EXHIBIT 10.3

                          PROPERTY MANAGEMENT AGREEMENT

         This Agreement (the "Agreement") is made as of December 12, 2000 by and
between CRIT-VA,  Inc., a Virginia  corporation  (the "Owner"),  and Cornerstone
Realty Income Trust, Inc., a Virginia corporation (the "Manager").

                                    RECITALS:

         Owner is the owner of the  apartment  communities  listed on Schedule A
hereto  (collectively,  the "Properties").  Owner has selected Manager to manage
the Properties on the terms and conditions set forth in this Agreement.

         NOW  THEREFORE,  for  good  and  valuable  consideration,  receipt  and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:

         1. Designation of Property Manager. Owner hereby engages Manager as the
sole and exclusive manager to rent, manage and operate the Properties,  upon the
conditions and for the term and compensation  herein set forth. All or a portion
of the services being performed by Manager may be contracted or subcontracted to
another  property  management  company,  provided  that such  company  agrees in
writing to be bound by the terms of this Agreement.

         2. Term of Agreement. This Agreement shall be valid for an initial term
of two (2) years.  In the event  Owner sells its  interest  in a Property,  this
Agreement  will  terminate as to such Property upon the date of such sale.  This
Agreement shall renew  automatically  for successive  terms of two (2) years, on
the same terms and  conditions  as set forth in this  Agreement,  unless a party
elects not to renew this  Agreement by  delivering  written  notice to the other
party at least sixty (60) calendar days before the end of any two-year term.

         3.  Acceptance of Engagement.  Manager hereby accepts its engagement as
the manager of the Properties and agrees to perform all  services  necessary for
the care,  protection,  maintenance and  operation  of  the  Properties. Without
limiting the scope of the foregoing:

             (a)  Manager  shall  collect  all rents and other  income  from the
Properties,  provided that nothing herein contained shall constitute a guarantee
by Manager of the payment of rent by tenants.

             (b) Manager shall purchase, at the expense of Owner, all equipment,
tools,   appliances,   materials,   supplies  and  uniforms  necessary  for  the
maintenance or operation of the Properties.

             (c)  Manager  shall  contract  on behalf of Owner for  water,  gas,
electricity  and other services  necessary for the operation and  maintenance of
the Properties.

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             (d)  Manager  shall  advertise  for  the  rental  of  units  at the
Properties, the cost of which shall be paid by Owner.

             (e) Manager shall use all reasonable efforts to keep the Properties
rented by procuring  tenants for the Properties and negotiating and executing on
behalf of Owner all leases for units at the Properties.

             (f) Manager shall hire, evaluate, supervise,  discharge and pay all
employees or  contractors  necessary  for the  management  and  operation of the
Properties.  Owner agrees that all wages and compensation (and federal and state
unemployment  insurance  and  other  required  charges)  with  respect  to  such
employees and contractors shall be paid from Owner's funds.

             (g) Manager shall prepare and file all returns and other  documents
(other than promissory  notes,  mortgages,  deeds of trust or other documents or
instruments  which would  encumber the  Properties)  required  under the Federal
Insurance Contributions Act and the Federal Unemployment Tax Act, or any similar
federal or state legislation.  Manager also shall file returns and reports,  and
pay from  Owner's  funds,  all sums as may be required  from time to time by the
states or localities in which the Properties are located.

             (h) Manager shall  maintain  accurate and complete books of account
with entries for all receipts and expenditures,  and such books of account shall
be the  property  of Owner and shall at all times be open to the  inspection  of
Owner, or any of its employees or duly authorized agents.

