A property management company is responsible for managing and maintaining the real estate properties of its clients. Apart from that, they also help in increasing the value of the property and dealing with the occupants of the property. Hence, real estate investors hire property managers to look after the daily operations of their real estate assets, dealing with the concerns of the tenants.
Before you find out how to start a property management company, you must have a good idea of what exactly property management is. Apart from that, you must also understand the roles and responsibilities of a property manager. We will discuss these factors in the upcoming sections. Hence, to learn more about the steps to take so as to start a property management company, read on through to the end of the article.
What Is Property Management?
According to Investopedia, “Property management is the daily oversight of residential, commercial, or industrial real estate by a third-party contractor. Generally, property managers take responsibility for day-to-day repairs and ongoing maintenance, security, and upkeep of properties. They usually work for the owners of investment properties such as apartment and condominium complexes, private home communities, shopping centers, and industrial parks.”
However, depending on the type of job and the demand of the real estate investor (client), the roles and responsibilities of the property manager can change. The basic job is to preserve the value of the properties in hand and, at the same time, ensure the generation of income.
Basically, a real estate investor or the owner of the property hires a property manager to oversee the management of the real estate property. Depending on the type of property, a property manager’s job can change. Some of the major types of real estate properties that property managers get involved with include residential property, commercial property, industrial properties, and other types of properties.
What Does Property Management Involve?
The property managers take on the responsibilities of the day-to-day operations of the real estate, which include screening tenants, arranging repairs, maintaining the property, providing an overwatch, working with property developers, etc. The owners of the real estate pay a fee or percentage of the rent to the property managers.
Indeed.com also adds about property management companies – “A property management firm is an office where property managers work. Property owners can hire a firm to maintain their properties when they don’t have the time, experience, or capability to manage their properties themselves. There are several property management firms throughout the United States offering their real estate assistance.”
Real estate investors and property owners delegate the regular operations of overlooking the properties to individual property managers or property management companies. The following are some of the major responsibilities of a property manager on a regular basis:
- Marketing properties
- Handling maintenance requests and repairs
- Managing rent
- Managing tenants
- Supervising other employees
- Handling taxes
- Understanding landlord-tenant laws and regulations related to the property
- Managing the budget
How To Start A Property Management Company?
One of the first things you need to worry about before you start a property management company is the associated costs.
According to SmallBizTrends.com, “You need to consider capital and operating expenses to start this type of business. Property management enterprises start out with costs averaging $19,267 dollars. These businesses often collaborate with real estate agents to facilitate the sale of apartment buildings and contribute to other related activities.”
The following are some of the steps you should take to start a property management company:
1. Choose A Niche Market
One of the first things that successful businesses do is find their niche and plan according to it. Find out what type of property type you specialize in, and master in managing that type of property management. Once you do that, you will find it easier to attract clients in those niches, and starting your company will be easier.
2. Plan Your Business And Define Your Services
Your planning of business will have an impact on the resources that you will need to operate on. Apart from that, it will also help you determine other aspects like number of employees, types of resources, etc. Start by planning out in a document, and this will help you think through all the details of your business in the future.
3. Determine The Legal Structure
The legal structure of your property management company will affect the way in which you file taxes, the rules of the state, compliance with local tax rules, etc. Hence, you will need to think carefully in this regard. You can also consult with a notable attorney in your local area to choose the best legal structure for your business.
4. Develop Your Brand Identity
When yours is a startup or a big business, developing a brand identity is of the utmost importance. For new property management companies, brands are even more critical. Brands help in building the business’s credibility and make customers associate services with the name of the company.
5. Build An Online Presence
You cannot afford to start a business without having an online presence, especially in the age of digitization. Make sure your business has an attractive website, and ensure the business develops an online presence through social media and other portals where it can connect with clients.
Wrapping Up
Hope this article was helpful for you in getting a better idea of how to start a property management company. Given the number of opportunities in the real estate industry, property management has a lot of opportunities for growth. However, as you start your property management company, make sure to focus on marketing your business online.
Having a strong online presence will allow you to get access to new clients and connect with your real estate clients faster. Hence, take measured steps as explained here to get the best results. Do you have any more information to add on how to start a property management company? Share your ideas and opinions with us in the comments section below.
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