Is Property Management a Good Business?

[Julie Marquez]

Earlier I asked about how to become a property manager, and got some great responses and have been talking to people all about having a property management company.

Now I want to know the pros and cons and all the opinions about the risk and reward of having a property management company. I don't see a lot of people running to work in this side of real estate. Most people don't get their brokers license to manage other people's rental. What's the good, the bad, and the ugly of doing property management?

[Tracy Streich]

Julie, 

I have been managing properties for others for about 8 years. We manage about 500 SFR doors. It is a great business. To really make it work you need to get your Brokers license and not work as an agent under another broker. It is always different from state to state but there are several ancillary business streams that can grow out of PM as you get larger. Start with the basics and get a good software in place. I mean real management software, not the stuff a self managed person would use. You will be accountable to other owners so it needs to have good reports and accounting built in. The down side is that many owners have unrealistic expectations. The tendency when you start is to always say "yes" bc you are building and want the business. Make sure the things you agree to are sustainable. An owner may ask for you to drive by inspect every 2-4 weeks. This might sound easy with 20-30 properties but will be impossible with 300-400. If you are not firm from the start with tenants and owners from the start they will both try to run you over. Lastly, NARPM, The National Association of Property Managers. If you manage single family or small apartments it is a must to get involved. The education and resources will save a lot of headaches.