If you’ve ever considered getting into real estate property management, but weren’t sure it was right for you, or considered hiring a property manager for your properties, or know that your landlord has a property manager and want to know more about how that works, you’re in the right place.
Property management sounds simple on the surface, but it’s one of those businesses that’s a lot more complicated than it may seem at first.
Let’s talk about what real estate managers do, what kind of licensure they need to maintain, and the pros and cons of being in the property management business or hiring someone to manage your properties for you.
There’s a lot to cover here, so let’s dive right in.
What Do Real Estate Managers Do?
On the surface, property management is pretty simple to understand. Property managers handle the day-to-day concerns of a property, from finding tenants to scheduling maintenance work and other tasks.
Property managers make it possible for some people to be absentee landlords or take on the job of managing larger properties that would be impossible for any one person to oversee on their own.
A good property manager is a little like an apartment building superintendent, except that they generally hire out maintenance work and other tasks instead of doing the maintenance themselves.
Every property management situation is going to be a little different, and every manager and landlord is going to have slightly different priorities that might change how the property is actually overseen and cared for. With that in mind, here are some of the key responsibilities of a property manager.
Key Roles And Responsibilities
Property management businesses typically take care of more than one property, and even individual property managers often have more than one property, and sometimes more than one client, they work with.
Every job is going to come with a different combination of these responsibilities, but this should give you a good sense of what property managers do and how they do it.
- Interviewing and screening potential tenants
- Collecting rent payments
- Arranging for any included services, including, utility services, landscaping, cleaning services, and more, depending on the type of property
- Evaluate the condition of the home and retain records of any damage
- Schedule and maintain records of all maintenance or improvement projects
- Make sure the terms of the lease are respected by all tenants across all managed properties
Most states also require property managers to have a license to make sure they know how to perform their duties and also understand the rights of both the tenants and the landlords they work with, what they can and can’t do, and how to ethically perform their job.
What the license entails, and which licenses are required, can vary pretty widely, so it’s important to look up the requirements if you’re considering becoming a property manager or are moving states and might need additional licensure.
What Kinds Of Real Estate Property Management Are There?
There are as many kinds of property management as there are property rentals. The most common forms of property management are residential and commercial since those kinds of properties are more likely to be rented.
Different kinds of property management come with different requirements. For instance, the demands on a property manager in charge of a large multi-family apartment or townhome complex is going to be very different from the requirements and demands on an office space property manager.
If you’re considering going into property management yourself it’s important to consider what kinds of property you think you would be best suited to, and what kind of demand on your time you’re willing to embrace.
One of the differences between residential and commercial property management is that commercial properties usually have limited hours of operation, and only need the property manager to be available during those hours, or relatively similar hours.
Residential property management, on the other hand, can include emergencies that need to be addressed right away, regardless of what time it is or what the normal contact hours are for that property.
Who Needs Property Management Services?
The people who most benefit from property management services generally fall into one of two categories. They are either people who want to be absentee landlords and are willing to sacrifice a portion of their profits in order to not have to do much with the properties they own.
The other kind of people who generally benefit from property management are people who own large properties, or who own many different properties, and don’t have the time to directly manage all of them.
In some cases, landlords may also hire a property management company not because they don’t have the time or skills needed to manage their properties, but because they live too far away from the properties in question to manage them effectively.
In general, if you can’t reasonably drive to the property you own in an emergency, you might want to get a property manager that lives closer to be able to take care of the day-to-day needs of the property.
Pros And Cons Of Being A Property Manager
Like any job, there are pros and cons to being a property manager. That said, this is only a partial list. If you’re serious about making this move in your career it would be helpful to talk with some current property managers to get a better understanding of the role, how much you can expect to earn, and what kind of demands there will be on your time, as well as what skills you will need to be successful as a property manager.
Here are some highlights of the pros and cons to help you decide if this is worth researching further.
Pro – Property Management Can Be A High Paid Role
One of the main reasons people decide to get started as property managers is that it can be a relatively well-paid job, especially taking care of larger properties, or working with a landlord who owns a lot of properties in your area.
Property management doesn’t always pay well, but the job is generally in demand, so you will be able to work your way up and charge more for your services as you develop your skills and get a little more experience.
Con – Property Management Can Be Time Consuming
One of the downsides of property management is that dealing with all the different needs of different properties, establishing vendor relationships, finding contractors that you can rely on, and even just finding new tenants, can be very time-consuming and you can’t always count on having a regular schedule.
Property managers also often have booms and busts in how busy they are. They might have a lot to do for a few months and work a lot of overtime hours during that busy period, followed by weeks or months of not having very much to do.
Pro – Property Management Has A Lower Initial Cost Than Property Investing
If you’re interested in getting into real estate investing, learning how to be a property manager and working as a property manager can not only help you save the money you need to get into real estate, it can also help you develop the core skills a good real estate investor needs to evaluate a property.
The lower upfront cost of getting your license and starting makes it easier to break into the real estate world, and also lets you work with a wide variety of professionals in real estate. That means you’ll have more opportunities to figure out what you really want to do in this industry.
Con – Property Decisions Aren’t Always In Your Control
One of the frustrating parts of being a property manager is that, even though you are the main point of contact for tenants, you aren’t the last word in terms of what happens when a building needs maintenance, and you won’t always be able to make decisions about budgets or even which service providers you work with.
That lack of control can make your job harder, and can also be frustrating, especially if you’re dealing with frustrated tenants and your client, the landlord, won’t budge on an issue.
Pros And Cons Of Hiring A Property Management Service
There are also pros and cons to hiring a property management service from the landlord’s side. This is just a quick overview, but let’s take a look.
Pro – More Free Time
Having a property management company take care of your properties is a good way to reclaim your free time and make sure you’re able to do the things you enjoy with your money and your life.
Con – Management Services Cost Money
On the other hand, in exchange for that extra time that you don’t have to spend taking care of your properties, you won’t make as much of a profit on those leases that the property management company takes care of.
A portion of your profits, sometimes a large portion, will go to the property management team.
Pro – Having A Property Management Company Can Help You Make Good Management Decisions
Property managers, especially experienced managers, will know what’s best for your building, while also understanding the profit motive and the need to keep costs down when possible. Having a property manager on your side when you’re a real estate investor, especially in the beginning, can help you avoid some of the common mistakes landlords make that can lower the value of your properties or make it harder to keep tenants.
Con – Additional Middleman Between You And Your Tenant
Unfortunately, like any profession, there are indeed bad property managers out there. Having a property management company taking care of your buildings means that you are trusting them to do what you tell them to, to stick to the budgets you give them, and to work in your best interest as well as the best interest of the property itself.
Unfortunately, not all property managers will do that, and it can sometimes be hard to tell the good ones from the bad. So you’ll have to be aware, every time you hire a property manager, that you’re taking a risk that they either won’t know what they’re doing, won’t be up to the job, or won’t be acting in your best interests.
Interested In Starting Or Hiring A Property Management Company?
Whether you’re considering hiring a property manager or becoming one, Teifke Real Estate has the experience you need to help you make the best decisions on these next steps in your journey. Contact Us to learn more about property management, and to start planning!
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