Many people own real estate primarily as their home, but, to careeres, real estate is more than simple the roof over one's head and the ground under one's feet. Real estate is a valuable asset--land and structures, such as office buildings, shopping centers, and apartment complexes--that can produce income and appreciate in value over time if well managed. Real estate can be a source of income when its use is leased to others, but a substantial career expense when it must be leased from others. Property and real estate managers control income-producing commercial and residential property, and manage the communal property and services of condominium and community associations. They also plan and direct the purchase, development, and disposal of real estate for careeres.
The majority of property and real estate managers work in the field of property management. When owners of apartments, office buildings, retail and industrial properties, or condominiums lack the time or expertise to assume the day-to-day management of their real estate investments, they often hire a property manager, or contract for one's services with a real estate management company. Most property managers handle two or three properties simultaneously. Property managers act as the owners' agent and adviser for the property. They market vacant space to prospective tenants, through the use of a leasing agent, advertising, or by other means, and establish rental rates in light of prevailing local rates. They negotiate and prepare lease or rental agreements with tenants and collect their rent payments and other fees. Property managers direct the bookkeeping for the property, crediting the owners' accounts for rent received and dispersing checks for mortgage payments, taxes, insurance premium payments, payroll, and upkeep and maintenance costs. They also direct the preparation of financial statements and periodically report to the owners on the status of the property, occupancy rates, dates of lease expirations, and other matters.
Property managers negotiate contracts for janitorial, security, groundskeeping, trash removal, and other services. When contracts are awarded competitively, managers must solicit bids from several contractors and recommend to the owners which bid should be accepted. They monitor the performance of the contractors, and investigate and resolve complaints from tenants. Managers also purchase all supplies and equipment needed for the property, and arrange for specialists to be brought in to perform any repairs that cannot be handled by the maintenance staff employed at the property.
Property managers hire and, when necessary, discharge the maintenance, stationary engineering, and on-site management personnel employed at the property. At smaller properties, the property manager might employ only a building engineer who maintains the building's heating, ventilation, and air-conditioning systems and performs other routine maintenance and repair tasks. Larger properties require a sizable maintenance staff supervised by a full-time on-site or resident manager, who works under the direction of the property manager.
Although some on-site managers oversee large office buildings or shopping centers, most manage apartments. They train, supervise, and assign duties to the maintenance staff at a property. Routinely, on-site managers inspect the grounds, facilities, and equipment, determine what repairs and maintenance are needed, and assign workers to perform them. Occasionally, outside contractors are required, and the on-site manager may obtain bids for the work and submit them to the property manager. On-site managers schedule routine service of the heating, ventilation, and air-conditioning systems and insure that the work of the maintenance staff and contract workers is up to standards or contract specifications. They also keep records of labor and materials costs for operating the property and submit regular cost reports to the property manager or owners. They also may recruit candidates for vacant maintenance staff positions, interview the job applicants, and recommend a qualified candidate for employment to the property manager.
Dealing with tenants is an important part of the work of on-site managers, particularly apartment managers. Apartment managers handle tenants' requests for service or repairs and try to resolve complaints concerning other tenants or visitors. They show apartments available for rent to prospective tenants and explain the occupancy terms. They also are responsible for enforcing rules and lease restrictions, such as limitations on tenants' ownership of pets or use of parking areas.
Property and on-site managers employed by condominium and homeowner associations must be particularly adept at dealing with people. Instead of tenants, they must deal on a daily basis with homeowners--members of the community association that employs the manager. Hired by the volunteer board of directors of the association, the community association manager administers its daily affairs and oversees he maintenance of property and facilities that the homeowners own and use jointly through the association. Many community associations are small and do not require professional management, but managers of the larger condominiums have many of the same responsibilities as the managers of large apartment complexes. Some homeowner associations encompass thousands of homes, and in addition to administering the associations' financial records, their managers may be responsible for the operation of community pools, golf courses, community centers, and the maintenance of landscaping, parking areas, and streets.
careeres employ real estate managers to locate, acquire, and develop real estate needed for their operations, and dispose of property no longer suited to their uses. Real estate managers employed by corporations that operate chains of restaurants, apparel and grocery stores, and gasoline service stations locate sites well suited for these types of establishments, and arrange to purchase or lease the property from the owners. They select a site based on their assessment of factors such as property values, zoning, likely patterns of population growth, and traffic volume and patterns. They negotiate contracts for the purchase or lease of the property, bargaining to secure the most beneficial terms for their company. Real estate managers periodically review their company's real estate holdings, identifying properties which have become less desirable locations for their type of career due to community development or changes in the composition of the population. They negotiate the sale or termination of the lease of properties selected for disposal.
Real estate managers who work for land development companies acquire land and plan the construction of shopping centers, houses and apartments, office buildings, or industrial parks. They negotiate with representatives of local government, other careeres, community and public interest groups, and public utilities to eliminate obstacles to the development of the land and gain support for the planned project. It sometimes takes managers years to win approval for a project, and in the process they may modify the plans for the project many times. Once they are free to proceed with a project, managers negotiate short-term loans to finance the construction of the project, and later negotiate long-term permanent mortgage loans. They then contract with architectural firms to draw up detailed plans, and with construction companies to build the project.
