Referrals
Referrals are a great source of business. Many firms will offer a fee to a real estate brokerage firm that refers business to them. The fee may be a fixed amount or a percentage of the first year’s management fee minus any out-of-pocket on-site costs. Brokerage firms that do not have a property management department or do not manage a particular type of property may welcome the opportunity to refer a professional property management company to their clients and earn a fee for the referral. Some companies will pay an employee for generating business or providing a referral. (It is imperative to seek advice of legal counsel and check with your state’s real estate regulatory agency regarding the payment of referral fees to non-licensees. This practice is forbidden in many states.) Referral sources should also be added to your contact list.
Further detailed information on starting a management business can be found in the IREM publication Business Strategies for Real Estate Management Companies © 2004 by Richard F. Muhlebach, CPM® and Alan A. Alexander.
Comments
As noted above, the two authors are experienced and well known in the real estate industry. We pay referrals to companies that find tenants for our properties as well as expect to receive referrals when we assist others. This is another networking source that can certainly be used to increase the size of your business.
Referrals are a key-source of new clients for most real estate management firms. Richard Muhlebach and Alan Alexander are highly-respected real estate professionals and I am always excited to read anything they have written. There's no better resource on management practices and principles then the life experiences fellow IREM members share with us like Richard and Allen.
- Lori Burger | Flag this comment for review