Property Management?

Question

Is property management a viable business?  I know some realtors who do it on the side but nothing significant, I don't believe.  Is it possible for somebody who has limited real estate experience (only owning a few properties) to get involved in property management and actually do something with it?

When I say limited, I mean I only own a few properties and I only have a year or so in "landlording" experience.

I'm recently unemployed so I don't necessarily have any first job holding me back in regards to time.

Am I in fairy-tale land?  Let me know your thoughts.

Joel Owens · Answer

I analyze all business models and streams of income without prejudice and emotion involved. It's purely a numbers and return for the time invested in the possible income stream.

Property management just like another stream of doing BPO's is not the highest and best use of my time.

For those that like PM work I hope you do well but from others they have crazy volume and headaches to get a minimal return.

Max Drizin · Answer

If you are connected to brokers around the area, you can always talk to them about starting a management company with them.  Share the profits, use their name and position and nothing else.  If you can pitch it to them as something viable, and get accounts on your own, it might be worth it to look into.

One pitch I might try, since I'm doing this with my own brokerage, is that you offer property management as a service to anyone they have buy through them.  It creates long-term customers who are almost chained in to a broker, at least mentally.

Granted, there are probably plenty of objections they will have, but it's worth a shot if you have the connections to get accounts and the connections to brokers.

Patrick Rogers · Answer

Bryan,
Many people can hang their license underneath a Broker for a small fee.  Usually a set fee is what I recommend, however some may insist on a percentage. If that is the case I would find a Broker who was willing to do a  combination of a set fee and a small percentage.
Also, make sure that you have the right to the properties when you get your own Brokers license.
Hope that helps.
Patrick Rogers

Jason Lipovsky · Answer

Property Management is a viable business.  I recently sold an office building to a successful apartment manager.  Most brokerages incorporate management into the business model becuase if they are managing the assets, typically they have the first shot at the debt placement and/or the asset sale.  The management keeps the business running and the financing/sales make the brokerages rich! Take your time and obtain your license.

Bill Gulley · Answer

Nope, all states, which rely on making real estate regulations and testing requirements do so in close consultation with the National Board of Realtors.....wink and nod! ....sell and lease are well adopted issues for agency law.

What you can do is work for an owner in an employee capacity and only manage properties for that owner. This is for office staff basically and on site managers living there usually. But to act as an agent of the owner a license will be required. Bummer, barbers have to get a license too!

Steve Babiak · Answer

That particular requirement is not the U.S. Federal Gov't - it is a state requirement that agents for various real estate activities be licensed.  Your state might not have the requirement BTW.

Joel Owens · Answer

"Is property management a viable business?"

Not for me. The return is way too low for my time. I make a much better return transacting commercial deals and doing my own investments.

Property management is time intensive and the pay is poor and the investors always complain they are overpaying for what they get. It really is a thankless industry.

Bill Gulley · Answer

I really had to give this some thought to arrive at what I feel might be best for you, especially being in your current circumstance. I can understand you being frustrated. I'm pretty familiar with all aspects of the real estate industry at the residential and small commercial ends and I've thought briefly about these angles.

Then started thinking how we could put you on a positive path.

A good and old friend  is a very well off business man who owns a large trash collection business with a fleet of trucks, the reason he came to mind is that he started out with a pickup and a trailer and only needed a business license.  When he started, practically out of highschool, he didn't need any special license. Today he is totally against big government just as you expressed, even though his business is highly regulated now and I remind him that government is actually keeping his competition away (and then he smiles).

So, I might suggest,if you really have ill feelings about government, rules, regulations and laws, that you select another line of work and not go into real estate as it is highly regulated, and for good reasons.

Above all, you need to be happy in what you do and if you feel you can't have the freedom you really seek in business you really won't be happy as you'll be cursing the system as road blocks for a long time. You'd be much happier just getting a simple business license and staying away from regulated professional ventures.

As long as you stay away from the application of chemicals, some lawn care guys are doing very well too.  :)

Bryan P. · Answer

Oops-just researched that you need a broker's license to manage props.

Ok then, nevermind my post.

I love our government, makes it impossible for the little man to do anything.  Red tape after red tape.  Screw you Uncle Sam.

Bryan P. · Answer

I should probably note that my market is depressed (rust-belt PA) and there's alot of rental activity going on.  Cheap houses, lots of renters, a fair amount of investors.

In regards to ability, I can do just about anything with my hands and I'm organized.  And motivated.

I just want to know if this is fairy-tale land as I just mentioned, or if it's possible.

Property Management?

Most Popular Reply