Perez, Angelica A.

BS – REM 3A

1. Jeff, like most property managers, discovered that he preferred a specific

type of property management. What are the advantages and disadvantages
of working as an employee manager as opposed to working as a third-party
manager?

Employees work part-time or full-time for an agency with a contract of employment,

while third-party managers are employed from outside the company but work for it. To
explain more about contract of employment, a management contract is a type
of outsourcing agreement where you hire a third party, called a management company,
to manage a project, function or work department for you. They are both different from
each other and give several advantages and disadvantages.

Working as an employee advantages can be less cost. The first main advantage of
working as an employee is that it costs less as comparing to the third party manager. As
the employees works inside the organization and third party managers are hired from
other organizations. Second one is they are well known to the organization, the
employees of the organization are well known to the environment. Third one is, working
as an employee are more open, there is more openness among the employees working
in the organization as comparing to the third party manager. Lastly is the payroll, it is
always better to work on direct payroll of company rather than on third party payroll.

Going to its disadvantages, working as an employee is lack in expertise knowledge.

There is a lack of expertise knowledge in the employees as compared to third party
manager as they have more knowledge. Second one is biasedness, sometimes the
biasedness occurs in decision making due to personal likings and disliking for
employees where as it does not happen in the case of third party manager. Third one is
lack of interpersonal skills; there is a lack of interpersonal skills among the employees of
the organization as compared to the third party manager. Lastly is the unfair decision.
Sometimes unfair decisions are taken by the employees working in the organization but
it does not happen with the third party manager.

2. List reasons why property owners would choose to hire a property

manager rather than manage the property themselves.

Owning investment property can be a great way to accomplish your financial goals,
but it takes a lot of work to manage your investment well. That's why successful
investors take the time to research and hire a professional property management
company. Working with a property manager gives you a hands-off approach to your
rental properties. On the other hand, working with a property manager will cost you
money.

There can be many reasons why property owners would choose to hire a property
manager rather than manage property themselves. Some of the reasons are as follows,
first is setting the right rental rates. Property manager helps to set the right rental rates
of the property as they have more knowledge about it. Next is maximizing the
profitability of the money. Most property managers charge a percentage of your
property’s monthly rental rate in exchange for their services. The rate typically runs
anywhere from 6-10%, which is generally less than the money you save by hiring a
professional to take care of your property. Also they do financial record keeping.
Property manager also manages the daily record keeping of the financial transactions
related to property. They have property law and regulations. A property manager has up
to date knowledge about the property laws and the related regulations. They also have
inspection reports. Property managers have to do the daily inspection of the properties
so that in case if there is any fault detected can be easily sought out. They are enabling
the owner to invest in geographically distant properties because mostly the owners are
not able to invest in properties beyond your home area but by hiring the property
manager it becomes easier to invest in geographically distant properties. Lastly, they do
collecting and depositing monthly rent payments on time. Property manager also has to
collect the monthly rent payments from the tenants and depositing it to the owner’s
account.

By hiring a professional property manager, you can add great value to your rental
property investments, which is why so many experienced real estate investors agree
that working with a good management company is the best thing.

3. Why should a property manager be concerned about ethics?

It’s one thing to know a code of ethics. Almost every professional organization or
trade association has one and property management is no different.  Code of Ethics
helps companies and individuals build relationships of trust with their customers,
employees, suppliers, owners and the communities in which they work. Property
manager should be concerned about ethics because it is the responsibility of the
Property Manager to protect the public against fraud, misrepresentation, and unethical
practices in property management.  Every employee will not only understands the code
of ethics, but knows how to apply it and expects ethical behavior not only of themselves,
but everyone around them. It takes a lot more than that, to establish a true code of
ethics in your business. It requires good, ethical leaders at the top; a willingness to
suffer for the sake of doing the right thing; and a relentless renewal of effort in
communicating the organization's ethical values from the top down to all employees.
Anything less puts the entire organization at risk.