Thoughts on property management as a side business?

Question

Hey all! I am always looking for more ways to produce income, currently I am employed full time working for the government and I own 6 LTR units and self manage them.

I was curious what it would take if I wanted to start managing other people's properties on the side. My biggest concern is having a 9-5 mon-fri job, and if I would be able to field calls/requests during business hours. I can l make phone calls if need be but would prefer to do email/text for management purposes during these hours.

I would obviously start small just managing like 5 units to see if it works. Do you guys have any thoughts on if it's possible to do with a 9-5 day job? And what systems would you recommend to have in place or any advice would be great. If it was something I could scale I would definitely be open to expanding it. Thanks!

Justin Winn · Answer

Many states want you to have a real estate license in order to serve as a property manager for other people, so I would start with confirming your states requirements. If that is the case then factor in the cost of maintaining your license to determine if it really makes sense with the low volume of properties you mentioned.

I also work a day job and manage my own properties, but I also have help. So I would look at friends and family that you trust that you may be able to share some responsibility with. Maybe they field the calls and you handle marketing, financials, etc. In my case, my parents field the phone calls, and call the vendors, I run the financials, marketing, etc.

Finally the last thing I would consider based on your post is the capacity for my vendor list to keep up with an increased volume of work orders and your ability to follow up on the completed work. Do you have multiple vendors for plumbing, HVAC, etc? If so, vendor throughput may not be a concern.

Chris Seveney · Answer

Lots of great comments here. I will also add doing a PM business has to have some scale to it, running 10 units and charging 10% based on rent vs. the amount of work you will do will end up costing you significant money based on just the insurance alone. There is no way I would ever recommend anyone running a 9-5 to take on a property management business, as I have worked for a developer for a decade who has a PM operation and it is constant hassle, stress and work. There are no days off either.  Definitely not the business I would do while having a 9-5

Sergey A. Petrov · Answer

Starting a business and a side hustle aren’t the same thing. Licensing (real estate and general business), insurance, contracts, systems, processes, employees, marketing, etc. Unless the startup is a “i am just going to try doing it out of the back of my pickup truck and see how it goes”, once you work out your business plan you’ll quickly see how fast your start up capital will get into tens of thousands of dollars and countless hours of your time. Depending on where you want to end up with the business you might not be able to juggle a full time job…

just my two cents having started several businesses from scratch.

Sam Hudacek · Answer

Definitely alot to consider! Thanks for all the responses, I will do more research and look at my options.

Patrick Drury · Answer

@Samuel HudacekTypically, you have to have your real estate license to manage others properties. Also, there is no way you could pay me enough money to be a property manager for a side hustle. If you are doing it for other people that's a full-time job. My partner is a full-time property manager and it's a lot. There is more to it than just coordinating repairs. Accounting, turning units, leasing, and more. I would recommend you not do it unless you want to make a career out of it.

Karen Margrave · Answer

You definitely want to know the laws of your state regarding property management. Here in CA you have to be licensed. In addition, our laws are so complex and ever changing, and favor tenants over property owners. Trying to manage properties as a side hustle would be asking for a lot of problems. However if you start a company and have a licensed person (if required by the state) running it, that might be a good option, though may not be very profitable.

Steven Foster Wilson · Answer

Doing a property management company is no small thing. I have a friend that started his own PM business. He quit his 9-5 job and started doing the PM business. He was very organized and had a plan going into it. You have to scale if you want it to be successful but also you have to keep you clients happy. Doing it while working your full time job sounds like a lawsuit waiting to happen. Clients can easily get upset and if you are not making them money... Things can go down hill very quickly.

John Underwood · Answer

What are the requirements in your are to become a PM?

Some states require you to be a Realtor, others you can take a course and pass a test.

It is a much bigger commitment both financially and timewise to go legit.

Nathan Gesner · Answer

If you manage property for others, you have to be licensed according to State law. That's not a wise move unless you intend to get into it full-time and earn a living. I would also warn you against taking on financial responsibility and liability for the property of others while just dabbling in it. If you're going to manage millions in assets, you should educate yourself and do it right.

Nikhil Agarwal · Answer

I think we both are in very similar situations. I currently self-manage 10 properties while having a 9-5 (well, more like a 7am to midnight) kind of job. A very close friend has 20 properties between himself and his various partners that he self-manages. Together, we've realized it might be a good idea to start a property management firm given our own properties are becoming challenging to self-manage and we've been thinking of giving them to a property manager anyways.

However, we decided to take a different approach. We are hiring someone to be the property manager of our properties and starting our property management business that way. The idea is that they can focus on the property management/day-to-day and we can focus on growing the business and finding more investors who'd like us to manage their properties.Just wanted to share this as an idea for you to consider as well!

Thoughts on property management as a side business?

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