Property Management: Licensing & Other Requirements

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Property Management: Licensing & Other Requirements

Deryk Kennedy
Design Engineer · New Albany, IN · Member since 2013 · 13 posts · 2 votes

I initially tried posting this in the Indiana Discussion forum, but it wouldn't allow it.

I am, and have been, working on getting into REI, but have been dealing with a significantly bad case of Paralysis-by-Analysis.

In an attempt to start treating, and eventually curing myself from, this horrible sickness, I have decided to get my foot in the door by working as a small scale property manager in the S. Indiana area. Primarily focusing on the tri-county Indiana area north of Louisville, KY. 

I have done some research on the necessary steps to officially get into this field, but through discussions with Realtors & wannabe Realtors, I now feel more confused than I had previously. 

It is my understanding that some laws have recently changed that greatly altered the process for obtaining licensing. I know of a few individuals who had significant issues with the process to the degree that they had taken nearly all their course work but were then told that due to changing laws they would have to start over.

I would like to get advice from you all regarding both the field of Property Management, in general and specifically in Indiana, and in the licensing and additional requirements that I may, as of now, be unaware of to professionally perform in this arena.

NOTE:

I am currently unable, financially, to make this my primary day-to-day job, so will have to work it around my current career that represents 10 hrs/day during the week. It's understandable that this greatly reduces my opportunities.

I'd like to thank you all for your comments and questions and hope that this thread will be of assistance to others wishing to develop their knowledge in this specific area.

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Erik HitzelbergerPro Member
Investor · Louisville, KY · Member since 2011 · 331 posts · 278 votes
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@Deryk Kennedy  In Kentucky, unless you meet one of the exceptions, you have to be a licensed real estate agent to manage properties for others.  (You can work as an assistant to an agent someone without a license).  The guidelines for getting a license in KY are on the KREC website.  KREC (dot) KY (dot) gov.  Since IN/KY licenses are reciprocal, I imagine the criteria is similar.

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  • Erik HitzelbergerPro Member
    Investor · Louisville, KY · Member since 2011 · 331 posts · 278 votes
    10y

    @Deryk Kennedy  In Kentucky, unless you meet one of the exceptions, you have to be a licensed real estate agent to manage properties for others.  (You can work as an assistant to an agent someone without a license).  The guidelines for getting a license in KY are on the KREC website.  KREC (dot) KY (dot) gov.  Since IN/KY licenses are reciprocal, I imagine the criteria is similar.

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  • Steve Osowicz
    Real Estate Broker · Louisville, KY · Member since 2014 · 121 posts · 91 votes
    10y

    @Deryk Kennedy like @Erik Hitzelberger says you must be licensed to manage rental property and collect a fee as compensation (in Kentucky), however that being said...you do not have to be licensed to work for a property manager as a W-2 employee. So if you really want to get your foot in the door, you could work for an apartment complex, let's say on the weekends or Saturdays, showing the units and other duties as assigned. Then you could work towards getting your license if you so desired. If you do go further and get your license you would have to operate under a broker for at least 2 years before you could get your broker's license and be completely solo. Again, this is Kentucky so I am not certain how close Indiana matches our laws and regs. 

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  • Kevin Manz
    HVAC Tech · Fort Wayne, IN · Member since 2015 · 423 posts · 223 votes
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    What is the difference between a broker and a realtor

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  • Steve Osowicz
    Real Estate Broker · Louisville, KY · Member since 2014 · 121 posts · 91 votes
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    @Kevin Manz the terms for licensees is different for each state, so for example in Kentucky you must first be a licensed agent (sales associate), then you can become a broker with time and an exam. I am under the impression other states do not require you to be a sales associate, you are a broker after the requirements have been met. A Realtor is a member of an organization that adheres to additional standards of business. So, all Realtors must be licensed agents but not all (but most) licensed agents are Realtors. It is like a trade organization. 

