Vancouver Real Estate Agents are Leaving and the Property Manager Pool is Shrinking, But the Rental Market is Stronger Than Ever…What Gives?
Back in 2007, many Vancouver real estate agents had clients who wanted to sell their homes, but couldn’t and still pay off their mortgage. For homeowners who moved to new cities, the best and often only option was to rent their existing Vancouver rental home until housing prices recovered. The sub-prime mortgage crisis hit many people hard and for many in the industry, a real estate agent salary was no longer enough. Listings were now primarily rental properties and during this time, those having a real estate license turned to property management as it showed the promise of a way to make a living during the downturn. On the surface, this seemed like a workable solution.
There are 71,584 property management firms in the United States, according to InfoUSA, a database company. This number surged during the housing crisis that started eight years ago. This number is now declining with two reasons for the change: 1) Real estate agents are exiting the property management business, and 2) Smaller property management firms are selling their businesses to larger competitors.
Unfortunately, the skills, knowledge and systems needed for selling real estate are very different from what is needed for property management. Many Vancouver real estate agents found property management difficult, time consuming and unrewarding. In addition, these agents’ sponsoring brokers found that the legal liability of Vancouver property management could be very expensive, if not handled well.
As real estate prices recovered, “accidental landlords” began selling their properties. Agents started making money on sales again, and those with properties to manage found their property management clientele shrinking. Many now find property management a distraction and impediment to sales, where they are able to make more money. As a result, agents and their brokerage houses are exiting the property management business and referring clients to professionals like Real Property Management Authority.
In addition, smaller property management companies are finding it difficult to match the technology, systems and economies-of-scale larger Vancouver property management firms such as Real Property Management enjoy. Investors have become more sophisticated and demanding during the past eight years. Many owners of smaller property management firms are baby boomers approaching retirement, and seek a profitable exit from their business. The combination of these factors is starting what will soon become a wave of industry consolidation.