How Much Do Property Managers Make? And How They Can Make Even More
Property managers are usually people who can handle many things at one time, work well with people, manage multiple accounts, and can keep people organized. How much do property managers make depends on how much they charge.
Normally, property managers are business owners managing properties for landlords. The average income or salary for a property manger is around $50,000 a year. This can be higher or lower depending on what area of the country they are managing properties in.
Most property managers I have worked with are usually business owners. A property manager would usually start in the business by managing one to two properties to start. Then, the property manager will continually ad more properties to their portfolio of properties over time.
Property Management As A Business
Property managers build up the business little by little.
If you want to start your own business being a property manager, focus on getting just one landlord to work with you, then build from their.
Once you get the first landlord, you will be able to get more because you can show that other landlords already trust you.
As property management companies grow, so do their profits. After a while, they have a lot of landlords they are working for and have many properties they manage.
So, how much do property managers make depends on how hard the property manager wants to work and how many landlords they are working with.
Want to make more money, get more landlords and manage more doors. It's that simple.
Here is the math in rough numbers:
Doors X Property Manager Fee = Profit
100 Doors Managed X $95 = $9,500
Now, having 100 doors will be a lot of work. Most likely you will need to hire employees to help you run your business.
What is the average salary for a property manager in the United States?
Like I said, most property managers start their own business and do not just go out and get a job. Their salary and income can be seen as comparable. A salary is what you are paid when you work for someone.
Income is what your business makes and you take home.
The average salary or income for a property manager is around $50,000 a year.
Now this does depend on the area of the country the property manager is working in. Places like San Francisco will make a lot more money than what a property manager makes living in Oklahoma.
Property managers are Entrepreneurial
Most property managers started as a one-man shop managing a few properties.
Hiring employees is the next step when the business gets larger. This is when a property manager earns a salary instead of making income.
Do You Need A Degree To Be A Property Manager
No, you absolutely do not need a degree to be a property manager! 🙂
You are basically a person who is managing someone else's home for them. Making sure people living there are taking care of the place, paying rent, and finding new tenants when you need to.
It is not rocket science and is a pretty simple job. It is simple but it is not easy. You need to deal with tenants, landlords, municipalities, etc. in this business.
Do You Need A License To Be A Property Manager
Yes and No.
It all depends on the city you are working in. Some cities have passed laws requiring a property manager to have a license of some sort.
It may be a realtors license or a property managers license.
All you need to do is call the local city department that handles business licenses.
Ask them what you need to start a property manager business and they will help you follow the laws, pay the right fees, and comply with their regulations.
Pro Tip: Ask Other Property Managers
If you are working in a new city that you do not know anything about, look to other property managers.
Check their websites, listings, and even call them.
By checking this, you will see if Property Managers will have a specific license needed by the city.
What Property Manager Do
The main goal of the property manager is to make money for the landlord.
Their customer is the landlord not the tenant. It is the Landlord that pays the Property Manager, not the tenant.
Property managers must manage the properties they oversee well. Here is a list of the things that property managers will do for their landlords.
- Review Properties Before the Landlord Buys Them
- Calculate Rehab Costs
- Manage All Rehab Logistics
- Tenant Search
- Tenant Leasing
- Rent Collection
- Property Maintenance
- Property Inspections
- Field Maintenance Calls 24-Hours a Day
- Remove or Evict Tenants When Necessary
- Make the Property Ready for the Next Tenant
How Much Do Property Managers Make depends on how much they charge.
It is normal for a property manager to charge 8% to 12% of the monthly collected rents.
On top of the monthly pay, property managers have the ability to charge for other services and add fees onto their contract.
Here is a list of other fees and charges a PM can charge their landlords.
- Setup Fee
- Monthly Management Fee
- Flat Fee
- Percentage of Monthly Rent
- Leasing Fee (Tenant Placement)
- Lease Renewal Fee
- Maintenance Fee
- Hidden Fees (Beware for These)
- Third Party Markup Fees (10% for Contractors Work)
- Vacancy Fee
- Rent Due Fee (not what is collected but what is due)
- Advertising Fee
- Late Fees
- Eviction Fees
- Pet Fees
- Return Check Fees
- Paying Utility Bills
- Inspection or Visitation of the Property
- Reserve Repair Fund
- Early Termination Fee
- Eviction Fees
How much a property manager can charge for each of the items listed above really depends on the market you are working in.
Much like other business, you can only charge what the customer is willing to pay for. If other property managers are not charging these charges, it will be hard to get a landlord to pay for the service.
If, on the other hand, there are property managers in the area that are charging these fees, you can have a range of prices and percentages you can charge.
Pro Tip: Negotiate Your Property Management Agreement
Play around with the fees to see which ones landlords will be fine with.
If you have a fee that a landlord doesn't like, be ok with striking that from the Property Manager Contract so you don't lose a customer.
How to Be A Good Property Manager Landlords Will Hire
I wrote an extensive article on this subject and you can find it here:
This is a short list of the things you need as a property manager to have landlords hire you.
Since most landlords are far away from their properties, they need a good manager they can trust. The the landlord cannot trust the property manager, they will quickly find one that they will be able to trust.
Capability is crucial for the manager be able to take care of all the properties they manage. They may be trustworthy but if they cannot make money for the landlord, they are of no use.
Communication is key to a successful property manager. They need to be able to communicate quickly with their tenants and landlords to make sure everyone knows what is going on.
Personal Repour with Your PM
Property Managers must have a personality that is service oriented. They are there to serve their landlords. If the landlord feels as though the property manager is a burden, they will hire someone else that isn't.
Referrals and Online Reviews
For new landlords to find and trust you, make sure that you cultivate good referrals and reviews for your managing properties well. Make sure your current landlords are ready to refer your service to anyone who may be interested in working with you.
Summing it All Up
Figuring how much do property managers charge all depends on your market, your experience, and your current customers
A property manager can only charge with the market can bear. If landlords find that a property manager is charging too much, they will find another landlord.
If a property manager is not trustworthy, or the landlord cannot work with the property manager, they will go to another company instead of you.
Be ready to negotiate your property manager contract and get those landlords to work with you.
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