As a real estate agent, you might be considering branching out into property management. Maybe an investor client has inquired about whether you could manage a property you just helped them close on. Or, you’re looking for additional revenue streams that could be possibilities thanks to a real estate or broker license.
What would a real estate agent do as a property manager?
First things first, what exactly does a property manager do? It’s important to understand the tasks you’ll be called on to perform on a regular basis. As a property manager of rental properties, you can expect to:
- Show open properties and screen renters, including doing background and credit checks
- Create leases to ensure they are comprehensive and executed
- Handle tenant inquiries, maintenance requests and emergency complaints
- Complete property checks and handle the routine regular maintenance such as filter changes, landscaping and snow removal
- Collect rent and implement late fees
Essentially, you’ll be taking care of all of the daily and routine maintenance that a landlord or property owner doesn’t want to deal with. Which means, you’ll be tasked with the unpleasantness others would prefer to outsource.
What are the Pros and Cons for Real Estate Agents Who Want to Become Property Managers?
Pro: You can expect to earn approximately 8-10% of rent each month for every door that you manage. This can add up quickly.
Pro: Particularly with renovated rentals, there may often be few issues each month that need your attention.
Con: You will be the go-to contact 24/7 when it comes to complaints and emergencies. This is a BIG factor to consider. How will this create friction with family time? Vacations? Do you plan to hire an assistant or substitute when you’re away or sick?
Con: Scaling is necessary for substantial income. Are you prepared to scale up to 100, 200 doors to manage? Although it is possible to manage just a dozen or so properties, until you reach double digits, you might not see a significant boost in your revenue.
Pro: Many common parts of the management process can be automated.
Con: You may need to choose between being a real estate agent and a property manager. You may not be able to do both.
Pro: You can increase your income stream without having to take on the risk of owning a rental property.
Get off to the Right Start as a Property Manager
How do proceed if you’re a real estate agent considering becoming a property manager
Here’s a few steps to take if you’re a real estate agent exploring the option of becoming a property manager:
- Look into your state’s requirements. Some states require you to be a broker before you can be a property manager. It’s best to find this part out first before you commit too much time and effort to the option.
- The National Association of Property Managers has resources to look into. And if you do go down the route of property management, this is an association you may want to consider joining.
- Read the experience of other agents on forums on sites like Reddit and BiggerPockets.
- Look into investing in high-quality management software that will keep you organized right from the start.
- Learn to set boundaries early so you can scale appropriately. It’s easy as a beginner to want to say yes to everything a client or tenant might want. Set your protocols to match your goals rather than the other way around.