Real estate managers also work as land and permit agents for companies engaged in mining and quarrying, oil exploration, and construction pipe and utility lines. They search public records to determine the owners of land which their companies have identified as being likely to contain oil, coal, or other mineral deposits, or which lie in the path of the planned pipe or utility line. They contact the landowners and negotiate the purchase of the land, or agreements such as leases, options, rights-of-way, or royalty contracts that permit use of the land. They also may settle claims by landowners for damage resulting from the activities of their company.
Property and real estate managers work in clean, well-lighted offices, but they usually spend a major portion of their time away from their desks. Property managers frequently visit the properties that they oversee, sometimes nearly on a daily basis when contractors are performing important repair or renovation work. On-site apartment managers may spend a substantial portion of their workday away from their office visiting the building engineer in the boiler room, checking up on the janitorial and maintenance staff, or investigating a problem reported by a tenant. Many real estate managers spend the majority of their time away from home, traveling to company real estate holdings or searching for properties that might be acquired.
Property and real estate managers often must attend meetings in the evening with property owners, community association boards of directors, or civic groups with an interest in property planned for development. Many apartment managers are required to live in the apartments where they work so that they are available to handle any emergency that occurs while they are normally off duty. They usually receive compensatory time off, however, for working at night or on weekends. Many apartment managers receive time off during the week so that they are available on weekends to show apartments to prospective tenants.
Property and real estate managers held about 227,000 jobs in 1990. Most worked for real estate operators and lessors or for property management firms. Others worked for real estate development companies, government agencies that manage public buildings, corporations with extensive holdings of retail properties, real estate investors, and mining and oil companies. Many were self-employed developers, apartment owner-managers, or owners of property management or full-service real estate brokerage firms that manage as well as sell real estate for clients.
Training, Other Qualifications, and Advancement
Most employers prefer to hire college graduates for property and real estate management positions. Degrees in career administration, finance, real estate, public administration, or related fields are preferred, but persons with degrees in the liberal arts are often accepted. Good oral and written communication skills, and an ability to deal tactfully with people are essential. Most persons enter property and real estate management as on-site apartment or community association managers, or as assistants to property managers. Previous employment as a real estate agent is an asset to apartment as a real estate agent is an asset to apartment managers because it provides experience useful in showing apartments and dealing with people, as well as an understanding that an attractive, well-maintained property can command higher rental rates and result in less turnover among tenants. In the past, many persons with backgrounds in stationary engineering and building maintenance have advanced to apartment manager positions on the strength of their knowledge of building mechanical systems, but this is becoming uncommon as employers are placing greater emphasis on administrative and communication abilities for manager jobs.
On-site managers usually begin at a smaller apartment complex, condominium, or community association, or as an assistant manager at a large property or association. As they acquire experience working under the direction of a property manager, they may advance by transferring to positions with greater responsibility at larger properties. Persons who excel as on-site managers often transfer to assistant property manager positions where they can acquire experience handling a broader range of property management responsibilities.
Although persons often advance to assistant property manager positions on the strength of on-site management experience, employers are increasingly hiring inexperienced college graduates with bachelor's or master's degrees in career administration, finance, or real estate for these jobs. Assistants work closely with a property manager and acquire experience performing a variety of management tasks, such as preparing financial statements, analyzing insurance coverage and risk options, marketing the property to prospective tenants, and collecting overdue rent payments. In time, many assistants advance to property manager positions.
The responsibilities and compensation of property managers increase as they manage larger properties. Most property managers are responsible for two or three properties at a time, and as their careers advance they are gradually entrusted with properties that are larger or whose management is more complex. Many specialize in the management of one type of property, such as apartments, office buildings, condominiums and homeowner associations, or retail properties. Managers who excel at marketing properties to tenants may specialize in managing new properties, while those who are particularly knowledgeable about buildings and their mechanical systems might specialize in the management or older properties that require renovation or more frequent repairs. Some experienced property and real estate managers open their own property management or real estate firms.
Persons most commonly enter real estate manager jobs by transferring from positions as property managers or real estate brokers. Real estate managers must be good negotiators, adept at persuading and handling people, and good at analyzing data to assess the fair value of property or its development potential. Resourcefulness and creativity in arranging financing are essential for managers who specialize in land development. Real estate managers may be required to hold a real estate broker's license.
Many property and real estate managers attend short-term formal training programs conducted by various professional and trade associations active in the real estate field. Employers send many managers to these programs to improve their management skills and expand their knowledge of specialized subjects, such as the operation and maintenance of building mechanical systems, insurance and risk management, career and real estate law, and accounting and financial concepts. Many managers also participate in these programs to prepare themselves to advance to positions of greater responsibility in property and real estate management. In many cases, completion of these programs, together with meeting job experience standards and achieving a satisfactory score on a written examination, leads to certification, or the formal award of a professional designation, by the sponsoring association.
