The Rental Property Manager's Toolbox A Complete Guide Including Pre-Written Forms, Agreements, Letters, and Legal Notices: With Companion CD-ROM

The Rental Property

Manager’s Toolbox

A Complete Guide Including

Pre-Written Forms, Agreements,

Letters, and Legal Notices:

With Companion CD-ROM

By Jamaine Burrell

The Rental Property Manager’s Toolbox—A Complete Guide Including Pre-Written Forms, Agreements, Letters, and Legal Notices: With Companion CD-ROM

Copyright © 2006 by Atlantic Publishing Group, Inc.

1210 SW 23rd Place • Ocala, Florida 34474 • 800-814-1132 • 352-622-5836–Fax Web site: www.atlantic-pub.com • E-mail [email protected] SAN Number :268-1250

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Requests to the Publisher for permission should be sent to Atlantic Publishing Group, Inc., 1210 SW 23rd Place, Ocala, Florida 34474.

ISBN-13: 978-0-910627-71-9 ISBN-10: 0-910627-71-1

Library of Congress Cataloging-in-Publication Data

Burrell, Jamaine, 1958-

The rental property manager’s toolbox : a complete guide including pre-written forms, agreements, letters, and legal notices : with companion CD-ROM / Jamaine Burrell. p. cm.

The accompanying CD-ROM contains dozens of forms, sample contracts, letters, notices, rental applications, agreements, and checklists.

Includes bibliographical references and index.

ISBN-13: 978-0-910627-71-9 (alk. paper) ISBN-10: 0-910627-71-1

1. Real estate management--United States--Handbooks, manuals, etc. 2. Rental housing--United States--Handbooks, manuals, etc. 3. Real estate management--United States--Forms. 4. Real estate management--Law and legislation--United States--Forms. I. Title: Property manager’s toolbox. II. Title.

HD1394.5.U6B87 2006

333.5068--dc22

2006003915

LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. No warranty may be created or extended by sales or promotional materials. The advice and strategies contained herein may not be suitable for every situation. This work is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If professional assistance is required, the services of a competent professional should be sought. Neither the publisher nor the author shall be liable for damages arising herefrom.

The fact that an organization or Web site is referred to in this work as a citation and/or a potential source of further information does not mean that the author or the publisher endorses the information the organization or Web site may provide or recommendations it may make. Further, readers should be aware that Internet Web sites listed in this work may have changed or disappeared between when this work was written and when it is read.

EDITOR: Jackie Ness • [email protected]

ART DIRECTION & INTERIOR DESIGN: Meg Buchner • [email protected] FRONT COVER & BOOK PRODUCTION DESIGN: Lisa Peterson, Michael Meister • [email protected] GLOSSARY COMPILED BY: Christina Mohammed

Printed in the United States

Contents

Foreword 9

CHAPTER ONE: What Is Property Management? 13

The Owner as Property Manager ..................................................... 13

Hiring a Professional Property Manager ........................................ 14

The Role of the Professional Property Manager............................. 16

Continuing Development .................................................................. 18

Counselors of Real Estate (CRE) ................................................ 20

Society of Industrial and Office Realtors (SIOR) ..................... 20

Realtors Land Institute (RLI) ...................................................... 20

The National Association of Residential Property Managers (NARPM) ...................................................................................... 22

Institute of Real Estate Management (IREM) ........................... 24

Certified Commercial Investor Member (CCIM) Institute ..... 26

Economic Models ............................................................................... 27

Property Retention.............................................................................. 28

Appreciation ........................................................................................ 29

Cash Flow ............................................................................................ 29

CHAPTER TWO: Management Properties 31

Residential Properties ........................................................................ 31

Financing ...................................................................................... 32

Renting and Leasing .................................................................... 33

Configurations .............................................................................. 34

Commercial Properties ...................................................................... 36

Financing ....................................................................................... 36

Leasing ........................................................................................... 36

Configurations .............................................................................. 37

Industrial Properties ........................................................................... 40

Financing ...................................................................................... 40

Leasing ........................................................................................... 40

