Residential Property Management, Fish or Cut Bait?

on 27 November 2015

Residential property management is not for the uncommitted.  This is not a part-time gig!  You must either be all-in or just don’t be involved. 

It will invariably end badly for the uncommitted.  

Recently, more and more licensees are dabbling with leasing and some are even stepping out on a limb and offering property management services. Caution is in order here!  Although there is tremendous liability at stake, this is not a reason to not do it—just a reason to properly prepare for the job. Entering this field of work unprepared could cost licensees their licenses.  It can also result in debilitating lawsuits. So how can one prepare for the job? That’s the question.  

The process and protocols of working with a tenant or property owner in leasing and marketing is similar to selling. There are differences though. One big one is investing in sufficient industry specific marketing resources to do a good job.  This requires substantial financial and time commitments. It also demands a level of professional competency equal to the job.  So this may not be right for the casual player. But the bigger step is in the management of the property. 

Property management demands a certain temperament, which, if lacking, could cause emotional displeasure at best, and result in professional catastrophe at worst.  The job is definitely not right for everyone. Indeed, it would be ill advised to wait and discover this after having acquired several property owners that are depending on their agent’s professional competency to protect their investments. A good place to start researching might be to take a few locally established, property managers to lunch and pick their brains. Ask the hard questions and be honest with yourself when you hear the answers. 

After passing this first test, before even beginning work for property owners, seek formal training from the local chapter of the National Association of Residential Property Managers, www.NARPM.org or from a local board of REALTORS©, if they sponsor such training. These foundational classes will lay the framework for the business.  They might also offer that key perspective needed to decide if this is the right business in the first place.

There are two common ways of starting up a property management business—the slow way and the fast way. The slow way is to simply hang out your shingle and begin gently growing, learning as you go with a gradual learning curve. The fast way is to acquire inventory by purchasing an existing company. The slow way is probably the wiser plan of action, but the fast way would be okay if the acquisition of the inventory came equipped with experienced staff. It would be a bad idea, for example, to acquire 180 units from a sole practitioner, and expect to replace that practitioner without any other help. In most cases, the bookkeeping alone would be enough to drown the enterprise. In any case, don’t fear doing it, just be prepared and be careful.

Daniel R. Wilhelm
Managing Broker
3 Options Realty, LLC.
http://www.3optionsrealty.com
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Phone: 678-397-1282