While real estate can be a highly lucrative career choice, it’s also fairly inconsistent. While you could rake in tens of thousands one month, you might have nothing coming in the next. But that doesn’t mean you need to work a 9 to 5 job to avoid the cycle of feast or famine.
Kevin Kellogg, an agent based in the Florida Gulf, has built a consistent and lucrative business by thinking outside of the box. The key to sustaining his business is property management, one of the services offered through his company, Logical Choice Realty Group. Just over three years old, Logical Choice Realty Group, or LCRG, offers property management to approximately 60 investors.
Steady Income and Building Rapport:
The Short-term Benefits of Property Management
One reason Kevin decided to offer property management services was to guarantee himself and other LCRG agents stability in all kinds of markets, no matter “when the next buyer or seller was coming along.”
“LCRG was created initially with a property management platform to ensure a monthly paycheck,” he says. “We all need a steady monthly income, and, working in real estate, offering property management was one way to make sure this would happen.”
Perhaps you’re reading this and thinking that property management and selling real estate are two distinctly different careers, but Kevin maintains they can actually go hand-in-hand.
“We look at having tenants as having 150 potential buyers,” he explains. “We treat them with respect and respond in a timely fashion to their requests and service needs. We take care of them and nurture them. Most [property managers] just run a tenant into the ground and disrespect them and hang a three-day notice the moment they’re not on time. We try to work with them and build that relationship.”
One of Kevin’s own clients, Jerry, can vouch for Kevin’s theory. After living in a rental condo Kevin’s company managed, he decided to work with Kevin again when he was ready to purchase a home. Jerry relocated to Florida from Texas and serendipitously found Kevin and his company when he selected a condo for rent that was listed with LCRG.
“I shopped on websites and found the condo and, thanks to Kevin, was able to relocate confidently without visiting in person,” he says. “Kevin sent me photos and a video of the condo, and he was very responsive. He’d follow up with me within the hour. Also, I had a situation pertaining to my UHaul and my arrival time, where I couldn’t park at the condo, so Kevin let me park at his house overnight.”
After a year and a half spent happily in his rental, Jerry decided it was time to buy a home. He eventually found the “perfect” property: a house with a cottage in the backyard, suitable for his mother to move into and still maintain her own space. He knew immediately that he wanted Kevin to be his agent.
“Kevin negotiated for me — I paid less than the listing price for a perfect house in a historic area of town,” Jerry says. “He was instrumental in the process. I’ve referred him to three or four other people since then.”
Growing Future Business: The Long-Term
Benefit of Property Management
Yes, property management has offered Kevin and his team reliable monthly income. But perhaps more importantly, it has demonstrated the importance of building a foundation for business and fostering slow, steady growth. Kevin and his team have had to exhibit patience for tenants to become buyers and for investors to buy again, and it’s a lesson that can be applied to every facet of the real estate industry.
“I think foundation is missing a lot with agents,” Kevin says. “They're chasing every new possibility that comes along, and they forget that the smaller, incremental steps are what it takes to have a good foundation for a business.”
For Kevin, keeping the ball rolling and ushering fresh business through the door is a matter of staying in touch; he’s been able to keep growing his business without resorting to overly aggressive marketing.
“It's just been a little bit of networking,” he says. “We did buy two small companies out — 10 doors and 30 doors. And that helped us with our growth. It's just being in the right place at the right time, respecting people, and being thankful.”
What are his suggestions for agents who are just beginning to build their own foundation?
“Check with your broker to see if property management is a service offered,” he says. “It’s a steady monthly income, and, by building a relationship with your investors, you could then help them buy and grow their portfolios as well as increase your real estate sales.”
“And it goes back to the way you’re treating people,” he continues. “Houses don’t sell themselves, and houses don’t buy houses. This is a human industry.”
Build Your Own Property Management Business
Here are some quick tips for building a successful, steady income like Kevin:
- Find vacant homes and look up the owners’ current mailing address. Send them your marketing materials and follow up to sell them on the benefits of renting their homes vs. letting them sit vacant.
- Search Craigslist or Facebook Marketplace to find rentals. Most rentals on these sites are being rented out by the owners. Again, you can sell them on the benefits of having a reliable professional to handle every aspect of their rental experience.
- Attend networking events with current and future real estate investors. These investors can bring you consistent property management opportunities if they agree to partner with you on the properties they acquire. Then, if and when they decide to sell those properties, you’ve already formed a relationship and given them a reason to hire you over other listing agents.
- Utilize attractive promotions, like: “I’ll rent your home in two weeks, or I’ll rent it for free.” This is a great way to get people to take a chance on you, especially if they’ve had trouble finding quality tenants.
- If you’ve been struggling to sustain a consistent income throughout the year, consider adding property management to your repertoire.
- Like Kevin, when you work with renters, you also open yourself up to a whole host of buyer leads, who will come to you if and when they decide to buy a home in the future.
- If you want to establish a steady stream of property management business, partner with local real estate investors to manage their rental properties.