Configurations .............................................................................. 41

CHAPTER THREE: Financial, Legal & Advertising Skills of a Good Property Manager 45

Leveraging ........................................................................................... 45

Securing a Lender......................................................................... 46

Financial Management ....................................................................... 47

Maintaining Files .......................................................................... 47

Calculating Rate of Return ................................................................ 50

Investment ..................................................................................... 51

Appreciation ................................................................................. 52

Cash Flow ...................................................................................... 52

Mortgage Principal ...................................................................... 53

Depreciation (Income Tax) .......................................................... 53

Taxes ..................................................................................................... 54

Federal ........................................................................................... 54

State ................................................................................................ 58

Local ............................................................................................... 58

Tax Evasion ................................................................................... 59

Tax Audits .................................................................................... 60

Laws and Regulations ........................................................................ 61

Insurance .............................................................................................. 64

Basic Insurance ............................................................................. 65

Additional Insurance ................................................................... 66

Agents ............................................................................................ 68

Adjustors ....................................................................................... 69

Market Research .................................................................................. 69

Advertising .......................................................................................... 70

Newspapers .................................................................................. 70

News Releases .............................................................................. 71

Radio .............................................................................................. 71

Magazines...................................................................................... 72

Television ....................................................................................... 72

The Internet ................................................................................... 72

Signs/Signage .............................................................................. 73

Rental Guides ................................................................................ 73

Referral Systems ........................................................................... 74

Tenant Location Services ............................................................. 75

Dedication ............................................................................................ 76

Vision .................................................................................................... 77

CHAPTER FOUR: Acquiring Management Property 81

Financing and Loans .......................................................................... 82

No Money Down .......................................................................... 82

Mortgage Loans ............................................................................ 83

Conventional Mortgages Versus Lines of Credit ..................... 93

Owner Financing .......................................................................... 96

Loan Documentation ................................................................... 97

Loan Terms .................................................................................... 98

Loan Fees ....................................................................................... 99

Mortgage Brokers ....................................................................... 100

Points............................................................................................ 101

Pre-Purchase ...................................................................................... 102

Inspection .................................................................................... 102

Trash Removal ............................................................................ 113

Purchase ............................................................................................. 114

The Real Estate Agent ................................................................ 114

The Attorney ............................................................................... 116

The Accountant ........................................................................... 118

The Financial Advisor ............................................................... 123

The Contract ...................................................................................... 125

Breaking the Broker’s Contract ................................................ 131

Breaking the Seller’s Contract .................................................. 133

CHAPTER FIVE: Property Maintenance 137

Emergency Maintenance ........................................................... 137

Preventive Maintenance ............................................................ 138

Corrective Maintenance ............................................................ 138

Custodial Maintenance .............................................................. 139

Cosmetic Maintenance .............................................................. 139

Building Relationships .............................................................. 139

CHAPTER SIX: Renting Management Property 143

Showing.............................................................................................. 145

Unassisted Showings ................................................................. 146

Open-House Showings .............................................................. 147

Individual Showings ................................................................. 147

Renting and Leasing ....................................................................... 149

Completing the Application ..................................................... 149

Screening ..................................................................................... 149

Making the Decision ........................................................................ 154

Collecting Deposits .......................................................................... 160

Reviewing the Lease or Rental Agreement ................................... 161

Non-Rent Revenue ........................................................................... 162

Laundry Facilities ...................................................................... 163

Vending Machines ..................................................................... 165

Parking ........................................................................................ 166

Storage ......................................................................................... 166

Internet Access ........................................................................... 167

Tenant Lease Options ................................................................ 168

Other Revenue-Generating Opportunities ............................ 168

CHAPTER SEVEN: Establishing Good Relationships 173

Investors ............................................................................................ 173

When Investors Form a Partnership ...................................... 173

Establishing Rules and Guidelines .......................................... 174

Establishing Legal Representation .......................................... 174

Types of Partnerships ................................................................ 174

Property Managers ........................................................................... 177

On-Site Property Managers ...................................................... 177

