Disclaimer: Bryan Church’s Real Estate Corner is not presented or intended to be used as investment, legal, tax, or as any other advice and should not be used as a basis for any type of decision.  Consult a professional before making any decisions.  

The Future Looks Bright for California Property Managers

August 7, 2016

Property managers will be busy people in the future as more and more homeowners become tenants who need a place to live.  Of course, people will continue buy properties, especially if there are low interest rates loans available.  However, if residential property values decrease due to less demand for residential housing, homebuyers may decide to wait out the downward-trending buyers' market and buy after it finally bottoms out.  For this reason, property managers with the ability to handle sales and purchases, as well as property management, should do well during the coming years as world-wide central bank stimulus programs run their course and the economy returns to normal market fundamentals. 

 

Property management is a specialty profession where real estate brokers manage single-family homes, condominiums, duplexes, apartment buildings, leased investments, and other special use properties.  California real estate brokers and salespersons who manage properties must understand real estate agency relationships, fair housing laws, contract law, and rental agreements.  They must have a working knowledge of common property management business practices, credit and background checks, property maintenance, insurance, trust fund accounting, advertising, real estate economics, and even some knowledge of real estate taxation. 

 

In California, property managers need a real estate license to be able to manage properties for the general public.  They can have a real estate broker's license and work on their own; or have a real estate salesperson's license and work under a broker (although a real estate broker can work under another real estate broker).  Property managers are usually paid a percentage of the gross collected rents received each month. If you are working as a real state salesperson under a real estate broker, you may be paid a percentage of collected rents, hourly, or salaried with bonuses.  It really depends upon the size of the property management company, type of properties managed, and amount of rental activity in the market. 

 

An advantage for people going into the property management profession is that owners always need a professional to manage their properties.  With a large number of single-family homes being investor-owned, the need for property managers should increase in the future.  This provides steady employment for property managers and allows some upside from sales commissions.  This occurs as properties are bought and sold by real estate investors who have their properties under your management.  It also positions you to be ready for the next single-family upward-trending sellers' market.  Unfortunately, with stimulus money first pouring in from the U.S. Federal Reserve Bank, then Japan, and now the European Union is going to inject funds into new businesses and infrastructure, the necessary market fundamentals needed to produce an upward-trending sellers' market may not occur until sometime in the future.     

 

Therefore, handling real estate investor purchases and managing these properties over the holding period should be a good place to be for a new real estate licensee in the coming years. 

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