Many times, real estate agents are confused with property managers and vice versa. People need to know that the Real Estate Industry and Property Management Industry are two separate industries, even though they may overlap at certain times.
There are certain similarities between the two, yes, but it wouldn’t be correct to call a real estate agent a property manager and vice versa. It is true that both businesses deal with property, but that is where the similarities mostly come to a halt.
So what makes a real estate agent different from a property manager? Well, here’s what they are.
Differences Between Property Managers And Real Estate Agents
1. Functioning
To begin with, a real estate agent looks after the listing and selling of properties on behalf of the owners of the property. They also assist potential buyers in making buying decisions and showing them the properties listed for sale. Additionally, they also help the property owners to rent out their premises. On the other hand, along with all the functions mentioned above, a property manager would also manage various other aspects of the property on behalf of owners – Beyond the simple ‘buy-sell-rent’ arrangement.
So, while a real estate agent would help you let out, sell your house or buy a new one or get one on rent; a property manager will look after everything associated with your property – right from screening potential tenants to enhancing the value of your property as well as helping you decide whether to buy/sell or rent a particular property. Their job role also includes assisting you with legal issues, and keeping you abreast with the market norms, and ensuring the care of your property in your absence.
2. Issues addressed
A real estate agent will set up a deal with prospective buyers/tenants in case you are looking to sell or rent out your property and vice-versa. The real estate agent thus primarily concerns himself with buying and selling of property. He/she acts as a bridge between the buyers/tenants and sellers/owners of a property.
Whereas, a property manager will ‘manage’ the property. If your property is outside the city or even the country you live in, you can hire property managers and leave the maintenance of your home to them including the repairs, tenant issues, rent collection, regular upkeep, etc.
3. Transactional vs Contractual business
Real estate business can be correctly termed as a transactional business. That means it does not involve a contract. Once the said transaction of buying/selling or letting out/renting is complete between the two parties, the role of a real estate agent ends.
However, property management is a business based on a contract. The property manager and property owner enter into a contract whereby they clearly state the terms of service, the properties to be looked after and the scope of their management and authority is defined.
4. Specialisation
The property managers offer a wider range of services. Additionally, they work in a more organised manner when compared to the real estate industry.
Why Must You Hire A Property Manager?
The term ‘property manager’ is actually quite restrictive – property management services take care of all your property-related matters, including enhancing the value of your property by maximising rental yields and even helping you decide if you should buy/sell or rent a particular property.
While real estate agents are crucial to the property and real estate ecosystem, their scope of services is limited. It should be noted that this is owing to the nature of their business, and has nothing to do with the intent of an individual agent.
As mentioned earlier, the nature of business between a real estate agent and a client is ‘transactional’ – that which comes to an end with the completion of a buying/selling transaction. However, in the case of property managers, or more accurately ‘real estate portfolio managers’, the business relationship extends way beyond.
Here’s a look at how they both differ.
1. Expertise:
Real estate portfolio managers are experienced people and have ample knowledge about property that most people do not. They also understand and are updated with the market trends and the market norms, when it comes to legal matters, rentals, and various due processes which need to be followed for property transactions and upkeep.
It is because of their expertise in the field of property and real estate that you need not worry about things like maintenance of your house or of finding a new tenant or ensuring the local taxes are paid on time, etc. If a property related problem arises, you will get the best advice, from your real estate portfolio manager.
2. Enforcement:
When it comes to renting from tenants, things can be difficult when the tenant defaults in payment. You cannot practically keep following up with them or visit them personally to understand their issue to get a resolution. Similarly, there could be instances of alterations to the property or illegal activities being conducted, which you cannot keep an eye on.
This is when the real estate portfolio managers come into the picture. They will talk to the tenant on your behalf and would ensure that things go smoothly or take the necessary steps to ensure no illegal activity is conducted on the premises. You are always kept in the loop with the goings on concerning your property.
They also ensure that your relationship with the current tenant is always amicable and pleasant.
3. Better business:
Since your property is well-maintained, devoid of any wrongdoing, it enjoys better market value. Also, tenants are willing to renew their agreements and stay-on, or newer tenants are easy to find. This also means that the tenants would not mind the periodic review of the rental amounts.
4. Reduces stress:
Since real estate portfolio managers address all your property woes, you need not worry about anything!
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