Rental Agents as the Property Manager ................................. 178

Professional Property Managers .............................................. 179

Contractors/Suppliers .............................................................. 180

CHAPTER EIGHT: Tenants 187

Lease Options .................................................................................... 189

Furnished Rentals ...................................................................... 191

Occupancy ......................................................................................... 193

Rent ..................................................................................................... 194

Due Date...................................................................................... 196

Grace Period ............................................................................... 196

Late Fees ...................................................................................... 197

Payment Methods ...................................................................... 198

Roommates .................................................................................. 199

Partial Payments ......................................................................... 199

Rent Increases ............................................................................. 199

Rent Control ................................................................................ 200

Subsidized Housing ................................................................... 201

State and Local Rental Subsidy ................................................ 201

Types of Tenants ................................................................................ 205

Pet Owners .................................................................................. 206

Smokers ....................................................................................... 206

Tenant Selection ............................................................................... 210

Tenant Safety and Security .............................................................. 212

Access and Control ........................................................................... 213

File Access and Control ............................................................. 213

Key-and-Lock Access Control .................................................. 213

Key Card Access and Control Systems ................................... 214

Lighting Control Systems ......................................................... 216

Professional Security Control Systems .................................... 216

Safety Programs .......................................................................... 218

Informing Tenants of Crimes .......................................................... 220

Advertising Safety and Security .............................................. 221

Security Devices ......................................................................... 221

Sexual Offenders ........................................................................ 222

Safety and Injuries ...................................................................... 223

Fire Safety .................................................................................... 223

CHAPTER NINE: Tenant Problems and Complaints 229

Failure to Pay Rent ..................................................................... 233

Creating a Disturbance .............................................................. 236

Unsupervised Children ............................................................. 236

Housing Unauthorized Individuals ........................................ 237

Housing Unauthorized Pets ..................................................... 238

Creating Surplus Storage .......................................................... 238

Unusual Situations ..................................................................... 238

Subleasing ................................................................................... 239

Departing Roommates ............................................................... 239

Death of a Tenant........................................................................ 240

Domestic Problems .................................................................... 241

Tenant Notices .................................................................................. 241

Tenant Evictions ................................................................................ 243

Serving Notice ................................................................................... 253

Involving the Courts .................................................................. 253

Taking Possession ............................................................................. 254

Enforcing Judgments ........................................................................ 254

Tenant Move-Out .............................................................................. 256

Wear and Tear .................................................................................... 258

Refunding Security Deposits .......................................................... 260

Move-Out Inspection ....................................................................... 262

Security Deposit Accounting .......................................................... 262

CHAPTER TEN: Selling Management Property 267

Marketing .......................................................................................... 267

Hired Help ......................................................................................... 269

Taxes and Section 1031 ..................................................................... 271

Sales Techniques ............................................................................... 272

Closing ................................................................................................ 277

Bibliography 285

Index 286

Glossary 293

Resources 355

About the Author 367

Forms 368

Foreword

People have hoped, dreamed and planned for it, saved for it, worked for it, fought over it, died for it—real property.

At the top of most people’s acquisition list is their own land with a home on it. I call that the white picket fence syndrome.

Whether or not we own our land and home, eventually the allure of reaping financial rewards from owning real estate leads many to take that leap into the real estate world.

An investor entrepreneur may want to include real property in his or her portfolio. Another individual may see the career advantages of assisting others in buying, selling and/or managing real estate. Both persons wish for a successful financial outcome with real estate as the vehicle. However, in the beginning of their endeavor, they need backbone rather than wishbone. They need the tools to make their dreams come to fruition.

Taking the first steps toward investment property acquisition for oneself or entering into a property management career may seem like a grand idea. Just as a rock climber wouldn’t think of throwing himself off a cliff to rappel down a 500 foot granite face without having procured the right equipment and trained for the arduous task, so too, anyone contemplating venturing down the path of real estate investment and property management needs the tools of developed skills and on-going training.

