Opening a Property Mgmt Division?
Hey BP Real Estate Agents! I'm considering adding property mgmt to our business to supplement the buying and selling and to offset the swings in the market. What advice can you give for those who have started PM from scratch? TIA!
I'm based in Arkansas, by the way.
@Billy Daniel - join NARPM and get connected with the local community. They are a great resource and can be very helpful for when you are starting out.
Property Management is a whole different ball game than buys/sells. With buys/sells, you are generally dealing with professionals (attorneys, agents, lenders, appraisers, etc) that are not emotional. In property management, you are dealing with lots of emotions and is really not about managing properties but about managing people (owners, tenants, vendors). Most do not have the aptitude for it but those who do can flourish.
Quote from @Billy Daniel:
Hey BP Real Estate Agents! I'm considering adding property mgmt to our business to supplement the buying and selling and to offset the swings in the market. What advice can you give for those who have started PM from scratch? TIA!
I'm based in Arkansas, by the way.
Join NARPM and learn from people that have been there, done that! I had my business for six years before I joined NARPM and I wished i had done it on day one. I learned so much from networking with other property managers and they are very eager to share. There are a lot of good classes to take that will help accelerate your learning, some specifically for the business owner.
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#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
@Billy Daniel it's not for those who can't deal with stress.
Quote from @Drew Sygit:
@Billy Daniel it's not for those who can't deal with stress.
Preach Drew!!!!
Learn to develop a thick skin. LOL! Yes, NARPM is fantastic. Look to find other associations or groups in your city or state as well. In WA, we have the Rental Housing Association which was absolutely the most helpful, supportive, amazing group to be a part of, especially when I got stuck on issues. I tried to operate fair for everyone involved but tenants were your best friend when applying but love to threaten to sue when you charge them $50 for damages. Some owners expect PMs to be house sitters. You need to set expectations on services provided. A good PM is hired to screen and place great tenants, keep great tenants, maintain the investor's asset, be professional, stay up to speed on local Landlord-Tenant laws, etc. Being an investor yourself helps prove your worth to clients. PM is a great business model, IMO. I personally found that I would gain 3 units, lose one, gain 6, lose two and so on but always continued to grow and really never at risk of losing the entire portfolio all at once. The ones that left usually sold the property or moved back in. I found it easy to add properties thanks to so many other lousy PMs out there. I sold my PM business in 2014 but definitely know there are more tech tools to help streamline the leasing and management processes. Best wishes in your PM journey!
I think 2/3rds of complaints are through property MGMT. Its a whole other job, and you must be a systems and ops guy. Otherwise you will lose money. Opportunity cost are too high. I haven't started PM yet even though my investors have asked. I would need to hire the right human capital to build it out. Otherwise I would lose out on the sales income.
I was also told that your goal is to get to 80 doors as fast as possible. Otherwise it isn't worth it.
Thanks to everyone for the input/advice! There is a lot to consider. Seems NARPM is a great place to start!!