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  • Deryk Kennedy
    OP
    Design Engineer · New Albany, IN · Member since 2013 · 13 posts · 2 votes
    10y

    Thanks for the feedback. From my own research, for Indiana, it does appear to be a sole operator for Property Management, one must:

    Have a Broker's License, which requires (1) year as an active licensed real estate salesperson.

    Which in combination requires a fee, at least 2 exams, a year of experience, and a few courses.

    That much I understand. It appears that this process may not be the best way to get the ball rolling. 

    Are there any specific opinions, recommendations about Property Management, specifically for SFH and small multiplexes (duplexes up to quads)?

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  • David Hedges
    Investor · Crown Point, IN · Member since 2014 · 177 posts · 84 votes
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    @Kevin Manz it's been a while since i looked into it (so if I'm off on any of this someone please correct me), but what I recall of Indiana is to be a broker, you need to first get the realtors licence, and hold that for 1 year. Of what I recall I think the material they test over is about the same, I don't recall though if there are different requirements in continuing education or other things like that. 

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  • Lee Smith
    Residential Real Estate Broker · Indianapolis, IN · Member since 2009 · 477 posts · 304 votes
    10y

    @Deryk Kennedy  I am a licensed managing broker in Indiana.. There is no longer a salesperson's license. They decided to get really confusing.. The two licenses you should be looking into are "Broker's license" and "Managing Broker's License"... The new Broker's license was the old salesperson's license. Here's what the code says.. http://iga.in.gov/static-documents/a/9/9/5/a9952b9...

    Broker's License(Salesperson License): Statute: IC 25-34.1-3-4.1

    • You have to be 18 or older and no convictions(See link above)
    • Have a High School Diploma or GED
    • Complete approved broker course(salesperson)
    • Pay the fee
    • Pass the test
    • Submit license with who your sponsoring managing broker will be.


    Managing Broker License: Statute IC 25-34.1-4-0.5

    • Hold a Broker's license for 2 years
    • take and pass at least 24 hours of broker management courses approved by the commission.(This is above and beyond your normal ongoing education requirements.


    If you are managing properties you need to have a Managing Broker's license, or have approving managing broker.

    When you sign up with a managing broker, he or she may allow you to have a property management business, but you will probably owe them fees because they are responsible for your actions for the first 2 years.

    You don't have to work full time at this to be a property manager or Realtor(in Indiana we get this designation as a requirement and have to pay fees accordingly). You will find that most Realtors frown upon you for not being full time, but who cares.. I did this part time for the first 6 years I had my license.


    Hopefully this all helps explain the scoop... 

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  • Lee Smith
    Residential Real Estate Broker · Indianapolis, IN · Member since 2009 · 477 posts · 304 votes
    10y

    @Deryk Kennedy  GET OVER THE ANALYSIS PARALYSIS!!! Just do a deal... Too many people fall into this trap.. I do occasionally as well... It's like putting in your max bid on ebay.. If you lose a deal, oh well, life goes on..... Have multiple exit strategies and you should be good!  

    My only advice: Don't force your first deal to work. Sometimes deals are NOT deals.. Just move on to the next one... A lot of newbies will look at a deal and analyze it, and mull it over, and squeeze the numbers time and time again trying to make the deal not stink.. DON'T DO THIS!!!  If it doesn't look like a deal, then just move on to the next one....

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  • Zoranna Brown
    Huntington, IN · Member since 2017 · 1 post · 0 votes
    9y

    Lee Smith . Hi I am new to this forum as the Real Estate world! I called on a FSBO a little over a month ago and the owner(in Florida) asked me if I was interested in managing his properties, rent or sale on land contract. After looking into his properties I found his list extremely large for Indiana. My thoughts were to land contract as many as possible in my area then move on else where and make this an extremely large (side) business. Looking out for people with poor credit. Unfortunately my managing broker told me NO. Now what? Are there any places I can go that will allow me to do this? Its a small town and I really dont want to stir anything up. And should I leave my Agency I will loose my current listings. So torn. Any advise?

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