If you've ever considered starting a property management company, now may be a great time to do so. With more people than ever renting, property managers seem to be in high demand. Property management companies are looking at very good prospects in the short and long term. That said, you don't just become a property manager overnight. There are things you need to do and steps you have to take to start your own property management business. In this article, we look at what it takes to launch a career in property management.
What Is Property Management?
In the most basic terms, property management involves overseeing properties for a client. Such properties might include multi-family housing, commercial properties, and single-family residences among other property types. Sometimes it so happens that the person who purchases a property to rent out decides to manage that property on their own. In this instance, the property manager and owner are the same. Often, however, an owner will look to hire a property manager or property management company to look after the property as the investor doesn't have the time to handle this role on their own.
As far as the responsibilities of a property manager, they can vary depending on property type, the scope of work assigned, and even the property location. For example, some property managers will be the go-between for the tenant and landlord. Others will handle showing properties to prospective tenants; some will take care of maintaining and cleaning the unit. The scope of a property manager's job will be decided according to the terms agreed upon between the property management company and the property owner.
Getting Started as a Property Manager
The good thing about getting into property management is that the initial startup costs can be low, lower than with many businesses. As far as education and experience, there are no degrees required; having some background in real estate or hospitality management for example can be helpful, though not necessary. As a property manager some key attributes that you should have to include the ability to stay organized and keep everyone else organized, the ability to communicate effectively and be responsive, and the capacity to effectively interact with people.
Keep in mind too, you will likely be working with a variety of vendors, contractors, and other tradespeople in terms of property maintenance and upkeep. You need to be able to negotiate efficiently and draw a line where/when needed.
The great thing about having a property management company is that you get to wear a multitude of hats; meaning, a day is never dull. One day you could be meeting with the property owner, the next you might be interviewing prospective tenants and getting bids from painters. You also may be tasked with working directly with the localstate zoning and housing boards to ensure the property remains in compliance with all relevant regulations.
Some Details Associated with Being a Property Manager
Typically, a property manager can make between 50 and 75k per year depending on how many properties they oversee, their location, and what they are willing to undertake as far as how much work is involved with the property.
While there may not be a degree requirement, some areas will require certain licenses for you to become a property manager or start a property management company. For instance, in some states, you might need to get a real estate license to be able to call yourself a property management company. The best thing to do is to check with both your local and state governments to see what might be required of you.
Now, that said, even if you do not need a real estate license, getting one can only lend greater credibility to your business. If you plan to grow your property management firm and want to handle bigger commercial properties eventually, these property owners may require a license.
When you do go to set up your company, your best bet is to set it up as an LLC. This is a simple entity to establish (less expensive than setting up a corporation/) and you still get protection; that is to say, your assets are not tied to the business. Many people can set up an LLC on their own utilizing online resources. Or, of course, you can always hire an attorney to help.
Marketing Your Property Management Company
Once you've established your business, you need to start marketing. The key when it comes to marketing for a property management firm is to know how to reach the right people, in other words, landlords and property owners.
Networking can work well here. You also want to reach out to relevant people in your local area. For example, touch base with real estate agents who deal extensively with people purchasing rental properties. They may have clients actively searching for a property manager. You could also talk to contractors. They deal with clients all the time who have rental properties and again, who may be in the market for a property management firm.
Of course, you are going to want to establish an online presence for your business. Have social media accounts and a website that describes your services and targets your core demographic.
Running your property management business doesn't necessarily have a cut-and-dry formula. Because, as noted there are so many different responsibilities associated with this job, one day to the next can (and will/) differ. The more you can automate by way of scheduling, invoices, and even collecting rent (if this is part of your role/), the better off you will be. And this also leaves you more time to grow that business and make more money.
First Union Lending is here to help. We work with small businesses all the time, getting them the cash they need when they need it. If you need working capital for any reason, call today, and let's get started.