Management of Family Owned Real Estate Properties in London - Dissertation Example

How Property Agents have Reduced the Complexities Involved in the Management of Family Owned Real E Properties in London Table of Contents Chapter One 2 1.1 Introduction 2 1.2 Background of the study 3 1.3 Statement of the problem 4 1.4 Research objective 4 1.5 Research objectives 5 1.6 Research questions 5 1.7 Scope of the study 5 Chapter Two 6 Literature review 6 2.1 Functions of property agents 6 2.2. Complexities/ difficulties encountered in managing family owned real estate properties 7 2.2 Impact of property agents in managing family owned real estate properties 8 Chapter Three 9 3.0 Research methodology 9 3.1 Research methods 9 3.2 The investigate research methods 10 3.3 Target population 10 3.4 Sampling method 11 3.5 Data collection 11 References 11 OLeary, Z. ( 2009). The Essential Guide to Doing Your Research Project. SAGE Publications Ltd 12 Chapter One 1.1 Introduction In the writings by Sorenson et al. (2013), he started off by describing a business entity as an institution, corporate or commercial entity that is established under the guidelines of a country’s commercial law, which allows it to engage in a legal business activity, which mostly include the sale of goods and/ or provision of valuable services. The various types of business entities include a limited liability company, a sole trader business, partnership, and corporations. In the United Kingdom, the most common types of businesses are limited companies, public limited companies, and sole trader business. Numerous factors influence the classification of a business entity and some these factors include the scope of the business, the nature of ownership, structure of management, the number of owners, and even the amount of share capital. Under the aspect of ownership, there exist two types of classifications for business entities, which include the family-owned businesses and partners’ owned business. Family owned businesses are entities that are purely owned by members of one family and the top management is normally comprised of the family members who engage each other in running the day-to-day affairs of the company. In the studies conducted by Casillas et al. (2007) they stated that family owned businesses start when two members of a company say, a husband and a wife create a partnership venture or two siblings team up to start their own business, of which they later drawing in other family members to assist them in the management of the business. Example of some the most popular family owned businesses in the UK include the Daily Mail and General Trust, Associated British Foods, Laing O’Rourke, Swire Group, Arnold Clark Automobiles, and Bestway Group. 1.2 Background of the study This particular paper will focus on family owned real estate businesses that are located within the City of London. Among the most prominent real estate companies that are family owned, include the Grosvenor Estate, the Cadogan Estate, the Howard de Walden Estate, and the Portman Estate. According to Darlow (2013), these companies have a big shareholding in the London property market mostly because their founders acquired land in the earlier centuries when land was low in value and the families have held on to the land till present times when they are under development. However, it is important to note that besides these prominent families there are other small family owned real estate companies that also own one or two real estate within the London city. Whilst focusing on family owned real estate companies in London, the research study will focus on the aspect of management in these companies in particular how the collaborations of property agents work with these family owned businesses. A property agent or a real estate agent is described as an individual that has been approved and issued with a license that enables him to represent either a landowner or a land buyer in a real estate transaction and out of the deal, he is able to earn a brokerage commission (Mccrea, 2005). Besides the brokerage services, property agents also act as agents for the owners of residential and commercial properties and therefore, they act on their behalf while dealing with tenants of the aforementioned properties. In this regard, the property agents are tasked with rental collection, handling of customers’ dispute, and maintenance of the rental property on behalf of the client. 1.3 Statement of the problem Fritz (1997) conducted management studies, which explored some of the complexities/ difficulties that are normally encountered in the management of family owned business and he concluded that the management of family owned businesses is quite different from other types of businesses and even the difficulties experienced are unique and rarely experienced in other types of business. In the studies conducted by Fritz (1997), he established that there are five common complexities that are normally experienced in the management of family owned business including real estate business. These complexities include family feuding that arises due to failure of the family members to separate their personal lives and business. The other complexities include nepotism, lack of a proper succession plan, inclusion of emotions in the running of the business, and the loss of crucial non-family employees who may opt to leave the company because of family conflicts and restricted growth opportunities since certain senior positions are preserved for the family members. It is because of these common complexities that family members of real estate businesses in London opt to use the services of property agents in order to avoid encountering these common complexities (Poutziouris et al 2006). 1.4 Research objective To establish how property agents have reduced the complexities involved in the management of family-owned real estate properties in London 1.5 Research objectives a) To establish some of the complexities or difficulties that are normally experienced in the management of family owned real estate properties in London b) To establish the services that are offered by property agent firms c) To establish how the services offered by property agents help in reducing the complexities/ difficulties that are normally encountered in the management of family owned real estate properties in London d) To establish some of the challenges that property agents experience while managing family owned real estate businesses in London. 1.6 Research questions a) What are some of the complexities involved in the management of family owned real estate properties in London? b) What are some of the services offered by property agents? c) How does the services offered by real estate agents help in reducing the complexities that are involved in the management of family owned real estate properties in London? d) What are the challenges experienced in managing family owned real estate businesses in London via property agents? 