By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA
Property management is all the buzz these days, as it is becoming the saving grace of the real estate industry. Across the country, real estate agents and realtors who are unable to maintain consistent listings and sales have turned to property management as a steady income stream until the market “picks up” again. This increase in competition for property management accounts by quasi real estate agents/managers has lead many who want to build their property management portfolio to take on any and all assets.
Many new to the industry agree to manage dilapidated properties from slumlords at management rates sometimes as low as three or four percent, and welcome the unrealistic rental rate demands from new investors trying to cash flow on properties that never will. However, by far the most common mistake made by these new entries into the business is taking on accounts that are located just too far away from their own area of operation or expertise.
We have all seen the marketing signs before – “Countywide,” “Citywide,” or “We service all areas.” Now, please understand that many well-structured property management companies large and small can accurately market this way, as they have the means, systems, and staff available to handle distant accounts across larger serviceable areas, and do so in a professional manner. That’s not always the case for single parties handling a few accounts here and there. Saying “no” to a potential account, or offering to refer that client to a reciprocating property management company for a referral fee, seems to be a hard thing to do in a struggling real estate market.
In my experience, the successful property managers know their limits, and would rather deliver exceptional service than risk blemishing their reputation on a property they should have referred. Nothing will destroy the will of a new property manager faster than having to drive clear across town numerous times a week to show a property that maybe difficult to rent. The more trips the manager makes across town to the property, the more evident the profitability of the account comes into question, and things like drive time to-and-from, gas expenses, and vehicle wear-and-tear start to take a toll. In the end, the owner is usually unsatisfied with the results and the property manager is just glad to see the property go. Unfortunately, real estate property management is based on relationships, and saying “no” maybe the best way to go when dealing with a property outside your area of operation or expertise. Besides, there’s nothing wrong with getting a referral check and keeping your clients.