What’s that one question you get asked when you first meet someone new?
Usually it goes something like…
‘What do you do for a living’ or ‘What fills your time or fuels your passion’?
[feel free to borrow that next time you are at a networking or social event]
When I answer and tell my new friend I’ve been in the real estate management industry for over a decade I’m met with many more questions like, ‘What is real estate management like’ and ‘Is property management difficult’?
Since you asked, I’m about to answer those same questions for you, my new friend, and share with you a few resources along the way for a deeper dive into the industry.
What is Real Estate Management?
Real estate management at its core and in simple terms is the stewardship of a property or portfolio of properties.
A property can not maintain itself and needs a caretaker. Not in the ‘groundskeeping’ sort of connotation (although you’ll need to keep an eye on the curb appeal and image) but rather it’s the concept of asset management. Asset managers focus should be on on the totality of what the property requires to be at its best condition while working towards optimal benefit to the renter and profit margins for the owner.
Who is that asset manager?
They can either be the self-managed owner (aka investor), a hired professional property manager working for the investor, or a property management company working on behalf of the investor.
What Does it Mean to Manage Real Estate?
But beyond just the actions, processes, and system to manage the assets – real estate management is also the vocation of that caretaker or property management business.
And what does that mean exactly? It means the occupation of managing real estate assets is both the execution and planning of all the tasks as well as the responsibilities for the outcomes.
Real estate management embodies the person (or business) doing the management as well as the position of the stewardship of the physical assets.
More simply put, real estate management is a purpose + responsibilities + systems + people.
What Types of Property Management are There to Explore?
Getting into the business of property management can look like investing in your first rental home, starting your own property management company, or taking an entry level position in the industry – and everything in between.
The variety of types of real estate properties as well as the many different entry points in real estate management creates a lot of opportunity to enter into the field whether you decide to self manage or outsource.
Residential Property Management
When you think of real estate management, often residential property management comes to mind first. Within this segment there are multiple opportunities and here’s a sampling:
Mobile home parks (also known as manufactured home communities)
Commercial Property Management
Other options to manage real estate comes by way of serving the commercial needs of businesses by way of:
Many more commercial and residential real estate management opportunities exist and you can find a more comprehensive list of property types and management entry points here: How to Get Into Property Management
The Responsibilities of a Real Estate Property Manager
Whether you are self-managing, hiring an individual, or outsourcing to a management company, you’re sure to have questions about the responsibilities of a real estate property manager.
Is property management difficult?
Property management is certainly complex. There is a physical component to getting tangible tasks completed and the mental component of keeping on track with systems and deadlines. The list of tasks can seem daunting (see duties and responsibilities below) without good support and tools.
Usually when someone asks is property management difficult the underlying question is, ‘Is real estate management right for me’? The question holds the answer.
One aspect of the occupation often left out of the discussion is the emotional aspect of the job. Interacting with your tenants and meeting their housing needs isn’t something done without a high level of care and emotional energy.
In addition to dealing with renters, you’ll be engaging with prospects, vendors, repair persons, and more. Not to mention, if you’re starting a property management company you’ll be working with property owners (clients) to manage their property portfolio and expectations.
People are the heart of the rental business so if interfacing with the public is difficult then a position in property management may hold additional challenges for you.
If you understand the responsibilities and requirements, have a good asset management system in place using great tools in a robust real estate management software, and have the right mix of inter and intrapersonal skills – then the difficult part is just deciding to jump in. The work itself is challenging and rewarding but not any more difficult than other occupations that interface with the public.
Any occupation can be over complicated and made more difficult if you work hard enough to make it so – and property management is no exception. A driving purpose to help others plus using the best systems, tools, and resources can make real estate management easier than you may imagine.
Real estate management is a purpose + responsibilities + systems + people.
What are the property management duties and responsibilities?
Do you remember learning about prepositions in school? In, on, around, and through … If something can happen in, on, around, or through the rental property it falls under the duties and responsibilities of a property manager
The core of real estate asset management is the physical aspects of the property. For example, you need to be ready for and deal with natural disasters, landlord insurance, plumbing issues, renovations, vandalism, landscaping, and all things physically related.
Marketing and Financial
For tax compliance, profitability, and maximizing profits you’ll need to have a head for numbers as well as an understanding of marketing. Filling vacancies turns into income – and that income needs to be tracked.
