Summary: In this article, learn about the many pros and cons of being a property manager, so you can determine if it’s the right choice for you.
As the famous saying goes, “knowledge is power.” This is especially true when it comes to considering a career as a property manager. It’s important for individuals to understand both the advantages and disadvantages of this profession before making a decision. Without this knowledge, they may find themselves ill-equipped to handle the challenges that come with managing properties, or miss out on the many benefits that the job can offer.
Professional property management has a long and varied history, dating back to ancient times. In ancient Egypt, for instance, the pharaohs employed overseers to manage their vast estates and ensure their efficient use. Similarly, in ancient Rome, wealthy landowners hired managers to oversee their properties, collect rent, and maintain buildings.
In the United States, the profession of property management began to emerge in the late 19th century, as cities began to grow and urbanization increased. As more and more people moved into cities, the demand for rental housing grew, and property owners needed someone to manage their properties and ensure they remained profitable.
By the early 20th century, property management had become a recognized profession, with the establishment of organizations like the National Association of Real Estate Boards (now known as the National Association of Realtors) and the Institute of Real Estate Management (IREM). These organizations helped to establish standards for property management, provide education and training for property managers, and promote the profession as a viable career path.
The big question is whether or not you should become a property manager. In this article we’ll discuss the pros and cons of being a property manager, but first… what does a property manager even do?
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What Does a Property Manager Do?
A property manager is responsible for overseeing the day-to-day operations of a rental property on behalf of the owner. However, the specific duties of a property manager may vary depending on the type of property being managed and the terms of the management contract.
The duties of a property manager include the following:
- Finding and screening tenants.
- Collecting rent.
- Maintaining the property.
- Coordinating repairs.
- Responding to tenant complaints and disputes.
- Managing finances.
- Ensuring compliance with relevant laws and regulations.
- Conducting regular property inspections.
- Managing evictions if necessary.
How Stressful is Being a Property Manager?
Being a property manager is not an easy job. It requires juggling multiple tasks and responsibilities and calls for a combination of social, technical, financial, and even legal skills.
A property manager needs to have the skills to deal with and resolve tenant issues, as well as handle complaints. They also need to be able to handle emergencies such as water leaks, fires, or other accidents. The property manager also has to stay up-to-date on local and state regulations related to rental properties, fair housing laws, and eviction processes, as violating these regulations can lead to legal trouble and even more stress.
Property managers are also responsible for tracking income and expenses, creating budgets, and providing owners with financial reports.
Pros and Cons of Being a Property Manager
On the one hand, being a property manager can be a lucrative and rewarding career, with opportunities for growth and advancement. On the other hand, the job can also be stressful and demanding, with long hours and a wide range of responsibilities. Here are some of the key pros and cons of being a property manager.
Pro #1: The property management sector is growing.
The first pro of being a property manager is that the sector is growing quite rapidly. According to a report by Statista, the property management market in the United States has been growing year-on-year since 2009 with a slight decline in 2022. The report further states that in 2022, the estimated market size of property management in the US was $90.5 billion
In addition, Mordor Intelligence reports that there are 307,621 property management businesses in the US, which is an increase of 4.1% from the previous year. Furthermore, since December 1995, the PPI (Producer Price Index) for residential property management services has risen 39.2% for an annual growth rate of 1.537%. These statistics indicate that the property management sector is growing and is a promising industry for those interested in pursuing a career in property management.
Pro #2: Proptech tools make property management easier.
Proptech, or property technology, is a type of technology that streamlines and optimizes real estate buying, selling, marketing, and management.
According to an article on Forbes, historically, residential property management has operated in a silo, separated from businesses that rely heavily on technology for innovation, growth, and success. However, the benefits of technology in the property management industry cannot be overemphasized.
Proptech tools such as rental property management software, virtual property tours, and smart home devices have made property management easier and more efficient for property managers. Property managers can now manage rent payments, maintenance requests, and lease renewals all in one place thanks to rental property management software.
Smart home devices, such as smart thermostats and security systems, provide tenants with more control over their living spaces. They enable property managers to monitor and manage their properties remotely.
In summary, the use of proptech tools has made property management easier for property managers by streamlining and optimizing various aspects of the industry. This has revolutionized the way property managers operate and manage their properties, leading to increased efficiency and productivity.
Pro #3: Low barrier to entry
Another pro of being a property manager is the low barrier to entry. Historically, the property management industry has always had a low barrier to entry. This is because property management is a service-based industry that does not require a lot of capital to start up. In the past, property management firms were typically small, family-owned businesses that managed a few properties in a local area.
