Should I Change from the Realty industry to Property Management?

Question

Aloha!!! to everyone, I just recently received my license as a Realtor in the State of Hawaii. I have been reading about Property Management. I actually thinking about doing mostly property management due the current state of the market. (For experienced PM's: Exactly what headaches’ has anyone encountered as property managers? What problems did you have? What are the pro and cons? The typical charge for a PM is about 50-70% of one months’ rent to obtain a tenant, then about 8%-12% monthly to manage, right? Just wondering what problems that you ran into. I’m seriously considering going into that market. Your opinion would be most helpful.) I am trying get a insight on what or how the average PM days are like. Does matter how much reading you do or research, having a variety of opinions seems most helpful concering certain subjects. So all would be ver helpful... thanks and Happy Answering...

Answer 1

I would certainly take Property Management over Property Sales these days. Sales are looking gloomy and probably will be for atleast a year or 2.

You have the charges right. The most common seems to be 50%/first month + 12%/other months. But the local market in Hawaii may be different... I'd check out the competition to get a feel for what they charge.

The biggest pain is renters who don't pay. Kicking them out is a HUGE pain. And You'll want to know the laws in Hawaii about kicking tenants out.... and know them really well before you're certain you want that responsibility. Some states are very renter friendly and let renters get away with crazy stuff before they must legally leave a house. ALWAYS check credit scores, that is your best gauge of a renter's quality.

Maintaining the properties isn't bad as long as the owners are pleasant to deal with. You simply hire the workers to do the job and take the expenses out of the rent. It's easy to do since you get the rent check before sending any $$ to the owner.

I hope that's helpful. Best of luck in your career adventures!

Answer 2

Real estate tends to be a particularly cyclical industry, going up and down based on trends in the economy at large such as the fluctuation in interest rates. The story of real estate often mirrors the general story of the American economy. Real estate soared in the post-World War II 1950s, sank in the 1970s, rose again in the early 1980s until the depression at the end of that decade, and was prosperous again at the end of the 1990s. Because of low interest rates in the mid-2000s, residential real estate was booming even when the economy was slow until the mortgage crisis hit and the bubble collapsed. After that point it sank and as of 2011 has yet to truly recover. Brokerage firms have taken on property management divisions in order to diversify their revenue streams and combat poor economic climates.

The real estate industry consists of three primary fields: brokerages, leasing, and management. Brokers bring together buyers and sellers of property, assist in the price negotiations and arrange the steps between a buyer first taking interest in a property and closing, including appraisals and inspections. Generally, the seller pays a commission, dependent on the sale price (usually 5 or 6 percent), and this is split between a broker working for the buyer and the broker working for the seller. Real estate brokers must be licensed in the state in which they work. Leasing brings together property owners with tenants, sometimes owning that property themselves, or subleasing property they have leased from someone else. Management companies are responsible for making sure their buildings are filled with tenants, deciding what to charge these tenants, making sure the buildings run properly, paying utilities, hiring staff and other maintenance for owners who do not want to manage buildings themselves. Since most property expenses are fixed, maintaining low vacancy rates is critical to management companies. In particular, property management has been a fast growing field and should continue in its expansion, as commercial and residential properties that were overbuilt during the real estate boom will continue to need management until they are sold.

The old adage, “Location, location, location,” is cliché but true -- location is centrally important to determining the marketplace and the value for real estate. Factors controlling the quality of a location include public transportation access, the quality of the roads and schools, income levels and stability and success of the local economy. Some popular real estate franchises are the Century 21 Real Estate franchise and the Coldwell Banker Real Estate franchise............Property Management Bendigo

Answer 3

http://www.irem.org/
is the Institute for Real Estate Management

http://www.payscale.com/research/US/Certification=Certified_Property_Manager/Salary
is a salary survey