The financial responsibilities may seem daunting but if you use a property management software with the right tools, posting expenses, electronic rent payments, and automated financial reports and tax documents can all be automated. When choosing the right system, don’t forget to ask if they also offer free onboarding and training to get you on the right marketing and financial footing.
Deep Dive: Marketing | SEO Tips & Free Resources for Property Managers
Tenant and Occupancy
You’ll always be involved in the tasks of managing the occupancy of the rental property. Just like seasons come with different maintenance tasks, there are seasons to manage tenant occupancy:
Track interested leads
Conduct tenant screening
Draft and execute leases and rental agreements, and
Handling tenant concerns
Asset management is the big picture whereas facility management is more the fine details in the maintenance of individual components of the facility (property) such as:
Yearly fire extinguishers inspections and filling
Changing smoke and CO2 alarm batteries
Checking for leaks and damages
Upkeep of community amenities and common areas like a pool or clubhouse.
It also means vetting which vendors to use and keeping that vendor list current.
Deep Dive: The Landlord’s Guide to Screening Vendors
Administration & Risk Management
As a real estate manager, you have to wear all the hats which means making sure you are in compliance with local, state, and federal regulatory laws as well as any property management, financial, and insurance compliance. The job also comes with tasks like making sure you have a good disaster preparedness plan.
Left unattended, real estate unmanaged becomes a liability. Real estate is like a living breathing thing in that it needs attention to survive.
What to expect as a real estate property manager
You can expect the unexpected as a real estate property manager.
What does that mean? Well, it means that no two days are alike. In between the routines of office tasks, you may be presented with emergency situations, vendor meetings, vacancy showings, rental inspections, and more.
You’ll be expected to be responsive to tenant concerns and repair requests and be thorough in crafting and executing lease agreements and other documentation.
Property managers should expect the unexpected and proactively prepare for any contingency.
If you’re managing a community property you may be responsible for organizing community events and activities.
No matter the role, you’ll need to be good at documentation and communications. What are those roles?
- Real estate manager — Oversees one or more properties on behalf of one owner or ownership.
- Real estate management company — One company overseeing a property or a portfolio of properties for many property owners.
- Investors (private landlords) — Manage the purchase of real estate to either – flip, hold, rent, outsource renting, or sell. Sometimes an investor or investor group will create a property management company as a separate entity to manage their investments in-house.
If you’re thinking about getting into a career as a real estate manager take a look at these guides for getting started:
When should you hire a management company?
After reading about all the ins and outs of the property management world, if you own property or are looking to invest, you may wonder if it’s best to manage your rental assets yourself or hire a management company.
That answer depends on your goals and time commitments. I know many investors who take on the management of their own portfolio, while others have outsourced some or all of those duties to a real estate management service.
Real estate management services can be stand-alone or comprehensive and cover the complete management of your rental assets or just a portion of those duties. You can outsource your tenant screening and selection, marketing, maintenance, landscaping, bookkeeping, or the entire management.
If you’re wishing to manage properties yourself, consider this bit of advice from Nathan Miller, founder of Rentec Direct:
A novice investor may see a rental property as a simple equation of: rental income – (mortgage + expenses) = profit.
While this formula is the basic mantra for an investor, you also need to include your landlord duties and energy into that equation. Investors can choose to hire a property management company to handle these duties or self-manage their rental properties. Alternatively, a lot of investors have found success in self-managing their rental properties as a way to cut down on their management expenses. Nathan Miller, Forbes Real Estate Council
He also shares this bit of advice with the BiggerPockets readers about outsourcing:
“It’s common to handle everything yourself when you invest in your first rental property, and it can often be a good idea – you’ll leave with a solid understanding of the budget, timeline, and tasks that go into making real estate investments successful. However, the transition from owning one property to owning multiple is a major milestone and usually means it’s time to scale your investment business. Instead of outsourcing everything at once, you might choose to build a team slowly as your business grows and your finances allow.”
Full article available here: Property Management | When is it Time to Outsource?
The bottom line
What is real estate management without a great landlord software and good systems, policies, and procedures in place? That is true at every level from investors managing their own rentals to property management companies caring for owner property portfolios. Real estate management is not difficult but it is complex and certainly rewarding.