             (i) Manager shall deliver to Owner of all lenders'  annual property
inspection  letters regarding repairs necessary to avoid mortgage loan defaults.
Manager  shall  deliver  a  detailed  monthly  statement  of  all  receipts  and
disbursements  on or before the 20th day of each month for the preceding  month.
Such  statement  shall show the status of  collections,  shall be  supported  by
cancelled  checks,  vouchers,   duplicate  invoices  and  similar  documentation
covering all items of income and expense,  and shall be kept in Manager's office
and shall be available for inspection by Owner's  representatives  at all times.
Manager also shall deliver a monthly operating  statement showing the income and
expense  for the  month,  for the  year-to-date  and for the  same  month of the
preceding  year.  The cost of performing the  accounting  functions  outlined in
paragraph  (h) and this  paragraph  (i) shall be paid by Owner  pursuant  to the
terms of this Agreement.

             (j) Manager  shall  deliver to Owner  annual  reports  containing a
composite financial report of the monthly statements provided in accordance with
paragraph  (i),  plus  a  statement  by  Manager  as to  the  operations  of the
Properties during the previous year and recommendations, if any, as to necessary
policy  changes or  improvements  for the  forthcoming  year,  accompanied by an
estimated budget for such items.

             (k) Manager shall deliver to Owner from time to time,  and at least
semi-annually, a tentative budget of expenses.

             (l) Manager shall deliver to Owner from time to time,  and at least
annually,  the following schedules with respect to the Properties:  (1) forecast
of rental and occupancy changes;

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(2)  review of lease  negotiations;  (3)  annual  analysis  of  leases;  and (4)
schedule of capital improvements and method of financing such improvements.

             (m) Manager shall deliver to Owner,  on a regular basis,  all forms
necessary  to  operate  and lease  the  Properties  and  manage  the  personnel,
including but not limited to form leases, contracts and management policies.

             (n)  During  the  initial  term of this  Agreement,  Manager  shall
supervise the transition  from the former owners of the Properties and shall, to
the extent  necessary,  implement  new  management  systems  with respect to the
operation of the Properties.

         4.  Deposits of Rent and Other  Income.  All sums  received from rents,
tenant security deposits or other deposits on units at the Properties,  deposits
on keys and other income from the Properties, shall be deposited as collected by
Manager  to the  credit of Owner in such bank or banks as may be  designated  by
Owner from time to time.  Such funds shall be disbursed only in accordance  with
the terms of each particular  lease and any applicable  federal,  state or local
laws, regulations or ordinances.

         5. Insurance.  Owner shall place all insurance policies with respect to
the Properties and their  operation.  Manager shall be included as an insured in
the  policies  covering  general   liability,   public  liability  and  workers'
compensation  insurance.  In the event  Manager is  authorized by Owner to place
insurance policies,  the companies,  the general agents, the amounts of coverage
and the risks insured shall be subject to the approval of Owner.

         6.  Indemnification.  Owner hereby agrees to indemnify Manager against,
and to  hold  Manager  harmless  from,  any  loss,  cost or  expense  (including
reasonable investigative expenses and legal fees), judgment,  award, settlement,
fine,  penalty and liability of any kind incurred by or asserted against Manager
by reason of, or in connection  with, the engagement of Manager  hereunder,  the
performance  by Manager of the services  described  herein or the  occurrence or
existence  of any event or  circumstance  which  results  or is  alleged to have
resulted in any death or injury to any person, any destruction of, or damage to,
any of the Properties,  or any suit, action or proceeding  (whether  threatened,
initiated or completed) arising from any of the foregoing.  Notwithstanding  the
preceding,  however,  no such  indemnification  of  Manager  shall be made,  and
Manager shall indemnify  Owner against,  and shall hold Owner harmless from, any
loss  that  a  court  of  competent  jurisdiction  shall  determine,   by  final
adjudication,  to have resulted  from willful  misconduct,  gross  negligence or
fraud by or on the part of Manager.

         7. Compensation of Manager for Managing the Properties. Owner shall pay
to Manager a "Property Management Fee" for management of the Properties pursuant
to this  Agreement in an amount equal to five percent (5%) of the monthly  gross
revenues  from the  Properties.  The  Property  Management  Fee shall be paid to
Manager  on or before  the 10th day of each  month  and shall be based  upon the
income from the  Properties  received by Owner (for such month) by such date. If
additional  income from the Properties is received by Owner after such date, the
sum due to Manager  with  respect  to such  additional  income  shall be paid to
Manager when Manager is paid its fees for the next succeeding month.

