courses required to qualify for and maintain a real estate license [Bus & P C §§10153.2, 10170.5];
  • on-the-job training as an agent;
  • experience as a landlord;
  • practical experience in the business management field; and/or
  • exposure to related or similar management activities.

Owners measure how capable a broker will be at handling their properties by judging the caliber of the broker’s management skills. Most owners look to hire an experienced property manager with well-earned credentials and a responsive staff who will perform to the landlord’s expectations.

Other indicators that a property manager will successfully handle rental property include:

  • prior experience handling and reporting trust account activities;
  • a knowledge of current programs used to record and track activity on each property managed by the property manager; and
  • a competent staff to perform office and field duties and to quickly respond to both the landlord’s and the tenants’ needs.