Real Estate Sales Vs. Property Management: Differences Explained
There is a thin but distinctive line between real estate agents and property managers that most people fail to draw. While both belong to the same industry, the formal path to becoming a real estate agent or a property manager differs.
Whether you are a real estate investor or planning your career in the industry, it is vital to understand the key differences between the two roles. Let's dive into the Real estate vs. property management discussion to understand the differences.
What is a Real Estate Agent?
A real estate agent represents the buyers and sellers of properties in a specific area. Real estate agents spend most of their duty hours hunting opportunities to connect buyers with sellers in the real estate industry. Agents get a commission against each property sale or purchase. Real estate agents either work independently or offer services on behalf of a licensed realtor.
What is a Property Manager?
The role of a property manager is to manage and operate a real estate property for a particular fee when the property owner cannot manage it. Property managers or estate managers spend most of their time looking after the property's daily management tasks according to the owner's directions.
Differences Between Real Estate and Property Management
Let's dig deeper into the roles of property managers and real estate agents to understand how they differ in most capacities.
Qualifications
The formal qualification is a distinctive feature that separates property managers from real estate agents. Since property managers manage the day-to-day tasks of a particular property, they must be sufficiently aware of the dos and don'ts of their job. Generally, becoming a property manager requires you to have at least a high school degree or GED.
In some U.S. states, you may need to cover a pre-licensing course to become a professional property manager. It is worth noting that a college diploma is not mandatory for offering services as a property manager. While true, some professional property management firms in the U.S. prefer college diploma holders for the job.
When it comes down to real estate agents, there are no such requirements. Real estate jobs do not require a school or college diploma to be a perfect fit. However, many states set pre-requisite requirements for completing 30-90 hours of real estate education courses for better work opportunities.
Real Estate License
Having a valid real estate license is valuable for real estate brokers and property managers. While this is true, the type of license varies for both roles. The real estate division has two common licenses: a broker's license and a property management license.
In most cases, a real estate agent must have a broker's license while offering independent broker services. If working under a licensed firm, real estate agents may not need a personal license to carry out broker activities in the designated areas. Only a few states exempt brokers from having a license to offer services.
Real estate agents may need a real estate salesperson license with varying requirements (from state to state) to be involved in buying and selling properties. To get your salesperson license, you may need to check with your state's authorities to appear in the license exam.
Property managers must have a property management license to offer services in a particular area. Some companies may require both license types for a property manager to work professionally. However, some states, like Kansas, Maine, Maryland, Idaho, and Vermont, do not require property managers to have licenses.
If working under a licensed property management company, property managers may not need a personal license to carry out their duties. To get a property management license, you may check with your state's authorities to find more information.
Pay Scale
Property managers and real estate agents usually share the same pay scale bracket. While true, their income sources vary due to the different nature of their jobs.
Real estate agents make their earnings by the commission values against each sale and purchase of a property. Typically, agents take a specific percentage of the property's worth from the buyer and the seller. If working under a real estate firm, they may receive a few additional benefits.
On the other hand, property managers earn their income from property owners by offering property management services. They may decide on a fixed rate or a specific percentage of the property's rental income. Typically, property managers take about eight to twelve percent of the property's monthly income. Moreover, property management firms may have different policies for generating revenue from property owners.
According to the 2020 median salary statistics, real estate agents make about $47,925, and property managers earn about $49,965 annually. You can check the latest stats online for real-time data collection.
Roles and Responsibilities
The most distinctive boundary between real estate and property management is the responsibilities of the two jobs. Property managers carry out management tasks, including looking after the property's maintenance, hiring tenants, collecting rents, and advertising properties for rental and other services.
The core responsibilities of a property manager include:
● Advertising properties.
● Screening tenant applications.
● Creating rental drafts.
● Negotiating and collecting rents.
● Maintaining properties.
● Addressing tenant concerns.
On the other hand, real estate agents play the role of a middle man between property buyers and sellers. They connect the two sides and seek commission for every successfully closed deal.
The primary responsibilities of a real estate agent include:
● Creating and promoting property ads.
● Meeting buyers and sellers.
● Describing property details to buyers.
● Securing the sales agreement.
The Takeaway
The above real estate vs. property management comparison can help you understand the primary differences between the two jobs. Although both roles are influential in the real estate industry, their capacities lie in different zones. If you are a real estate investor in the U.S. or planning to start your firm, the above details will come in handy.
To find out some of your area's popular real estate and property management firms, you may explore the various online resources for more information.
KH Realty Group has been committed to delivering excellent real estate management service to our clients since 1993 in the greater Liverpool, NY area. KH Realty Group follows the BHHS CNY Realty Standard Operating Procedure. Contact us today for free consultation and see how KH Realty Group can help you.
