Real estate agents can make a lot of money, but it takes time to become successful in the business. Many people have asked me and wondered to themselves if starting in the property management business, would be a good way to begin working as a real estate agent. When you work with a property manager, they will most likely pay you a salary or wages and you will gain experience learning how to manage properties. As a bonus, many property management companies will let real estate agents sell properties on the side under the property management brokerage.
Even though you would get paid regularly and you would get some experience selling houses, I don’t think starting in property management is the way to make a lot of money in real estate. If you want to be a successful real estate, as I’ve learned from my time as a Montrose area real estate and property management company agent, you need to focus on selling houses from day one.
How much money do property managers make?
Property managers get paid by taking a percentage of the rents on the properties they manage. They may get 8, 10, 12 percent or other varying amounts for managing properties. Some property managers will also charge leasing fees, which may be one month’s rent or a half a month’s rent. Most property managers do not make a lot of money, unless they manage a lot of properties.
If a property manager managed 100 properties, and received 10 percent of the rents, they would make $10,000 a month if the rents were each $1,000 a month. That is a decent amount of money, but there is a lot of work involved in managing 100 properties, and all of those properties won’t be rented every month, which would reduce the amount the property manager makes. It would also take a very long time to build up a business that manages 100 proprieties in most markets. There would be many expenses that come along with a physical business, like marketing, rent, utilities and more.
A property manager has to rent homes, collect rent, screen tenants, manage repairs, keep track of accounting and complete many other tasks. Many property managers, need help when they start managing 100 properties or more, because it is a lot of work. If you want to work for a property manager to begin your real estate career, you may get a steady pay check, but it won’t be a big check. Most property managers do not make a lot of money and will not have a lot of money to pay their staff.
How much money do real estate agents make in the property management business?
A real estate agent who works for a property manager will be lucky to make much more than $12 an hour. My sister ran a property management company for years, and she had a lot of turnover with anyone she hired. In fact, one of the members on my team worked for her property management company before she joined my team. She hated working in property management! She hated dealing with tenants, repairs and the phone calls that come in the middle of the night. I am not saying everyone will hate property management, but it is more of a job than a career. Dealing with tenants, contractors and paperwork is not fun for many people, especially when you have to do it for other people’s properties.
If you own your own rental properties and manage them it is a lot more fun, because you should be making a lot more money!
What kind of training will real estate agents get from a property manager?
I think it is very important that new real estate agents get a lot of training and if possible have a mentor. However, you want a mentor that knows how to sell houses, not manage rental properties. That is unless your dream is to manage rental properties and not sell houses. In my opinion you will make much more money selling houses than managing rental properties. If you want to be a real estate agent and make money selling houses, it doesn’t make sense to learn from someone who doesn’t specialize in selling houses.
Even though property managers sell some houses, most of those houses involve the properties they manage. Property managers usually are not marketing for buyers or sellers, but will list a house for a landlord. In fact some property management companies will have a clause in their contract with landlords saying the landlord has to sell their house with the property management company if they list it. While you may learn how a property management company sells houses, most new agents won’t be able to use their techniques unless they are a property manager.
Will property managers have time to train new agents?
Property managers will have to train anyone that works for them, but they are going to train them how to manage rental properties. Most people do not have the time to train people how to do the job they were hired for correctly, don’t expect them to also train you how to do a job you were not hired for. Do not expect training specific to selling houses, because that is not the property manager’s specialty and they won’t have the time for it.
If you are working for a property management company, it will also be very hard to sell houses on the side. It is hard to sell houses part-time with any type of job. Clients will want to see houses at different times of the day and week. They will not want to wait until the weekend or until you get off work to see a house.
What alternatives are there for new agents starting out?
If you want some type of pay check when you become a real estate agent, you have more options than property management. The best option is to join a successful real estate team and it is possible they may pay you hourly to perform certain tasks for the team. When you join a successful real estate team, you know you are in an environment where the focus is selling houses, not renting them. You also know you will be learning from agents who sell many houses a year, know how to market themselves and know how to get clients.
If you want to become a successful real estate agent you want to focus all of your time and effort on building your business. Working part-time or for a company that does not focus on the niche you want to be in will slow down the process. Find a real estate team, not a property manager to work for and you will become much more successful, much quicker. If you are thinking of getting your real estate license, here is a great article on what it takes.