Professional management refers to third-party property management provided by licensed management firms. Contrasts with self-management by the owner.
Professional management firms handle operations, compliance, tenant relations, and reporting in exchange for a management fee (typically 4-8% of collected rent). Larger firms offer institutional-grade systems; smaller firms offer more personalized service.
LA multifamily buyers typically underwrite with professional management fees included, regardless of whether the seller is self-managed. This adds 4-6% of EGI to the expense line and reduces underwritten NOI. Sellers preparing for market should either include professional management costs in their operating statement or expect buyers to adjust.
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