A brief history of property management will show you how a caretaker became a professional property manager. You may be surprised, but this journey is quite fascinating. People have owned properties for centuries. So, you may wonder, who owned these properties in ancient Greece or Rome? Can we go back further into history?
The garden and the serpent
At the beginning of time, there was a garden. Should we dare say that the couple in charge of that garden were the original property managers? Perhaps. The couple, however, did a pretty lousy job. They may make excuses blaming the devious serpent, but… The truth of the matter is – they weren’t up to the task. So, it became necessary to make rules stricter and more precise and the work more demanding.
Fast forward to ancient Greece and the Roman Empire
The city owned most of the land in ancient Greece. City managers were the first property managers in charge of rent collection and managerial duties.
By the time of the establishment of the Roman Empire, the system had evolved into a more intricate design. There were laws regulating purchasing and selling the land owned by private entities. Also, there were men trained in the law who were in charge of handling such affairs. This market is the root of professional property management. However, it was still pretty modest compared to the systems we have in place today.
The Roman Empire grew and expanded quickly, which meant that a lot of land throughout the world that was known then belonged to the Romans. That is when the foundation for the feudal system established during the Middle Ages was laid.
The Medieval feudal system
The king owned all the land. He was the almighty ruler who had the right to authorize any land rights transfers and land seizures. The king divided the land and gave it to the lords who served him. The lords then distributed their land to vassals, who were the property managers of the time. They did all the property management work for their lords.
Of course, their managerial duties looked much different from what they are today. Vassals were in charge of overseeing grain and crop production, livestock, and goods collection so it would be sold in the market. The lords would receive all the profits, which would then go to the king, who, after all, made it all possible.
The king, as human nature dictates, always wanted more. So, to acquire more land, they typically engaged in a war. Some kings did win more land, and others lost it. Depending on who the victors were, the property managers changed as well.
Then the Middle Class rose
Every society tends to evolve. The feudal system worked fine for a while, but a new class of businessmen emerged when the society became too complex for the feudal system to handle it well. Guilds were established – associations of craftsmen or merchants. They often had considerable power. They introduced the concept of privately owned property – the property that the king had no control over.
The Industrial Revolution changed everything
Things were pretty simple before. There were the rich; there were the poor. Then the middle class emerged, and things got a tiny bit more complex. But then, the Industrial Revolution caused a considerable shift in the distribution of fortune within a society. It is thanks to this revolution that the actual property managers appeared. And their role was (and is) vital!
Where would workers live?
Factories started popping up everywhere, and workers needed to live close by. As it usually happens, the brightest businessmen knew how to collect the surplus of capital as factories produced goods at an incredible pace and generated wealth through that production and supply chains. Since the revolution caused increased housing needs, these clever businessmen invested surplus capital into real estate. They began building new residential areas for the growing workforce.
It quickly became apparent that they would need considerable time to manage those new properties. So, a new need developed: a need for professional property managers who would screen tenants, collect rent, handle repairs, etc.
The Industrial Revolution brought a massive wave of immigrants to the US. So, it seemed that opportunities in the real estate sector were limitless. There was so much land suitable for new construction and so much need for new housing that the expansion was fast and constant.
The rural flight and postwar period
At the turn of the 20th century, the migration of people from rural to urban areas started to grow. More and more people lived in apartments in the growing cities than single-family homes on the farms. Then, after the First World War, the need for housing rentals grew even more. It caused the profession of a property manager to evolve further.
Although there has been a shift in this migration over the last few years, especially during the pandemic when many families have decided to move to smaller towns and rural areas, the rural flight is still a thing. So, investment in rental properties and apartment buildings in big cities is still a profitable prospect.
The job of a property manager expanded so much that the banks started relying on them to handle the issues caused by home foreclosures during the Great Depression.
After the World War II
To maximize the profit potential from the rental industry, property managers started developing tools for market research and analysis. After the Second World War and the Great Depression, the US began to recover, and Americans started purchasing investment properties again. That is when these tools came in handy.
Later, during the 1960s and 1970s, the need for property management services grew even more prominent. The population started to move around more freely, and somebody had to manage all those properties. Then, new regulations were introduced, paired with the economic volatility, so managers had to improve their skill set. Besides property management, they also had to become money managers. They had to find ways to lower their property management expenses while increasing profits for the rental property owner.
A brief history of property management – delivered
We have literally sprinted through this brief history of property management, but what other way is there when you have a few millennia to go over? Property management has always been there, it only had different shapes, and the scope of responsibilities differed. As time went by, the job description evolved and encompassed more and more duties. Moreover, the role of a property manager demanded new skills and more knowledge. Today, professional property management services play a vital role in rental property management and serve as a catalyst for income generation for property owners.