Why Does a Property Manage Do at Work?
Welcome back to this week’s CA Realty Training blog! This week we have a special treat - an interview with property manager Matt Williams (of Williams Real Estate Advisors) from Los Angeles.
First, it’s always good to know how someone got into the business. For Matt, he was in brokerages and commercial loans before managing properties. He calls loans and selling a “pop business,” meaning a business that makes money in “pops” like commission checks (rather than a monthly income). This means that it can be tough to know when you’re going to bring in money.
Property managers have the advantage of knowing how much they are going to make in any given month, which is a luxury not afforded to mortgage brokers or real estate salespeople. Whether residential or commercial, large loans or small loans, both of those businesses can be on a “feast or famine” cycle which can be bad for trying to expand operations. It’s hard to plan for an expansion or a new hire if you’re not 100% sure you’re getting a deal next month. Therefore, it’s easier for a property management firm to choose office space, hire new people, and generally be more stable than most agents.
Property management is best described as: managing owners’ expectations, managing tenants’ expectations, and generally going between everyone and solving problems. That’s why Matt describes his position as being like a mediator!
But what are the daily duties? Mainly: collecting rent, creating monthly reports, tracking bank reconciliations, dealing with city and county regulators -- basically, customer service. This is where any real estate agent’s personality will come into play. Do you have what’s required to be nice and friendly all the time, even when you’re being yelled at? This can be a very tense job, and it’s important to have a layer of detachment so you don’t take everything personally.
Another key portion of the job is to respond quickly, yet manage expectations when you initially respond. It’s a matter of prioritizing - not every 1 am call needs an emergency plumber. For example, in a 2-bathroom apartment, 1 clogged toilet is not an emergency. However, in a 1-bathroom, things are a little bit different… and must be acted on accordingly. The thing to remember, though, is that there has to be someone around to take the 1 am call -- either you sleep with your phone under your pillow, or you hire staff to do so.
Property management is a lot of work. Matt loves his job, but it’s a lot of moving parts. He talks to owners, tenants, government agencies, vendors, and suppliers on a daily basis. There are late nights and early mornings, and people usually only call their property manager when things go wrong. This job is full of problem-solving, which can be great for you to exercise your brain.
It really depends if you have the right personality for the job. Though some people would hate the constant problems every time the phone rings, for someone like Matt, it’s actually fun to solve tenants’ problems and get things fixed. He gets to speak with all kinds of people and hear all sorts of stories, which can be rewarding as well.
One of the mistakes that a seasoned vet points out is when investors get their first few rental properties and try to manage them themselves. “Why bother paying a property manager?” everyone thinks. However, it’s always easy with the first one… the second one is harder, the third even harder, and with any more than that it starts to become a full-time job. Also, consider that property management is in fact a lot of people management, and decide if that is something you want to get yourself into. It can be tough for your own investments!
In a lot of ways, Matt (the property manager) and the property owners share a lot of the same desires -- they want tenants to be happy, pay rent on time, and generally treat the places well. It doesn’t benefit anyone (except maybe the tenant) if the place is not treated well and has to be heavily redone before the next tenant can move in. That’s why Matt is always so meticulous about collecting security deposits -- the owners want to make sure their place will be okay in the event of a destructive tenant.
Sometimes, the rent is late, and of course, nobody is happy with that situation. If a rent check is not received, Matt’s philosophy is that there is a piece of information missing -- he does not immediately jump to the conclusion that the tenant is in the wrong. He’ll call the tenant, and if the tenant says the check was mailed on time, it’s all about ascertaining the truth before accusing anyone of anything.
It is important to note that not everyone is cut out for property management, but those that are, usually find it a very rewarding and happy career. People that love problem-solving, people who find a thrill in difficult situations -- these are the types of people that will be great at property management.
What does Matt recommend if you want to get into property management? First, he recommends doing something with “pop income” -- e.g. being an agent or mortgage broker, or someone else that earns commissions. Then, once you have enough saved, start being a property manager. In that way, it’s a lot like being an agent -- you should save money before starting, and you do the best working for yourself. And lastly, remember the 3 P’s - Patience, Positive attitude, and Problem-solving skills. Keep these in mind and you’ll be a great property manager!
Real Estate Agent and Trainer, Robert Rico, interviews Matt Williams, Real Estate Advisor and Property Manager. This interview takes a deep look into the career of property management. Do you want to see more video blogs? Subscribe here!