Starting a property management business can be a great way to make money in real estate without having to buy and own an investment property.
However, with the ever-increasing competition in the industry, it’s not always easy for property managers to run as much profit as they initially hoped. Numerous factors determine how much money you can make with this career, including your market, specialization, portfolio, and team.
Table of Contents
- Increase the Rent (Smartly)
- Add More Rentals to Your Property Management Portfolio
- Leverage Technology
- Offer Additional Services
- Manage Both Rental Property Types
- Specialize in Different Property Types
- Expand Into New Rental Markets
- Hire a Property Management Team
- Cut Down Expenses
- Get a Real Estate Agent License
- Add Value to Rental Properties
- Market Effectively
- Get More Property Management Certifications
- Buy Your Own Investment Properties
- Property Management Frequently Asked Questions
According to Salary.com, the average salary for a residential property manager in the US market as of May 2023 is $70,800. This is not bad considering you don’t even need to work full-time every day. Moreover, there are many different things you can do to further boost your income and enhance your profitability.
In this article, we’ll provide beginner and experienced rental property managers with 14 concrete tips on how to make more money. We’ll also show you how the tools available on the Mashvisor platform can help you with some of these steps.
Let’s get started!
Related: 18 Property Management Basics Every Manager Should Know
1. Increase the Rent (Smartly)
Most property management companies charge a percentage of the monthly rental income, while some ask for a flat fee. It means that for most property managers, their salaries depend on the revenue they generate for landlords or Airbnb hosts, which in turn relies on the rental rates. So, the first way to boost your income is to increase the rent.
Nevertheless, raising rent could result in the loss of tenants and, thus, higher vacancy rates. But maintaining constant rent for a long time will only limit your growth. In addition, inflation will catch up with you in the long run. If you handle the process strategically and systematically, it is possible to increase your rent roll and still retain your renters.
How to Implement Rent Raise in an Effective Manner
The smart way to go about rent increases is to look at similar rental properties in your area, known as rental comps, and see their rates. This applies to both short and long term rentals.
A great place to find reliable, up-to-date data on rental comps of both types is Mashvisor. Our rental property calculator allows you to access data on real estate properties comparable to the one you manage and see their rental rates. In this way, you can decide which of your properties should get a rental rate increase and which shouldn’t.
Meanwhile, if you’re a property manager working with short term rentals, applying a dynamic pricing strategy is a must. It means you have to adjust the nightly rate on a daily basis to reflect even the slightest change in local supply and demand.
The Mashvisor Dynamic Pricing tool can help you optimize and automate this process to maximize rental income for the investors you work with. In return, this means more money for you.
To improve the pricing strategy of your managed properties, sign up for a 7-day free trial of Mashvisor.
Later in this article we’ll show you other ways our platform can help you make more money as a property manager.
Mashvisor’s Dynamic Pricing tool lets you choose between market- or user-driven pricing when setting nightly rates. This makes the automation process simpler for property management professinals.
2. Add More Rentals to Your Property Management Portfolio
You can make more money as a property manager by onboarding new rentals. Whether you charge your property management clients a flat fee or a percentage of the rental income, working with several rental properties means having more streams of income. It’s as easy as that.
There are different ways in which you can grow your business portfolio. You can look for entirely new customers or – even more effectively – you can get to manage more rentals for your existing clients.
However, it is easy to get overwhelmed when managing multiple properties, especially if you’re just starting in the real estate property asset management industry. It is why it is crucial to grow carefully and strategically.
In the following sections, we’ll provide some specific recommendations on adding new properties to your portfolio.
Related: How to Find Affordable Investment Properties With Huge Potential
3. Leverage Technology
The tasks involved in being a successful property manager can be very time-consuming and stressful. You have to simultaneously handle tenant and property owner requests. The good news is that you and your team can use various types of rental property management technology to boost your productivity and stay ahead of the competition.
Dealing with real estate investor and renter communication, repair issues, payments, and even evictions has been made easier thanks to tech-enabled property management tools. Using digital platforms, you can easily manage multiple rental properties anywhere in the US rental market from the comfort of your home. All you need to use these technologies is a smartphone or a computer.
Related: Why Is Property Management Software Important in Real Estate?
4. Offer Additional Services
You can make more money as a property manager by offering your investors and tenants additional paid services.
When it comes to services to real estate investors, you can consider options like interior and exterior design. This option will be highly appreciated by the owners of furnished properties and vacation rentals who are just starting and don’t have access to design and furnishing companies.
You could also consider tackling property maintenance and repairs in-house by hiring the necessary professionals. In this way, you can keep more of the profit from managing properties to yourself rather than paying fees to third-party contractors and vendors.
The process of filing property taxes and providing consultation on rental property tax deductions is something that not many property management companies offer. So, that’s another area in which you can grow to make more money on a monthly basis.
