Should I sell real estate before working in property management?

Question

I just become a licensed real estate agent in Florida. I got my license with the idea of doing property management and eventually possibly own my own PM company. I have been looking for opportunities in PM and have been told by a few brokers that it is best to begin by selling real estate and learning the business before transitioning to PM. I am a little surprised by this advice. I own one rental and don't really see how selling real estate is a prerequisite for PM. Any input or feedback would be greatly appreciated.

Dawn Brenengen · Answer

@Joy Hardin My business is about 50/50 sales and PM.  I like them both for different reasons.  Being a PM is great if you are customer service oriented.  I think the biggest complaint most people have about their PMs is that they don't communicate.  It always just boils down to communication.  Most of my owners, while they don't like to spend money, are not unhappy to do so as long as they feel they are in the loop and have made the decision themselves.

Sales are great too.  It's a large paycheck, and you get to help people buy homes, which most people really love.  Also, it's not an ongoing transaction like PM, so if you have a client you are not particularly in love with, you will part ways after the sale.  PM is forever unless you fire the client  ;)

Sales are very volatile, though.  Most areas are in seller's markets right now, so there are a lot of transactions happening.  Agents are making a lot of money right now.  RE is cyclical, though, so that will not always be the case (i.e. 2009-2012).  PM is a much more stable income.  In sales, you could make 100k one year, and 25k the next.  Not everyone has the ability to weather such a discrepancy.

Don't let people sway you from PM.  Do a good job, and your clients will love you and so will your tenants.  It's not that hard, but for some reason, many can't handle it.

Russell Brazil · Answer

PM and residential sales are two completely different skill sets.  I will say though, that PM is a volume business. In order to be profitable you are going to need to find a large number of clients, while with residential sales you can do 10 or 15 transactions and make a very comfortable living (Depending on home values of course).

I self manage my own properties, but not in a million years would I want to be a PM.  I think residential sales is a far easier, enjoyable and more lucrative gig.

David Dachtera · Answer

@Joy Hardin,

Just my opinion, but I would almost see PM-ing as a stepping-stone to sales. The idea being that having a "Rolodex" (does anyone even know what that is nowadays?) full of renters might also mean a file full of contact info for potential home buyers.

Just a thought...

Where I live, "broker" (formerly sales agent) and property management are licensed separately.

Dawn Brenengen · Answer

@Joy Hardin I was in sales for nine years before going into PM.  The only crossover is that a license is needed for both jobs in my state, and I can also help investors buy and sell their investment properties.  So, it's kind of one stop shop for my clients.

Christopher Brainard · Answer

I don't see any reason you would need residential sales experience to be a PM - they are two completely different jobs which require different skill sets. I do agree with @Russell Brazil as far as PM being a much harder (less enjoyable and riskier) job. Almost all meaningful lawsuits brought against a brokerage firm are related to property management. Maybe they want to give you a test drive as an independent contractor before cutting you loose as a Property Manager.

-Christopher

Account Closed · Answer

If you can get started in property management and receive training and ongoing education jump right in no need to sell first

Jeff B. · Answer

PM vs REA:

• Both require (should) be certified
• Yes, they are different skill sets
• Both have ethics and license considerations
• PM has multiple issues to manage

The PM has to deal with Fair Housing regs, the REA/Broker does not.

The PM can offer more services (aka rental agency, manage mortgage/property taxes, and even full asset management (aka all maint.) )

Jesse Stephenson · Answer

I did sales only until 2009  then i went broke while i noticed by PM friend was still making over 100k and was paying an assistant about 25k to do alot of the work.  Now i do both, My wife and I manage 70 homes and I sell about 5 to 8 a year.  This time if the economy takes a nosedive i wont go broke.

Dale Shin · Answer

I went straight into management without any sales experience.  I have been doing some sales lately and as everyone says, they are completely different.  While I can see that having some sales experience will "round you out," it was not necessary for management.

John Dirgo Deweese · Answer

As everyone else has said, property management and sales are two very different animals. It sounds like most of the people you talked to didn't really want to add property management to their service mix.  A lot of brokerages make that choice for themselves and that is entirely their call.  They are probably looking to avoid the liability that comes with property management.

If your interest is in property management, you should pursue that.  Once you are established, there is a nice stability of income that should never be discounted.  Getting a solid paycheck while learning a vitally important part of real estate investing for your own future is a great combination.

Should I sell real estate before working in property management?

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