A lot of people who regularly work in real estate are embracing property management as a side business. Across America, realtors and real estate agents who have been shocked by the decrepit state of the industry are not making enough sales and are having a hard time keeping consistent listings. As a result, they are managing properties as a way to pay the bills until the market picks up again. Because more quasi-property managers are flooding the market, there is more rivalry between the quasi managers and the pros, which is obliging all who want to build their portfolio to find additional properties to rent out.
Many of the newbies are agreeing to manage broken down properties from landlords at management rates as low as three or four percent while accepting high rental rate demands from these same owners. Unfortunately, these same owners will expect to make money from the dilapidated properties that aren’t ever likely to generate a welcome income. This is one mistake but one far more typical mistake made by such newcomers to the industry is to manage accounts that are geographically located too far away from their own headquarters and/or general neighborhood of expertise.
Many property management firms market themselves as companies that can handle properties in different locations within the city, but it must be understood that the best property management companies are the ones that are best structured to handle such accounts. They have the systems, the means and the staff members on hand to serve such accounts across different districts and neighborhoods, and are able to do so professionally. However, newbie realtors and real estate agents, as single parties, often accept such geographically distant accounts and are not able to process or handle such accounts properly. But because of the struggling real estate market, they find it hard to refer a landlord client to a professional property management firm for a simple referral fee when they can generate a steady income profit from managing the property themselves.
The property managers with experience know how much they can take on and would rather deliver Grade-A service than risk tarnishing their reputation on a property that may prove to be too problematic for them in the long run. Nothing kills the motivation of a new property manager as much as having to drive across town several times a week to try to rent out a property that is difficult to rent out in the first place. The more the property manager has to spend on driving from place to place, the more he will question whether the account is worth preserving as total driving time and gas expenditures add up. In the end, the property owner is unhappy with the care and maintenance undertaken by the hired property manager and eventually lets the property manager go.
This is why it is best to own up to your experience when you are a real estate agent or realtor and to understand that saying “no” is in your best interest when talking about a property that is significantly outside your area of coverage. After all, property management is not the same as simply selling or renting out a property as a realtor – it is much more complicated than that.