Property managers typically fall into one of two main categories: residential or commercial. Although both property management roles require similar skills and knowledge in areas like rent collection or maintenance scheduling, there are also significant differences between the two. In this blog post, we will discuss the differences between residential and commercial property management and highlight the skills that are needed in each real estate vertical.
Accounting and Finance Principles
One of the main differences between residential and commercial property management is the complexity of the accounting and finance principles involved. Residential property management often involves managing a straightforward expenses for units or properties, making reporting and tracking less complex. On the other hand, commercial property management often involves managing larger properties with multiple tenants and complex lease agreements. Often commercial properties are managed by third parties, and these property managers are required to provide sophisticated financial reporting to portfolio owners on a monthly and quarterly basis. Therefore, commercial property managers must have a strong understanding of accounting and finance principles, including budgeting, forecasting, and financial reporting. They will typically have college degrees, whereas residential property managers often do not. A commercial property manager must have a keen eye for detail and be able to analyze complex financial data to make sure the building is performing well and bringing in strong returns on investment.
Long-Term, Complex Leases
Another difference between residential and commercial property management is the duration and complexity of leases. Residential leases are usually straight-forward, typically short-term, lasting for one year or less. In contrast, commercial leases are usually long-term, lasting for several years. In commercial leases, there are also different lease features like triple-net, CAM fees, or complex tenant improvement projects to be managed. Commercial property managers must therefore have a deep understanding of commercial lease agreements to ensure that all parties comply with the terms of the lease.
Different Tenant Types
Residential property managers typically deal with individual tenants who are residents of the building they lease, while commercial property managers deal with a variety of businesses, retailers, and other commercial entities that use buildings for business purposes. Each type of tenant has different needs and requirements, and the commercial property managers must be able to address the business needs of their tenants, responding quickly to any issues or concerns.
Overall, commercial property management is more complex than residential property management. Commercial properties often involve higher value buildings, larger budgets and more complex lease agreements. This means that not all residential property managers can easily fit into a commercial property management role. Rather, companies who wish to hire commercial property managers must seek out professionals with a slightly different skillset – even as the titles may be the same on paper.
How TalentWoo Can Help
Finding qualified property managers for commercial real estate (CRE) companies can be challenging. That’s where TalentWoo comes in. TalentWoo is a real estate recruiting firm that connects CRE companies with qualified and experienced property managers. Many CRE companies rely on us to quickly and easily find the right property managers for their needs, saving both time and money. Unloading the hiring burden onto TalentWoo allows these proper to owners to focus on their own asset operations.
Contact www.talentwoo.com today to arrange a consultation call.