Twenty years ago, resources for the landlord or property manager were hard to find. For the most part, applicable and relevant education and resources were non-existent. Resources

were on the wishin’ and hoping list. The IREM® (Institute of Real Estate Management) offered through NAR® (National Association of Realtors) did a fine job of preparing and supporting those who were preparing for commercial real estate management. However, there was a giant void for those who wanted to develop skills and expertise in managing their own or other’s residential properties.

In the late 1980’s a few landlords working in the trenches began writing about the field and offering how-to suggestions via newsletters and books. A group of professional property managers formed a trade association with the goals of developing education, credentials, support, and networking opportunities. Known as the National Association of Residential Property Managers, NARPM®, this trade association has grown to support residential property managers in the United States mainland, Hawaii, and abroad. Today there are numerous resources for landlords and professional property managers. The Rental Property Manager’s Toolbox highlights major institutions and entities that offer education and assistance for landlords and property managers. It is a welcomed asset to property management development.

If you are a person who is contemplating purchasing that first investment property or who is a relatively new landlord, you will find The Rental Property Manager’s Toolbox to be invaluable.

It offers quality tools to help build a sound foundation that will lead to a more successful outcome and avoid the pitfalls that result from poor planning and inadequate knowledge. Property management is a complex field fraught with exponentially expanding information and changes that can be a source of risk to the landlord or property manager. Ongoing education about current trends, technology, laws and statutes is essential.

If you are an investor, this book can assist you in deciding if you have the skills, temperament and time to be a landlord.

After reading this book and familiarizing yourself with the requirements of property management, you can evaluate and choose the best professional property manager for your portfolio should you decide being a landlord is not for you.

If you manage real estate for a fee, The Rental Property Manager’s Toolbox is a two-tiered toolbox. The book is a comprehensive primer on all the facets of property management and offers many resources for the property manager. If you have mastered the basic tools, you can use this book to assess and evaluate your current skill level, knowledge and expertise and become aware of systems and procedures you need to fine tune.

The Rental Property Manager’s Toolbox with its detailed guidelines, pre-written forms, agreements, letters, legal notices and companion CD-ROM can be the backbone that replaces the

wishbone for the investor and property manager. If you are reading this book, you are taking a commanding step towards more cutting edge professionalism. This book can be your tool for achieving personal and financial success.

Karen Ebert, MPM, RMP, Realtor

A founding member of the NARPM® (National Association of Residential Property Managers), Karen Ebert, MPM, RMP, is a Realtor and served as an officer, director, and first editor of the Residential Resource, newsletter of the NARPM® and was given the NARPM®

President’s award in 1998. She wrote and presented several education workshops for the NARPM® annual conventions. Karen holds the e-Pro designation from the NAR®. She has been president and director of operations of Austin Landmark Property Services, ALPS, Inc. in Austin, Texas since 1986. ALPS earned the designation of CRMC (Certified Residential Management Company) provided by the NARPM®. Karen and Rick Ebert, MPM manage close to 500 rental units.

Author Dedication

My writing is dedicated to both my biological family and my street family. A special dedication is reserved for my single mother, who lost the battle with cancer, the many, many neighborhood youth of Baltimore City who were murdered before we were ever privileged to see their adult faces and those who had their adulthood abruptly shortened. R.I.P.

1

C H A P T E R O N E

What Is Property Management?

Property management is the care and maintenance of leased or rental property by or on behalf of the property owner. Property management requires a number of skills, including finance, insurance, research, marketing, communication, problem solving, people skills, and, of course, management. A property manager takes on a number of responsibilities, with the overall goal of maintaining rental property sufficient to collect rental payments as prescribed by a lease or rental agreement. A property manager may maintain residential, commercial, or industrial properties. In all properties, the property manager must meet the needs of the tenant as well as of the property owner. Management activities usually require the skills or services of more than one individual for maintenance, repairs, and other necessary assistance. A property manager must delegate and coordinate these types of services.

The Owner as Property Manager

The property owner may serve as the property manager for his or her own property. Owners are quite successful in managing

The Rental Property Manager’s Toolbox their own properties when they have the skill set necessary to accomplish the job. Owner-managers usually have a small number of properties to manage and are located within close proximity to their properties. Also, owners that extend their budgets to rehabilitate or modify rental property may fall short of funds and take on the responsibility of managing their own property as a cost-savings measure.

