This is the ninth episode in our new weekly video series covering property management principles. This episode covers a property manager’s actions to increase the intangible image – goodwill – of a property.

The prior episode illustrates a property manager’s periodic evaluation of all lease and rental agreements to minimize expenses and maximize rental income.

Constant curation of the earning power of a property

The way a property is operated develops a level of goodwill with tenants.

Economically, goodwill equates to the earning power of the property. A property manager in the ordinary course of managing property will concentrate on constantly increasing the intangible image — goodwill — of the property.

Goodwill is maintained, and increased, when the property manager:

  • cares for the appearance of the property;
  • maintains an appropriate tenant mix (without employing prohibited discriminatory selection); and
  • gives effective and timely attention to the tenants’ concerns.

A prudent property manager makes recommendations to the landlord about maintaining the property to eliminate any accumulated wear and tear, deterioration or obsolescence. Thus, they help enhance the property’s “curb appeal.”

The manager who fails to promptly complete necessary repairs or correctly maintain the property may be impairing the property’s goodwill built up with tenants and the public.

Allowing the property or the tenancies to deteriorate will expose the property manager to liability for the decline in revenue.

Stay tuned for the next installment of the property management series.