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Why You Shouldn't Use a Real Estate Agent To Manage Your Rental Property

Why You Shouldn't Use a Real Estate Agent To Manage Your Rental Property

A person holding a California real estate license is allowed to represent third-parties in real estate transactions. Even though the real estate license entitles a licensee to perform both sales and leasing/management functions, these two areas of real estate couldn’t be more different. 

Historically, property owners hired a real estate agent to lease and/or manage their rental property because there wasn’t another option. However, Landlord/Tenant regulations laws are more complex, the legal environment has grown hostile towards landlords, and tenants have become more entitled, so the need to offer specialized property management services has become increasingly important. To better serve the needs of real estate investors, dedicated property management firms have popped up. 

A great analogy is in the legal field–a licensed attorney is allowed to practice any area of law they choose, but the law is complex, so attorneys have chosen to specialize in just a few areas of law. It doesn’t make sense to hire a bankruptcy attorney to represent you in a criminal case. 

Another analogy we like to use is this: a real estate sales transaction is like a 100-yard dash. Agents want to get to the finish line as fast as possible. Transactions only last 1-3 months and then the “race” is over. Property Management is like a marathon. It’s all about slow and steady because tenancies often last many, many years. They’re both runners, right? Sure. But the skill set required to be a great sprinter and a great marathon runner couldn’t be more different. Similarly, the skills required to be a great real estate agent are vastly different from the skills required to be a great property manager. 

There are several key reasons why a property owner should consider hiring a dedicated property manager instead of a real estate agent: 

  • Expertise: Property managers specialize in managing properties, whereas real estate agents focus on buying and selling properties. A property manager has the expertise and knowledge to handle all aspects of property management, including tenant screening, lease agreements, rent collection, tenant management, property maintenance, and more. 
  • Legal compliance: Property management involves a lot of legal compliance, such as fair housing laws, lease enforcement provisions, disclosure requirements, eviction procedures, and building codes. An experienced property manager is well-versed in all these laws and can ensure that the property owner is in compliance with them. 
  • Tenant relations: A property manager is responsible for maintaining positive relationships with tenants, handling tenant complaints, lease violations, and addressing any issues that arise. And they have to do so for many, many years. This can be a time-consuming and stressful aspect of 

property management that is best handled by a dedicated professional with the experience to excel. 

Compensation: When a real estate agent is selling a home to earn a 5-figure commission, they will always choose to focus on the transaction instead of managing a rental property for ~$300/mo. Real estate agents may argue this, but it’s just human nature to focus on the most lucrative activity.

Why You Shouldn't Use a Real Estate Agent To Manage Your Rental Property 

Property management is a full-time career that requires a lot of time and effort to learn. By hiring a dedicated property manager, property owners can save time and focus on other aspects of their business or personal life. A property manager also provides convenience by handling all aspects of property management, so the property owner doesn't have to worry about anything. 

Overall, a dedicated property manager provides property owners with the expertise, time, legal compliance, and tenant relations needed to effectively manage their properties. With the option to hire a specialized property management firm, hiring a real estate agent that sells real estate doesn’t make sense.