Real Estate and Property Management

01Purpose and scope

• This manual supports the course Real Estate and Property Management. It describes how the work is actually carried out by owner representatives, property managers, leasing agents, maintenance coordinators and the staff who sit between an owner's capital and the people who live or work in a building. The focus is operational: the activities that fill units, keep them safe and habitable, collect rent and protect the value of the asset.
• The scope covers residential rental housing, small commercial buildings and mixed use properties, along with light oversight for owners who hire a third party to run their assets. It does not cover acquisition underwriting in depth, appraisal methods or fund level investor reporting, which belong to other disciplines. Where a decision depends on local statute, such as eviction procedure, security deposit handling, habitability standards or fair housing rules, the requirements vary by jurisdiction. The current authoritative source is the state, county or city code and the agency that enforces it.
• Practice changes with the property type and the owner. A single family rental managed by an owner who lives nearby can run on a light process with a shared spreadsheet and a few trusted vendors. A portfolio of several hundred units with a corporate owner needs written policies, delegated authority limits, a formal vendor program and a regular reporting cadence. The trade-off is between responsiveness and control. Tighter controls slow routine decisions, while loose ones expose the owner to avoidable loss and make disputes harder to resolve.

02Core principles

• Property management rests on a few principles that hold across asset types. The owner's objective sets the standard. Stable cash flow, capital preservation and a planned sale each imply different choices about rent levels, deferred maintenance and tenant turnover, and the manager should confirm which goal governs before making those choices.
• The manager acts as an agent under a written management agreement, so every expense, rent change and tenant decision should trace back to authority the contract grants. When authority is unclear, the manager asks before acting rather than after. Preventive maintenance costs less than emergency repair, but only when it is scheduled, performed and recorded. Tenants are customers and also legal counterparties. Consistent application of lease terms and courteous written communication reduce disputes more than any single policy does.
• Finally, the financial picture has to reconcile to the bank and to the ledger, not only to the expectations in a budget. A property that looks profitable on paper can carry unpaid receivables, unrecorded vendor invoices or a trust account that does not match the deposits it should hold. A manager cannot build a reserve larger than the owner chooses to fund, and a strong leasing result in one submarket can hide weak underwriting elsewhere in the portfolio.

03Planning and preparation

• Before a manager takes on a property, collect the ownership documents, existing leases, the rent roll, several periods of operating statements, service contracts, insurance certificates, warranty records and any open violations or code notices. Walk the property with the owner or a representative and photograph each unit and common area. This baseline becomes the reference point for security deposit deductions and for later disputes about condition.
• Draft the management agreement before the first tenant change. It should state the fee basis, authority limits for signing contracts and approving repairs, the spending threshold for emergency work, reporting frequency, trust account handling, insurance requirements and termination terms. Thresholds should reflect the size of the asset and the owner's tolerance for risk, and they should be reviewed when the building changes or when exceptions start to pile up.
• Build the budget from actual history, adjusted for known changes such as a utility contract renewal, a labor rate increase from a vendor or a planned roof replacement. Set a reserve target based on the remaining life of major systems including roofing, boilers, elevators, paving and plumbing stacks. Identify the stakeholders early: the owner, the lender if one exists, the property insurer, key vendors and the leasing team. Each one will expect different information, and agreeing on that information before work starts prevents later friction.

04Recommended workflow

1. 1
   : Confirm the owner's objective and the authority limits in the management agreement before listing any unit, so that the leasing plan matches what the owner has actually approved.
2. 2
   : Set the asking rent using comparable listings, recent executed leases and the vacancy history of the building. Record the basis in writing and send it to the owner with the expected days on market and any concession plan.
3. 3
   : Market the unit through the channels that have produced applicants before, screen each applicant against one written criteria set, verify income and rental history, and check references where the law allows. Keep the criteria consistent across every applicant.
4. 4
   : Prepare the lease using the approved form where the jurisdiction requires one, include required disclosures such as lead paint notices where they apply, collect deposits and fees only as the law permits, and have a qualified attorney review any nonstandard clause before signing.
5. 5
   : Conduct a move-in inspection with the tenant present, note condition with dated photographs and written comments on each room, and collect signatures from both parties before keys are released.
6. 6
   : Manage the tenancy through a single request system. Log every maintenance request, assign a priority level, dispatch a qualified vendor, record the cost and close the request only after the tenant confirms the repair.
7. 7
   : Handle renewals, rent increase notices and move-outs on the timelines set by local law. Inspect the unit at move-out, compare it to the move-in report and deliver an itemized deposit statement within the deadline that applies in your jurisdiction.

