Overview of Property Management
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What is property management?
Property management involves the operation, oversight, and administration of real estate or property.
Types of Property:
- Residential Property: It refers to real estate intended for living purposes. It includes various types such as single-family homes, multi-family homes, apartments, villas, condos, townhouses, and vacation stays.
- Commercial Property: It refers to property intended for business activities, such as shops, restaurants, hotels, offices, industrial facilities, malls, and similar establishments.
- Mixed Property: It is a type of property that combines both residential and commercial uses. For example, a building where the ground floor is occupied by a shop, while the upper floors (from the first to the tenth) are residential units..
Types of Property according to revenue:
- Leased Property: This refers to a property where the lessor (owner) allows the lessee (tenant) to use the property for a defined period in exchange for regular payments, which may include rent, maintenance fees, agreement charges, and a security deposit. Example: John (Lessor/Owner) owns a villa in Chennai. Babu (Lessee/Tenant) pays John Rs. 5,000 per month for rent, Rs. 2,500 per month for maintenance, Rs. 1,250 for agreement charges, and provides a security deposit of Rs. 10,000.
- Sale of Property: This refers to a transaction where a seller transfers ownership of a property to a buyer in exchange for payment, including charges such as transfer of ownership and agreement fees. For example, Krishna owns a villa in Bangalore. He sells the house to Varun for Rs. 15,00,000. Varun is required to pay Rs. 10,00,000 for the transfer of ownership and Rs. 5,00,000 for the agreement charges. After the transaction, Varun becomes the owner, and Krishna no longer has any rights to the property.
- Property Management or Managing Property: This refers to a service where a management company oversees a property on behalf of the owner. The service typically covers tasks such as rent collection, property maintenance, handling agreement formalities, and managing security deposits. For example, Sony owns a property but prefers not to deal with tenant-related matters. She hires a property management company, PropTiger, which manages all aspects, including rent, maintenance, agreements, and security deposits.