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This is a very common question from those interested in becoming a property manager. In fact, even current property managers constantly want to know what their earning potential is, or should be. Despite years of collective data from governments, industry organizations and real estate management companies, the truth is there is a such a wide range that even the average annual salary can be deceiving. In this post we will take a more in depth look at the history of the property management profession and variables that go into determining the salary range so you can be better informed as to how much you should expect to earn as a property manager.
History of the Industry
It is fairly well known that real estate “investing” or purchasing land rights that can be leased out for money or another form of a rent payment such as crop sharing, goes back to the first civilizations in human history. Throughout the past several millennium there has been major debate on legal definition of ownership and the accompanying responsibility as well as legal specifications on acquisitions and sales of real property. But in light of the fact that real estate ownership goes back to ancient times, the Property Management Industry as we know it today is relatively new for several reasons. Some of those reasons are:
- Modern building construction (Think high rises, energy and the new green building standard, etc..)
- Local and federal government involvement (Think Section 8, code enforcement, licenses needed to sell or manage real estate, etc..)
- Economic Real Estate cycles (Think REO properties, REIT’s, and the housing crash of 2007-2008)
Many experts look at the 1930′s as being the starting point in modern real estate management. Before then, for the most part, owners were also managers, and if they had employees their duties were mainly to perform basic tasks like fixing things and collecting rent. During the 1930′s the Great Depression caused many real estate owners to lose their investments and banks came in to foreclose and recoup the assets. Since bankers had no clue about managing real estate, there was a need to employ professionals that would be responsible to manage and operate the real estate on multiple levels.
Becoming a Profession
More and more over the past several decades real estate owners and investors have been looking for qualified individuals to manage their properties. The old adage “You get what you pay for” is very true when it comes to finding the right talent to manage real estate assets. Managing real estate can be complex with many different layers and “moving parts.” Hiring the wrong person could result in lost profits, legal issues and even foreclosures. This is becoming even more true as property types evolve, laws change and the market gets more and more competitive. I was recently talking to a recruiter who was telling me about a property manager position he was offering that paid $90,000. The role was to manage 250 B+ market rate units on one site. Sounds high doesn’t it? I thought so too. That role I figured should pay somewhere closer to $60,000-$65,000. I asked the recruiter what the catch was, and he said, “Property management is becoming more and more a profession. This job would have paid $60,000 5 years ago, but this landlord is looking for the best and brightest to manage their investments.”
There are many variables when it comes to determining the salary of a property manager. Location, property type, duties, direct reports, amount of units or square feet, single or multi-site, and company standards are just a few of these variables. I don’t think I need to explain how a property manager who manages two high rises in Manhattan with 1000 total units and 30 employees will be on the higher end of the pay scale then a site manager who manages 30 C apartment units in Mobile Alabama on 1 site and supervises 1 maintenance technician. There are general rules that apply when determining the salary of a property manager. Those rules are determined by two key ingredients: Skill Set & Experience. As a general rule a manager who manages more units, more sites, and/or complex properties will have more skills and/or experience then a manager who manages fewer sites, fewer properties, with property types that are not as complicated. Just as in any industry, more experience and a higher skill set will earn you more money. But there is no special algorithm, and this is not absolute. Subsidized properties can be extremely complex to manage, with HUD breathing down your neck and “high maintenance” tenants and properties, but I have seen them pay at the lower end of the spectrum. Condo managers on the other hand don’t have to deal with leasing apartments but I have seen some condo managers make a nice living.
Statistics – Property Manager Salary Information
Here is the moment that you have been waiting for. You probably searched for “property manager salary” or a related keyword phrase and landed on this post and just wasted the last few minutes of your life reading about history and other bits of information that you don’t care about. If that is you, then I don’t apologize, because if you are thinking about getting in the industry, or just want to see how much you should be getting paid, then I can tell you that the highest paid individuals in this industry learn about it more then you. But, if you have been enlightened by this post and it has reaffirmed your desire to be a great property manager then you should go for the gold and aim to hit the highest earning potential. Keep on target and working hard and you will one day be in the top 20% and quite possibly the top 10% of earners in the property management industry. Here is some information on property manager salaries.
- Glassdoor.com shows that the median salary for property managers in the USA is $50,000 as of the date of this post.
- US Department of Labor reports that in 2012 the median salary is $52,610 where the bottom 10% earns $26,600 and the highest 10% earns $113,400 per year. Find more from the Department of Labor on their website: http://www.bls.gov/
- Good link on property manager compensation from the Institute of Real Estate Management here.
- This is probably the best and most comprehensive property management salary report covering multiple industry verticals and positions. You can check it out here