Property Managers: Rental Property and Expanded Services Can Generate Huge Profits

Rental Property and Expanded Services Can Generate Huge Profits

In my last article, I discussed how 2008 will be a great opportunity to purchase rental property from motivated landlords with negative cash flow properties.  As property managers, we can leverage our personal rental properties and expand our services to generate huge profits for our business.

Property managers have a huge advantage in being able to purchase a property below market and realize instant equity. We have access to a pool of motivated sellers, MLS, and can earn a commission at closing. The return on your investment can be further increased with monthly cash flow, principle reduction, yearly appreciation, and tax savings in depreciating your rental property.  However, only licensed real estate professionals can use rental property to generate business income.

I leverage my personal rental properties to generate business revenue for my companies. We provide maintenance and repair services, sales, leasing, property management, and mortgage services.  Our goal is to generate as much revenue per client as possible.  We offer a one stop shop for our customers and market to buyers, builders, Realtors, sellers, investors, and tenants. What better client to leverage our services to than tenants renting homes that I own.

We assist tenants in repairing their credit, obtaining a mortgage, representing them as a buyer’s agent, and utilizing our in house maintenance company to help them fix up the property or make any necessary repairs. We offer incremental savings with each additional service they choose. For example, if the tenant uses our buyer’s agent and mortgage services, we will waive the loan origination fee. We will also discount our repair and maintenance services. Bundling our services at an aggressive price point provides a win-win scenario for both the tenants and our companies. We earn incremental business and potentially save tenants thousands of dollars. Not only are tenants happy to utilize our services, but they refer business to us as well. Our state requires that we disclose a multiple role form when providing real estate and mortgage services.

In our market, there is a huge demand for home buyers who just sold their home and need a place to park while they build a new home. Few property managers offer lease terms less than six month, because short term leases are not profitable for the owner. I fill this market demand with properties I personally own and network with Realtors and builders and offer short term leases for their clients and customers. In return, I ask them to refer my company future property management business. We will refer the owner back to the Realtor if they decide to sell the property in the future. This makes the sales transaction go very smoothly, and Realtors are thankful for us providing this service.

Our maintenance company specializes in getting properties ready for sale and lease. We do small and large projects. We market our maintenance and repair services to homeowners and Realtors. Most Realtors don’t have relationships with maintenance vendors. We provide reliable services at affordable rates. Our handymen are full time employees, and we provide company transportation. Our maintenance company can take care of most inspection repair items, and we can assist Realtors in getting their client’s home ready for sale. 

The more properties you own, the more you can leverage your services to generate business income. I encourage property managers to take advantage of near record low interest rates and purchase as many rental properties as possible. Consider expanding your service offerings. Mortgage services are extremely profitable and require little capital to get licensed. Many states require only a few classes to obtain your loan officer license, and you may be able to get real estate MC E credits with the completed classes. Consider subleasing some of your office space with a mortgage broker who will pay you rent and sponsor you as a loan officer. Offering maintenance and repair services can generate future real estate clients. A homeowner needing painting services may be in the market to lease or sell their property.  Expanding your service offerings and levering your personal rental properties and can offer a limitless return on your investment.

In my next article, I will discuss how property managers can take advantage of tax loopholes only available to licensed real estate agents.