If you’re looking for a way to make money in real estate, now is an exciting time to undertake a career in property management. Rental property management is a huge sector of the real estate industry that is expected to grow. According to a research report issued by MarketsandMarkets, the global market size of this sector is expected to grow from $14.47 billion in 2018 to $22.04 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 8.8%. Of course, the United States continues to dominate the market and is projected to hold the largest market size during the forecast period. This tells you that you can expect to earn a good salary as a property manager in the US housing market. Wondering how much do property managers make? Keep reading to find out.
What Does a Property Manager Do?
A real estate property manager is someone who takes care of the many aspects and daily operation of residential, commercial, or industrial properties. They make sure that these properties operate smoothly, are well-kept, are occupied, and retain their value. When you become a property manager, you’ll typically work full time and be responsible for the following (among other) duties:
- Meet with and show rental properties to prospective renters
- Discuss the lease and explain the terms of occupancy
- Collect monthly fees from tenants
- Arrange for repairs and maintenance as needed
- Pay bills such as mortgage, taxes, insurance, payroll, and cleaning
- Investigate and settle complaints, disturbances, and violations
- Keep records of rental activity
- Prepare budgets and financial reports
- Know and comply with local fair housing laws
When real estate investors or rental property owners lack the time or expertise needed to handle these tasks, they often hire a property or real estate manager. As a rental property manager, you’re hired either directly by the owner or indirectly through a contract with a property management company. If you have skills and talent for problem-solving, listening, speaking, organizing and analyzing, becoming a property manager is a great career choice! Let’s take a look at what salary you can expect to make in this sector of the real estate industry.
How Much Do Property Managers Earn?
According to Glassdoor, one of the world’s largest job and recruiting sites, the national average property manager salary in the United States is $54,183/year as of July 2019. The typical pay range falls between $36k at the lower end and $79k at the high end. As you can see, while the duties and responsibilities are similar for all property managers, the salary can vary widely. This is due to certain factors which include:
- Education: The minimum educational requirement for managing rental properties is a high school diploma. However, since some duties are related to marketing, finance and business planning, employers prefer hiring those with bachelor’s degrees. You can expect to earn more with a degree in real estate, business administration, public administration, finance, or accounting.
- Certifications: Being a certified property manager shows companies and future clients that you’re a professional who understands the market and is more knowledgeable than the average property manager. Thus, this will set you apart and gives you the opportunity to grow your career. There are a number of certificates you can get including NALP, CAM, CPM, and MPM certificate.
- Experience: Years of experience also affects how much property managers make. As you would expect, the more experienced you are, the higher you’ll get paid. If you want to gain experience as a new property manager, consider taking on-the-job property management training or extra courses in real estate development, management, finance, urban planning, etc.
- Property Type: The final factor affecting your property manager salary is the type of real estate properties that you manage. While the national average is $54k, apartment managers earn $41k, self-storage facility managers $71k, and real estate asset managers $76k according to Glassdoor.
How to Make More Money as a Property Manager
If you already manage rental properties and you think you’re not making as much as you should, here are some of the best tips for you:
1) Know How Much to Charge Clients
Not setting the right price is one of the main reasons why beginners may not earn as much as they should as real estate property managers. If you charge too high, you could push away potential clients. Charging below-market-rate management fees, however, is not the answer and it won’t make you stand out. Sure, this may win you some clients, but property management companies generally rely on these fees to fund their operations. Meaning, if you offer a significant discount, it becomes harder to respond to your clients’ needs and the quality of your services will decline as you start to get more clients – this will cost you in the long run.
To avoid this, property managers need to be realistic and do their research. Start with checking what other managers are charging to get an average for the local market. According to research, the average property management fee is 6-12% of the rental property’s monthly rent. Then, take into consideration the number of units, the number of properties that you manage, and the type of services you offer. This way, you can find the perfect price that both attracts clients and allows you to have a profit margin and earn more money from managing rental properties.