Moreover, you can extend the range of services you provide to renters, whether long term tenants or short term guests.
For instance, if you work with long term rental properties, you can offer cleaning services, laundry services, dry clean services, and others. Even a minimal extra fee collected on a regular basis will push up your business income.
If, alternatively, you manage short term rentals, you can offer Airbnb experiences in addition to the rental space. Many guests are now looking for this, and it will also help improve the rankings of your manager listings on the Airbnb platform.
5. Manage Both Rental Property Types
Most property managers work with either long term or short term rentals. You can be different by managing both types of rental properties. It will help cater to the needs of owners who invest in both rentals and would like to work with a single property management company.
But before you take this step forward, you should keep in mind that traditional rentals and vacation rentals have very different requirements. Thus, you should study the needs and best practices in detail before expanding your business. The last thing you want as a professional property manager is to fail your clients and push them away from your company.
It will have the exact opposite effect of the desired growth in income for you and your colleagues.
6. Specialize in Different Property Types
Another business growth strategy you can apply to your property management firm is to diversify the types of properties you manage. If you focus exclusively on single-family homes or multifamily real estate investments, you can look into condos, apartments, and townhouses as well. If you have the capacity, you might even consider venturing into commercial property management.
Like the point made above, be careful to expand your business only when you are ready to do so. Make sure you get the necessary knowledge and understanding of the specific needs and requirements of each new property type before getting into it.
7. Expand Into New Rental Markets
Many property managers can make more money by growing into new cities and states. Indeed, most professionals start in their local market and add new locations to their coverage as they grow their teams.
If you opt for this way to boost your income, you have to proceed strategically. One important consideration is to expand into the best long term and the best short term rental markets. It simply doesn’t make sense to offer property management services where there isn’t enough demand and rental incomes are low.
If you manage vacation rentals, you should also look into the cities with no Airbnb regulation restrictions. This will help your business grow unlimitedly.
8. Hire a Property Management Team
For many of the steps suggested here, you’d need to expand your team of professional property managers. Whether you want to offer additional services, onboard new properties, include different property types, or venture into more markets, you will need more human resources to do so successfully.
It means you have to set up strict and efficient hiring procedures to land the best experts in each local market. Moreover, it’s important to offer on-the-job training opportunities to continue improving the services provided by your team and to retain your best employees.
9. Cut Down Expenses
The higher the expenses incurred with managing an investment property, the lower the yields will be for you. Therefore, to make more money as a property manager, you must lower the costs of running your rental homes.
You can do this by conducting regular inspections to prevent minor maintenance problems from worsening. Hiring efficient contractors or building your own team to handle repairs and renovation will also help you lower maintenance costs. Finding great tenants and retaining them will minimize vacancy rates.
Moreover, you can optimize the management of your own business and team as well as the properties in your portfolio by using software tools. This can be both general business tools and real estate automation platforms.
10. Get a Real Estate Agent License
Getting a real estate license is not required for opening a property management business, contrary to popular belief. However, it will allow you to make commissions by helping investors find rental properties to buy.
As someone already familiar with the real estate industry, you are in a unique position to identify and locate the best investment opportunities in your market(s). Then, you can hand them over to investors you’re already working with or new investors. And the best part is that they will likely want you to manage their new properties.
So, you get to make money both from the real estate commission and the property management fees.
11. Add Value to Rental Properties
Adding value to a rental property will make it easier to attract and retain tenants, as well as allow an increase in rental rates.
You can boost the value of a rental property by furnishing it or upgrading household appliances such as the heater, air conditioner, or dishwasher. Updating old lighting fixtures, applying a fresh coat of paint, restoring the flooring, or adding an extra room are other great ways of sprucing up your rentals.
But before getting started, be sure to run all of this by the rental property owner, who will have to pay for upgrades. Be sure to explain it as forced appreciation and outline how it will benefit them and their rental property business in the long run.
12. Market Effectively
As a property manager, it is your responsibility to advertise your rental properties in order to attract more tenants or guests. Consider using multiple marketing strategies to reach as many potential renters as possible.
It is a must to add your managed properties on the best rental listing websites like Zillow, Trulia, Apartments.com, Airbnb, and Vrbo. Your digital ads should be interesting and detailed to attract good tenants. Be sure to include the price, a map, relevant keywords, and high-quality photos. Don’t forget to leverage social media platforms such as Facebook, Instagram, LinkedIn, and Twitter.
In addition, in terms of marketing existing properties, you could post a yard sign, advertise on Craigslist, and ask current tenants for referrals.
Furthermore, you need to work on generating new property management leads. To make substantially more money, you have to continue adding more and more properties to your business.
Make sure you have a professional website setup. You may want to consider getting expert help to ensure you have a user-friendly website optimized for online search engines (SEO). The better your property management website, the more leads you can generate and the more money you can make.