Managers of public housing subsidized by the Federal Government are required to be certified, but many property and real estate managers voluntarily earn a formal professional designation because it represents formal recognition of their achievements and status in the occupation. A number of organizations have such programs. The Institute of Real Estate Management awards the designations Accredited Resident Manager and Certified Property Manager, while the National Association of Home Builders awards the designation Registered Apartment Manager. The National Apartment Association confers the designations Certified Apartment Manager and Certified Apartment Property Supervisor. The Community Associations Institute bestows the designation Professional Community Association Manager, while the Building Owners and Managers Institute International awards the designation Real Property Administrator. The International Association of Corporate Real Estate Executives confers the designations Associate of Corporate Real Estate and Master of Corporate Real Estate.
Employment of property and real estate managers is projected to increase about as fast as the average for all occupations through the year 2000. However, the majority of job openings are expected to occur as experienced managers transfer to other occupations or leave the labor force. Opportunities are expected to be best for persons with college degrees in career administration and related fields.
The projected pattern of employment growth in the economy favors growth in the demand for office buildings, retail establishments, and apartments, and consequently growth in requirements for property and real estate managers. A large proportion of the new jobs created over the 1986-2000 period are expected to be in wholesale and retail trade, finance, insurance, real estate, and the various service industries. Since establishments in these industries are the primary tenants of commercial properties, rapid growth of these industries is expected to require growth in the Nation's supply of office and retail space. In addition, the expected rapid employment growth in retail trade should require growing numbers of real estate managers to acquire and develop properties for expanding restaurant, grocery, apparel, and specialized merchandise chains.
Growth in the Nation's stock of apartments and houses should also require growing numbers of property and real estate managers. Although the rate of new household formation is expected to decline somewhat over the 1990-2001 period as fewer young workers enter the labor force, the high cost of purchasing a home is expected to force a growing proportion of new households to delay leaving rental housing. In addition, developments of new houses are increasingly being organized with community services and oversee jointly owned common areas, requiring professional management.
A growing proportion of commercial and multiunit residential property owners are expected to entrust the management of their properties to a professional manager. Recent changes in income tax laws have greatly limited the tax benefits that property owners and investors can derive from unprofitable apartments and commercial properties. To help properties become more profitable, more owners are expected to place their investments in the hands of property and real estate managers.
Earnings of property and real estate managers vary greatly according to the level of their responsibility. A survey conducted by Huntress Real Estate Executive Search Inc. found that the middle third of the on-site apartment managers surveyed had annual salaries averaging $29,952 in 1990, while the lowest third averaged $19,500 a year and the highest third, $40,000 annually.
Property managers had considerably higher earnings than on-site managers, according to the same survey. The middle third of property managers responsible for multiple apartment properties averaged $57,300 a year in 1990, while the lowest third averaged $45,400 and the highest third, $66,500 annually. Of property managers responsible for shopping centers, the middle third earned $63,200, the lowest third $53,000, and the highest third $71,600 annually. Of these who managed office buildings, the middle third earned $69,800, the lowest third $49,100, and the highest third $78,200 annually.
Earnings of corporate real estate managers were generally comparable to those of property managers, according to the same survey. Among those employed by fast-food and restaurant chains, the middle third of the lease negotiators and site selection representatives average $57,400 annually in 1990, while the lowest third averaged $47,200 and the highest third, $81,900 annually. The middle third of real estate directors earned $71,500 a year, while the lowest third earned $53,300 and the highest third, $81,900 annually. Among real estate managers employed by retail apparel chains, the middle third of the lease negotiators and site selection representatives averaged $59,900 a year, the lowest third $46,200, and the highest third $72,800. The middle third of real estate directors for retail apparel chains had an average annual salary of $68,500, while the lowest third earned $56,700 and the highest third, $85,400 annually.
Community association managers received compensation comparable to on-site and property managers employed by other types of properties. Property and real estate managers usually receive medical and health insurance paid by their employer. Many resident apartment managers receive the use of an apartment as part of their compensation package. Property and real estate managers often are given the use of a company automobile, and managers employed in land development often receive a small percentage of ownership in projects that they develop.
Property and real estate managers plan, organize, staff, and control the real estate operations of careeres. Other workers who perform these functions in other fields include restaurant and food service managers, hotel and resort managers and assistants, health services managers, education administrators, and city managers.
Sources of Additional Information
General information about careers in property and real estate management and programs leading to the award of a professional designation in the field is available from:
Apartment Owners and Managers Association of America, 65 Cherry Plaza, Watertown, CT 06795-0238.
Building Owners and Managers Institute International, 1521 Ritchie Hwy., Arnold, MD 21012.
Community Associations Institute, Suite 7, 1423 Powhatan St., Alexandria, VA 22314.
Institute of Real Estate Management, 430 N. Michigan Ave., Chicago, IL 60611.
International Association of Corporate Real Estate Executives, Suite 8, 471 Spencer Dr. South, West Palm Beach, FL 33409.
National Apartment Association, Suite 804, 1101 14th St. NW., Washington, D.C. 20005.
National Association of Home Builders, 15th & M Sts. NW., Washington, D.C. 20005.