Property

Management System
Chapter J – RESIDENTIAL
PROPERTY

Types of Residential Properties

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 What is Residential Property?
Residential property is any building or unit zoned and
purposed as living space. It’s one of two general
categories of real estate, the other being commercial
property.

Residential property is usually owner-occupied, but not

necessarily. By real estate industry convention, any
properties with fewer than five units — none of which
are for commercial use — are classified as residential.
Larger properties and those with mixed residential and
commercial use, then, qualify as commercial.
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Source: https://www.sharestates.com/glossary/residential-property/
 What is Residential Rental Property?
Residential rental property refers to homes that are
purchased by an investor and inhabited by tenants
on a lease or other type of rental agreement.
Residential property is property zoned specifically
for living or dwelling for individuals or households;
it may include standalone single-family dwellings to
large, multi-unit apartment buildings

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Source: https://www.investopedia.com/terms/r/residentialrentalproperty.asp
DIFFERENT TYPES OF RESIDENTIAL
DEVELOPMENT
 Single-attached Homes
 Single-detached Homes
 Apartments
 Townhouses
 Duplexes
 Mobile Homes
 Condominiums
 Hotels

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 Single-attached Homes. Means that one
side of the house is built on the boundary of the
lot. You share the border with a neighbor so a
wall is built between the two properties. This
type of residential property is typically more
affordable than single-detached homes.

Single-detached Homes. It is unattached to

the neighboring house so there is space on all
sides of the structure. This gives homeowners
more privacy, especially if the lot is spacious. If
you have kids and pets, they will like the
outdoor space.
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Source: https://propertysourceph.com/blog/types-residential-buildings-philippines/
 Apartments. Apartment building is typically
owned by one person who rents it out to tenants. The
building has multiple units which share walls.
Depending on the terms of your landlord, maintenance
and upkeep can be included in the rent or you will be
responsible for it in its entirety. Compared to a
monthly mortgage, rent is usually cheaper.

Townhouses. Townhouses are built in a

multi-housing complex so units are attached to
each other. These are typically designed with
multiple floors and a parking garage.
Townhouses are also often built-in gated
communities to increase your security 24/7.
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Source: https://propertysourceph.com/blog/types-residential-buildings-philippines/
 Duplexes. A duplex is a multi-family home that
has two units in one building — regardless of how
those homes are arranged. Units can be side-by-side or
stacked on top of each other. Duplex buildings also
have two separate entrances for each unit. This means
each tenant has their own entrance. These two separate
units are typically similar in size.

Mobile Homes. Is a type of building that

people live in, usually staying in one place, but
able to be moved using a vehicle or sometimes
its own engine

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Source: https://www.apartmentguide.com/blog/what-is-a-duplex/ and https://dictionary.cambridge.org/us/dictionary/english/mobile-home
 Condominiums. Condominiums are residential
properties within a multi-story building. Typically, you
share one or two of your walls with other units.
Condominium buildings are typically located in high-
density areas in the city, so they’re a great option if you
want to live near restaurants, malls, and offices. In the
Philippines, condominiums are divided into three types
—low-rise, mid-rise, and high-rise.

Hotels. Hotels is an establishment whose

primary business is to provide lodging facilities
to a genuine traveler along with food, beverage,
and sometimes recreational facilities too on the
chargeable basis, provides paid accommodation,
generally for a short duration of stay.
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Source: https://propertysourceph.com/blog/types-residential-buildings-philippines/ and https://tourismnotes.com/hotels/
 Other Alternative and Services. Housing alternatives ranges from fully
furnished units, where everything is supplied for the tenant, to unfurnished
apartments equipped only with floors and walls, with the standard unit lying
somewhere in between. Large multifamily complexes are referred to as
communities. The larger the community, the more likely it offers recreational
facilities such as swimming pools, tennis courts, patios, exercise rooms
(gym) and recreational rooms.

