If you happen to come across a real estate agent who also manages properties, you may have a few questions. For example,- How can my real estate agent split their time between managing rental properties and selling homes? Could there be a conflict of interest between the two roles? In fact, can a real estate agent be a property manager?
In some states, real estate agents can be property managers, if they hold a real estate brokers license, but in other states, they do not need any qualifications at all. There are also a handful of states in which you must have a property manager’s license, or other specialized certifications before you can legally manage properties.
To understand how this can work, I’ll tell you all you need to know about the differences between a real estate agent and a real estate broker, what a property manager does, how the role is different from that of a real estate agent/broker. Finally, I’ll run through the legalities that are involved, how the regulations vary from state to state and the differences between a real estate agent working alone and a real estate agent working for a business.
What’s The Difference Between A Real Estate Agent And A Broker?
A real estate agent must hold a real estate license before they can carry out any of the duties and take on the responsibilities of the role.
A real estate broker is a qualified real estate agent who has taken additional training, education, and examinations in order to take on the duties and responsibilities which come with being a broker.
A real estate agent must work under the supervision of a real estate broker. The level of this supervision varies, but ultimately, a broker is liable for the actions of all of the agents they supervise.
A real estate agent cannot call themselves a broker unless they are qualified.
A real estate broker may call themselves a broker or an agent, depending on their role and their preferences.
A broker is also an agent. Always.
An agent may or may not also be a broker; you would have to ask them in order to know.
What Is A Property Manager?
A property manager is a person who acts on behalf of a property’s owner and is responsible for a variety of tasks such as finding tenants, collecting rents, and ensuring proper repairs and maintenance are carried out.
The exact duties of a property manager vary according to the needs of the owner. The manager may be hands-on and directly involved in every aspect of managing a property, or they may oversee other people who carry out repairs, advertise for and interview tenants, keep the accounts, etc.
Property managers can be responsible for commercial or residential properties, and they can work for individuals, businesses, not for profit organizations, and governments.
This range of potential roles, responsibilities, and employers means a property manager may be responsible for anything from one small privately-owned home to a vast portfolio of properties owned by multiple clients.
How Is A Property Manager Different From A Real Estate Agent?
While they both involve working with properties, the two roles of a real estate agent and property manager are actually very different.
A real estate agent is responsible for ensuring their client gets the best possible deal they can, whatever that looks like for the client. To do this, they, among other things:
- Help buyers identify suitable homes.
- Provide advice as to the value of a property.
- Help sellers identify opportunities to increase the sales value of their homes.
- Finding buyers.
- Market properties.
- Advise what, in the offer to purchase and a final sales contract, is and is not in their client’s best interest.
- Act as a go-between in negotiations, and much more.
Once the sale is complete, unless an issue arises, the real estate agent’s involvement is over. Apart from in a few instances, the real estate agent is paid a commission on each sale they complete.
A property manager can be responsible for:
- Collecting and accounting for rents.
- Regular property maintenance.
- Carrying out or arranging repairs when needed.
- Advertising vacancies.
- Vetting and interviewing tenants then signing a tenancy agreement on behalf of the owner.
- Carrying out evictions where necessary.
- Dealing with any other issues raised by tenants or owners, and much more.
The role of a property manager is ongoing, and they are usually paid either a fixed salary or a percentage of the rental income of the properties they manage. So, for instance, a person who manages a single property with a $2,000 a month rent they could expect to receive somewhere in the region of 10-15% or $200- $300 per month. On the other hand, a person who manages an apartment complex with 20 units that earn a total of $25,000 rent per month may receive $2,500 to $3,750 per month.
What Qualifications Does A Property Manager Need?
The qualifications a property manager needs depend on which state the managed properties are. If one person manages properties in multiple states, they must adhere to the qualification requirements in each state where a property is situated.
In a few states, no qualifications are required to be a property manager, and in Kansas, there are no qualifications needed for those who are managing residential properties.
For other states, you must hold either a real estate brokers license or a specialist property manager’s license. In some cases, you must hold a real estate license before applying for a property manager’s license.
In addition, there are dozens of “mico rules” that cover specific situations, such as the fact that in some states, you do not need any qualifications if you are a property manager who lives on site.
So, Can A Real Estate Agent Be A Property Manager?
The answer to this question depends on whether the real estate agent is working on their own or under the supervision of a broker. It also depends on which state the property to be managed is located.
So let’s try and keep things as simple as possible.
Rules For Individuals – Real Estate Agents
First, let’s look at the regulations if a real estate agent is acting alone and not in their capacity as an employee of a real estate brokerage or property management company. And to be extra clear – we are talking about someone who holds a real estate agent license and NOT a real estate brokers license.
- In Idaho, Maine, Maryland, Massachusetts, and Vermont, there are no licensing requirements, so yes, a real estate agent can be a property manager.
- In Kansas, yes, a real estate agent can be a property manager if the property is 100% residential. If the property is commercial or mixed-use, then they must hold a real estate brokers license. The exception to this is if the agent has a 5% or more ownership stake in the property. In this case, a real estate agent can be the manager of the property.
- In South Dakota, South Carolina, Montana, and DC, anyone can apply for a property management license, so, with a few particular exceptions, yes, a real estate agent can be a property manager – as long as they have a property management license.
- In Oregon, in most cases, a property manager must have either a real estate brokers license or a property management license. So, as long as they hold the later, yes, a real estate agent can be a property manager.
- In all other states, a real estate brokers license is required to take on the role of a property manager. So, in these states, a real estate agent can be a property manager IF they hold a real estate brokers license. However, if the agent does not hold a brokers license, then they cannot be a property manager.
As noted, there are a few very specific exceptions to these rules here and there, but in order to keep things simple to understand, I have excluded them from this list. The exclusions are items such as in South Dakota, you can carry out limited property manager duties without any license at all, but if you are collecting rents or negotiating leases, you must hold at least a property manager’s license.
Rules For Individuals – Real Estate Brokers
A licensed real estate broker can act as a property manager in any state. Those states that require a property manager’s license also allow licensed brokers to carry out the duties of a property manager.
Rules For Individuals Working For A Business
In states that require a brokers license to be a property manager, a real estate agent may be able to carry out the duties of a property manager as long as they are doing so under the supervision of a managing broker.
The same rules apply to property management companies in states where a real estate brokers license is required. The business must designate a managing broker who must hold a real estate brokers license. Other staff members may then carry out the duties of a property manager, but the ultimate responsibility for their actions will rest with the broker.
Whether or not a real estate agent can be a property manager depends on their qualifications and the state in which the managed properties are located.
About The Author
Geoff Southworth is the creator of RealEstateInfoGuide.com, the site that helps new homeowners, investors, and homeowners-to-be successfully navigate the complex world of property ownership. Geoff is a real estate investor of 8 years has had experience as a manager of a debt-free, private real estate equity fund, as well as a Registered Nurse in Emergency Trauma and Cardiac Cath Lab Care. As a result, he has developed a unique “people first, business second” approach to real estate.
This article has been reviewed by our editorial board and has been approved for publication in accordance with our editorial policy.