However, as the industry has grown, larger firms have entered the market and consolidated the industry, making it more competitive. Despite this, the low barrier to entry still exists, making it possible for new property management firms to enter the market and compete with established firms.
Pro #4: Not tied to one client
As a property manager, you are typically not bound to one client. Property managers manage multiple properties and clients, providing a diverse and stimulating work environment.
According to Buildium’s 2022 State of the Property Management Industry Report, only about 11% of the surveyed property managers had between 1-20 properties in their portfolio, while more than 58% of the respondents managed over 100 properties. Managing an extensive portfolio that includes different property types helps the property manager to develop a broad range of skills and expertise.
Pro #5: Opportunity to learn a lot about real estate investing
Property managers have an excellent opportunity to gain a deeper understanding of real estate investing. By managing multiple properties and working closely with property owners and tenants, property managers develop a comprehensive understanding of the real estate market and the factors influencing property values.
This knowledge can be invaluable for property managers interested in pursuing a career in real estate investing or who wish to become property owners themselves. In addition, property managers often have access to a wide range of real estate industry contacts, which can further enhance their knowledge and expertise.
Pro #6: Good earnings potential
Property managers typically earn a base salary, which can vary depending on factors such as the size and complexity of the properties they manage, as well as the location of those properties. On average, in the US, a property manager with just a year’s experience can earn up to $56,397 a year. Instead of a salary, a property manager could also be paid property management fees which are a percentage of rental income for the properties they manage.
Property managers also earn additional income through maintenance and repair work, leasing fees, and other ancillary services.
Pro #7: Flexible working hours
Property managers have some degree of flexibility in their work hours, which is another pro of being a property manager. However, it’s important to note that their schedules are often determined by the needs of the properties they manage and the clients they serve. For example, property managers may need to be available to respond to emergency maintenance requests at all hours of the day or night, or they may need to work weekends or holidays to accommodate tenant move-ins and move-outs.
Some property management positions may offer more flexibility than others, such as those focusing on managing vacation rental properties or properties with fewer units. Flexibility in a property management job ultimately hinges on the nature of the role and the particular requirements of the properties under management.
Con #1: Some states require real estate certification
One of the biggest cons of being a property manager is that you may need to become certified. Only a few states permit property managers to work without a real estate license in the United States. These states include Idaho, Maryland, Maine, Massachusetts, and Vermont, while in Kansas, only residential property managers are allowed to work without a license. States such as Montana, South Dakota, South Carolina, Oregon, and the District of Columbia require only a property management license.
In some states, the requirements for obtaining and maintaining a certification may be strict. And failure to meet these requirements could result in losing the certification and the ability to work.
Con #2: Dealing with unreasonable requests and complaints
Historically, the issue of unreasonable requests and complaints has been a challenge for property managers. In the past, landlords were often seen as being unresponsive to tenant needs, leading to conflicts and disputes. This perception has changed in recent years, as many property management firms have embraced customer service and tenant satisfaction as core values. However, even with improved customer service, property managers still need to deal with unreasonable requests and complaints.
There are several reasons why tenants may make unreasonable requests or complaints. Sometimes, tenants may have unrealistic expectations about what a property management firm can do or what is within their control. Other times, tenants may be frustrated with other aspects of their lives and take out their anger on property managers. In some cases, tenants may be trying to take advantage of a property management firm or seeking compensation for a perceived problem.
To handle these types of situations, property managers need to have strong communication skills and be able to navigate complex tenant relationships. They may need to provide clear explanations of what is and is not possible when it comes to addressing tenant concerns, as well as work with tenants to find creative solutions to problems. While dealing with unreasonable requests and complaints can be challenging, it is an essential part of property management. It requires a certain level of patience, empathy, and professionalism.
Con #3: Requires multiple skill sets, e.g., marketing, negotiating, etc.
One potential disadvantage of becoming a property manager is that it requires diverse skills and competencies to succeed. These skills include knowledge of real estate laws and regulations, financial management, marketing and leasing, maintenance and repairs, customer service, and negotiating, among other areas.
Having to master all these skills can be challenging and time-consuming, particularly for individuals just starting out in the field or managing multiple properties. In addition, property managers may need to continually update their skills and knowledge to stay current with changing market conditions, tenant expectations, and regulatory requirements.
Con #4: Dealing with lengthy eviction processes
A tenant’s eviction can be time-consuming, costly, and emotionally draining for all parties involved, which is a big con of being a property manager.
