Becoming a Licensed Property Manager in Pennsylvania

[Tim Porsche]

Hi All,

I've been managing my own rental properties (currently have 6 units) for the past 5 years with good success and lately have become interested in managing properties for others as a way to create an additional stream of income. My plan would be to start small (managing 10-20 units) and take on more clients once I get a better feel for the business and see how things are going after a year or so.

 As I understand it, in PA you either need to be a licensed broker to do this, or else have your real estate salesperson license and then work under a broker. My questions are...

1. Is it worthwhile to go through the whole process of becoming a broker just to manage others' properties?

2. If you go the route of getting your real estate agent license and work under a broker, what sort of monthly/annual fees is normal to pay the broker in order to engage in the property management business under them? 

3. If working under a broker, would you be able to set your own rates and policies and run your business as you choose? Or does the broker do all of that while you work more as an employee under them?

4. How much in annual fees would you need to pay as a broker? How much in annual fees if a licensed real estate agent?

Thanks in advance for any feedback!

[Will Fraser]

Hi @Tim Porsche, the answers to your base question of "to get a license or not" really comes down to why you want to do any of this and what you want out of it.

If you're wanting to do this on the side as a hobby or a passive income stream then getting a license is going to be an exercise in futility.  As you've begun to see with managing your own units there is a complexity to it that grows un-linearly with growth.  To seek to add revenue streams through managing property makes good sense and it is a great business to be in and be skilled at, but it's not a passive income source, nor is it a good fit as a side-business IMO.

If you want to build a business around management then you'll need to have a broker's license or employ one.  Either way gets it done, but one is less costly than the other.  

Management is ALWAYS done in the name of a broker, so if you don't have a broker's license and have your own shop, then you'd need to be licensed as a sales agent under a broker that will allow you to manage other people's properties for profit.  In my limited experience here, it is less likely this will be the case with franchises than with boutique or local brokerages since the compensation structure of management doesn't port well well the franchises' billing methods.  I'm sure there is additional reasoning for this, but hopefully this gives some good guidance.

So, if you're going to get licensed, go the full nelly and work towards your broker's license.   If you want to manage properties for other people, this is the route to go, just be sure you want it and then go get it!