Owner-management offers cost effectiveness, saving both monthly management fees and maintenance costs. If, however, the cost savings are swallowed up by poor workmanship, poor time management, or poor management skills, it may be more advantageous for the owner to take on the additional expense of professional management services. The owner-manager who performs a poor plumbing repair and has to take time from his or her normal job to repair the plumbing a second time around, and also replace and repair furniture and structures damaged by the water, loses profits that could have been more effectively invested in professional management services. Should such damage be so severe that it causes tenants to be displaced, additional losses and expenses are incurred. Cash flow may be disrupted for many months to come.

Hiring a Professional Property Manager

Owners who lack the necessary skills and required time or those who have a large number of properties should make use of professional property managers. The chosen professional assumes responsibility for the management of property for a fee, usually collected on a monthly basis. The monthly management fee entitles the owner to a commitment to manage the needs of the property. The costs to actually perform services such as repairs and legal filings are incurred by the owner. Though the 14

Chapter 1: What Is Property Management?

property manager assumes responsibility for maintaining the property, the owner has the final say about the treatment of his or her property. The owner should be clear on the expectations of the management company and select a company that allows owners to choose their level of participation in the management process. Generally, professional property managers are expected to:

• Screen prospective tenants.

• Collect lease payments (rent) from the tenants.

• Make or coordinate repairs to the property.

• Enforce rules as specified in the rent agreement and established by law.

• Satisfy tenant complaints and provide problem

resolution.

• Inspect the property on a regular basis.

• Provide monthly or agreed-upon schedules of accounting for the property.

• Advertise and show vacant properties to prospective tenants.

The owner should have the option of taking control over any of these functions if it is found to be more cost effective than having the management company perform the same function.

If, for example, the owner lives in close proximity to the property and is able to mow the lawn of the property, there is no need to pay the management company’s fee for this service.

Likewise, if the owner is associated with a gardener that he or she feels comfortable with and charges a lower cost than the 15

The Rental Property Manager’s Toolbox management firm for the same work, the owner may intervene in the professional management process and insist that his or her chosen gardener be used to perform the work instead.

Property-management companies may have more than one property manager. Property owners should interview the individual who will be responsible and accountable for the management of their particular property. An appropriate manager will be able to provide references, such as previous clients, to contact with regard to the quality of service. It is important to understand the difference between an exclusive property-management firm and a real estate broker that offers property-management services. Real estate brokers and their salespersons have a direct responsibility to assist their clients in the sale of properties. They offer property-management services, in most cases, at reasonable fees in hopes that the owner will eventually sell the property. The real estate agent’s expertise and experience in the sale of property is not necessarily the expertise necessary to properly manage property.

The Role of the Professional Property Manager

The professional property manager offers expertise in the laws and regulations applicable to the particular property. Most states require that property managers be licensed in either real estate or property management. The Institute of Real Estate Management (IREM) is an organization of property managers that certifies and accredits property-management firms based on excellence and dedication. Its ratings, from the most to the least prestigious, are as follows:

• AMO—Accredited Management Organization

• ARM—Accredited Residential Manager

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Chapter 1: What Is Property Management?

• CPM—Certified Property Manager

A good management company will combine its experiences and expertise in maintaining property to seek better tenants, higher rents, and lower costs, as well as to generate a satisfactory cash flow. The professional-management company should:

• Be insured for general, automobile, and professional liability as well as workers’ compensation.

• Hold a fidelity bond to protect against the theft of money collected on behalf of the owner.

• Be able to handle the financial aspects of the business to include bookkeeping and rent collection. The

responsibility for taxes associated with the particular property belongs to the owner.

• Offer the necessary people skills to assess and resolve tenant issues.

• Provide for the screening of applicants.

• Establish an effective method of two-way communication with the tenant.

• Establish relationships with maintenance and repair workers, who may offer more timely services at

preferential pricing.

