Skip to Content

Ready to find your nearest Real Property Manager? Click here!

Find a Real Property Manager

Advice, tips and trends for property investors

Are Real Estate Agents Leaving the Property Management Industry?

real estate agent

Real Estate Agents are Leaving and the Property Manager Pool is Shrinking, But the Rental Market is Stronger Than Ever…What Gives?

Starting in 2007, many real estate agents had clients who wanted to sell their homes, but couldn’t do so and still pay off their mortgage.  For homeowners who moved to new cities, the only option was to rent their existing home until housing prices recovered.  The sub-prime mortgage crisis hit many people hard and for many in the industry, a real estate agent salary was no longer enough. Listings were now primarily rental properties and during this time period, having a real estate license led many to property management as it showed the promise of a way to make a living during the downturn.  On the surface, this seemed like a win-real estate agentwin situation.

There are currently 71,584 property management firms in the United States, according to InfoUSA, a database company.  This number surged during the housing crisis which started eight years ago.  Now that number is declining with two reasons for the change: 1) Real estate agents are exiting the property management business, and 2) Smaller property management firms are selling their business to larger competitors.

Unfortunately, the skills, knowledge and systems needed for selling real estate are very different from what is needed for property management.  Some real estate agents found property management difficult, time consuming and unrewarding.  And these agents’ sponsoring brokers found that the legal liability of property management can be very expensive, if not handled well.

As real estate prices have recovered, “accidental landlords” began selling their properties.  Agents started making money on sales again, and thosereal estate agent with properties to manage found their property management clientele shrinking.  Many now find property management a distraction and impediment to sales, where more money is made.  So agents and their brokerage houses are exiting the property management business and referring clients to professionals like Real Property Management.

In addition, smaller property management companies are finding it difficult to match the technology, systems and economies-of-scale larger property managementfirms such as Real Property Management enjoy.    Investors have become more sophisticated and demanding during the past eight years.  Many owners of smaller property management firms are baby boomers approaching retirement, and seek a profitable exit from their business.  The combination of these factors is starting what will soon become a wave of industry consolidation.

real estate agent real property managementReal Property Management Winchester in San Diego, CA and Real Property Management DFW in Dallas, TX are at the vanguard of this movement.  Both offices have acquired other local firms and added hundreds of new properties under management.  Other Real Property Management offices such as Real Property Management Antelope Valley in Palmdale, CA have taken over management of smaller portfolios previously managed by real estate agents and real estate brokers.  During the next five years this trend will escalate.

As the Real Property Management organization grows, so does our buying power.  This means even more advancements in our technology, economies-of-scale and service quality.  We are more confident than ever that we will be able to improve our services to you, and continue to raise the standard by which all property management firms are judged.

How were you effected by the sub-prime mortgage crisis?

Do you feel the economy is bouncing back?

 

Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedIn

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

  1. Callie Marie says:

    I agree that the skills needed for selling real estate are very different than residential property management. My husband and I rent so I know that we look for completely different things than if we were to buy a home. For instance, it is OK if the appliances and style are outdated because we only plan on staying for a couple years. It will be interesting to see how these two industries continue to vary.

    1. Thanks for your comment Callie 🙂

  2. This is one of the most informative information I’ve read. It really helps a lot. Thanks for sharing this and teaching some of your Idea’s

  3. EcoHomes says:

    Hi Chanda,

    Very well said and explained. Thank you for the wonderful article that gives good tips advice.

    -Nile

  4. If I was a real estate agent, I would probably stay in the market. Even though there are those who are leaving, it’s still a good source of income. You may not make a sale that month so where is your income? With the properties, you will have that rent check every month, just as long as there are people living there.

  5. Drew says:

    I would stay in the industry if I were an agent. The skills used are very different but can be pretty appealing to clients. This was very informative, thanks so much for sharing!

  6. landon murie says:

    Will be interesting to see how property management does now that the housing market has increased in health.

    1. Hi Landon! We watch the market closely and so far things are looking good from the investor/property manager/landlord view: https://www.realpropertymgt.com/2016-economic-outlook-for-landlords/