Property Management - Starting Questions

10 Replies

All, I am not sure if this is the right forum for this and apologize if it is not. I am a new Real Estate agent and am researching many different areas of the profession so I can determine where my characteristics/traits can be best utilized to become successful. I have read a book or two on Property Management and watched some YouTube Videos. I am solely looking for a push in the right direction on somewhere you feel I can go to get really good and thorough information on how to properly become a property manager. 

Thank you in advance for your help.

Hi Jonathan.  Your best training will be absolutely be hands-on.  I suggest you get a P/T job (or F/T if you can handle both) at a property management firm so you can see all that being a PM entails.  Find a local manager in your area and offer to take them out for a coffee or lunch in exchange for a Q&A session on the pros & cons.  Books are great, but should only be coupled with real world experience before you start your own company or start managing other people's investments.  

Unfortunately, there are a lot of people who call themselves property managers but actually have no clue as to how to properly manage real estate because they've never done it before.  It really hurts our industry when they "fake it til they make it".  I'm sure you've seen a lot of investors on this site and others who bash us regularly because of their personal experience with bad managers (or people who claim to be managers) and I totally understand it.  Those of us who really take pride in our work have to constantly fight against the perception that we are all lazy and incompetent.  All that said, be sure you get as much knowledge and experience as possible before you venture out on your own.  Best of luck to you!

@Jonathan Bolano congrats on your new license!  You are doing the right thing to research a specialty because real estate is waaaaay too broad to think you can do it all.  Property management is a great specialty; for residential search out NARPM (National Assoc. of Residential Property Managers) and for commercial management search out IREM (Institute of Real Estate Management). 

@Jonathan Bolano Like Laticia said, the best teacher is experience. You can read a lot but the nuts and bolts that will shape your working days come down to state and local statutes, how working with the local government (Housing Authority, building inspectors, etc) is done, and then all of the fun that comes with leasing and managing tenants. And managing employees/maintenance/contractors. And working with lawyers and collection agencies. And working with accountants! The list goes on.

You can get a sense from that that how you'll manage in a particular area is really defined by a combo of a lot of external things and how you fit your services into the local market, and how to best serve the needs of your clients and tenants.

Beyond all of those things, the best advice you can get, if you're serious about building a property management company, is to really think about what systems you want to put in place. What will you do to be sure work requests are fixed in a timely fashion, how will you handle and process leasing activity and rental applications, how will you handle access issues at the properties, how will you do bookkeeping, etc... . Start, as much as possible with things that work at 1 property or 100 properties so you're not having to completely change your practices as you go through growth phases. Some things you won't be able to foresee but having that mindset will help get you in the right gear.

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@Peter MacKercher  

Hey Peter,

This is great advice and I understand experience is key. I posted something two posts about this to Laticia that explains why I don't have that luxury. I am doing my best outside of what I already have on my plate to learn more about this the best I can. I plan to own my own properties and want to understand what types of things most property managers do and focus on so I can hit the ground running. I believe in planning ahead. 

"It is better to be ready for an opportunity and not have one than to have an opportunity and not be ready." - Don't recall who said this

The things I want to learn about are the systems that are commonly used. I have contractors to respond timely, I have a plan in place for applications and screening. I have not looked into access issues, bookkeeping, etc. 

In my current role at my FT job, I am in charge of people and labs. I started with one and made sure to make everything I did scalable because of where I seen the roll going. However, I would definitely still need guidance in this moving forward. 

If you're looking for specific systems then it's better to ask specific questions -- do you have any issues you're trying to work through at the moment? A lot of mentoring and advice tends to work that way. You're working on something and ask a mentor about the issue at hand, and you get advice on that. It's hard to open book things otherwise since there's a lot to cover.

@Peter MacKercher  

So I'm interested in learning the following:

- Does a PM help choose tenants, manage applications, and screening?

- Does PM have access to repairs account and solely determines if something needs to be fixed or not, and then fixes pulling money directly out of the repairs account?

- Does the PM handle evictions

- Do most PM's print up quarterly reports to show if building is making or losing money

- Basically, do I pay the PM monthly off rent, and then literally manage the entire building? What would my involvement need to be?

I'll start with that for now.

@Jonathan Bolano Some of the answers will be fine tuned by your agreement with the individual owner, but generally the answer to those questions are:

- Yes

- Yes, but there are commonly dollar limits set, so that, if a repair were to exceed $500, the PM must seek consent from the owner. Some owners will want to know about every maintenance item that comes up as it does, some are OK with seeing it on monthly reports, some owners, typically long-term clients, trust your judgment and may only ask for details about this or that if the item is unexpected or unusual.

- Yes

- Quarterly would be slow; most PMs send these each month.

- How you pay PM fees and structure, you have some discretion over. There are rules about how bank accounts can be set up and so forth, but that comes down to state/local law level. A common structure is to keep a reserve account for each property that the owner funds to a certain amount. That's used to cover expenses/repairs. The PM collects rents, assesses their fee for collections, then distributes the remainder to the owner.

But yes, if you're going to offer a property management service you should expect to manage the entire property. Leasing, repairs, inspections, accounting, evictions, etc.

You're probably best off reading some books about property management to get a better idea. Some of your questions above are pretty fundamental and it seems like you're just getting a picture of what the industry actually does, so that'd be a lot faster than pinging a bunch of questions on the forums. I recommend checking out the BiggerPockets books -- they're very readable and informative.

i have a question !! I had a property management since 2011. We been working well i guess.

Start this year 2018 he collect the first 3 months rent but DIDN'T give it to me. 

Everytime i called and ask him he kept saying he will deposit to me today.... 

what should i do?

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