1. Introduction to Property
Management
Lecture 1
Department of Real Estate Management
Faculty of Technology Management and Business
(Semester1 2012/2013)
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2. Lecture outlines
• History of property management
• Property management today
• Where property managers work
• Different property management jobs
• Property management as a career
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3. History of property management
• In its earliest day, the property manager had
only one job,
– TO COLLECT THE RENT
• In the 1930s, economic depressions, where
people out of job, the stock market crash,
mortgage default that end up with the banks kept
many of properties.
• But bankers have no knowledge to manage
property.
• Thus the property manager was born.
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4. Property management today
• For the last 25 years, most people became
property managers by unintentionly.
• In the 21st century, the growth of real
estate investment by the investors and
companies that manage large properties,
demand for property management is
indeed a full-time career.
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5. Where property managers work
• Third-party managers
– Work for the property owners of the property they
manage
• Real estate investment trusts (REITs)
– Employee of the company
• Institutional owners
– Work for group of building owners: banks, large
limited partnerships, foreign investors, etc.
• Corporate real estate management
– Work for corporations to manage their income
producing real estate
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6. Different property management jobs
• On-site manager
– Day to day operation: collecting rent,
preparing reports, supervising maintenance,
cleaning works
• Leasing agents
– Leasing broker: locating & signing new
tenants to occupy space in building
• Tenant representative
– Mostly for commercial property: assisting
tenants in locating space and negotiating
lease
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7. Different property management jobs
• Property manager
– Responsible for the operation of several
properties, overseeing on-site manager, involve
in planning and budget for property management
activities, and usually report to asset manager
• Portfolio (asset) manager
– Executive responsible for large no of properties,
evaluate the properties performance, act as a
substitute to owner, approve policies and
financial, act as advisor to owner.
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8. Property management as a career
• Board of valuers, appraisers, estate
agents (BOVAEA)
– Role of property managers can be found in
http://www.lppeh.gov.my/role.php
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9. Property management as a career
• The Board was set up in 1981 under the
purview of the Ministry of Finance,
Malaysia.
• The setup and operation of this Board is
governed by the provision of Valuers,
Appraisers and Estate Agents Act 1981.
• Its primary function is to regulate the
Valuers, Appraisers and Estate Agents
practising in Malaysia
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10. Property management as a career
• The Functions of The Board are
– To keep and maintain the Register of Valuers,
Appraisers and Estate Agents, Probationary Valuers
and Probationary Estate Agents and firms of Valuers,
Appraisers and Estate Agents.
– To approve and reject applications for registration.
– To hold disciplinary proceedings.
– To conduct examinations.
– To prescribe Scale of Fees.
– To regulate the professional Conduct/Ethics of
Valuers, Appraisers and Estate Agents.
– To award scholarships
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11. Property management as a career
• Role of Property Manager
– Currently only a registered valuer can practice as a
Property Manager.
– The property manager ensures that the owner gets
the best returns of his property investment.
– He also ensures that the building is well maintained,
the building services well looked after and all
expenses paid.
– He is able to optimise usage and enhance the
investment in property.
– He advises on lease renewals, selection of quality
tenants and the appropriate tenant mix.
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12. Number of Firms & Registred Members &
Probationary Members (Active)
• Firms
Firm Type Firms
Valuer & Estate Agent (VE) 300
Valuers (V) 80
Appraisers & Estate Agent (AE) 9
Estate Agents (E) 900
Estate Agent & Property Management
7
(EPM)
Property Management (PM) 35
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13. Number of Firms & Registred Members &
Probationary Members (Active)
• Registered Members
Licence Type Members
Registered Valuers (V) 840
Registered Appraisers (A) 17
Registered Estate Agents (E) 1650
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14. Number of Firms & Registred Members
& Probationary Members (Active)
• Probationary Members
Licence Type Members
Probationary Valuers (PV) 520
Probationary Estate Agents (PEA) 243
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15. Payment to Property Managers
• An annual fee based on:
– 5% of the gross annual rent on the first
RM30,000
– 3% of the gross annual rent on the residue up to
RM 100,000
– 2% of the gross annual rent on the residue over
RM 100,000
• The fee is applicable to each holding.
• The expression ‘holding’ as used here has
the same meaning as defined in Section 2
of the Local Government Act 1976.
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16. Section 2 of the Local Government Act 1976
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17. Payment to Property Managers
• The expression ‘gross annual rent
means the rents reserved or deemed to
be reserved by the lease or lettings plus
any incidental receipts collected
accounted for or both in the course of
management.
• Minimum fee :
– As above but may be subject to a
maximum discount of 30% and a minimum
fee of RM50 per month.
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18. Discussion
• Would you prefer to work as an
employee manager or a third-party
manager?
– Why?
– What are the advantages or
disadvantages of each?
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19. Answer
• Employee manager
– Advantages
• The security of a paycheck
• The freedom from having to solicit clients and
properties to manage
– Disadvantages
• Being confined to working for someone else
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20. Answer
• Third party manager
– Advantages
• The freedom of running one’s own business
(although the property owner’s goals must always
be fulfilled)
– Disadvantages
• The work (and insecurity) of finding new clients
and new buildings to manage
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21. References
• Evans, M, (2007), Opportunities in
Property Management Careers,
McGrawHill.
• Kyle, R, (2000), Property Management, 6th
Edition, Dearborn.
• http://www.lppeh.gov.my/role.php
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