Many real estate agents in North Carolina are tempted to offer property management services on the side to boost their income, especially in those months that are slow in sales. But is that a good idea? In this post, we discuss why real estate agents should not offer property management services, and suggest an alternative to boost your income from property management without actually being involved in managing a rental property.
Earning extra revenue from property management sounds attractive, and, as a property management company, we fully understand why. Unlike sales, property management is a recurring revenue business that generates a smaller, yet steady income over the year. Since NC license allows real estate agents to do both sales and property management, why not to rely on revenue from property management in those periods when sales drop? Everything seems good! But...
Property management and real estate sales are two different business domains
Although technically NC agents are licensed to do both real estate sales and property management, in practice they are not equally versed in both fields. And that is normal, considering that property management and sales are completely different business domains!
Whether we are talking about residential versus commercial real estate sales, or residential sales versus residential property management, all these business models require different sets of skills and high degrees of expertise and knowledge, which only years of experience will bring.
Want to do property management? Do it full-time
If you want to do property management, do it full-time! Unless you really want to become a professional in property management and are willing to dedicate yourself full time to acquiring the skills you will need, we recommend you do not offer property management services on the side.
Another aspect that fellow real estate agents should be cautious about is that property management demands a thorough knowledge of legal matters. Property management is also highly litigious because our day-to-day business relies on client trust. To build trust and avoid court appearances, property managers are extremely knowledgeable about legal issues and how to address them.
If sales is what you shine at, focus on sales
At Smart Shield Property Management, our goal is to make an impact and create added value for our partners and clients, and we think that only by concentrating all efforts in what we know best can make us achieve that goal. We believe that real estate agents should focus on closing new sales businesses.
The key to increased revenue = partnering with a property management company
By focusing on sales, in fact, you can increase your revenue through property management as well! You can actually partner with a property management company and sign up landlords. You still do what you are best at, closing new deals, but you also earn from referrals you send to the property management company.
We have a separate video covering how to set up a partnership with a property management company and increase your income through referrals. If you are interested in partnering with us, you can find out more on our website!