Managing Friends/Family's rental properties Pro's vs Con's?

Question

Hey BP,

We have several friends that own a lot of rental properties, and several of them mentioned using us as their property manager.

Is this a good idea or will it make our BBQ's awkward?

We know we'd do a great job  but as everyone knows not all PM's can make everyone 101% happy all the time.

Fred Heller · Answer

@Karen Morgan No, you would still need a real estate license. Activities like leasing, collecting rent, and handling money are considered brokerage activities under Texas real estate law.

If you're serious about property management, then you'll need to create a corporation, either an LLC or an S-corp. Then you'll have to get a brokers license for that entity. In order to get a brokers license, you'll need someone with a brokers license to sign on as the designated broker of the company. He/she will also have to be an officer like VP or Secretary.

You'll have to complete the 190 hours education requirement plus test to get your own real estate salesperson license. After you have that, your corporation can sponsor you under its brokers license.

Mark B. · Answer

In some states if you are an employee of the owner of the property you do not have to be a RE agent/broker to manage others properties. More often this is done with multi family.

BBQs - You need to spell out expectations in advance, including backups when you go on vacation or are otherwise unavailable. Something will eventually go wrong or one of you will disagree with something. This is more likely to go well if both parties have the personalities and knowledge to know what decisions belong where, that life isn't perfect and ability to get past when things don't go well. This really isn't all that different than the concept of doing business with family members - some can pul it off successfully and others can't.

Anthony Gayden · Answer

Be sure to check state laws. In AZ you have to be a licensed RE agent to manage others properties.

If you are already an agent, I think it is a good idea if you are trying to start your own property management business. Treat their properties as well as you treat your own. They will spread the word and you will see more business coming your way.

Account Closed · Answer

Dont do it. FreindsZFamily-their not your business partners.  Avoid f n f if at all possible.

Karen Morgan · Answer

@Fred Heller  Thank you, Fred!  Clarifying question:  can you have a person w/ a real estate license as an employee or the company to qualify?  Just curious...been starting to think about doing property management but don't have a license myself.

Fred Heller · Answer

@Karen Morgan  Yes you must hold an active real estate license and be sponsored by a broker (if you don't have a broker's license) to manage Texas property that you do not own.

Karen Morgan · Answer

@Fred Heller - I assume this is true in Texas?

Karen Bickford · Answer

@Jennifer Griffin if you are not already managing for them you are missing out on the opportunity.

On the other hand it could  also be viewed as the practice  of lending money, hiring or renting to friends and family and that view is you shouldn't do it :)

Fred Heller · Answer

In many states you can't legally manage the property of someone else without a RE license.

Linda Weygant · Answer

In Colorado, you must be a broker in order to manage property that does not belong to you.

Managing Friends/Family's rental properties Pro's vs Con's?

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