The eviction process typically involves a series of legal steps, including serving notices, filing court documents, attending hearings, and potentially involving law enforcement to remove tenants who refuse to vacate the property. This process can take several weeks or months to complete, depending on the state and the case circumstances.
Con #5: Lots of paperwork
One major con of being a property manager is the amount of paperwork involved in the job. Property managers are responsible for a wide range of administrative tasks, such as preparing lease agreements, collecting rent payments, handling maintenance requests, and managing financial records. And any paperwork errors or omissions can have serious consequences.
The property managers’ job description requires them to be organized, detail-oriented, and skilled in record-keeping to ensure that all paperwork is filed correctly. However, property management software has made it easier for property managers to manage paperwork electronically, reducing the need for physical files and simplifying many administrative tasks.
Con #6: Legal liabilities in some cases
Being a property manager means bearing legal liability in some cases. This is because property managers are responsible for ensuring that their properties are safe and habitable for tenants and that all laws and regulations related to property management are followed.
If a tenant or third party is injured on the property or if the property is found to violate laws or regulations, the property manager may be held legally responsible. Property managers may also be held liable for issues related to fair housing laws, such as discrimination against tenants based on race, ethnicity, religion, or other protected characteristics.
To minimize legal liability, a property manager must know about all applicable laws and regulations and take steps to ensure that their properties comply.
Con #7: Long hours
Working long hours and feeling overwhelmed is a significant drawback of being a property manager, especially when managing multiple properties. It’s hard to maintain work life balance as a property manager, if you manage lots of properties. In some cases, property managers are required to respond to emergencies outside of regular business hours, which can lead to long workdays and even working on weekends.
Con #8: Needs a tough skin
Being a property manager requires tough skin, which could be emotionally draining. Property managers must be able to handle difficult situations, including tenant complaints, emergencies, and conflicts with property owners. They should be able to deal with difficult tenants who are late with rent payments or violate their lease agreement’s terms. They also need to be equipped to handle emergencies, such as flooding or power outages, and make decisions quickly and decisively.
Essentially, a property manager must develop the ability to remain calm under pressure, communicate effectively, and make tough decisions when necessary. This is one of the big cons of being a property manager.
What Are The Challenges Faced By Property Managers?
From managing tenant relationships to maintenance and repair works to managing finance and creating a work-life balance, property managers face various challenges in their day-to-day work. Some of these challenges include:
A property manager requires excellent time management skills to complete tasks efficiently and effectively, which is a significant challenge. Property managers need to develop workflows, prioritize tasks, and delegate responsibilities to manage tenant relations, oversee maintenance and repairs, handle finances, stay up-to-date with regulations, and handle unexpected emergencies.
Finding good tenants
It is a property manager’s duty to find reliable and responsible tenants who will pay rent on time, take care of the property and follow the rules and regulations set by the property owner and the property manager.
However, you cannot judge a book by its cover; hence, property managers need to develop a robust tenant screening process. This process may involve conducting background checks, credit checks, and employment verification to assess the tenant’s financial stability, criminal history, and rental history.
Accounting can be a significant challenge for property managers, especially if they are responsible for managing multiple properties or large rental complexes. Property managers are expected to keep accurate financial records, manage income and expenses, and prepare financial statements. They are even expected to stay up-to-date with tax laws and regulations to ensure they file accurate and timely tax returns.
Hiring the right hands
Should You Become a Property Manager?
Property management can be a rewarding career path for individuals who enjoy working with people, have strong organizational and communication skills, and are interested in the real estate industry.
There are benefits to becoming a property manager, but there are also challenges and downsides to working in the property management sector. As a property manager, you can earn high wages, work flexible hours, and learn multiple skills at once.
However, you also have to deal with difficult tenants and property owners, emergencies, manage complex accounting tasks, and regulatory requirements. Sometimes, you’ll have to work late hours and during the holidays.
To become a property manager, research the job’s requirements and responsibilities, the local real estate market, and the regulatory environment. You may also consider pursuing relevant education or certification programs, such as a real estate license or property management certification.
This article has considered the pros and cons of property management as a profession. Individuals with the right skills and interests can find a fulfilling and rewarding career in the property management industry.
Managing tenant conflicts or fixing leaky pipes isn’t going to be a great use of your time if you want passive rental income as a real estate investor.
Unless you are looking for a full-time job, it’s best to find and hire a good property manager. If you are looking for investment properties with professional property management already in place, we can help. Become a member of RealWealth for free to view available properties.