If you’ve been in the real estate game long enough, you’ve probably heard property owners ask, “Can my Realtor also manage my property?” It sounds convenient. One person handling everything, from finding tenants to managing repairs, collecting rent, and dealing with tenant complaints. But is it really a good idea? Here’s what you need to know before making that call.
The Convenience Factor
Let’s start with the obvious reason someone might think this is a good idea. Hiring one person to handle all aspects of real estate can simplify your life as an owner. Realtors already understand the market, know how to price homes, and are usually familiar with rental laws. Many have access to a broad network of contractors, handymen, and inspectors.
If you already trust your Realtor, why not let them manage the property too, right?
This setup can work if the Realtor is licensed and experienced in property management. However, property management requires a different skill set than selling or buying homes. Even though both roles revolve around real estate, the day-to-day responsibilities don’t exactly overlap.
Realtors Are Salespeople First
Real estate agents are trained to sell. That’s what they do best. Marketing properties, negotiating prices, and closing deals – this is their bread and butter. When it comes to rentals, many realtors know how to market a property and screen potential tenants, which can make them effective in filling vacancies. But what happens after the tenant moves in?
Managing a rental property requires attention to detail, handling repairs, and making sure rent gets paid on time. These are tasks property managers do every single day. Realtors don’t always have the time or desire to stay on top of these things. Their main focus is selling homes. A property manager, however, is all about maintaining long-term relationships with tenants and keeping the property in top shape.
Licensing and Legal Issues
In most states, being a licensed Realtor doesn’t automatically qualify someone to manage properties. Property management has its own set of regulations. While some states allow real estate agents to manage properties, others require a separate license. That means if your Realtor isn’t properly licensed, they’re technically not allowed to manage your rental property.
If your Realtor is managing your property without the right license, that could lead to some serious legal issues down the line. Property management comes with a lot of legal paperwork, compliance with local rental laws, and proper handling of security deposits. Messing up any of these details can lead to lawsuits, fines, or worse.
Property Management is a Full-Time Job
Managing a property is not a set-it-and-forget-it deal. Tenants can call at any time of day or night with complaints or emergencies. Whether it’s a broken pipe, a heating issue, or a leak in the roof, someone needs to handle it immediately. Realtors are often juggling multiple clients and showings, which means they might not have the bandwidth to respond to tenant needs quickly.
A professional property manager, on the other hand, has systems in place to handle tenant issues swiftly and efficiently. They typically have 24/7 hotlines for emergencies and established relationships with vendors who can take care of repairs at a moment’s notice.
Tenant Relations
There’s an art to maintaining good relationships with tenants. It’s about keeping them happy while ensuring they respect the property. Property managers have years of experience in dealing with tenants, resolving conflicts, and making sure rent is collected on time. If a tenant is late with rent or violates the lease, property managers are trained to handle these situations calmly and professionally.
Realtors, on the other hand, don’t usually deal with tenants for extended periods. Sure, they might screen a tenant or show them the property, but that’s where their job usually ends. When the tenant is unhappy about something, or the rent is late, a Realtor might not be as effective at handling those issues.
Financial Management
Managing rent payments, keeping track of expenses, and sending financial reports to the owner require a lot of attention to detail. Realtors generally aren’t trained to handle financial management for properties. A property manager has software that helps track every penny spent on repairs, maintenance, and income. This gives the owner a clear picture of the property’s profitability.
If your Realtor doesn’t have experience in financial management, there’s a risk that rent could fall through the cracks or expenses might not be accounted for properly. Property managers also deal with taxes related to the property and can often save owners money by staying on top of tax deductions.
Legal Issues with Tenants
If a tenant stops paying rent or breaks the lease, a property manager knows exactly what to do. Evicting a tenant requires knowledge of local laws and strict adherence to procedures. One wrong step, and you could find yourself in legal hot water. Property managers deal with evictions all the time and know how to handle them without causing legal issues.
Realtors, while they might have some experience with the laws around renting, don’t usually handle evictions. If things get messy with a tenant, a Realtor might not be the best person to resolve the situation, especially if it requires going to court.
How Realtors and Property Managers Can Work Together
There’s also an option where your Realtor and a professional property manager work together. The Realtor handles the marketing and leasing side, while the property manager deals with the ongoing responsibilities of managing the property. This arrangement can give you the best of both worlds, provided you hire the right people.
This approach makes sense if your Realtor is great at getting tenants in the door but doesn’t have the time or skills to handle the day-to-day management. The property manager can take over once the tenant is settled, ensuring your property is well-maintained, and rent is collected.
Weighing the Pros and Cons
Let’s recap the situation. Can your Realtor also be your property manager? Yes, but it’s not always the best solution. While the convenience of having one person handle everything might seem appealing, it often leads to problems if the Realtor isn’t equipped to manage the property.
A Realtor might not have the legal knowledge or the time to properly manage a rental property. If they aren’t licensed for property management in your state, this could expose you to legal risks. On the flip side, a property manager can ensure that your property runs smoothly, tenant relations are handled properly, and your property remains profitable.
Before making your decision, weigh the pros and cons based on your situation. Consider how much time your Realtor can realistically dedicate to managing your property. Do they have the expertise in dealing with tenants, maintenance issues, and financial management? If you trust your Realtor and they are licensed to manage properties, this might work for you.
However, if you’re serious about making sure your rental property runs like a well-oiled machine, hiring a dedicated property manager is likely the better choice.