Is Property Management a good way to learn RE when starting out?

Question

Hello,

For someone completely new to real estate investment, would you recommend getting a Property Management license?
Must someone be licensed to manage properties?
What is the best way to acquire hands-on experience managing properties before making a first investment?

Thanks!

Taj Akinbode · Answer

Are you looking to manage other people's properties for them? Or manage your first or second personal property?

In the state of Texas where I am licensed, there is an exception to the real estate license requirement. This exception is that a Texas property owner may manage their own home as a rental property without a license. Check to see if there is similar exception in your state.

If you answer yes to option 2 above, I would advise that you should not let property management license acquisition delay you from getting started with your real estate investment goals. When you have expanded your portfolio beyond a certain property count, then it might make sense to acquire a property management license and then find an existing property management company to work with for about 6 months with the intent to learn as much as you can within that timeframe. You don't want to get stuck managing other people's property when you could be pursuing your own investment dreams.

I would also advise that you seek out educational opportunities relating to property management from day one. There are tons of online materials that you can leverage to shorten your learning curve. You should also seek out in-person workshops or seminars. Set a goal to learn as much as you can within whatever timeline you define for yourself and acquire this knowledge with a sense of urgency.

If however, your plan is to become a property manager helping other people and corporations manage their properties and big apartment complexes, You should consider the advise that have been given by previous contributors.

Hope this helps.

InYoung Choung · Answer

@Chris LumLee That's an excellent idea (shadowing rehab investors). Thank you!

Mark Ainley · Answer

@InYoung Choung I like how you think at our Property management company here in Chicago we love hiring people that want to learn the industry.  No better way to understand the back, less glamourous side, of real estate investing then working at a Property Management firm.

InYoung Choung · Answer

@Lawrence Potts

Thank you. I agree with you about the benefits.

Chris LumLee · Answer

Any real estate skills you can pick up (through work in this case) will be helpful- but not required. When I first started investing I had a Budget Analyst job so that's all I knew. Then I spent a little while as a "Property Manager" that oversaw property managers. That's where I went to the school of hard knocks and learned some repair-related issues. If I didn't learn it there, I would have ended up learning about it through the property managers who oversaw my properties.

If you're looking to learn before you invest, I would say that one way is to shadow rehab investors so you can at least learn about rehabbing and maybe light construction. This will help you see details that you won't think of that can eat through your investment profits.

Lawrence Potts · Answer

@InYoung Choung

I think working in PM is a great way to learn. I spent almost a year working as an office admin for a small PM and it was overall a great experience.

Just starting out, I would spend a year working under someone else’s business. There’s a lot of liability and depending on the state, could get you in trouble really quick without even knowing it. Then get your license while working and see if it’s something you’d want to do on your own.

I think it’s a great way to learn the ropes before you get your own property. You get to build up your own systems and processes and network under a business that already works/can improve.

However, there isn’t a lot of money to be made in PM. There will be some months where the work is minimal for what you make. Other months you’ll be up to your eyes in things to do. But what I found working in PM is that you don’t necessarily do it to make a great business income, but to build a massive network.

Think about it….let’s say you’re looking to get a deal under your belt but you’re a little short on capital and you’re having a hard time finding a deal that makes sense. The owners of the properties you manage, if they have a change of plans and decide they’re going to sell, who do they talk to first? YOU! They need to tell you they’re going to sell and will need to dissolve the PMA once the deed transfers. Then you can see if them selling to you makes sense to them. They will already have a good relationship with you and will trust that you can take care of the property well.

And most owners are older. Retired. And sometimes they’re needing somewhere or someone to park there money. They just want to lend and get a return. You can bring a deal and partner or they can lend private money to you.

Just some thoughts about PM. But whatever you decide to do, just do something. Take action. You’ll learn along the way. Hope this helps!

Nathan Gesner · Answer

It is one of the best ways! Steady income, you'll learn how to manage quickly. If you are working with a professional company, then you will learn some tips that put you ahead of the game against other Landlords.

Most states require a real estate license. Some have a separate license specifically for Property Management. Check with your state licensing board.

Monica Der · Answer

Yes it definitely is! In CA you have to be licensed to offer this service. Investing is a business - property managers learn to be the eyes and ears on the ground for your business.

InYoung Choung · Answer

@Patrick Pendley

Thanks for the insight.

I am not in the states. I am currently in Canada.

Sorry I should've clarified this from the beginning.

Wale Lawal · Answer

@InYoung Choung

Yes it is, as you will learn how to manage the property and deal with the tenants.

Please check with your state licensing board if you need a license specifically for Property Management.

Good luck!

Is Property Management a good way to learn RE when starting out?

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