Property management is a growing field, and many people are looking for ways they can be a part of it.
To become a property manager, most states require a real estate license as well as a high school diploma. As the properties get higher in value, property owners expect more education and experience. Some owners even expect bachelor’s degrees in business, accounting, real estate, or finance, while others don’t expect any education at all.
Let’s go through some simple steps that you need to take to manage the property.
The Three Steps to Managing Properties
Knowing Your State
One of the most important things to do is look into what your specific state requirements are. Each state has different laws when it comes to real estate and property management, so look into it. Most states require you to have a real estate license to operate as a property manager, so look at our blog post about How to Become a Real Estate Agent in Your State. That way you can know for sure what you are getting into.
Getting a real estate license is a great idea, even if you are not required to have it. It will put you ahead of the curve and land you better-paying jobs.
There are also a lot of great reasons to be a real estate agent as well as a property manager at the same time, which we will dive into later.
If your state requires a real estate license in order to manage a property, then you need to complete your required prelicensing. Different states have different education requirements for becoming a property manager or even getting your real estate license. Generally, you are going to need to take a certain number of prelicensing hours and then pass your state exam. This can be pretty complicated, which is why offer help.
We do happen to have a course that is designed specifically to help people pass the real estate exam. It is fairly inexpensive and will help you prepare to pass on your next attempt.
Finding a Property Management Job
When looking for a property management job, it is important to put yourself out there. Networking is worth so much in the real estate business, so do some work in developing your social media profiles, specifically LinkedIn.
A lot of landlords are looking to relieve some of the burdens that come with owning property. You can fill that need. If you are currently renting, ask your landlord if he is looking for anybody. Ask him if he knows anybody who is looking for somebody.
If you end up becoming a real estate agent, then you have a brokerage that you can use as a resource. You can ask the broker himself as well as the other agents if they know anybody looking for a property manager.
Getting your feelers out is really important. Like any other job, you can find job postings online if you are looking in the right place.
What You Need to Be a Property Manager
You don’t need much to be a property manager. In a lot of states, you don’t need anything to become a property manager.
In most states though, you do need a real estate license and to be registered with a brokerage in order to manage a property. Getting a real estate license can be difficult, but it opens up a lot more options than just managing the property.
The two main things that are needed are a real estate license and connections to property owners. Once you have those two things you are ready to get started. The great thing about being a real estate agent and a property manager is that those things come rather easily.
What Being a Property Manager Entails
A property manager has a lot of potential duties, but sometimes they are only put in charge of a few of those duties. Here are some of their duties and a breakdown of what each one means.
Rent is one of the biggest concerns that renters have, and having a property manager take care of this can make life a lot easier. Depending on how experienced the property manager is, the owner could save this task for themselves or pass it on to the manager.
The responsibilities that are associated with rent are more than just collection. Somebody has to decide how much the tenants are going to pay for rent when it is necessary to evict and adjust rent according to state law.
This is really hard for somebody that isn’t familiar with the area to do, so if somebody owns the property and doesn’t live in the area it is a good idea to have an experienced real estate professional deal with this sort of thing.
Managing tenants is one of the most time-consuming parts of property ownership. If not done correctly, the property could end up being empty, which is not desirable in any situation.
There are a lot of different duties that fall into this category, which includes but is not limited to:
Dealing with move-ins and outs: Coordinating who is moving out and when, making sure the place is clean for the new occupant, and dealing with fees and rent pertaining to that.
Handling leases and contracts: Managing leases and contracts can be a major headache, so it makes sense that the property owner would want to delegate this. Mainly it is keeping track of the paperwork and such that is related to tenants, but it could include things like waste disposal and other expenses.
Finding and Screening new tenants: Getting people to move in can be difficult, and the property manager is going to be better equipped for this. Generally, this means advertising, pricing correctly, and then closing deals with tours of the property. All of these things can be delegated to a property manager.
Dealing with complaints: Unfortunately, owning a rental property can end up being mostly about dealing with complaints and tenant emergencies. This can mean late-night calls and being ready for anything at a moment’s notice.
Evictions: Nobody likes evicting people, but this job usually falls under the property manager to follow the proper procedures with local law enforcement.
Making sure that the property is in good condition is an important job, but it is one that cannot be done remotely. The property owner relies on the manager to inspect various parts of the property for any issues that need repair. Normally you would hire out some sort of contractor to fix any issues that arise. If you are handy you could fix things yourself and save some money depending on the agreement that you have with the property owner.