In any type of residential rental housing, the kind and number of facilities
provided has a direct effect on the property manager’s workload; swimming
pools, laundry rooms, and parking areas increase the maintenance activities
for the premises. These facilities and services affect the overall desirability
and influence the rental structure of any type of residential rental complex,
commanding more in rents to offset the extra maintenance activities
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Source: https://cesource.com/courses/Property_Management_9e.pdf
Residential Market Analysis
Prepared by: Kristine May N. Decena

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 Market surveys of comparable residential properties
and economic conditions in the immediate area are
absolutely essential for two reasons:

1. To establish a rental schedule for the apartments

or single family dwellings
2. To gauge the property’s viability as an income-
producing investment

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 Establishing a Rental
Schedule
The residential managers must analyze the rental
values of comparable properties in the area.
Many managers will shop other properties to see
the space that is being rented, the amenities
offered, and at what value. Reading the
competitor’s advertising is another way to learn
of competing market values

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 Establishing a Rental
Schedule
This comparative analysis measures and records data
such as size, location, amenities and rental structures
for buildings similar to the subject property (Figure
1). After the relative market value of the space is
determined, a base rental can be established for each
type of apartment. This base rate should be adjusted
to reflect preferential location, view, exposure, size,
or design. An increase in the base rate might also be
justified if the occupancy level in the neighborhood
is 95% or better, indicating a heavy consumer
demand. 14
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 Figure 1: Comparative Analysis

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 Establishing a Rental
Schedule
Employment and income data collected for the
neighborhood should serve as a touchstone for
setting the residential rental schedule. Because of
rising costs, the increasing number of working
couples, and the trend toward smaller families, may
persons are willing to spend a higher percentage of
their income on better living accommodation.

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Source: https://cesource.com/courses/Property_Management_9e.pdf
 Gauging Profitability
Gathering demographic information can assist the
manager in making recommendation to increase
profitability. However, it is not sufficient for the
manager merely to be aware of the total number
of persons in an area; he/she must also know the
size of the average family to determine the type
and number of housing units needed.

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Source: https://cesource.com/courses/Property_Management_9e.pdf
 Gauging Profitability
The manager must analyze current population shifts
in terms of land use and income level. Such shifts
may be caused by increases population mobility,
unsettled economic conditions, changes in family
size and structure, and extended longevity because
of improved health care.
The implications for the future of neighborhood and for the manager’s
property are quite different between an increase that stems from influx
of middle-income families into an expanding community and one that
is due to overcrowding in low-rent buildings.
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Source: https://cesource.com/courses/Property_Management_9e.pdf
Marketing Availability of Space
Prepared by: Kristine May N. Decena

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 Signs and Curb
Appeal
Proper signage and maintaining curb appeal are
essential because many rental prospects come to
the property as a result of searching the
neighborhood. Curb appeal, the impression
created when the building is first seen from the
street, helps attract good tenants and maintain a
positive attitude among the current residents.

The basis for “curb appeal” is that one never has a

second chance for a good first impression.

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 Price Adjustment
Sometimes market conditions may preclude the rental of
some units. An alert leasing manager quickly realizes
which units are renting rapidly or are not moving fast
enough and either adjusts the price or changes the
method of advertising and display.

An optimal price structure should assure the manager of a

95% occupancy level for all units. If each type of
apartment is priced correctly, the different units will have
the same rate of demand; that is, demand for studio, one-
bedroom, and two- bedroom units will be equal. If a single
house stands empty for any period, the manager will have
to discuss with the owner reasons for the vacancy and
solutions, which may include lowering the rent.
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 Show List
Compiling a show list is one effective method to establish
a reasonable rental schedule. This list should itemize no
more than three apartments of each type and size in the
building that are available for inspection by prospects.
When one unit is rented, it should be replaced by another
vacant apartment that is ready for rental.

The show list and traffic count should be reviewed weekly

to determine which units are not moving. The manager
should then inspect these units personally to find out why
they are hard to rent. All curable flaws (worn carpeting,
obsolete fixtures) should be corrected.

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Show List
■ The show list can be used as a control guide for the
marketing program, and the traffic count of showings
will serve as a source of feedback on its success or
failure.
■ The features of particular units can be itemized on
the short and easy-to- read list so the manager can do a
better and more informed selling job.
■ The maintenance staff can more easily maintain 12
to 15 units on the list in top-notch condition rather than
trying to maintain all building vacancies.
■ The limited number of show units suggests that
space is at a premium and that a decision must be made
quickly.
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 Advertising and
Display
The building may still struggle with a high vacancy
rate if prospective tenants are not actively attracted to
view the premises. The manager must develop,
implement, and monitor an advertising campaign as
discussed in Chapter 4. There are specific types of
advertising that are more appropriate when
advertising residential property. Regardless of the
type of advertising used, the manager should
implement a tracking program to monitor the
effectiveness of each type of marketing.

