June 21, 2024


Mad about real estate

Property Managers: Leverage Rental Property to Generate Property Management Business

Consider expanding your service offerings to include mortgage services.  Mortgage services are extremely profitable.  Many states only require one or two courses to get licensed, and you may be able to use the loan officer course to get MCE credit for your real estate license.

You probably have a large pool of prospective investors with adjustable rate mortgages who need to refinance their mortgage. Why refer this business, when you can easily provide this service. You already have an established relationship with each owner.  If you own your office, you may even consider subleasing space and partner with a mortgage broker. Our in house mortgage broker pays us rent and refers real estate and property management business to us. This drastically lowers the overhead cost for both companies.

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 easily achieve instant equity by purchasing property below market and earning a commission at closing. We can increase our return on investment with monthly cash flow, appreciation, principle reduction, and tax savings by depreciating rental property. However, only licensed real estate professionals can use rental property to generate business income.

No other investment can potentially offer a greater return for a property manager than investing in rental property.  Our company provides maintenance, sales, leasing, property management, and mortgage services. We leverage all of our services to generate as much revenue per client as possible.  We offer a one stop shop for all our customers. 

As a licensed real estate broker and loan officer, we generate thousands of dollars each year by assisting tenants living in rental properties I own to purchase homes. 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. Not only are tenants happy to utilize our services, but they refer business to us as well.

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. Yet 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. We have obtained many property management referrals because of this service offering. Even the short term tenants have referred property management business to us.

The more properties you purchase, the more you can leverage your company’s services to generate business income. You will save thousands of dollars in income taxes each year by depreciating each rental property.  Owning rental property can lower your income tax liability to low single digit percentages. Some landlords with a large rental property portfolio pay no income taxes, because their depreciation expense exceeds their taxable income.

I encourage property managers to take advantage of near record low interest rates and purchase as many rental properties as possible. Leverage your rental properties to generate incremental business income.  

In my next article, I will discuss how licensed real estate agents can leverage rental property to generate additional business and tax savings.