How to Start a Property Management Company

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If you're considering starting a property management company, you're on the right track. Property management is a lucrative and growing industry, and there are plenty of opportunities for entrepreneurs willing to do the work. 

This post will clarify the basics of starting a property management company, from choosing your business model to finding your first clients. 

By the end, you'll understand what it takes to get your business off the ground and make it a success.

Understand the legal structure of the business

For a property management company, you will need to decide if you want to be a sole proprietor, partnership, limited liability company (LLC), or corporation.

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Each option has pros and cons, so it's essential to consult a business attorney to decide which is right for you.

The most important thing to remember is that, as the property management company owner, you will be personally liable for any debts or liabilities incurred by the business

This means that if something goes wrong and someone sues the company, your assets could be at risk. 

You may consider setting up the business as an LLC or corporation to protect yourself from this. This will create a "buffer" between your assets and the business, meaning that your assets will not be at risk if the company is sued.

Secure a license

Once you have decided on the legal structure of your business, you will need to obtain a business license. This is typically done through the city or county where your business will be located.

Getting a business license can vary depending on where you live, so you must check with your local city or county clerk's office to find out what is required. 

You will most likely need to submit a business application and pay a fee. You may also be required to provide proof of insurance, such as liability insurance, and post a bond. 

Once you have obtained your business license, you can legally operate your property management company.

You should understand the license renewal requirements. Depending on your business location, you may need to renew your business license yearly or every few years. 

The renewal process is typically similar to the actual application process, and you will likely need to pay a fee.

Choose your business model

Property management companies have two main business models: full-service and à la carte.

Full-service property management companies provide a comprehensive suite of services to their clients. It includes finding tenants, collecting rent, maintaining the property, and handling repairs.

Á la carte property management companies, on the other hand, allow their clients to pick and choose which services they need. 

This flexibility can appeal to some property owners, but it's important to remember that à la carte companies often charge more for their services. 

There is no right or wrong answer when choosing a business model. It depends on your preferences and the needs of your potential clients.

Set up your company's office and website

If you're operating a full-service property management company, it's crucial to have a physical office space where potential clients can come to meet with you. This doesn't need to be fancy - a small office in a shared space will suffice.

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If you're operating an à la carte property management company, you may be able to get away with not having a physical office space. In this case, you can meet with potential clients at their properties or a coffee shop.

In addition to setting up a physical office space, you will also need to create a professional website for your business

Your website should include information about your company, your services, and how to contact you. You may also want to include testimonials from satisfied clients.

Generally, SEO is always important for any business with a website, but it is crucial for property management companies. This is because potential clients will often use search engines like Google to find property management services in their area.

Optimizing your website for SEO can ensure that your company comes up first in search results. This makes it more likely that potential clients will visit your website and contact you for services.

When hiring experts in property management SEO, look for a team that understands the best practices. They should know the power of using the right property management keywords.

This helps you get found by potential clients explicitly looking for the types of services you offer. In the end, your website grows due to the organic traffic.

Get the right insurance

As a property management company, you will be responsible for many different properties. This means that you will need to have the right insurance in place to protect your business.

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You should have liability insurance, which will cover you if someone is injured on one of your properties

You may also want to consider getting errors and omissions insurance, which will protect you if you make a mistake that leads to property damage.

Look for an insurer that specializes in insuring property management companies. This will ensure you get the coverage you need at a price you can afford.

You may also want to consider getting a business owner's policy, which bundles different types of insurance into one convenient package.

Hire competent real estate employees or contractors

If you're operating a full-service property management company, you will likely need to hire employees to help you run your business.

You may want to hire someone to answer the phone, handle accounting and bookkeeping, and show properties to potential tenants. You will also need to hire property managers who will oversee the properties you manage.

When hiring employees, it's important to choose competent and trustworthy people. You should also ensure they have the necessary experience and qualifications

If you're operating an à la carte property management company, you may be able to get by hiring contractors instead of employees. 

This can be more cost-effective, as you only have to pay for services when needed.

Invest in the right business tools and technology

You must find the right business technology to run a successful property management company. This includes software that will help you keep track of properties, tenants, and finances.

You may also want to consider investing in a customer relationship management (CRM) system to help you keep track of your clients and prospects.

When choosing business tools and technology, it's essential to choose user-friendly and cost-effective products.

You should also make sure that they integrate seamlessly with each other. Investing in the right tools and technology can save time and money while streamlining your business operations.

It would help if you always tried different business tools to see which works best for your company.

However, you should only invest in the tools that you need. There's no point in spending money on unnecessary products or services. When choosing new business tools, it's essential to do your research and read online reviews. 

This will help you find the best products at the most reasonable prices.

Have a pricing structure in place

Before marketing your property management company, you must have a pricing policy.

This will help you determine how much to charge for your services. There are a few different pricing models that you can choose from, including flat-rate, hourly, and commission-based.

When choosing a pricing model, it's essential to consider your target market. If you're targeting high-end clients, you may want to charge a higher rate. However, this is different when targeting budget-conscious clients since the rate ought to be low.

You should also consider the services you offer and how much it will cost you to provide them.

A good pricing policy is fair to the property management company and the client. It should also be easy to understand and transparent. The price should be based on the services that the company offers and the value that they provide. 

Finally, the pricing policy should be flexible so that it can be adjusted as needed.

Promote Your Business

Now that your business is running, you need to start promoting it to potential clients. You can do this in several ways, such as advertising local publications and participating in trade shows and events.

How to Start a Property Management Company

You should also ensure that your website is optimized for SEO so potential clients can easily find you online.

On the other hand, digital marketing is a must for any business today. It's the most effective way to reach potential clients and is more cost-effective than traditional methods like advertising. 

When promoting your property management company online, use targeted keywords so potential clients in your area can easily find you. You should also use social media, as this is a great way to connect with potential and current clients.

A marketing plan is essential for any business but vital for property management companies. This is because the property management industry is very competitive, and you must ensure that your company stands out from the rest.

A good marketing plan will help you to identify your target market, promote your company effectively, and track your progress over time. 

Final words: How to start a property management company

Starting a property management company can be a great way to earn a good income. However, ensuring that you do things the right way is meaningful, so your business is booming

Following the tips above, you can set your business up for success from the beginning.

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

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