1.7 Scope of the study The study will entail the use of both secondary and primary research methods, which means that secondary sources such as scholarly books, articles and even internet sources will be employed in the data collection process. The researcher will apply the primary research method by conducting a field research whereby he will make a formal visit to a few selected property agent offices that are located within the London area. Because of the anonymity issue or preference to privacy, it will be quite impossible for the researcher to get hold of members of families that own real estates in London and have contracted a property agent to manage the properties. Therefore, the researcher will rely only on the feedback provided by the property agents, who feedback will sufficiently provide all answers to the research questions. The researcher will use questionnaire and interviews to collect data. The use of both tools is important since questionnaire enable the collection of data that can be easily compared while interview questions will enable the researcher to get more insights on certain crucial questions. Chapter Two Literature review 2.1 Functions of property agents Property agents are important individuals in the society and without them the there would be chaos in the family owned real estates in London. Zeller (2011) stated that property agents perform the following duties that ensure successful management of property: Rent collection The property agents ensure that individuals living the houses pay their rent monthly and strict action taken against those who fail to pay the rent. The owner of the premises is saved the trouble of knocking on the client’s doors to ask for rent since the property agents have a role to bank all the money paid by the customers to the owner. Handling tenant’s disputes The property agents handle tenants’ disputes by listening to them and taking measures to ensure that they are comfortable in their premises. The property agents’ act as intermediaries between tenants and the owner as they report complains made by the tenants and report to the owner before making any changes. Maintenance Property agents ensure that the environment around the estate is clean by employing individuals to clean the neighborhood. They also employ technicians to repair broken equipments and furniture in the premises of their tenants ensuring that everything is working as required. 2.2. Complexities/ difficulties encountered in managing family owned real estate properties Managing family owned real estate properties is a difficult business and the following challenges are encountered; Possibility of poor management There is a possibility of poor management where the role of the property agent is given to an individual who has no or little knowledge and skills on how to manage the real estate properties. This happens when the child of the real estate owner is given the mandate to manage the premises since they are owned by the family (Carsrud and Brännback, 2012). Family feuds There is difficulty in managing the family owned real estate properties where there is family wrangles based on succession of the properties after the death of the current owner. This is difficult because the family members interfere with the functions of the property agents by allocating themselves duties and responsibilities that they are not qualified to perform (Poutziouris et al. 2006). 2.2 Impact of property agents in managing family owned real estate properties Property agents have a positive impact in managing family owned real estate properties because they ensure that the neighborhood is a safe environment for individuals to live in. The property agents make it easy for the owners to earn their revenues since they collect rent from tenants and handle all the critical matters in the real estate properties. By maintaining the facilities at the family owned real estate properties, the property agents attract many people to rent houses around the area since it is a clean and secure neighborhood. Property agents ensure a peaceful environment among tenants by handling disputes that occur frequently in the real estate properties hence enabling them to live harmoniously as a community. Chapter Three 3.0 Research methodology This third chapter is dedicated to highlighting and discussing some of the research methods as well as the design that will be deployed in order to answer the research questions and meet the main objective of this study The main aim of this research project just as a recap is to establish how property agents have reduced the complexities involved in the management of family owned real estate properties in London. 3.1 Research methods This present research study will apply the investigative research methods because there are other available previous research studies that focused on a rather similar objective as this present research study i.e. impact of property agents on managing family owned real estate properties (Kothari, 2004). An alternative research method that could have been applied was the exploratory research method but according to Kothari (2004), this method is only suited for research studies where there are no or very little previous studies that can be used for reference purposes 3.2 The investigate research methods There are various types of investigative research methods that can be employed, and the most common are; experiments, case studies, survey, theoretical perspectives, cross-sectional and longitudinal studies (OLeary, 2009). However, the survey method will be critically analyzed since it has been applied in this particular research project. The researcher will collect raw data from participants using questionnaires and by asking interview questions. The purpose of the survey in this particular project was to establish and analyze the views of a few selected property agents who are located within London to find out their opinion about how the services they offer reduce the complexities that are normally experience when family members manage their own real estate properties. 3.3 Target population The researcher will simply aim at issuing questionnaires and asking interview questions to senior officials of at least five property agent firms that are located within London. The researcher will target two senior managers in each of these firms and this brings the total of target population to ten. 3.4 Sampling method The researcher will use purposive and snowball sampling to arrive at a good sample. The respondents will be purposively selected so that respondents who are known to have key information will be selected. 3.5 Data collection The data collection process was scheduled to run for twenty-one days upon when the managers at the selected property agent firms that are located in London, were issued with questionnaires, which they filled out diligently. References Carsrud, A. L., and Brännback, M. (2012). Understanding family businesses undiscovered approaches, unique perspectives, and neglected topics. New York, NY, Springer. Casillas, J. C., Acedo, F. J., & Moreno, A. M. (2007). International entrepreneurship in family businesses. Cheltenham, Elgar Publisher Darlow, C. (2013). The London Property Market in AD 2000. London; Routledge Fritz, R. (1997). Wars of succession: the blessings, curses and lessons that family-owned firms offer anyone in business. Santa Monica, Ca, Merritt Pub. Kothari, C. (2004). Research Methodology: Methods and Techniques. New Delhi, India: New Age International Mccrea, B. (2005). The real estate agents business planner: practical strategies for maximizing your success. New York, AMACOM. OLeary, Z. ( 2009). The Essential Guide to Doing Your Research Project. SAGE Publications Ltd Poutziouris, P., Smyrnios, K., & Klein, S. (2006). Handbook of research on family business. Cheltenham, UK, Edward Elgar Sorenson, R. Brigham, K. and Lumpkin, G. T. G. T. (2013). The landscape of family business Cheltenham; Edward Elgar Zeller, D. (2011). Success as a Real Estate Agent For Dummies. Hoboken, John Wiley & Sons, Inc. Read More