Property management is easy to get into and an affordable field to enter. It requires minimal education and experience, and almost no small business start-up capital. You’re probably wondering, where do you sign up? We’re here to tell you what it takes to get a property management company started.
What is property management?
Property management is the administration of one or multiple residential, student housing, or commercial properties. The property owner and the manager can be the same person. Or, a property management company can run the properties if the real estate investor doesn’t feel they have the time, legal knowledge, and skills to manage the company independently.
The owner who chooses to outsource the management is looking for a creative and practical problem solver. The idea behind using a property management company is to limit the amount of time the owner needs to be involved. A successful manager is organized, responsible and self-motivated. This person requires both a love of working with people and a willingness to move swiftly and firmly. Roofs will leak, and tenants will break their lease. A property manager tackles these unexpected situations with ease and provides results.
Most importantly, whoever is managing the property needs to have a solid understanding of local, state, and federal housing laws and regulations to carry out their responsibilities on the job.
What do property managers do?
A property manager is the renaissance man of real estate. Responsibilities include everything from marketing vacant units, showing the properties, and collecting applications to getting leases signed, collecting rent, overseeing maintenance on the properties, conducting move-in and move-out inspections--and a hundred things more! They can also assist the owner, or be entirely responsible for, filing taxes for the property. Daily tasks involve working with landlords, tenants, and contractors, so the ability to communicate and deal with them honestly is crucial. A property manager must also be detail oriented, dependable, independent, and consistent.
Let’s park here for a minute and talk about two essential tasks--managing budgets and maintaining records. The manager must operate within a set budget for the building. In emergency situations when the tenants or investment property itself are in danger, they may use their judgment to order repairs. A manager should also keep thorough records of all the property's income and expenses; lists of inspections, signed leases, maintenance requests, any complaints, documents of repairs, costs of repairs, maintenance costs, a record of rent collection, and insurance costs.
More traits of a superstar manager are the ability to connect and empathize with people, and the initiative to respond to many types of situations, including the urgent ones! Managers want to build a knowledgeable network of contractors to handle maintenance work and special projects. In addition to the minimum requirements, an outstanding manager is proactive about making valuable enhancements to the property, as well as looking for ways to save money.
How to start a property management company
Starting a company is similar to starting any other commercial enterprise. First things first--establish a legal entity, either by hiring an attorney or online. Most are Limited Liability Companies (LLC), which anyone can set up independently. Then create a website, obtain an email account, and print business cards.
Next is the office set up; starting out, this can even be a small space in your home! You only need the basics: computer, copier, scanner and fax machine. It’s best to use a cell phone for communication with clients and contractors, as property managers spend a good deal out of the office.
A manager should have an in-depth knowledge of national and statewide laws regarding the proper way to screen a tenant, handle security deposits, terminate a lease, evict a tenant, and comply with property safety standards. While a practical experience in the real estate industry is helpful, it’s not required. Some states require property manager have a real estate license.
Marketing a property management company to get clients
Networking is a great way to build a client base. Connect with local real estate clubs and online groups, as well as local business organizations. Reach out to real estate agents who are in constant contact with landlords. Local lending institutions are also a good source of leads. They may have properties for which they are responsible and looking to outsource the management.
Advertise your services both online and offline. Be sure to run a paid campaign to capture property owners searching these terms in your area. Market through blogs, videos, social media; provide inspiring images, useful guides, and educational services. Above all, give customers an easy way to contact you.
Once you're all set up and have some properties to manage, running a property management business can be smooth and streamlined with property management software. Optimize daily tasks for efficiency, and you can focus next on growing your business and making more money.
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