You've been working with your realtor for years, you know, and trust them with your real estate needs. They have provided top-notch service, and you highly recommend them. Although, now you would like to rent your property and create passive income that comes with owning rental property. Rental properties can be extremely beneficial if you have the right person or property management company managing your rental home. You may think, "Well, I've worked with Jimmy through numerous real estate transactions. I should just have him manage my property." As a property management company, we have seen homeowners and real estate investors rely on their realtor to manage their property, and it usually doesn't go very well.
At The Listing Real Estate Management, we love our fellow realtors and brokers, and we appreciate everything they do! We are a fully licensed real estate brokerage that specializes in property management. Property management and real estate sales are two very different real estate activities. So, the question we'll be answering is, should I use my realtor to manage my property?
The short answer is no, think about it: if you were getting extensive commission checks for buying and selling real estate, why would you bog down all your time managing a single rental property? Many real estate agents and brokerages use property management as an income crutch. There are many moving parts to effectively and efficiently operating rental property, and if your realtor is chasing down sales, chances are your tenants, and rental properties are getting overlooked.
Realtor Programmed Mindset
Real estate agents vs. property managers have an entirely different mindset. Realtors spend most of their time chasing new clients, seeking new listings, searching the MLS for new listings, performing showings for their buyers, and wearing several other hats during their workday. A busy realtor does not have the time to take tenant calls, schedule maintenance requests, or adequately look after your rental property—their minds on several other things such as as…. Real Estate Sales.
Property managers and property management companies specialize in leasing and property management. Property managers spend all their time focusing on the day to day operations of running a successful rental property. Each property is accounted for and properly maintained. Many of the best property management companies don't make sales; they refer clients to excellent local realtors.
Real Estate Duties vs. Property Management Duties
Real Estate Agent Scope of Work
Assist and advise clientele in a real estate purchase
Assist and instruct the client in the real estate sale
Advise upon current real estate market conditions
Real estate marketing, open houses, brokers open
Assist the transaction from showing to the closing
Understand clients financial abilities, wants and needs
State licensing/education requirements
Property Managers Scope of Work
Rental property compliance
Follow state & federal rental property laws
Understand landlord/tenant law
Rental property collecting
Rent ready maintenance
Move-In/Move-out security deposit claims
Rental property tenant screening
Rental property accounting
Online owner portal
Online tenant portal
If you read over the scope of work duties between a real estate sales agent and a property manager or property management company, you can see there is a significant difference between the two.
Commission Structure for Real Estate Sales Vs. Property Management Pay Structure
The standard commissions for the sale of real estate are 6%. The buyer's real estate agent receives 3%, and the seller's real estate agent 3%. Real estate agents' primary focus is to gain sales and boost their sales volume.
Property managers receive a leasing fee ranging from 50%-100% of one month's rent for finding and placing a tenant. Monthly management fee (in the Orlando Market) 8%-10% of the rental amount collected is standard.
Commission structures are entirely different from one another, and that is typically a telltale sign as to the difference between the two.
Property Management Conclusion
Plato states it best, "Each man is capable of doing one thing well. If he attempts several, he will fail to achieve distinction in any." If your realtor's distinction is buying and selling real estate, they will not be properly looking after your rental property. Your realtor may tell you, "I've never managed property, but I certainly can." Then you need to do further research for your Orlando property management company.
We refer our sales to specialized real estate sales agents. We do this to achieve success in our niche. If you are a homeowner or real estate investor that needs guidance for excellent property management companies throughout the nation, reach out to The Listing Real Estate Management, the most reliable property management company in Orlando, Florida. We have a network of the best nationwide property managers. We're part of NARPM - the National Association of Residential Property Managers, so we'd love to point you in the right direction. Cheers!