Management also important

Press, 29 July 1987, Page 59

Management also important

In keeping with the trend across the Tasman in Australia an increasing number of owners prefer to remain aware of their investment and the “bottom line” of profitability from a distance. Their options are to stand aside and either appoint an inhouse manager, contract an outside professional manager, or even use a firm specialising in professional property management.

These firms offer a wide variety of services, ranging from supervision of day-to-day management, to valuations and sophisticated computer-backed business consultancy services. Good management of an investment building is as important as the actual structure of the building itself. In fact one management function is to keep an eye on the bricks, mortar and fitments of a building. This is just one of the host of activities that should be aimed at protecting, and hopefully, enhancing the performance of the

investment. A skilled owner, seasoned with practical experience in this field, may well decide to manage the building himself. This is frequently the case where only a small number of tenants are involved.

With commercial property enjoying a period as a favourite investment many owners no longer want direct management. Frequently these professionals belong to the Property Management Institute and are also members of the Real Estate Institute.

One prominent expert in this field is Mr John Dunn of Jones, Lang Wootton. He is a qualified member of both the institutes and in addition is a qualified valuer, and member of the Institute of Valuers. He notes that there has been a marked increase in the extent and depth of professional property management in New Zealand in the last decade.

This was a result of the property market becoming more

specialised and complex in recent years.

These complexities have arisen as the result of a variety of reasons such as legislative changes, high-technology building systems, inflationary expectations, developments in property administration, and the changing demands of tenants. Mr Dunn asserts that the role of the professional property management was to ensure the “optimum performance of the investment.”

Advantages to the property owner in using a professional property manager include:— * Gaining a full and competent management service. . ♦ Maintaining a “buffer” between owner and tenants.

* Having access to professional advice which the client may or may not possess or could not readily obtain elsewhere. ♦ In the case of a professional management company, obtaining a variety of support services from specialists' who offer knowledge and practical experience at

levels available from a single management person while being available as a package for the cost of a single management fee.

Property management may be as simple as the collection of rents and responsibility for organising building maintenance. Or a full service may be required. This process would involve rental collection, paying all bills, providing a full financial management service, and trust account reporting.

Monthly reports to provide a client with access to full financial disclosure of the performance of their investment at any time.

The governing factor for property management fees should be the level of service required, Mr Dunn said.

He added that property management specialists now offer a wider service and it is usual for clients to call selective tendering on the precise services required.