Compensation for property managers is typically based on what?

Compensation for property managers is often based on effective gross income. Effective gross income refers to the total income generated from a property after accounting for vacancies and credit losses, providing a more accurate representation of the income that property managers can expect to manage and maximize. This figure reflects the actual income available for management activities, allowing property managers to align their compensation with the performance of the property.

Using effective gross income as a basis for compensation encourages property managers to focus on maximizing occupancy and collecting rent, ultimately benefiting the property owners as well. This approach also ties the manager's compensation to the property's operating efficiency and income potential, making it a standard practice in property management.