SIC 6513 Operators of Apartment Buildings

SIC 6513

This category includes establishments primarily engaged in the operation of apartment buildings. Apartment buildings are defined as those containing five or more housing units.

NAICS CODE(S)

531110

Lessors of Residential Buildings and Dwellings

In 2004 there were 16.2 million apartments in the United States. Operators of apartment buildings are responsible for a valuable asset: income-producing real estate. Their goal is to preserve the asset and increase its value over time through proper management techniques, while generating current income. It is a common misconception that operators of apartment buildings merely collect rent, show apartments, and sign leases. In reality, the operation of an apartment building is far more complex. This is why many owners of apartment buildings contract with a professional property management firm to oversee management of their property and maximize its value.

Property managers act as the agent of the owner of the property and have a wide variety of responsibilities. They market vacant apartments to prospective tenants and establish rental rates in accordance with local conditions. They negotiate and prepare leases, collect rents, hire maintenance personnel, and handle the bookkeeping (taxes, mortgages, insurance) for the property. The property manager must also prepare reports for the owner concerning all aspects of the apartment property. Effective management of apartment buildings, from small buildings to very large apartment complexes, thus requires expertise in business management, real estate, finance, and accounting.

Early Apartment Operators

The demand for effective management of apartment buildings began in the late nineteenth century, in large measure because of two inventions that changed the face of urban real estate. Creation of the steel frame building and the electric elevator made possible the advance of high rise apartment and office buildings, changing the urban landscape forever. Construction of multi-family apartment buildings certainly contributed to this transformation.

The Great Depression of the 1930s had a profound effect on the evolving property management profession. Numerous failures and foreclosures during this era placed much of the nation's real estate in the hands of institutions such as trust companies, insurance companies, and banks. A large number of...