2) Manage Profitable Income Properties
As a beginner in the real estate industry, you may think the answer to how much does a property manager make depends on the number of properties he/she manages. More properties equals more streams of revenue, right? Well, only to a certain extent. While the number of properties plays a role, their quality is the driving factor for how much money you can earn from managing them. If you only focus on quantity over quality, you may end up managing properties that are more of a hassle than they’re worth. In order to achieve maximum profit from property management, you need to increase the number of profitable doors under your management!
To determine the profitability of rental properties, property managers use data that accurately predict how much they’ll likely generate in rental income. To get this data, you can use an Investment Property Calculator like the one Mashvisor offers. This tool gives you pre-calculated estimates of the comparable rental income of rental properties in major cities and neighborhoods in the US housing market. Without this, you’ll have to do your due diligence and research rental rates yourself.
To find profitable properties, you should also look for experienced real estate investors. These investors typically own income-producing assets and look for more properties to buy and for professionals to manage their investments. You can find one with the help of agents, wholesalers, and developers as they are always in touch with investors. When you get investor clients, you can use Mashvisor to help them find profitable rentals for sale. Investors will appreciate this extra service and you will gain profitable properties under your management without having to look for new clients.
Start out your 14-day free trial with Mashvisor now to easily find more properties for your clients.
3) Work in the Best Cities for Property Managers
While it’s certainly easier to manage rental properties near you or in the housing market where you live, you might want to broaden your horizons. The geographic location of rental properties plays a big role in the real estate industry including the property manager salary range. In the US housing market, certain cities offer better opportunities than others to real estate managers. If you want to earn more, your target should be to manage properties in such locations.
According to Salary.com, residential property managers get paid more than the national average in San Francisco ($72k), New York ($70k), Boston ($65k), Washington DC ($64k), and Chicago ($61k). These are the best cities in the United States to work in the property management sector. What’s more, these are also among the best places to invest in real estate. This means that you can definitely find investor clients looking for management help in these cities!
4) Invest in Property Management Tools
Successful real estate property managers in the US are rapidly adopting property management tools and automation solutions. If you’re looking to make more money from this career, you should consider doing this as well. Now is the time to ditch the old school ways of doing things in the real estate industry and take advantage of new technologies available for property managers. While you may not need them at the beginning of your career, you definitely will as you add more properties under your belt and the workload increases.
There are different types of communications and activities that you need to track, report on, and scale. By utilizing property management technology, you can automate and eliminate the need for manual tasks. For example, you can market vacant rental properties using 3D video tours and allow prospective tenants to browse the units as if they were really there instead of having to drive there yourself. This also limits the amount of manpower that it typically takes as you can handle most of the work yourself rather than hiring people.
Needless to say, leveraging property manager tools simplifies every aspect of property management and allows you to be more efficient. Ultimately, you can save time, money, and unnecessary headaches which will lead to a leaner, more profitable property management business. Wondering which tools you can use as a residential rental property manager? Here are the 7 Best Property Management Tools for 2019.
5) Offer Premium Services to Your Clients
Our last tip for making more money as a property manager is to increase revenue-per-door. As mentioned, property management is a crowded sector in the real estate industry with high growth potential. As more players enter the field, the competition becomes fiercer and you will need to find ways to increase your profit margin of the properties you already manage and existing clients if you can’t find new ones. The best way to do that is by offering premium services that they will find valuable.
The main revenue source for residential property managers is their management fee, but there are many services that can be incorporated to increase profits. This includes services like strategic planning, financial planning, regular maintenance and upkeep, property staging, etc. You can also charge fees for work that you already do like a leasing fee, inspection fee, marketing fee, and eviction fee. This allows you to maximize your profit margin and earn more money with the business you currently have.
The Bottom Line
Now that you have the answer to the question how much do property managers make and what it takes to become a successful property manager, you’re prepared to decide if you want to pursue this real estate career. Keep in mind that your skills and determination to succeed also measure how fast you can start generating profits from property management. So, if you truly believe that this is the right career path for you, it’s only a matter of time until you start making money in real estate!