STAFFING YOUR PROPERTY MANAGEMENT COMPANY
There is no magic answer. The number of staff members and their level of specialization within the management firm depend on these eight factors:
1. Number of properties the firm manages. A newly established management firm usually starts out with few accounts, so the expense of a management-support staff may be neither justified nor feasible. The founding real estate manager initially does most of the work. With more accounts comes the need to hire additional site managers to handle the day-to-day management of individual properties.
2. Types of properties in the portfolio. Some management firms specialize in office, retail or residential property, although many manage any type of property with equal ability. A firm with many diverse property types in its portfolio may have divisions for each property type; in that case, each division is likely to have its own specialized (or dedicated) staff as well as leasing and marketing personnel.
3. Size and tenancy of managed property. Managing and interacting with tenants in each phase of the cycle of tenancy requires significant work, so actual and potential numbers of tenants affect the size of the firm’s administrative and support staff.
4. Number of clients the firm has. Just as the potential and actual tenant population influences the size of the firm’s staff, the number of owners served influences the management firm’s reporting, accounting and administrative workload.
5. Level of service required. Clients may have unique needs for which the management firm must allot time. Some property owners—institutional owners in particular—may request or require that their reports conform to their standard formats, and the management firm may have to send multiple reports to various investors or partners.
6. Proximity of the managed properties to each other. A management firm that specializes in super-regional shopping centers is more likely to have a multistate or nationwide clientele than one that exclusively manages residential property. Each property may require a site manager and support staff if the properties are located in different counties or states.
7. Size of onsite staff. The size of the onsite staff may influence the amount of involvement the real estate manager has with the property. When a large staff works on site, you might have to devote more time to that property alone, which limits your availability to manage other properties.
8. Size and experience of property manger’s support staff. Whether you have administrative assistants and property accountants to perform some of the management duties will determine the number of properties you can manage. The more you can delegate these types of duties, the more you will be able to focus on the task of managing the property itself.
Unfortunately, there is almost always an imbalance in the amount of staff and work required. Management firms can rarely afford to have too many staff onboard awaiting new business. More than likely, the reverse situation occurs: too much work for the staff in place.
This article is from the 17th edition of Principles of Real Estate Management