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Source: https://cesource.com/courses/Property_Management_9e.pdf
 Advertising and
Display
The building may still struggle with a high vacancy
rate if prospective tenants are not actively attracted to
view the premises. The manager must develop,
implement, and monitor an advertising campaign as
discussed. There are specific types of advertising that
are more appropriate when advertising residential
property. Regardless of the type of advertising used,
the manager should implement a tracking program to
monitor the effectiveness of each type of marketing.

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Source: https://cesource.com/courses/Property_Management_9e.pdf
 Types of Advertising and Display
Classified Ads. The major vehicle for renting apartments
and single-family homes is newspaper classified
advertising. The classified advertisement should address
the needs of the prospective tenant. For example, if three-
bedroom apartments are difficult to rent, an ad might
appeal to a broader segment of the market if it is
promoted as a two-bedroom apartment with a den. It is
time-efficient to include in the classified ad the amount of
rent, size of the unit, address of the property, date
available and the phone number of the manager. A typical
small classified ad might read as does the one on the right.

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Source: https://cesource.com/courses/Property_Management_9e.pdf
 Types of Advertising and
Display
Websites. More prospective tenants are using the
internet to find available units. In particular, job
transferees often begin their apartment search on the
internet long before they visit the new city. At the very
least, good websites should include pictures of the
property, floor plans of typical units, and current
availability to find different style and price range
apartments. Many also include one-minute videos and
a listing of amenities of the property. You can often
also click on “area maps” for an idea of where the
property is located..

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Source: https://cesource.com/courses/Property_Management_9e.pdf
 Types of Advertising and
Display
Apartment Journals. In some parts of the country,
prospective tenants consult local apartment journals
as often as they read the newspaper. These journals,
published monthly and generally distributed free of
charge, are available at retail and convenience store
display stands or at sidewalk newspaper display-type
boxes. Apartment journals list most apartments in the
local area where they are published. A full-page ad in
one of these publications may cost less than a
weekend newspaper display ad.

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 Federal and state
laws
In addition to learning how to write an attractive and
effective ad, managers must also follow certain state
and federal laws. Many real estate regulatory bodies
require that the name of the licensee or firm be in the
ad.

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 Subdivision and Condominium Buyers’ Protective
Decree (also known as Presidential Decree No. 957)
SECTION 19. Advertisements
Advertisements that may be made by the owner or developer
through newspaper, radio, television, leaflets, circulars or any other
form about the subdivision or the condominium or its operations or
activities must reflect the real facts and must be presented in such
manner that will not tend to mislead or deceive the public.
The owner or developer shall be answerable and liable for the facilities, improvements,
infrastructures or other forms of development represented or promised in brochures,
advertisements and other sales propaganda disseminated by the owner or developer or
his agents and the same shall form part of the sales warranties enforceable against said
owner or developer, jointly and severally.
Failure to comply with these warranties shall also be punishable in accordance with the
penalties provided for in this Decree.
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Source: https://www.lamudi.com.ph/journal/government-regulations-pertaining-to-real-estate-marketing-and-sales/
 Rental Centers
A rental center is a special leasing area located in a real
estate development typically found in complexes larger
than 100 units. It includes a display area, furnished
models, and an area that can be used to close lease
transactions.

A center can shorten the rent-up time during the initial stage of a project’s
development. After rent-up is complete, the manager must decide whether
there is a continued need for the center to sustain occupancy levels through
replacement rentals. If, typically, only 50 apartments are vacant in any one
year, a model apartment would serve the merchandising goal more cost-
effectively. However, if 200 apartments must be rented each year, the need
for a rental center would be indicated.
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 Leasing Agent
Managers of larger properties have come to recognize
the benefits of using a leasing agent specialist. Good
leasing agents are often compensated on the number of
units rented, so they quickly learn how to present
themselves and their properties most effectively. They
are experts in learning the prospect’s basic needs and
desires, and how to handle and overcome objections in
order to rent the apartment

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