There are, however, those property managers who are unethical and will mismanage property. Their practices often result in careless tenants who cause damage. Typical circumstances of mismanagement practices include the following:

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The Rental Property Manager’s Toolbox

• Employing maintenance personnel who inflate the cost of supplies and labor.

• Accounting for repairs that are unnecessary or of no value.

• Ignoring needed repairs until small problems increase to larger, more expensive repairs.

• Implementing complicated rent-collection schemes to create an abundance of late fees, particularly when the management company is contracted to keep such fees.

• Overcharging to fill vacancies or purposely delaying the filling of vacancies to increase fees.

Continuing Development

Property management requires continuing career development, advice, and counsel. There are a number of resources available to property managers that will keep them in touch with trends, advances, and changes in the real estate and propertymanagement market. The Internet provides a wealth of available resources. Likewise, family, friends, and associates involved in real estate or real estate-related businesses are a source of valuable information. The real estate professional needs to have a network of professionals with whom to share ideas and information. They have the option of membership or participation in a number of community groups and professional associations.

Networks of real estate professionals usually require its members to pay a fee. As such, some groups entertain anyone willing to pay the associated fee regardless of their value to 18

Chapter 1: What Is Property Management?

the group as a whole. The property manager must research potential networks and groups to be sure that the groups provide the needs of his or her business. Property managers are encouraged to attend group meetings and to talk to members before joining an organization. The property manager needs to assess whether the group or individuals in the group are able to enhance his or her development.

Colleges, universities, and trade schools offer courses and seminars that property managers may attend not only to increase their knowledge base, but also to meet and network with other individuals in the field. The local newspaper may also provide valuable information about current and future trends, market fluctuations, and other avenues of the real estate market in the local area. The newspaper may introduce property managers to names and businesses to watch for in the market. The Internet provides news for any particular market of interest, networking information, and online courses. Many online courses are provided for a nonrefundable fee; as such, property managers must do some research into the many online companies to determine those that are legitimate and offer accurate and substantiated information. The Internet also provides information about real estate brokers. Real estate brokers are familiar with the local community in which they are located and they are able to provide valuable and useful information.

The real estate industry has a wealth of professional organizations, and property managers should investigate and explore the possibility of becoming a member of such organizations. Some of the prominent real estate organizations include the following:

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The Rental Property Manager’s Toolbox

Counselors of Real Estate (CRE)

The CRE is an organization of real estate professionals that support leaders in the real estate industry. Membership in the CRE is by invitation only. The CRE promotes a strict code of ethics and standards to which members must adhere. Members are judged by established criteria, and membership equates to recognition for outstanding performance in the real estate industry. Members must have at least ten years of experience in real estate, at least three years of counseling, and other qualities that represent excellence, knowledge, integrity, and judgment in the practice of real estate.

Society of Industrial and Office Realtors (SIOR)

The SIOR is a membership of Realtors who specializes in industrial, office sales management, and advisory functions.

Members number more than two thousand in 25 countries on six continents around the world. The prestigious SIOR

designation signifies a high level of competence and achievement. The organization offers educational programs for members which include courses, seminars, and conventions as well as publications and a quarterly magazine. The SIOR

Web site (www.sior.com) provides members with comparative statistics for more than 130 different markets. In addition to providing educational opportunities, the SIOR provides its members with assistance in public relations; mediation and arbitration services; networking opportunities; and the SIOR

designation of high competence and achievement.

Realtors Land Institute (RLI)

The RLI is an affiliate organization of the National Association of Realtors that exists to network real estate professionals interested in raw land. Land interests include land

20

Chapter 1: What Is Property Management?

development, management, planning, development appraisals, acquisitions, agribusiness, and other areas that pertain to land.

Members may earn the RLI designation, Accredited Land Consultant (ALC), by meeting established requirements for consultation services. The RLI has five primary focus areas: 1. Undeveloped land

2. Farms and ranches

3. Transitional and development land

4. Site selection and land assemblages

5. Subdivisions and wholesale lots

The RLI provides continuing education to promote professional expertise. In addition, the organization performs the following functions with respect to raw land:

• Identifies members as land specialists.

