Starting a property management company can be a lucrative business venture, but it also comes with a number of costs and expenses that entrepreneurs need to take into account. In this article, we will explore some of the key initial investments that are necessary when starting a property management company, as well as some of the other associated costs and expenses.
Licenses And Certifications
You can’t start a property management company without the proper licenses and certifications. In order to operate legally, you will need to obtain a business license from your state or local government. You will also need to obtain any necessary certifications, such as a Certified Property Manager designation from the Institute of Real Estate Management. Below is a list of necessary licenses and certifications and their typical costs:
-Business license: $50-$200
-Property Management license: $100-$500
-Certified Property Manager designation: $300-$1,000+
-Real Estate Broker’s license: $300-$1,500
As with any business, property management companies need to be properly insured. This is to protect both the company and its employees from any potential liability. The cost of business insurance will vary depending on the size and scope of your company, as well as the location. Below is a list of typical business insurance coverages and their costs:
-General liability insurance: $500-$2,000/year
-Professional liability insurance: $500-$2,000/year
-Workers’ compensation insurance: $500-$5,000/year
-Property insurance: $500-$5,000/year
Property management companies need to have the right software in place in order to function properly. This software will help you manage properties, tenants, leases, and finances. There are a number of different software options available, and the costs can vary widely. Below are some typical costs for property management software:
-Basic property management software: $500-$1,000
-Advanced property management software: $2,000-$5,000
-Financial accounting software: $500-$1,500
Creating A Website
In order to attract new business, property management companies need to have a professional website. This website should include information about your company, services, and how to contact you. Creating a website can be a relatively inexpensive investment, or it can be quite costly depending on how elaborate you want it to be. Below are some typical costs for creating a property management website:
-Basic website: $500-$1,000
-Advanced website: $2,000-$5,000
-Website with custom design: $5,000-$10,000
Marketing And Advertising
Property management companies need to market and advertise their services in order to attract new business. There are a number of different ways to market and advertise your company, and the costs will vary depending on the approach you take. Below are some typical costs for marketing and advertising a property management company:
-Print advertising: $500-$1,000/month
-Online advertising: $500-$2,000/month
-Social media marketing: Free-$1,000/month
-Direct mail marketing: $500-$2,000/month
In addition to the cost of hiring property managers, you will also need to factor in the cost of additional labor, such as maintenance workers and janitors. You may also want to hire assistants to further help you manage your properties. The cost of this labor will vary depending on the size and scope of your company, as well as the location.
There are a number of overhead costs that are associated with starting and running a property management company. These costs can include office space, supplies, furniture, and equipment. The amount you will need to budget for these costs will depend on the size and scope of your company.
Starting a property management company can be a costly endeavor. There are many factors to consider and they all vary in price. However, you can typically expect to spend several thousand dollars just to get started. That said, the potential rewards of starting your own property management company can be well worth the investment.