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         8.  Reimbursement  of  Expenses.  Owner  shall  reimburse  Manager  for
Manager's expenses, including salaries and related overhead expenses, associated
with bookkeeping,  accounting and financial reporting services pertaining to the
Properties.

         9. Reserves for Capital Items.  Owner  acknowledges  that the budget of
expenses  prepared  by Manager,  pursuant to  paragraph  3(k),  shall  contain a
category  labeled  "Reserve for Capital  Items." Owner agrees to place rents and
other income in a bank account,  or to permit Manager to transfer  Owner's funds
to such  account,  in  sufficient  amounts to meet the needs  reflected  in such
budget.  Such  funds  shall be  placed  in the  account  on a  monthly  basis as
reflected in the budget.

         10. Cash Flow. Owner  acknowledges that the budget of expenses prepared
by Manager,  pursuant to paragraph 3(k),  shall contain a category labeled "Cash
Flow." Owner agrees, in the event that the budgeted cash flow for the Properties
is negative in any month covered by the budget,  to place  sufficient funds in a
bank account, or to permit Manager to transfer Owner's funds to such account, to
correct  the  budgeted  operating  deficit.  Such funds  shall be placed in such
account at least forty-five (45) calendar days before the budgeted deficit is to
occur.

         11. Power of Attorney.  Owner hereby  makes,  constitutes  and appoints
Manager as Owner's true and lawful attorney-in-fact,  for Owner and in its name,
place and stead and for its use and benefit,  to sign,  acknowledge and file all
documents and agreements (other than promissory notes, mortgages, deeds of trust
or other documents or instruments which would encumber the Properties) necessary
to perform or effect the duties and  obligations  of Manager  under the terms of
this  Agreement.  The foregoing power of attorney is a special power of attorney
coupled with an interest, and may only be terminated by canceling this Agreement
as provided herein.

         12.  Relationship of Parties.  The parties agree and  acknowledge  that
Manager is, and shall operate as, an independent contractor in performing duties
and services under this Agreement,  and shall not be deemed an employee or agent
of Owner.

         13.   Entire   Agreement.   This   Agreement   represents   the  entire
understanding  between  the  parties  hereto  with  regard  to the  transactions
described herein and may only be amended by a written  instrument  signed by the
party against whom enforcement is sought.

         14.  Governing  Law.  This  Agreement  shall be construed in accordance
with,  and be governed by, the laws of the  Commonwealth  of  Virginia,  without
regard to any rules or principles thereof regarding choice or conflicts of laws.



                          (next page is signature page)


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WITNESS the following signatures:


OWNER:                              CRIT-VA, Inc.
                                    a Virginia corporation

                                    By:  /s/ Stanley J. Olander, Jr.
                                         ---------------------------
                                         Stanley J. Olander, Jr.,
                                         Vice President

MANAGER:                            Cornerstone Realty Income Trust, Inc.
                                    a Virginia corporation


                                    By:  /s/ Stanley J. Olander, Jr.
                                         ---------------------------
                                         Stanley J. Olander, Jr.,
                                         Executive Vice President



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                                   SCHEDULE A

                              (List of Properties)

The Properties consist of those real properties,  together with all improvements
thereon, that are located at the following addresses:

Arbor Trace Apartments
624 Suhtai Court
Virginia Beach, VA  23451

Ashley Park Apartments
6901 Marlowe Road
Richmond, VA  23225

The Gables Apartments
4008 Gaelic Lane
Glen Allen, VA  23060

The Mayflower Apartments
205-34th Street
Virginia Beach, VA  23451

Trolley Square Apartments
104 West Franklin Street
Richmond, VA  23220

Trophy Chase Apartments
2407 Peyton Drive
Charlottesville, VA  22901



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