How to Start a Property Management Business

Intro

How much do you know about the profession of a property manager? Have you ever thought of founding a property management company of your own? If that is the case, this how-to guide is for you.

If you think you are a pro on the topic, you can skip the first and the second paragraphs. Yet, if you are still wondering what property managers really do, you may want to read the following.

For starters, property management is a business that involves managing different kinds of people and real estate. Landlords, tenants, and contractors are the ones you will need to deal with, maintaining a professional relationship.

Also, as a property manager, you will need to know the local laws and create efficient and effective protocols. Not everyone would consider taking this job, even though it has its perks and rewards. However, if you feel comfortable with managing people and property, get to know how to start a property management company of your own.

Decide: becoming freelancer or an owner

First and foremost, you need to make up your mind on whether you want to work alone or with a proper team. What type of work would you prefer?

Check freelance

Let’s start with the realization that establishing a company comes with a lot of responsibilities. On the other hand, freelancing has its own range of responsibilities. The difference is that while freelancing, you take responsibility for yourself and your work. Period. Owing a company goes far beyond being responsible just for yourself and your actions.

Think of ownership

If you own a property management company, you have a lot of things to take care of. For instance, if a company acts as a letting agent (and a lot of them do), it means finding and vetting tenants, drafting legal tenancy contracts and making sure the tenants take care of the property. Also, you would need to mind the repair issues, manage finance and liaising between the landlords and the tenants. Overall, that’s a lot to handle and you need to make sure you want to get yourself into the hustle.

Another thing one needs to remember is that a property manager deals with multiple units at once. It can be residential, student housing or commercial. For example, you can be hired by a real estate investor as a property management company (or a freelancer). Usually, real estate owners have no time or experience to manage properties on their own.

What’s more, you should not undervalue legal issues which come with owning a company. Especially, if we are talking about property management, legal aspect of the job is one of the crucial ones. The established and well-known property management companies strive to minimize the damage of rental units and risk of litigation and boost the customer's profit.

Aside from the job itself, owing a property management company requires you to have staff. This means you would have to handle the managers, the real estate owners and the legal aspects of the company in full.

Build your skillset

In a case, you decide to devote your professional life to property management, make sure you have the right skills to be the good one.

Communication. As a property manager, you would need to communicate with people from different backgrounds. Having good people skills will make the experience more pleasant and enjoyable. Also, building relationships with contractors and local law enforcement requires your ability to adapt and be flexible.

Ability to empathize, being able to connect to people is also important. In property management urgent situations is a daily routine which you should be able to handle gracefully. Of course, you would want to build up a solid network of contractors to deal with maintenance problems. The best case scenario you will assist the landlords to make significant changes to their properties.

Basically, your everyday routine will involve working with property owners, tenants, contractors, so your people skills would come in handy.

Time-management. This skill is one of the most valuable ones that a property manager should have. Property owners are looking for people who are reliable, competent, who they can trust with their assets. Indeed, you would need to have time management skills to maintain relationships with the variety of clients, contractors and also don’t forget about paperwork. Timing is important in order to leave everyone satisfied and complete the work in time.

Detail-oriented. Be precise. The thing is that when you need to handle the variety of things, it’s tough to keep focus. Yet, the job assumes you will be the one responsible and in control of properties, legal paperwork and so on. In a case you lose some aspect of a deal from your focus, the deal can go sideways and there won’t be anybody to blame but you. That’s exactly why one needs to be detail-oriented in property management business.

Start your property management company

In a case you decide to go for starting your own company, the following tips will give you the understanding what you need to do in the very beginning. So, let's do business!

Make it legal

First and foremost what you need to do is establish a legal entity. You can either hire an attorney or do it yourself online. If you want to do it yourself, simply go to your state’s official site. There you can find information on how to fill up a Limited Liability Corporation (LLC) form. Afterward, download Article of Organization template which is free to use, and then file it.

Set up the office

Think of what you can do without leaving your apartment. For example, you can start your website, set up an email account or print out fancy business cards. What else might you need? Mobile phone, copier, scanner, fax machine: you will need all these stuff to organize your work.

The home office is a good idea at least for a start. However, whether you decide to work from home or rent an office, you would need a place to meet with clients and handling telephone conversations. Don’t forget to get yourself a mobile phone for work, you will use it all the time.

Pick the right technology

What kind of technology is the right one? It’s the one that helps you manage your financial records, keep them balanced and track the progress. You can get it in a software package for property managers.

Developing a website, make sure its design clean and user-friendly. It will be easier for clients to find you if you will be presented on the Internet. Also, a good marketing campaign will inspire the prospect client to become the current ones. Actually, there are software packages that include websites with professional design. Simply choose the option which works best for you.

Build your client base

Developing a business venture, you need to remember that customers don’t just appear. You need to search for them, attract them and even to fight for them. Well, that’s tough business. Thus, there are different ways to find clients, which we are going to discuss further.

Go for networking

Word of mouth is a great way to advertise your business in the very beginning. People skills we mentioned earlier will come in handy here. Talking to people, maintaining the relationships, it’s all about communication and community. For instance, you can contact the top selling real estate agents, as they usually know all about property for rent and those who want to buy property for investment.

Also, you can take a chance with Home Owners Associations (HOA’s) and real estate investment clubs. That’s exactly where you can find landlords and investors. You can also connect the Chamber of Commerce or another local business organization and try to present your venture.

Choose the right online ad campaign

Nowadays, there are plenty of channels for advertising your business, especially online. Beginning with Google ads, SEM (search engine marketing) and SEO (search engine optimization) to listing your business on FourSquare which is completely free.

For example, search engine marketing can help you to drive potential customers to the correct part of your website. Basically, what you do is pay for people to visit your web page or any kind of online presence. Here you can find a 4-step plan how to use SEM for property management companies.

Use offline marketing

Last but not least, give a try to offline marketing. It may sound old school, yet it still works. Newspapers, free papers, cable channels, go for any opportunity to advertise your business that seems reasonable. Pick the right channels. Considering the local market analysis, you can make the right choice.

Define the pricing

Initially, analyze the local market. Depending on the going rates, decide how much you want to earn at the beginning. Make sure that your charging rate does not influence the service’s quality which should be high every time. Reputation is important in every business, and property management is not an exception.

Also, before hiring staff, try to manage as many units as you can on your own. That’s how you can earn and still provide quality service. However, don’t get greedy. Remember that quality is a crucial element for every business.

Summing Up...

Starting a property management company is a challenge, which is not for everybody. However, if you are confident that establishing your own company is worth all the risks, simply go for it! Great rewards come with great risks, which is one more reason for building something of your own.

Find 5 the most interesting blogs on property management that will help you succeed:
1. Grace Hill
2. Propertymanagement.com
3. 30 lines
4. Let’s Talk Property Management
5. Marc Juleen