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How Many Properties Can a Property Manager Manage?
작성일 : 2010-01-21. 조회수 : 1500.
Assigning managers the appropriate number of properties to manage requires a mix of intuition and calculation
by Hal Cottingham, CPM and Richard Muhlebach, CPM
 
The oldest question in the real estate management profession is, “How many properties can a property manager manage?” The answer has always been, “Well, it depends.” Executive property managers often use their intuition to determine when a property manager has reached the maximum number of properties he or she can manage. However, quantifying the number of properties a property manager can manage can be achieved methodically.
 
METHOD TO THE MADNESS
Calculating the number of properties a manager can manage first requires evaluating the operations of a company and then rating the management activities of each property. To achieve this, companies should develop a point system taking such factors into consideration.
 
To develop a point system, the executive property manager must first determine a set of criteria used to evaluate the company’s management philosophy, how its operations work and the  experience of its property managers. Each property should then be assigned a score based on its management activities as they relate to the determined criteria. Companies also need to establish a range of points each property manager should be able to handle. They can then assign managers properties with a total point score within that range. Ultimately, the final determination of the number of properties a property manager can manage combines the objectivity of the evaluation process and the executive property manager’s intuitive understanding of how his or her company and managers operate. This process can be used to evaluate a variety of commercial and residential property types. An evaluation form can easily be developed for any property type or a portfolio of mixed property types.
 
 
 
INVARIABLY COMPLEX
To accurately assess a company, five variables should be taken into account. Each of the variables is used to determine how the property management company operates, which then forms the base for the range of property points within a portfolio that a typical property manager could manage.
 
The first variable to consider when assessing a company is whether a property management company or division is managing properties owned by the firm or its parent company— known as in-house management—or whether the firm is providing third party management services.

Generally, managing in-house properties is easier than managing third party properties: In-house management has one client with one set of goals and objectives, one accounting system, one set of reporting requirements and uses one property management software program. Firms providing third-party management services, however, have multiple clients with different goals and objectives, more reporting requirements, multiple required software programs, and the list goes on.
 
 
 
As a result, property managers working for firms managing their own properties should be able to manage more properties or be assigned a higher number of property points than property managers working for third party property management firms.
 
Another variable to consider when assessing a company is its operations. The firm should take a close look at its administrative and accounting support, the supervision and resources available to its property managers and additional duties assigned to property managers.
 
Some firms assign accounting responsibilities like calculating the commercial tenants’ pro rata share of pass through charges, year-end reconciliations and percentage rent adjustments to their property managers. Other firms believe their accounting personnel can more efficiently and accurately perform these calculations and would rather have their property managers in the field managing their properties.
 
Property managers who are lacking or sharing administrative assistants, or who are assigned additional duties like leasing, accounting tasks and tenant improvement supervision, will have less time to manage properties. If this is the case they should be assigned fewer properties to manage. Even so, the income from transactions and tenant improvement supervision often far exceeds the income generated by assigning one or two more properties to a property manager’s portfolio.
 
The level of service provided by the property management firm is also an important variable that should be analyzed. All property owners do not need the same level of service.
Institution owners require a higher level of service than local owners who visit their property regularly and do not need sophisticated accounting reports. In fact, the local owner will prefer to pay a lower fee for a lower level of service.
 
The final variable companies should take into account while doing their assessment is the experience and capabilities of their property managers.
 
Experienced property managers can manage a larger or more challenging portfolio than a neophyte.
 
Firms should develop two ranges of points their property managers can manage, one for the experienced manager and the other for the entry level property managers. The work habits and efficiency of the property manager will also determine the number of properties he or she can manage. Does the property manager have transaction experience leasing, refinancing or selling properties? Can the property manager supervise or coordinate tenant improvements? These and other skills will determine which properties and the number of properties a property manager can manage.
 
ANALYZE THIS
After assessing the management company, a rating system is then developed for each property and its management activities. Each property management activity and the property’s location are assigned a number and they are totaled for a property’s score.
 
When developing the points for each property’s management activity, the executive property manager considers a whole new set of variables (discussed in the sidebar on page 42) to develop a baseline for each management activity. Each property’s management activity or variable are then evaluated using the baseline points. The executive property manager can rate the properties the firm currently manages and this can be the starting point for creating the system discussed.
 
After the executive property manager has developed company specific criteria, determined the level of activity for the baseline of service for each variable, and issued, implemented and used the method for a while, he or she will become comfortable with the system created and assigning points and over time may modify the number of points used to determine portfolio sizes.
 
Every property management company has its own management philosophy and methods to operate its company.
 
Each property management company develops a market niche, including the types of properties it manages, the geographic area or areas it operates in, the level and types of services it provides and the type of property ownership or clients it serves.
 
The last step of the analysis is to assign properties to property managers based on the range of points they can manage. The executive property manager determines the number of points an entry level to an experienced property manager can manage based on the firm’s operations, market niche and management philosophy.
 
The intuitive component of assigning properties to property managers takes into consideration intangibles like matching a client’s personality with that of the property manager’s, matching specific talents and experiences of the property manager to the requirements of the property and other subjective factors.
 
A rating system can be developed evaluating the management intensity of each property. Incorporating the rating system into how the company operates allows for an objective system to determine the number of properties in a property manager’s portfolio.
 
So, how many properties can a property manager can manage? It is a question than can be quantified.
 
Though the answer to the question is company-specific, each company can establish criteria to determine the number of properties each of its property managers can manage.
 
Questions regarding this article can be sent to
 

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