Introduction and Management Agreement

A steel-and-glass high-rise or a pre-war brownstone does not govern itself. Left to the forces of entropy, a building decays, its tenants vacate, and its ledger bleeds capital. To understand property management is to understand the physics of real estate economics: you intervene in a physical structure to optimize a financial reality. Property management is the administration of residential, commercial, or industrial real estate to achieve the objectives of the property owner.

Pre-war brownstones, such as these in Harlem, represent complex physical assets that require active management to counteract structural decay and optimize the owner's financial returns.
Pre-war brownstones, such as these in Harlem, represent complex physical assets that require active management to counteract structural decay and optimize the owner's financial returns.

This discipline exists to satisfy two primary, interconnected objectives. First, one primary objective of a property manager is to maximize the property's financial return on investment for the owner. Second, one primary objective of a property manager is to preserve or increase the physical value of the real estate asset. You cannot achieve the first over the long term without rigorously executing the second. An unmaintained boiler eventually fails, taking the winter rent checks with it.