• Markets members’ businesses.

• Makes recommendations on public policy affecting land use.

• Develops and maintains professional standards.

• Advocates the wise use of land.

• Advocates reasonable rights and privileges for private land ownership.

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The Rental Property Manager’s Toolbox

The National Association of Residential Property

Managers (NARPM)

The NARPM exists to promote professional and ethical practices in the management of residential properties. Members of NARPM include residential property managers, property management companies, and their associated support staff. The NARPM is unique in that it focuses solely on the management of single-family rental homes and other small residential properties. In an effort to provide support to professionals in all aspects of residential property management, the NARPM offers three differing types of membership:

1. Professional Memberships are designed for individuals who act in the role of property manager and are licensed in states that require property managers to be licensed.

Over 75 percent of NARPM Professional Members are

either full or partial owners of the companies in which they are employed.

2. Support Specialist Memberships are designed for

individuals who provide support services to property managers and property-management companies.

Support Specialist Members perform property-

management functions but do not operate in a capacity that requires licensing.

3. Affiliate Memberships are designed for individuals who act as vendors in the property management

industry. Affiliate Members are required to comply with established professional ethics in providing products and services.

With member chapters in 24 states across the country, the NARPM provides professional training and accreditation for 22

Chapter 1: What Is Property Management?

residential property management by top industry leaders.

These leaders are not only poised to teach coursework, but also to share personal and professional experiences. In addition, NARPM members are provided the following resources and services to assist in their professional development:

• The NARPM newsletter, Residential Resource

• Special publications that address legislative issues and product innovations that are only available to members

• A national annual convention and trade show

• Regional and state conferences

• Discounted rates for professional courses

The NARPM recognizes members who demonstrate

knowledge, commitment, and dedication in residential property management by awarding such members with its nationally recognized designations:

• RMP—Residential Management Professional

• MPM—Master Property Manager

• CSS—Certified Support Specialist

• CRMC—Certified Residential Management Company

These designations symbolize achievement in coursework, property management experiences, and volunteer activities. A member who holds the MPM designation must head a company designated as a CRMC. Likewise, a company must have either a designated RMP or MPM member in order for individuals on its support staff to obtain the CSS designation.

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The Rental Property Manager’s Toolbox

Institute of Real Estate Management (IREM)

The IREM is a professional organization that provides nationwide educational, marketing, and advocacy needs to property managers. The IREM exists to enhance and support its members’ competence in gaining access to new clients, tenants, and markets. Members are taught skills that allow them to offer quality service that retains clients, tenants, and newly acquired markets. Members who are able to demonstrate extra effort in their commitment to professionalism may earn the IREM

designations: CPM, ARM, and AMO. The designations signify real estate professionals who are able to abide by high standards of business conduct. The CPM designation, the lowest level of designation provided by the IREM, allows licensed real estate recipients to attend professional classes, seminars, and lectures that target their particular business needs.

The organization assists property managers, property management companies, and other real estate professionals to include managers and owners of:

• Retail properties

• Office buildings

• Industrial properties

• Corporate real estate holdings

• Conventionally financed multi-family units

• Government-assisted multi-family units

• Homeowner associations

• Mobile home parks

24

Chapter 1: What Is Property Management?

• Single-family units

The IREM provides the following services to assist these individuals and companies:

• Education

• Research

• Analysis

• Publications

• Career development

• Networking opportunities

Classroom courses, online courses, and home-study courses are used to stress real-world skills. Courses are taught and developed by professionals in the field, with real-world experience. Course topics include the following:

• Ethics

• Maintenance and operations

• Marketing

• Asset management

• Legal issues

• Leasing

• Financial management

• Accounting

25

The Rental Property Manager’s Toolbox

• Human resources management

• Risk management

• Business development

The IREM also provides customized online training for government entities, corporations, and other organizations.

Certified Commercial Investor Member (CCIM) Institute

The CCIM Institute exists to promote commercial real estate professionals who