Real estate agents choose to become property managers
September 25, 2011 - 1:04 am
More real estate agents in Las Vegas have returned to school to obtain a property manager permit, which expands their business and clientele.
The state of Nevada requires 24 hours of property management education at a qualified school, with a passing score of 75 percent or more to activate a property management permit in Nevada.
The Nevada Revised Statute chapter 645 was changed in the early 1990s to accommodate property management as the housing boom began, said Michael Federwitz, executive director of Key Realty School. Key Realty offers courses in property management as well as training and pretest counseling.
As investors swooped in from out of state and other countries, rental issues became more prevalent, with real estate agents handling many of the lease agreements without full knowledge of property laws.
“Initially this (license) was implemented because there were so many complaints with the way that real estate licensees handled this type of activity,” said Federwitz, who has more than 25 years of experience in the real estate industry. “The legislature did it to make sure that the Realtors know the laws and that not knowing the law doesn’t exempt you.”
Interestingly, of its neighboring states, Nevada is the only state that requires a permit for property management, he said.
“The rental per capita base here is highest in the West,” he said. “Since we have more renters per capita, we are forced to go down another path to clearly and wisely represent the renters.”
Nevada has also been a relative newcomer to the real estate industry.
“California, Arizona, they had their huge growth spurts a long time ago,” Federwitz said. “We were forced to adapt to current market demands. We had a chance to look at what to put in play to better support our industry. Many states would say it is overkill, but you never hear renters complaining.”
Key Realty School has a staff of 30, from administrative to educators, who have been there since its inception.
“And they don’t come and go,” Federwitz said. “We have a very low turnover rate, a very strong staff.”
The school has administered real estate education to more than 40,000 students, with an average of 30 real estate agents a month taking the 24-hour property management course. More than 360 students take the property management seminar every year. This number hasn’t changed since the economic downturn as property management is a consuming part of the real estate job. The cost of the property management permit is $40, which is payable to the Nevada Real Estate Division once the permit is activated by the agent.
Many real estate agents take the leap, Federwitz said, to expand their clientele or to keep existing clientele as they move or decide to rent out their homes. Some of their home-buying clients have recently become renters themselves as the housing market has dipped lower and lower.
“The biggest reason Realtors would take this on is to take care of their clients, even if they have just one or two clients,” he said. “It’s not just for an increase in income, because it’s not that much, but also so that they don’t lose their clients.”
The average property manager charges 10 percent of the total rent as a monthly fee. This usually includes a walk-through with the potential renters. For additional fees, a property manager can usually run a credit check on potential renters and be the go between for repairs or problems that arise over the course of the lease.
“Realtors find that they do a sale for say, an investor, but then they have to turn around and hire someone else to come in and do the property management side,” Federwitz said. “This way the client is more comfortable staying with the Realtor and not having to search for another company to assist them.”
About 80 percent of applicants to Key Realty School that come in to take courses are extending their education, adding on to what they already practice as real estate agents, he said.
“The other 20 percent want to just be a property manager and build a portfolio of 50 properties or so,” he said, adding that number often includes commercial real estate as well.
To become a property manager, real estate agents need to have their real estate license first and foremost. Once they have that, and preferably a bit of experience, they can take the 24-hour course required by state law to meet the education requirement.
“Then you can add that permit to that real estate license,” he said. “It’s kind of like how a motorcycle permit is attached to your driver’s license. It’s viewed as a very specific kind of real estate activity. It’s an important part of real estate.”