In the context of real estate and this website, property management is defined as the process of making the sure that the property you have acquired functions properly and over time retains its functionality and formal standing, including its legal status. This includes paying appropriate real estate taxes, making repairs in case it becomes necessary, making sure the utility bills are paid etc.
Obligatory property management procedures are the ones most of the real estate owners cannot avoid. This is because they are related to either the very existence of the property, or to the services that are provided regardless of whether the particular owner actually uses them. Such obligatory a.k.a. common property management procedures include:
- real estate tax payments
- paying utility bills for common shared services (e.g. garbage collection, common staircase lighting)
- paying any debts that are accumulated by the bigger property your private residence is a part of, e.g. debts for utilities that are provided to a whole apartment complex, even if your individual apartment does not use them
Individual management procedures can also be called optional procedures, and they comprise actions, liabilities and duties that are not applicable to each and every property. Rather than that, they depend on whether the owner of the respective real estate decides to use certain services and utilities - if a service is not used, it is not provided and thus should not be paid for. Individual management procedures include:
- paying utility bills for individually calculated services (water supply, heating, electricity etc.)
- paying income tax, if renting the property out
Property management: Ensuring proper functionality and legal compliance
In the context of real estate and this website, property management refers to the process of ensuring that the property you have acquired functions properly and retains its functionality and formal standing over time, including its legal status. This encompasses various responsibilities and tasks that property owners need to undertake. Effective property management involves:
Obligatory management procedures
Obligatory property management procedures are essential tasks that real estate owners cannot avoid. These procedures are directly related to the existence of the property and the provision of essential services, regardless of whether the owner personally utilizes them. Some of the obligatory property management procedures include:
Real estate tax payments
One of the primary obligations of property owners is to ensure timely payment of real estate taxes. These taxes are based on the assessed value of the property and contribute to funding public services and infrastructure development. Complying with real estate tax payments is crucial to maintain legal compliance and avoid penalties or legal complications.
Utility bills for shared services
Property owners are responsible for paying utility bills associated with shared services within a building or complex. These services typically include garbage collection, common area lighting, elevator maintenance, and other communal amenities. Consistent payment of utility bills ensures the smooth operation of these services and contributes to the overall well-being of the property and its residents.
Debts for shared utilities
In cases where a property is part of a larger complex, owners may be responsible for paying accumulated debts related to shared utilities. This applies even if they personally do not utilize these utilities. For instance, if the entire apartment complex receives services such as water, electricity, or heating, the collective debts for these utilities must be settled to maintain the functioning of the shared infrastructure.
Individual management procedures
Individual management procedures are specific to each property and depend on the owner's decisions and usage of particular services and utilities. These procedures are considered optional as they are not universally applicable to all properties. Some individual property management procedures include:
Utility bills for individually calculated services
Property owners are responsible for paying utility bills for services that are individually calculated based on their actual usage. These services typically include water supply, heating, electricity, and other utilities specific to the property. Timely payment ensures uninterrupted access to these services and avoids any disruptions.
Income tax for rental properties
If the property is rented out, owners have additional responsibilities, including paying income tax on the rental income generated. Complying with tax regulations and accurately reporting rental earnings to the appropriate tax authorities is essential. Fulfilling income tax obligations ensures compliance with tax laws and contributes to the overall financial well-being of the property owner.
By understanding and fulfilling both obligatory and individual property management procedures, property owners can ensure the smooth operation and maintenance of their properties while meeting their legal obligations. This proactive approach helps preserve the value of the property, ensures a positive living environment for residents, and contributes to the overall success of real estate ownership.