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Property Management Structures

Gaining an in-depth knowledge of how the property management department is structured can give you a basis of what to expect from your agency of choice. More often than not, investors choose an agency based on brand, market presence and referrals. This leaves most investors satisfied with their choice, however knowing that little bit more about the agency will allow you to understand the reasoning behind any actions your property manager makes.

The easiest way to gain this knowledge is by asking the agency a simple question; is your property management department 'task based' or 'portfolio based'? The straightforward answer will allow you to cross check the information below and get a feel for the difference in the structures.

Task Based Property Management

An agency that operates on a task based structure often have more than 3 key staff in the rentals division. The role of each staff member is to complete the particular or individual tasks that are required in managing your investment. An example of this is the arranging of lease agreements, the conduction of inspections, the collection of rent, the following up of arrears, the reporting to investors, business development and the list goes on. One of the key benefits of this structure is the minimal dependence on a property management staff member at any time. The industry is known to be transient and 'task based' property management reduces the impact of staff changes on the management of your investment property.

Portfolio Based Property Management

When agencies use a portfolio based structure, you can generally expect a more personalised service. Relationships are developed between the property manager and the investors that are within the managers portfolio. Most tasks in relation to the management of your investment are performed by the property manager themselves, or by an assistant that works closely with the portfolio. This method also keeps staff accountable for any issues arising during the management, as the property manager will have knowledge over a significant duration if not the life of the management. This then leads us to the downfall of the portfolio based structure - being when a key team member leaves, as does a lot of the personal knowledge associated with the management and all parties involved. However, by using property management software efficiently, anything associated with the management of your investment can be documented and dated for later reference. Also, most agency principals will request the existing property manager remains on board until the replacement is trained sufficiently and have somewhat of an understanding of each of the managements.

In conclusion there are pro's and con's to each structure of management, but by knowing which stucture is used within your agency of choice - you will know what to expect in the service from the agency and understand why certain processes differ between different property management departments.