You can also initiate a referral program where you provide existing customers with an incentive to refer new business to your company. Maybe you can offer them a new service for free, or you can give them a discount on their property management fee.
13. Get More Property Management Certifications
Earning more property manager certificates will boost your credibility and give you an edge over the competition. With that, you can charge more for the services you offer.
Here are some certifications offered by accredited real estate bodies to consider:
- Certified Manager of Community Associations (CMCA)
- Residential Management Professional (RMP)
- Master Property Manager (MPM)
- Certified Support Specialist (CSS)
- Certified Residential Management Company (CRMC)
- Certified Property Manager (CPM)
- Certified Apartment Manager (CAM)
14. Buy Your Own Investment Properties
We’ve left the best for the end. Building your own portfolio of rental properties is the most efficient way to make more money as a property manager. After all, it makes sense. You are already an expert on the real estate industry and the local rental market. As a property manager, you are familiar with the best investment property lenders. Plus, you have someone to manage your properties. All that’s left is to buy a rental property.
To optimize the process of investing in rental properties for yourself (as well as your clients), you can use the Mashvisor real estate investment platform. Several tools can help you along the way.
To begin with, the Mashvisor Market Finder can provide you with a list of the best cities and neighborhoods for your preferred rental strategy. All you have to do is to enter your criteria to get immediate access to the most profitable markets for short term and long term rental property investments.
Next, you can use the Mashvisor Property Finder to search for available properties for sale in these top markets. Once again, you just need to input your requirements to get a list of the top-performing properties.This way, you don’t have to waste time driving for dollars and can focus on growing your property management business.
Last but not least, the Mashvsior investment property calculator helps you analyze the potential of any property before buying it. You can see what rental income, occupancy rate, expenses, cash flow, cash on cash return, and cap rate you can achieve. All this rental property analysis is based on the performance of actual rental properties in the area.
Growing Your Property Management Business: Final Words
Becoming a property manager can turn into a good source of stable income. But simply opening a rental property management company does not guarantee success. You have to put effort into growing your business to make more money.
The 14 tips above are tested and proven strategies to generate more income in the industry. However, implementing all of them at the same time might not be feasible or even advisable as you might spread too thin too fast.
If you have to choose a couple of these strategies, we’d recommend adopting technologies and purchasing your own rental property or two. If you need help with these, remember that the Mashvisor platform has many useful tools to boost your bottom line.
To learn more about how Mashvisor can help you make more money as a property manager, schedule a demo with our team of experts.
Property Management Frequently Asked Questions
What Is Property Management?
Property management refers to the professional, third-party managing of investment rental properties on behalf of property owners. It can include a wide range of services: anything from simply automating processes all the way to comprehensive property management services that mean zero intervention by investors.
There are two main types of property management companies: 1) Working with short term rentals and 2) Focusing on long term rentals. Some professionals choose to handle both types of rental properties.
In terms of market coverage and size, some property managers work with a few properties in a single market. Others manage thousands of rentals across the entire US housing market.
The main benefits rental management companies bring to real estate investors are three. First, investors get access to passive income by assigning all responsibilities related to a long term or Airbnb business to someone else. Second, they usually enjoy enhanced rental income as property managers know how to boost performance.
Third, investors can buy rental properties out of state as they do not have to worry about managing them. This is particularly important for markets with suboptimal investment property potential or unaffordable prices. Moreover, this allows them to grow their investment portfolios faster as there is no added manual work with each new property.
What Does a Property Manager Do?
A property manager handles all the aspects of running a successful rental property business on behalf of real estate investors.
The tasks for which a rental property manager is responsible can include but are not limited to:
- Helping with interior design and curb appeal
- Assisting with needed rental licenses
- Ensuring the home is ready to welcome renters
- Marketing the property
- Screening tenants or guests
- Preparing and signing lease agreements
- Communicating with renters
- Handling maintenance requests
- Inspecting the rental
- Managing repair works
- Cleaning the property between guests
- Restocking the rental between guests
- Helping with taxes
- Reporting performance
- Making sure all local legal requirements are met
- Finding new rental properties for sale for existing investor customers
A property manager operates as the right hand of a rental property investor.
How to Become a Property Manager
Becoming a property manager is relatively easy as it doesn’t require a real estate license or specific education or certification.
To become a property manager, you should go through the following steps:
- Study and become familiar with the local rental market
- Check out local laws pertaining to rental properties and establishing a business
- Decide on your property management focus in terms of rental strategy, property type, and included services
- Work on establishing a legal entity for your property management business
- Get access to the required technology and software
- Start marketing your business
- Onboard properties one by one
- Look for available courses and certifications to solidify and expand your expertise
When starting this real estate career, it’s important to not exceed your potential and not spread too thin. Start small and gradually add more and more properties to your management portfolio as you get the hang of it and hire new team members.