Asset Manager vs Property Manager
Here's the Story
Some owners think you should manage everything that remotely touches their property. Most have never owned a rental property and have no idea what property managers do. If you don’t manage their expectations they will instinctively ask you to manage mortgage issues, utilities, home warranties, set up bank accounts, file foreign tax compliance forms, manage HOA issues, insurance claims and whatever else needs to be done, in addition to managing the tenant and maintenance. That’s a perfect definition of an asset manager but most owners don’t know the difference and neither do most property managers.
Often, large asset managers (or foreign investors) will ask you to set budgets, estimate NOI, get bids on insurance coverages, manage the code enforcement officer, manage property tax disputes, oversee insurance claims and a whole host of other duties you’re not trained to (or have the experience to) manage. To make it worse, you’re not being paid to do all that stuff for the lousy $70 a month management fee.
Private owners sometimes have the same ideas and need help understanding what you do for the fees they pay you or, better yet, what you don’t do. If you don’t define it, they will, and often their expectations are off the chart and totally unacceptable. If you don’t have a way to explain the limits of your services there will be tension between you and your client as you attempt to quell their unrealistic expectations as they come up. Defining the difference between an asset manager and a property manager is a great way to address the issue.
Managers need a document to send their owners (or make it part of their new owner sign up package) that identifies the differences. Over the years we developed a document differentiating one from the other so the owner can get their heads around what you do and don’t do for your fees. It’s a editable document so you can add your company name, tweak it to your model and publish it.
If you don’t implement this with owners you’ll find yourself in a quagmire of trying to manage a host of things you can’t (and shouldn’t) be managing. Owners are happy to put it on you and attempt to back out of their responsibilities as the owner. There are just some things they can’t (and shouldn’t) pass over to the manager unless you want to (and get paid to) do them.
The premise of this is the monthly fee they pay doesn’t cover everything. They can’t expect you to do everything remotely related to the property for the fees they pay, and, if they want an asset manager, they should pay accordingly. Set expectations before getting into this relationship and make sure everyone is the same page. Every property manager is different so define this up front to reduce stress and confusion.
This package includes:
- The list of Asset Manager (45 tasks) vs Property Manager (23 Tasks) to tweak, add your company name and give to the owner.
- A training document for implementing this idea with your staff, new owners and existing owners.
- Language for your PMA initiating this conversation.