Property Management Agreement

Definition

A contract between a property owner and a management company outlining services, fees, and responsibilities for operating and maintaining the property. It's the document that determines whether your landlord actually fixes your toilet in a timely manner.

Example Usage

The property management agreement specified that the company would handle tenant communications, maintenance, and accounting for a 5% fee.

Origin

Standard contractual arrangement for delegating property operations

Fun Fact

Property management fees typically range from 3-12% of collected rent, varying dramatically based on property type and management complexity.

Source: Property management industry standard

Related Terms

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Recapture

IRS taxation of previously claimed depreciation deductions when a property is sold—the tax agency's way of clawing back your deductions.

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concessions

Money or perks the seller agrees to provide the buyer at closing, typically covering closing costs or repairs. It's the real estate equivalent of throwing in floor mats when buying a car.

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joint tenancy

A form of property ownership where two or more parties hold equal, undivided interest with right of survivorship, meaning the property automatically transfers to surviving owners upon one's death. It's estate planning that bypasses probate court, assuming everyone stays friendly.

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highest and best use

The most profitable legal use of a property that's physically possible and financially feasible. It's why your residential lot might be worth more to a developer than your emotional attachment suggests.

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principal residence

The home where you live most of the year, receiving favorable tax treatment including capital gains exclusions and mortgage interest deductions. The IRS cares deeply about distinguishing this from your 'vacation home' to prevent creative accounting.

🏠 Real Estate

Advanced

Cash-on-Cash Return

Annual pre-tax cash return divided by initial cash invested, the true measure of investment profitability in real-world terms.

🏠 Real Estate

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