How to Become a Property Manager & Get Into Property Management this Year

Buying and managing rental properties can be a good way to earn extra money or even to replace your current income. One of the biggest questions that arises when you buy a rental property is whether to outsource the property management or do it yourself.

At Addition Financial, we work closely with our members who want to get started buying rental properties. They sometimes ask us how to become a property manager.

With the help of some real estate experts, we’ve created this short guide to help you become a property manager this year.

Buy with Caution

You can’t become a property manager without property to manage. Our first tip relates to the process of buying your first rental property. It comes from Justin Pogue, the author of Rental Secrets. He offers two pieces of advice about buying your first property.

“First, that feeling of uneasiness about buying your first property will not go away until you actually buy your first property. While reading books, interviewing others and doing your due diligence is essential, you will still feel uneasy prior to your first investment. This is natural and normal.

“Second, schedule your property closing for the morning. You're closing on your first property and sifting through a mountain of paperwork to take on a 30 year commitment. Pay no attention to the title company people rolling their eyes as you dare to actually read the documents you are signing. In addition, if you have questions about the documents you'll want to have plenty of time to contact your lender to clear them up. You don't want to be rushing against the clock, especially if your lender is in another time zone.”

We like Justin’s advice because it acknowledges that buying a rental property can be stressful and more than a little nerve-wracking. There’s nothing wrong with being nervous, but the key is to carry out due diligence, take your time and make sure you understand what you’re signing, before you sign it.

Factor Your Time into Your Expenses

Property management is a job and if you want to learn how to become a property manager, you must think of it as a job that deserves compensation.

That’s a tip we got from Greg Bond, the CEO and Founder of Renovation 320. Here’s what he said:

“With any investment, you have to look at your return on your money and your time. For return on money, I first look at the purchase price of a rental property and then how much it will rent for per month. You need to factor in costs for maintenance, capital improvements, property management, vacancy, taxes and insurance. If you are still positive in cash flow per month after these expenses I would say that looks like a good deal!"

In other words, you must consider your time and fair compensation for it when you evaluate the purchase price of a rental property. You may need to do some research and consult with an experienced property manager to estimate the time investment in managing the property you’re buying.

Ask Questions

One of the biggest mistakes a first-time buyer of investment property can make is to assume they can handle managing a property without educating themselves about what the job entails. Our next tip comes from Nick Disney, the CEO of Sell My San Antonio House. He writes:

“If you are looking to get started in your local market, get out and network with experienced rental property investors. They will have a wealth of knowledge of things to do and not to do as you are getting started. They also already have many of the contacts that you will need such as contractors, insurance agents, and attorneys. Don't be afraid to reach out! Most experienced investors will remember what it was like when they started and won't mind giving you a tip or two to get you going in the right direction.”

While Nick’s tip doesn’t mention property managers specifically, it certainly applies to the topic of property management. Here are some ways to implement this tip:

  • When you meet an experienced property manager, invite them out for coffee and ask questions about their job.
  • Ask if you can shadow a local property manager for a day or two to get a feeling for what they do and how much time it takes.
  • Hire an experienced property manager to manage your first property and work side-by-side with them to learn the ropes.

If you can find a mentor – or more than one – you can learn from them and prepare to manage your first property.

Fulfill Your Legal Requirements

Property management is a job that requires specific education and licensing. The requirements are there to ensure that people who manage properties understand the relevant laws, including tenant rights and landlord responsibilities.

In the state of Florida, property managers are governed by the State of Florida Property Management Association (SFPMA.) Their website lists the requirements to be certified as a property manager in Florida.

The most important requirement is that all property management companies in Florida must have a real estate broker license. That’s because property management is considered a real estate function. There are some exceptions, but in most cases you will need a license. The requirements for a license are:

  • You must be 18 or older
  • You must have a high school diploma or its equivalent
  • You must have held a real estate associate’s license for at least 24 months in the five years before you become a broker
  • You must complete a Florida Real Estate Commission pre-licensing course
  • You must pass the Florida Real Estate Broker Association exam and pay all relevant fees

If you are managing a community association, you may not need a broker’s license. However, if your association has more than 10 units, or a budget over $100,000, you will be required to get a license.

Planning to buy a property outside of Florida? Click here to look up the real estate licensing requirements by state.

Prioritize Documentation and Communication

Property management is a job that involves a great deal of responsibility. If you go into it in a disorganized way, you can run into easily avoided problems.

Let’s look at documentation first. There are two categories of documentation:

  1. Document what you do and what you need to do, as well as how long it takes you to do it. Tracking your time will help you do a better job of managing your time – and that’s something that you must do. Property management can easily become more than a full-time job, and documenting what you do will help you understand the scope of your job.
  2. Document your interactions with tenants and potential tenants. All service requests should be documented, and any conversations you have related to your tenant’s rights and responsibilities or yours should be documented somewhere, either on paper or electronically.

Documenting your time and activities will help you plan your days. You can review your documentation to identify patterns and find ways to do your job more efficiently.

Communication is equally essential to your job. You should clearly identify and communicate your rental requirements to prospective tenants. For example, if you require a renter to have income at a certain level or you prohibit some breeds of dog, you should say that up front so there’s no misunderstanding.

The same is true when you must carry out routine maintenance. If you need to enter a tenant’s apartment, you are legally required to give them notice of your entry. Making communication a priority will minimize misunderstandings.

Ongoing Education

In every industry, best practices evolve over time. If you decide to become a property manager, you’ll need to commit to staying on top of new practices and technology if you want to do a good job.

Of course, you’ll also need to keep your real estate broker’s license up to date. Most states have continuing education requirements for licensing. It’s your responsibility to keep your license current and learn what you can to improve your skills and provide excellent service to your tenants.

Reach your real estate investment goals by using our printable checklist.

Establish Consistent Procedures

Finally, if you want to learn how to become a property manager, you’ll need to establish consistent procedures for your properties. These may include:

  • Criteria for approving rental applications, as mentioned above
  • A dedicated email address for tenants to contact you
  • A system for maintenance requests, e.g. an online ticketing system
  • An online rental payment portal
  • A management company website where tenants can access written procedures

Consistency is extremely important. Not only will it help you do a better job, but it will ensure that your tenants are treated fairly and predictably, even when you’re busy.

Learning how to become a property manager can take some time, but if you follow the tips we’ve included here, you can get there quickly and start reaping the rewards of owning and managing rental properties.

Need a loan to buy your first rental property? Click here to learn how Addition Financial can help!

The content provided here is not legal, tax, accounting, financial or investment advice. Please consult with legal, tax, accounting, financial or investment professionals based on your specific needs or questions you may have. We do not make any guarantees as to accuracy or completeness of this information, do not support any third-party companies, products, or services described here, and take no liability or legal obligations for your use of this information.