Asset Manager vs Property Manager (Scope of Services)
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.
Scope of Service
Most owners don’t know what property managers do for the fees they charge resulting in tension between owners and managers over unrealistic expectations.
To make this worse, some managers think they are supposed to manage the owner’s utilities, HOA issues, home warranties, insurance issues, tax reporting, property tax issues, property line disputes and basically everything that remotely affects the property. If owners have managers in other parts of the country/world they may come to you expecting you to manage all these things for the monthly fee you quoted them. If you don’t set these expectations and put bookends on the services you offer for the fees you charge, they will bully you into doing things you don’t know how to do, have no experience doing, don’t have the authority to do and are not getting paid for in order to keep your owner happy.
Over the years, managing for about 3,000 owners, we’ve fought these battles and, out of necessity, developed several strategies to push back (put bookends on our services), set expectations and let the owner know what we do for the fees we charge and what will cost more if they want additional services.
Just to be clear, you can choose to do anything the owner asks you to do and you don’t have to charge for it. You just don’t want the owner to EXPECT IT for the monthly fee you’re receiving.