05Quality checks, risk controls and compliance

• Fair housing law in the United States prohibits discrimination in housing based on protected characteristics, and the list of those characteristics and the enforcement mechanisms are set at federal, state and local levels. Apply the same screening criteria to every applicant, record the reason for each decision and train staff on which questions are off limits. This guidance does not replace advice from counsel or from the enforcement agency in your jurisdiction.
• Trust accounting for rent and deposits follows state rules that differ on account type, interest treatment, commingling and reporting. Reconcile the operating and trust accounts against bank statements at the frequency the agreement and the law require. Confirm that every deposit has a matching lease, receipt or ledger entry, and investigate any unexplained difference the same day it appears.
• Life safety is the highest priority risk in most buildings. Keep records for smoke and carbon monoxide detector testing, fire extinguisher inspections, elevator certificates, backflow tests and any permits required for the work performed. Review insurance coverage at each renewal with the broker, including liability limits, and confirm that vendors carry their own insurance and name the owner as additional insured.
• Routine quality checks include a periodic review of open work orders, aging of receivables, a sample audit of lease files for missing signatures and a walk of common areas with a written checklist. Habitability, entry notice, retaliation protections and eviction steps are all jurisdiction specific. Any eviction, tax withholding question or regulated financial activity requires the judgment of a qualified attorney, accountant or licensed professional, along with any required licensing or authorization. This manual does not replace that judgment.

06Collaboration and documentation

• The core records are the rent roll, the general ledger, the trust ledger, the work order log, lease files, vendor contracts and certificates, inspection reports and owner correspondence. Assign one system of record for each. A spreadsheet can handle a small portfolio, while larger operations usually rely on property management software with role based access and an audit trail.
• Roles should be separated where practical. The owner approves budgets and capital projects. The property manager runs daily operations within the agreement. The leasing agent handles marketing, showings and applications. The maintenance coordinator schedules vendors and checks completed work. The bookkeeper reconciles accounts. Where one person holds several roles in a small operation, add a second reviewer for payments, vendor selection and deposit refunds.
• Report to the owner through a standing package that shows occupancy, collections, delinquencies, open work orders, upcoming renewals and variance to budget, with a short narrative for anything unusual. Keep tenant communication in writing where possible. Vendors should receive a written scope, a not to exceed amount and a clear approval threshold before work begins, and the scope should be signed by the person authorized to approve it.

07Measures and continuous improvement

• Useful indicators include physical occupancy, economic occupancy, collection rate, delinquency aging, turnover rate, average days to fill a vacancy, work order completion time against a stated target, repeat repair rate and controllable operating expense per unit. Pick a small set and define each one the same way every period so trends are comparable across time and across buildings.
• Economic occupancy is gross potential rent less vacancy loss, concessions and bad debt, divided by gross potential rent. This measure shows whether a high physical occupancy is hiding discounts or unpaid rent. Targets should come from the owner's plan and the local market rather than from a generic benchmark, since a target that fits a downtown apartment building may be unrealistic for a rural storage property.
• Review results with the team and change one process at a time so the effect is visible. If repeat repairs rise, check whether the first visit diagnosed the problem correctly, whether the vendor was qualified for the work and whether the parts were ordered in time. Tenant satisfaction surveys help, but response rates are often low, so treat them as one input among several rather than a final verdict on performance.

08Common mistakes and how to prevent them

• Verbal approvals create disputes that no one can resolve later. Require written approval for any spend above the threshold, and file the email or work order approval in the vendor record or the lease file so the decision can be traced.
• Inconsistent screening is one of the most serious exposures in residential management. A manager who accepts one applicant with a thin credit file and rejects another for the same reason creates fair housing risk. Use a written criteria sheet, apply it the same way every time and keep a short note explaining each decision.
• Deferring preventive maintenance to protect short term cash flow raises emergency costs and shortens equipment life. Build the service schedule into the budget, and when a deferral is necessary, record it and report it to the owner with the expected consequence.
• Late deposit statements and missed notice deadlines are common and costly. Place every statutory deadline in a tickler system with reminders to two people, and keep copies of each notice with proof of delivery. Treating a vendor insurance certificate as valid indefinitely is another frequent slip, so track expiration dates and request renewals before coverage lapses.

09Practical checklist

• Confirm the management agreement sets authority limits, fees, reporting and termination terms.
• Record a baseline condition report with photographs for every unit and common area.
• Reconcile operating and trust accounts to bank statements on the schedule the law and agreement require.
• Verify that life safety inspections, permits and elevator certificates are current.
• Apply one written screening standard and keep a short decision record for each applicant.
• Confirm that lease forms and required disclosures match current local requirements.
• Log every work order with priority, vendor, cost and tenant confirmation of completion.
• Review receivables and delinquency aging, and document the collection step taken for each account.
• Send the owner a standing report covering occupancy, collections, variance and open issues.
• Check vendor insurance certificates and confirm the owner is named as additional insured.

★Learning sources

• Micro Degree: Real Estate and Property Management
• Micro Degree: Leadership and Team Management
• Micro Degree: Business Intelligence Management
• Micro Degree: ESG Advisory Services