Starting a successful property management company requires a few key things to get the business off the ground and running smoothly. In this article, we will outline the basic steps that you need to take in order to make your property management company a success.
Here are the 10 steps you can take to get started on building your very own property management business.
Ten Steps to Launching a New Property Management Business
1. Choose Your Type of Property Management Business
The first step in launching a property management business is to identify the type of property management business you want to launch. You might choose from the following types among others:
- Residential – overseeing the management of apartments, condos, townhomes, and single-family rental homes.
- Commercial – handling the management of office buildings, retail centers, warehouses, and other types of commercial properties.
- Association – providing services to homeowner associations (HOAs), condominium associations (COAs), and other types of property owner associations.
2. Name Your Property Management Business
Give your property management business an identity so people will think of it as a well-known and respected brand. You can take the name of your property management business from your industry, focus on a geographical location, or use your own name among other options.
The main goal for naming your property management business is to make it sound appealing and trustworthy so that potential clients will want to work with you.
3. Determine Your Property Management Business Model
There are several possible types of business models for a property management business including:
- Management by owner – You will be the sole proprietor of your business and will handle all aspects of running the company.
- Management by employees – You will hire a team of employees to work for your company and oversee their work.
- Management by independent contractors – You will hire independent contractors to perform specific tasks related to property management for your company.
- Management by property owner – You will work with one or more property owners to manage their properties. Determining the right business model for your company is an important step in launching your business. Be sure to consider the pros and cons of each type of business model before making a decision.
No matter which model you choose, make sure that it aligns with your business goals and the services you offer.
Read more about choosing the right business model for your property management business.
4. Choose a Legal Form for Your Business
By incorporating your property management business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.
The business structure you choose for your property management business will determine the amount of taxes you pay and which state or federal tax forms you need to file.
Read our article comparing the most common property management business structures.
5. Write a Property Management Business Plan
All property management business owners should develop a business plan.
A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team among other things.
Read our article about how to write a property management business plan.
6. Apply for the Necessary Permits and Licenses
There may be required licenses and permits you need to obtain before launching your property management business.
For example, you might need a valid Real Estate Broker’s license. The requirements for this license vary by state, but generally include completing a certain number of hours of pre-licensing education, passing an exam, and completing a background check.
You might also need to obtain a business license from your city or county government. The cost and time required to obtain this license varies depending on the location of your business.
You must also register your property management business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.
Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website, if you plan to hire employees.
Read our article about obtaining the proper property management business licenses.
7. Determine Your Budget & Apply for Funding as Needed
In developing your property management business plan, you will figure out how much funding you need to start and grow your business.
If you have your own funds to invest in your property management business, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your property management business include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.
Read our article about the costs associated with starting a property management business to help you determine if funding is needed.
Read our article about how to fund your property management business.
8. Get the Technology & Software Needed to Run Your Business Efficiently
When you start your property management business, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with Internet access, and accounting software for tracking expenses and revenues.
You may also want to invest in property management software, which will automate many of the tasks associated with running a property management business, such as marketing vacant units, tracking rent payments, and creating work orders.
Other pieces of technology you may need for your property management business include a printer, scanner, copier, and fax machine.
9. Market Your Property Management Business to Potential Clients
Before you start selling your services, you have to let the world know you exist. The first step is to create a website so people can learn more about your services and how they benefit them.
After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the property management industry through social media and blogs so they can help share your business.
You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new customers. Property management businesses should consider the following promotional strategies for which you should start getting prepared:
- Develop a marketing plan and budget
- Create captivating print or online advertisements
- Write press releases to announce newsworthy items about your business
- Speak at industry events or conferences
- Engage in email marketing to reach a larger audience
Read our article about how to market your property management business for more tips.
10. Get New Clients & Grow Your Business
When you promote your services, you’ll start to get interest from potential clients.
Make sure you’re ready to serve these clients. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your property management business.
Read our article about how to effectively grow your property management business to learn more.
Starting a Property Management Business FAQs
Why Start a Property Management Business?
The property management industry is growing at a rapid pace, and there are many opportunities for entrepreneurs to get involved. Property management businesses offer a variety of services that help landlords and property owners manage their properties more effectively. These services can include marketing vacant units, collecting rent, maintaining the property, and handling repairs and maintenance.
What is Needed to Start a Successful Property Management Business?
To start a successful property management business, you need a strong understanding of the industry and the various services that property management businesses offer. You also need to be familiar with the laws and regulations governing the property management industry in your area. Additionally, it’s important to have the right technology and software in place to run your business efficiently.
How Can I Start a Property Management Business From Home?
If you’re looking to start a property management business from home, the first step is to research the laws and regulations governing the property management industry in your area. You also need to have a strong understanding of the various services that property management businesses offer. Additionally, it’s important to have the right technology and software in place to run your business efficiently. Finally, you need to promote your business to potential clients so they are aware of your services.
How Can I Start a Property Management Business Online?
If you want to start a property management business online, research the laws and regulations governing the property management industry in your area. Become acquainted with various services that property management businesses offer. Then, acquire the right technology and software to run your business.
Next, develop an online presence so clients can find you and start booking services.
What are Some Tips for Starting a Property Management Business?
Tips for starting a property management business include:
- Research the laws and regulations governing the property management industry in your area.
- Understand the various services that property management businesses offer.
- Acquire the right technology and software to run your business efficiently.
- Promote your business to potential clients so they are aware of your services.
- Find and train the right people to help you grow your property management business.
Where Can I Find a Simple Checklist for Starting a Property Management Business?
A simple checklist to use when starting a property management business is as follows:
- Choose Your Type of Property Management Firm: This should be based on what you are best at and how much experience you have. Remember to keep your interests, skills, and experience in mind at all times.
- Name Your Property Management Business: This should be done with care, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
- Choose a Legal Form for Your Business: Whether you choose to become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
- Determine Your Property Management Business Model: Determine how your business will make money. Will you sell products, services, or a combination of both?
- Write a Property Management Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
- Apply for the Necessary Permits and Licenses: In most locations you will be required to apply for a business license and/or permits before you can begin operations.
- Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
- Get the Technology & Software Needed to Run Your Business Efficiently: You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
- Market Your Property Management Business to Potential Clients: A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so that you can provide them with the services they truly need.
- Get Clients & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your services.
Summary
By following the steps we’ve outlined in this article, you’ll be on your way to success when you start a property management company. Research the market, the industry regulations, and the potential services your business will offer. You’ll also need to acquire the necessary technology and software to run your business efficiently. And finally, promote your business to potential clients so they are aware of your services. With a little hard work and dedication, you’ll be well on your way to starting a successful property management company.