Property Management Demand

[Daniel Kramer]

I'm just starting out as an investor and also work full-time, so I plan to manage my own properties at least at first. Therefore, property management has been one of the aspects I've been researching extensively. I've noticed a common theme that good quality property management is hard to come by. 

I'll preface this by saying I love my W-2 income which allows me to get loans, but I've had the passing thought, "If I'm ever out of a job, I'm starting my own property management company." The glory is in the investing but the demand appears to be in the management. Is it really that hard? Why can't anyone seem to do it well? 

[James Wise]

Originally posted by @Daniel Kramer:

@James Wise Wow thanks. Scratch that plan, keep my job, got it. How, in all my research about being a good property manager did I miss that little detail?

Right, wrong or indifferent... that seems crazy to me, that I can manage my own properties, and maybe even be darn good at it, but I can't manage anyone else's without devoting years to obtaining a brokerage license. I'm sure there is good reason, but being an agent/broker seem somewhat unrelated to managing properties.

Dan

 Na you need government oversight. It'd be completely insane to allow any schmo off of the street to open up a property management company. To become a Broker you've got to have 2 years in the game, 40 transactions, a college degree, a physical office, a clean criminal history & I imagine some other stuff I can't think of off the top of my head. Beyond all of that you need to open up certain bank accounts and follow very strict accounting and license law procedures.

Biggest reason all of this stuff is import is the amount of other people's money you are handling. In a sale you don't really handle much money. Yes money changes hands but the title co handles the majority of the money directly. In management you handle the money directly. For example in my trust accounts at any point & time I've probably got around a million or so in there. That ain't my money, all client and tenant money. Can't just let any schmo open up a shop and have access to that amount of other people's money. Public would be at such a huge risk.

Now all of that above in mind that's why it's almost comical when you get all these threads going around here where all these new investors think that their property manager is ripping them off for like $30 here or there or some other dumb idea. It takes millions of dollars and a ton of time and infrastructure to run one of these businesses. Odds are pretty good most people with that much skin in the game aren't risking it all to rip off some California dude on a furnace repair lol.