change of career to property management

Hello everyone,

Just want to hear everyone's thoughts/advice about a career change to the real estate industry especially in property management.

Just a bit of background about me....
For a long time now, I have been thinking of a career change to the real estate industry. I have not done anything to date because of my current employment with the government offering me job security. But with a recent change to another department, I am not enjoying going to work due to the office culture and poor management. This has got me thinking - maybe this is the time to consider a career change to the real estate industry and take the plunge. My experience in a previous department has given me very good knowledge about the residential tenancy act (both in practice and theory), appearing in court and debt recovery from tenants. On a personal level, I manage all my own properties, conduct inspections, negotiate new lease agreements, find new tenants, handle insurance claims etc. I guess my passion/interest in the real estate industry is the reason why I would like to pursue a career in this field especially in property management.

Having had previous dealings with real estate agents in my past work role, and being an investor myself, I have some ideas on the type of services I would like to provide to my clients. By the same token, I understand that from an employer's point of view, one also needs to get more clients on the books. This is an area I probably lack due to experience, however I believe that my willingness to learn and my drive will allow me to succeed. (am I being too naive?)

My dilemma......
For a long time, having worked in the government sector, I have never worried about job security. My fear is leaving a secure job and going to another position that is dictated by the market (Am iI correct in saying this? Or is the rental market not affected as greatly compared to the sales market?). Can anyone suggest how I can overcome the job security mindset? I am also mindful of the salary as well, as I don't really want to go on to a low salary as this may set us back in terms of our goals. Would $70k be unreasonable? Can someone please advise?

I would be grateful if anyone (especially those in the industry in WA) can share their thoughts, advise if the real estate industry is a good career path, what the expected salary is with my knowledge, and should I be looking at a small, medium or big agency to work in.

Sorry for the long post.

theobserver

 

Are you sure you want to be a PM? Its hardly a glamourous role.

And some of the stuff you've said so far makes it sound like you don't know much about the day to day grind of being a PM...

I know a fair bit about how it goes down in WA, and most of it isn't particularly that great - salary or job satisfaction wise.

 

What he said.

I was reading the OP and trying to work out how you could have "passion" about going to court, finding tenants, tenant complaints and excuses, organising leases and so on.

But, good luck to him if he has that - he'll need it I reckon.

My only passion about realestate is the money from it.

 

If you are looking for a lowly paid high stress job then property management might be for you.

Personally i would avoid it like the plague. I employ a full time property manager to look after my portfolio and have done so for a decade or so but she looks after every aspect in regards to the properties.

Average salary for a PM is around $55K so certainly not glamourous.

Only thing you could say it is a salaried position whereas being a Real Estate salesperson or a Licensee is normally a self employed position or salaried running a debit / credit arrangement.

Cheers


Richard

 

I'd suggest taking a break from your job and take on a contract pm role through Hays or Hudsons, Brookfields, 5d, Dtz etc who have government contracts on commercial property - a variety of roles from junior to senior pm, administrative, analysts, trust accounting, facilities managers etc. These roles put your experience and knowledge to use albeit without commitment (comtract roles).

You can also look at the housing cooperatives who deal in low end residential on behalf of their clients.

 

+1. The money and scaring little old ladies out.

 

@theobserver great post, and whilst the above comments are true, don't let them scare you off. I left a govy job to do BA work and no regrets. Can YOU do it? I have absolutely no idea. Will it make PROFIT? Again I have no idea, this will be entirely dependant on how you set it up.

If you are still reading I offer the following 2 cents:

1 - You need to do considerable mind work so that your desire and commitment to a new business venture eclipses the fear of no job security. I did this with numerous books, videos, courses etc. Eventually failure was not an option and I became resolute.
2 - You can start to build a business before you quit, and you should, to prove the concept and check your determination levels. Read articles on "lean startup" ideas as the concepts are applicable, even if you are not a silicone valley app producer.
3 - The future of property management requires people like you - who want to outperform the industry. The fact that the average setup employs teenagers on lousy wages is an opportunity for you to shine and differentiate.
4 - It will be very hard work
5 - Work out the desired total income (say 100k?) work out commissions required to generate this. (ie if your local rents are 500pw and your coms are 10% then you need 40 properties. as the numbers change you need more or less properties to hit a target)
6 - To win you will need to build very good systems to free up your time as the only way you will make $ is with good volume. Under existing systems it seems good PM's are able to manage around 80-100 properties per quality staff member before breaking. Better systems should mean you can carry more, in the beginning you will be creating the systems yourself so you will have an initial capacity of less.
7 - refer to point 1
8 - refer to point 4
9 - disclaimer I have talked to plenty but I am not a property manager

 

@BuyersAgentGreat Post !

I've always found your posts to have great value for price, in this case only 2 cents!

 

You would probably need to be managing around 250-300 properties by yourself to clear about 100k when you factor in overheads.

marinade on that for a while.

