Starting a Property Management Company

Starting a property management company can be a little overwhelming if you have never worked in the area of property management before.  In fact if you have never worked with a property management company before then one of the first things you should do is go and work for one for a month or two.  After all if you are starting a property management company you will be working for yourself for the next 5 years at a minimum, so you should find out if this is something that you would be interested in.  If you need certain qualifications for start a property management company then get that prior to starting.

Starting a Property Management Company: The Basics

Every company that you can start will have very similar procedures that are required for you to get started.  For instance you will need to create and register a company name that only you own.  To do this you need to check with your state or province to see what other companies might have a similar name to what you want.  I went down to a local registry office to have a nuance search done, but prior to this you would go to your local business licensing location for your municipality.  For you the best way to find out is to get on the phone and make a couple of calls, or when in doubt talk with your lawyer.

Another step all companies have in common is getting a business license for the city or town you plan on doing business in.  Always check with the authority having jurisdiction in your area on what the procedure is.  Where I am from I just went and paid a fee, filled out a form and was registered, and prior to moving here I did the same thing in two other cities.  Check the business information section in your phone book and give them a call to see what they expect.

The next common step with all businesses will be for you to get a phone number, design and print some business cards, put together a marketing plan that will fit into your budget, find a lawyer if you don’t have one, get your bookkeeping set up, buy two domain names (one for your company brochure and one for marketing a website),  get insurance.

Starting a Property Management Company: Part 2

Now you have done the basics you will need to move to the next phase.  Now you need to find out if you need special insurance above the regular insurance all companies require.  Also you need to get registered with your state or province if this is a requirement for the industry that you are in.  Also companies that deal with door to door sales, or alarm companies need to have a special license and get photo ID in most cases.  Check with your area to see if this a requirement for you.  Most property management companies probably do not need this, but it is better to check then to get into trouble later on.

Now depending on the size of your property management company you may want to work out of your home or have an office to work from.  In most cases you will start from a home based business and grow from there.  Or you might rent an office from one of your clients in an apartment building or office building they have.

Speaking of office building are you going to work in the residential property management area or are you going to work in the commercial property management area?  There is different regulations and licensing for each.  Not just from a property management company side but also from the hiring employee side of things.  Where I am from you need to be a licensed real estate agent in the commercial real estate industry to be able to lease commercial real estate of any kind.  Check on the regulations in your area.

Starting a Property Management Company: Marketing

Now you need to get clients, but just prior to signing up your first tenant you will want to talk with your lawyer about the contract that is required in your area. You need to protect yourself and the client you are working for when dealing with tenants.  In most cases you can get these forms from an online service or go down to your local stationary store, but if I was starting a property management company I would speak with my lawyer just to make sure I am protected.

There are two methods of marketing that are required with a property management company.  First you need to find clients for yourself.  People or businesses that own houses, condos and apartments that they are renting out on a regular basis.  Secondly once you have found yourself a client you need to find clients for the buildings you are renting and leasing out.

To find people that own property that needs tenants you can advertise your services online, in a newspaper or contact them on the phone or stopping by their place of business.  You can also join forums online that have to do with property management, or even better find forums that have to do with real estate investing.  Do not spam these forums or you will get kicked out, but give some very insightful information about managing a property from your point of view, and some of those will not want to do this themselves and click through to your website.

Now to find clients or tenants for your buildings you will have to advertise either in a newspaper in your location, online with classifieds, an online rental service, and/or place a sign on the property.  I once owned a triplex and the most success I got was with my sign, but I did use all the above methods.

Starting a Property Management Company: Services

Now you are well into getting your property management company started and off the ground.  What if something goes wrong in one of your properties?  Depending on the size of the property you might need a full time maintenance staff that maintains the property.  This would include fixing any water leaks or lights, and doing any required cleaning.  Or you might subcontract out all or some of these services.  If you are subcontracting then you will want to build a relationship with a plumbing company, electrical company, roofing company, cleaning company, snow removal and lawn maintenance company.  Unless you plan on staying small and can do a lot of these services yourself.

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Feel free to contact me for any reason, also please comment and/or ask questions below.  Thanks for reading starting a property management company.

Kelly

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