Repairs are something that needs to be kept up with, so having somebody that is in charge of this is a great way to maintain the property.
If the property is big enough, then employees are necessary. Managing employees involves all sorts of tasks like hiring, firing, payroll, and other skills.
Many rental property owners don’t want to deal with this, so they delegate it to a property manager.
You rarely need employees when you are renting out homes, but if you have an apartment complex you might need to have some employees for general upkeep or maintenance.
Budgets and record-keeping
Keeping track of how much money is coming in while limiting how much money is spent can be a daunting task, but it is relatively simple. Each property management position has different expectations. Sometimes the property owner determines the budget while other times the manager will.
When you are managing a complex, this can get pretty complicated, but it can be pretty simple when it’s on a home-by-home basis.
Can a Real Estate Agent Be a Property Manager?
For those interested in being property managers, it is good to know if you need any education or licensing.
Real Estate Agents can be property managers. In most states, property managers are required to have a real estate license or work with a real estate broker. Many property owners are choosing to use property management companies instead of individuals.
Property management is fairly open-ended, and we are going to dive into it as well as how it is related to flipping houses and having a real estate license.
How Being a Property Manager Relates to Being a Real Estate Agent
Being a real estate agent has a lot of perks, and you refine a lot of great skills. Property management is a really great way to use those skills and perks to your advantage
You Already Have the Contacts
When you are selling properties as a real estate agent, some of those properties will be sold to renters. These renters are going to be looking for a property manager, and if you make a good impression they might hire you.
That means that you can get started with very little work. All advertising can occur really naturally, and you can be really choosy with the properties you manage. Some properties are going to be a lot more work to manage than they are worth. If you are already a real estate agent, then you are not depending on this for your income so you can be the price setter instead of the price taker. That level of choice is crucial for jobs like this.
Compliments Existing Business
When you are working as a real estate agent, who you know is a huge deal. Being a property manager ensures that you have a lot of contact with possible home buyers and sellers.
Having contact with this many clients will lead to a lot more business on both the real estate and the property management side of things.
A Lot of Overlap
When you go through the process of getting your real estate license, you are going to get a lot of really great information. You will learn all the information needed for the exchange of properties. That knowledge is applicable to the property management side of things and will benefit you greatly.
If you already have the knowledge, you might as well apply it right?
Benefits of Property Management
There are some very simple reasons why property management is a great fit for anybody with a real estate license or even anybody in general.
Great Side Income
Property management is a great way for you to switch your active income to passive. Property managers can get paid in a variety of ways, the most common being that they get a percentage of the rent collected. You can take some of the profits right off the top!
Protection Against Economic downturns
One of the hardest parts of being a real estate agent is how much the market affects your income.
For some people, this amount of fluctuation in income is not passable, and being a property manager helps mitigate that risk.
If, for example, the local market is a buyer’s market, you are not going to be able to sell homes as fast as normal which reduces your income. Those that are property managers will have part of their income remain even if they don’t sell any properties.
That amount of income consistency is really desirable for those that are self-employed.
Disadvantages to Property Management
Some might have concerns that property management is more trouble than its worth, which is a valid concern. Here are some reasons that property management might not be the best option.
You Have a Boss
If you are a real estate agent, then you know that one of the reasons that this profession is so great is because of the freedom that you have. When you are a property manager, you are no longer an entrepreneur. You have to report to the property owner and do what they say. That being said, this is a lot looser than most workplaces. Some even elect to pay a property manager as a contractor in which case you are still self-employed.
Managing Property Can Be Time-Consuming
Unlike real estate sales, this is not project-based. This is something that requires constant attention. If you are managing a relatively small number of properties you might not have a huge amount of work to do, but the more properties you have the more you will have to do each month.
Like I discussed before, there are a lot of things that you will have to take care of. Sometimes you are going to have emergencies to take care of in the middle of the night. For many people, that is not the type of schedule that they are looking for. Most of the time you can still choose to manage properties whenever you want as long as it gets done in a timely manner. The issue is that you really don’t know how much of a time commitment each property is going to be until it is filled with tenants and you are already managing them!
Luckily, that is about it. If you are willing to sacrifice the time and independence it is a really awesome career option.