 

And that's why so many (not all) PMs are borderline useless.

To be honest I employ my PMs to collect rent, pay bills and liase between me and the tenants. That's it. I entrust them with no business decisions regarding rent increase, what tenants to go with, to increase or not increase rent, how much etc. 1. most of them are not investors experienced enough to have a dam clue imo, and 2. they have their own agenda (sad fact, but unfortunately its the truth). Disclaimer: (not all, but many I have come across)

 

Great point @Biz - for the OP what are some of the more common overheads you think they should budget for? (given in the early days a physical office and lots of staff are unlikely)

 

Here are some of my overheads (not in order and doesn't include once off startup costs) :

• Keeping license up to date - cpd
• Pm software
• Accounting software
• Inspection software
• General office software / printer upkeep
• Bank facility fees
• Car petrol / upkeep
• Real estate.com.au / domain / pricefinder etc
• Tenant database subscriptions
• Office lease (if applicable)
• Mobile / landline / internet etc
• Staff wages ( if applicable)
• Ongoing stationery
• Website / domain renewal
• Advertising / marketing various mediums
• Prof indemnity insurance
• Forms from REISA (management agreements, leases etc)
• Interest if any of the above is financed

 

Damn. Are you my other twin brother!!

 

I bloody hope not! I'm not planning on sharing my family inheritance!!



ooooonly joooking

 

The software comment reminded me of an incident i had with my pm years ago.

"We have implemented a new software system that allows for bla blah blah. The cost of the sofwatre will be a once of fee of x. Please reply if you would like to utilise this software"

Me: " i do not consent"

Pm "unfortunately this software will be applied to across the board and is compulsory. The charge will be added to the eofy charge"

 

Definitely not related then. Our parents havent left any inheritance!

 

hehe....well as long as I'm the better looking one....we can be twins...

* ok hijack thread over

 

I think that property management can be a rewarding role in the right circumstances. I have owned three PM business (still own two) and we focus on building long term relationships with our clients. I find the business to be personally and financially rewarding and I believe our people feel the same way.

You want to avoid agencies that focus on quantity of properties over quality and working their property managers to the bone. The ones that take on everyone and anyone and often drop their management fees just to get the business. Their property managements are only viewed as future sales income.

We don't sell property so we are not taking on properties with that in mine. This I think makes a big difference to the type of business we take on and how our people feel about their work.

Good property management is about more than just collecting rent and passing it onto the landlord. It's about managing assets strategically in order to achieve the best possible results for the landlords and to do this one has to be a great relationship manager.

Unfortunately when agencies are focused more on quantity than quality, staff don't have time to manage relationships and are constantly putting out fires which causes a very stressful working day and often a revolving door with staff.

Its worth you putting your CV out there and having a few meetings to see the range of companies and how they work.

 

Hi Observer
Congratulations on moving to the entrepreneurial space in your career. Have you thought about engaging a career coach for a 1:1 conversation about what strengths and capabilities you bring to the table and how this aligns with Property Management...most capabilities are portable.

The points raised by members are all very valid - note the overheads of kicking off your own business and the insightful feedback shared that property management is much broader in scope than simply collecting rent.

Have a read also of Robert Kiyosaki's book 'Cashflow Quadrant' which offers a good read to moving from the PAYE employee role across to the 'investor' and 'business' quadrant where real wealth creation lies.

My business partner Martin and I both explored many different options as we moved from professional careers (many years investing in our professions) to our own business - when we unpacked all the costs of a franchise (include list of same overheads as listed above) plus royalties you end up buying a very expensive job when the real money is in the business model. Essentially, it appears to me that success lies in doing the hard work yourself - as soon as someone is there to 'hold your hand' you pay for it...

Reflect and build a succinct 3-4 page to the point business plan - what is going to be your points of difference? What value can you offer the industry? What fees do you need to charge to eventually replace your PAYE income?

Design your own project plan of what you need to do to achieve your end vision kicking off with getting your RE licence and developing a business plan and marketing strategy. What income have you got in place to establish the business? Are you going to buy a rent roll with a mitigation strategy in place to manage the loss of business as owners choose to not move across to you? Are you going to undertake the very tough job of building your own rent roll without borrowing to buy one - the real hard yards and worth it in the long run to build your business equity as your rent roll is your asset.

Explore our mindset - are you solutions focused? Are you resilient able to bounce back from set backs?

Have you thought about how you will manage establishing this business whilst working full time until your rent roll grows sufficiently to pull back to part time in your PAYE role and then take the leap of faith 100% into the business OR do you have sufficient cash reserves to move earlier into the full time space of the business? During the transition period from working full time to taking the leap of faith translates to working 7 days per week 12 hour days...

Congratulations on making a decision to explore an entrepreneurial lifestyle - you will work much longer hours than a PAYE role but the satisfaction is incredible - is your passion to delight your customers? Put a timeline in place to take action as unless you take action a dream simply remains a dream...