Starting a property management company is a great way to get into the real estate industry. It can be a lucrative business, but there are some requirements you need to meet before you can get started. This article will outline the education, training, and certifications you’ll need, as well as the licensing requirements and other legal requirements.
Required Education, Training, And Certifications
There is no formal education required to start a property management company, but you will need some knowledge of the real estate industry. You can get this knowledge through courses offered by many community colleges and online real estate schools. You will also need to be trained in the various aspects of property management, such as marketing, accounting, and maintenance.
Furthermore, there are some certifications that may be required (or at the very least will be very helpful) in order to start your property management company. The requirements for these certifications vary by state, but some examples of certifications that you may need include:
-Certified Property Manager (CPM): This certification is offered by the Institute of Real Estate Management and requires completion of a course and passing an exam.
-Accredited Residential Manager (ARM): This certification is offered by the Institute of Real Estate Management and requires completion of a course and passing an exam.
-Certified Apartment Manager (CAM): This certification is offered by the National Apartment Association and requires completion of a course and passing an exam.
-State-Specific Real Estate License: In order to manage properties in most states, you will need to have a real estate license. requirements for this license vary by state, but generally require completion of a pre-license course and passing an exam.
Licensing Requirements
In order to start a property management company, there are some licenses you need to obtain.
The first license you need is a business license. Requirements for this license vary by state, but you can usually apply for it through your local chamber of commerce or city hall. Getting this license will typically cost between $50 and $200.
The second license you need is a real estate broker’s license. Requirements for this license vary by state and some states don’t require it at all. However, getting this license will generally require the completion of a pre-license course and passing an exam. The cost of this license ranges from $100 to $300.
The third license you need is a property management license. requirements for this license also vary by state, but you will generally need to have a real estate broker’s license in order to obtain it. The cost of this license is typically between $100 and $200.
Other Legal Requirements
In addition to the licenses, there are some other legal requirements you need to meet in order to start a property management company.
The first requirement is to have liability insurance for your property management company. This insurance will protect you from any lawsuits that may arise from your business activities. The cost of this insurance varies, but it is typically between $500 and $1,000 per year.
The second requirement is to have workers’ compensation insurance. This insurance will protect you from any lawsuits that may arise from injuries sustained by your employees while they are working. The cost of this insurance varies, but it is typically between $500 and $1,000 per year.
The third requirement is to have errors and omissions insurance. This insurance will protect you from any lawsuits that may arise from mistakes made by your company. The cost of this insurance varies, but it is typically between $500 and $1,000 per year.
Other Services And Supplies You May Need To Start Your Property Management Company
In addition to the licenses and insurance, there are some other services and supplies you may need to start your property management company. These items are not legally required, but you won’t get far in your business without them.
Initial Investment
The initial investment for starting a property management company is typically between $1,000 and $10,000.
This includes the cost of the business license, real estate broker’s license, property management license, liability insurance, workers’ compensation insurance, and errors and omissions insurance.
It also includes the cost of any other services and supplies you may need, such as a computer, printer, and software.
Business Insurance
It is also important to get business insurance for your property management company. This insurance will protect you from any lawsuits that may arise from your business activities. The cost of this insurance varies, but it is typically between $500 and $1,000 per year.
Business Plan And Property Management Model
You will also need to create a business plan and property management model. This will help you determine the costs of running your business, as well as the best way to market your services.
There are many different property management models available, so it is important to choose one that fits your needs. Some examples of successful property management models include the flat-fee model, the percentage-of-rent model, and the commission-based model.
The most important thing is to make sure that your business plan and property management model are realistic and achievable. Otherwise, you will likely find yourself struggling.
Accounting Software
The third service you may need is accounting software. This software will help you keep track of your finances and budget. The cost of this software ranges from $50 to $200.
Conclusion
Starting a property management company requires some initial investment and obtaining various licenses and insurance. However, if you follow all of the requirements, you can be well on your way to starting your own successful business.