Metamorphosis of the Property Management Industry

Metamorphosis of the Property Management Industry

***

Even in a down economy, some industries boom. It’s simply a fact of economics. Property Management is one such industry.

If you’re a Facebook or Twitter friend of mine, you probably know I just finished teaching a 3-day property management prelicensing class in Nevada. The class is something I’ve been doing on a regular basis for many years. Not only is it great fun to help people further their careers, teaching these classes allows me the opportunity to observe industry trends from a unique perspective.

This week’s class was unlike any I’ve ever taught before. Not only was it the largest class I’ve had in several years, it was a class filled with experienced business people – people who bring the gifts of maturity and perspective to the table. Yet, with all their experience, most of the students are in the middle of a career adjustment. The face of today’s property manager has changed from what it was just a few years ago.

Back in the day…

In the early years of mandatory property management licensing in Nevada (1997-2003), my classes were attended primarily by seasoned property managers. They were managers who’d been working in the business for a long time, and were simply fulfilling the new licensing requirement. These students learned new things, yes. But, for the most part, they knew the business. They had firm ideas of how it should be done, and were sometimes resistant to change.

When the pent-up demand to fulfill mandatory licensing requirements waned, the next several years were quite stable. The student demographics didn’t fluctuate much, from one class to the next. During those years, the classes were comprised of a wide variety of student profiles. Some were professional property managers, some were owner/investors, others were sales people looking to provide a wider range of services to their clients. Every class was a melting pot of background and experience, and no significant trends emerged.

Fast forward to Now

The industry is shifting. I began to notice this shift last year, and it’s abundantly clear to me now. This time, the overwhelming majority of students in the class came from the real estate sales sector. Most are professional REALTORS®, having spent decades selling houses or commercial properties. Many of them have known great success in the real estate business, yet are relatively new to the specialty of property management.

Today, these professionals find themselves struggling in a sales market that shows no signs of stability; much less, improvement. To remain in the sales sector means to work months on every transaction, with those transactions paying less than they have in years. Many transactions simply fall apart, regardless of the efforts of the agents involved.  For thousands of licensees across the country, the business of selling real estate has become unsustainable. Today’s new property manager is a refugee from the struggling sales market.

Opportunity knocks…

One thing has always been true of the property management industry – no matter what the sales market does, the inventory doesn’t go away. The real estate is still there. Someone has to take care of it when it’s not in transition from one owner to another.

When the property management student of today enters the field, he/she enters with a job and clients waiting. In recent months, I’ve read dozens of news articles and blogs touting the optimistic outlook in 2011 and beyond for the multifamily rental industry. Many people who were once owners are now renters. They often represent combined families. Many have disabilities that require accommodations or modifications to the rental properties. Regulatory issues surrounding landlord/tenant relationships are constantly evolving.

The demand for rental property is strong, and the business of managing that property is more complex than ever before. To meet the need, a new brand of property manager is emerging.

Are you new to the property management industry in Nevada, or another state?  Why did you decide to enter the profession at this time? Do you have observations of your own you’d like to share with others? Please do so by leaving a comment on this post.