Why Real Estate Agents Don't Experience Property Management Success
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Real estate agents and property managers work in different niches of the property market. However, sometimes the lines between their roles might be quite blurry.
Some property owners think they can ask a real estate agent to manage their rental property. Indeed, there are real estate agents that do offer this service. However, if a property owner is ambitious about the return on investment they would like to realize from their investment property, hiring a real estate agent for property management is not the route to take.
As a property manager, you already know that's true, but you might not fully understand the advantage you have in helping rental property owners succeed! Read on to discover why you experience more property management success than real estate agents!
Real Estate Agent vs. Property Manager: What is the Difference?
The primary focus of a great property management company is managing properties. That's a critical factor that sets you and your property management company apart from real estate agents in your area.
Successful real estate agents are great at making sales. However, they operate on a different business model than property managers. Real estate agents focus on making one sale after another, moving from client to client as deals close.
So, what does a good property manager do? Property managers are intent on the long game. They invest time in building trusting relationships with their owner-clients and tenants. Property managers rely on recurring revenue from month to month, while real estate agents earn commission-based fees, usually as a one-off fee from a client they might not serve again.
Characteristics of a Profitable Property Manager
What makes property managers better for property owners? Most successful property management companies build teams of managers and support personnel who are:
- Experts in the local rental markets (average rent for different types of properties, vacancy rates, etc.)
- Familiar with the Federal Fair Housing Act and State laws governing landlords and tenants
- Exceptional at communicating, both in written and spoken form
- Excellent at dealing with people from all different walks of life
- Going to oversee properties with an investor mindset
- Well-organized and good at time management
We're not saying real estate agents don't possess some of the same qualities. However, property managers must embody these traits in a way that helps build long-term relationships with property owners and tenants.
Why Do Many Real Estate Agents Fail at Being Property Managers?
Can a real estate agent be a property manager? In theory, if they have the correct paperwork, a real estate agent may also act as a property manager. However, is it possible for them to divide their time between two significantly different tasks? Does an effective realtor have the right characteristics to achieve property management success? Let's dig deeper.
A Sprinter's Mindset
Real estate agents don't quite have the proper mindset for property management. Most real estate agents have a sprinter's mentality. They work hard and fast to close a transaction, then move on to the next sprint race (or home sale).
By contrast, property management is more like a marathon. Most successful property management companies must have a long-term mindset. If you approach a property management business with a sprinter's attitude, you will be unlikely to succeed.
Realtors who offer property management as a secondary service will not be as focused on gleaning the most they can from an owner's investment. On the other hand, a property manager is focused exclusively on overseeing rental properties and growing investment returns for owners.
For a realtor, it is all about the transaction. Real estate agents offer their services primarily preceding and during a sales transaction.
However, a property manager is relationally minded. Property managers provide services over an extended time and invest in relationships with clients, tenants, and vendors along the way.
Can Property Managers Be Real Estate Agents?
As long as the state licensing requirements are met, yes, property managers can act as real estate agents and oversee the sale of properties for investors. As a successful property manager, you will gain the trust of your clients. Your clients might then want to entrust a sale of one of their properties to you rather than outsourcing to a real estate agent.
Offering buying and selling services (in addition to our property management services) is an excellent way to expand your business and retain clients.
Benefits of Selling Investment Properties In-House
There are several benefits to overseeing a property sale in-house.
- You can sell a property to another investor who entrusts their rental portfolio to you so that you don't lose the income from this unit.
- The new property owners don't need to find a new tenant.
- The seller is likely to benefit from a swifter sale.
- The current tenants don't have to move out.
On the other hand, gaining a few brownie points from a local real estate agent is also advantageous. If you recommend them to your client, you may not benefit from a sales commission in the short term. However, you may benefit from many referrals (and years' worth of rental commissions) from the estate agent further down the line.
Maximize Profits with Solid Partnerships
Real estate agents might not make great property managers. However, they may make good business partners for a property management business. Real estate agents and property managers can have a symbiotic relationship: giving each other leads to further their respective businesses and improve profits.
Real estate companies usually pay for sales leads from Zillow, Trulia, and other sources. However, when client owners decide to sell a property, property managers get leads for free. Similarly, real estate agents encounter people buying properties that may require the services of a property manager.
Partnering with real estate agents gives you access to more investors who can use your services. Successful property management companies build good relationships with agents in their area. Realtors can do what they do best (sell lots of properties), then turn investors over to you so you can do what you do best (manage properties and maximize returns).
Enjoy More Property Management Success With Good Relationships
Building good, long-term relationships with property owners and tenants sets you apart from real estate agents offering property management as an additional service. Your relationship-building expertise can also help you build solid connections with agents in your market to generate referrals and deliver expert property management services to their clients.
When your company offers more services, your business and revenue grow! Let Real-Time Consulting Services help you analyze your business offerings, team members, processes, and more to help you experience more property management success.
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