Property management is a daunting line of business that encapsulates a lot. It is a business that requires managing different properties and also maintaining a healthy professional relationship with the landlords, tenants, and contractors.
For some people, managing people and property is what they are good and comfortable at. Therefore, choosing to become a property manager can be just an easy and rewarding career, though, there are some risks and challenges that come with this profession, as one would expect with any other.
Therefore, if you ever thought of having a property management company of your own, then this guide is for you. This article will give you an in-depth educational view of what to expect as a property manager and how to start and effectively manage a property management company.
What is Property Management?
To starters, we can say that property management is a business that involves managing and overseeing different kinds of real estate properties and people that includes landlords, tenants, and landlords.
This trade involves taking care of the day-to-day operations, including handling maintenance, listening to tenants’ complaints, collecting rents, and many more. Most of the time, the degree of work that comes with property management hinges on the contract between the property manager and the landlord.
To further buttress the point on property management, if a property landlord decides to employ a property management company to help with merely collecting rents from tenants, this would be the daily operation expected of such property management firm.
What Does a Property Manager Do?
Just as pinpointed in the description of property management above, the magnitude or kind of responsibility placed on a property manager’s shoulders grossly hinges on the type of contract struck with a landlord of a real estate property.
While some landlords may want to hire a property manager just to collect rents, some may want a property manager to oversee and manage all aspects concerning their property. Such is the power of the agreement stipulated in the contract between the two entities and must be duly honored. Regardless, below is a list of various responsibility of a property manager:
- Rent collection
- Listening to tenants’ complaints
- Managing the budget
- Marketing the real estate properties
- Understanding landlord-tenant laws and regulations
- Supervising other employees
- Handling taxes
- Handling maintenance request and repairs from the tenants
How to Start a Property Management Company
Property management comes with some perks and rewards, and as impressive as it sounds, it can be very challenging and desponding if not done correctly or if the right ingredients are put in place. To get a property management company of your own started or gain more experience in the field of property management, we have prepared a detailed, full guide for you.
Step 1: Determine the Legal Entity of Your Business
The first thing to do when you consider starting a property management company is to establish a legal entity for your business, which you can hire an attorney for or simply do it yourself by going to the website of the state you wish to establish your management business.
This step means determining three key things: the number of regulatory paperwork to file, the amount of taxes you will have to pay to stay in business, and the personal liability concerning investment properties in the property management business.
After determining these three key things, you can fill up a limited Liability Corporation (LLC) form from the state’s website if you plan to establish a long-term real estate firm or file as an incorporated business (S-Corp or C-Corp). These two corporations undoubtedly have their merits and demerits; this is where an attorney can be resourceful.
Then, you can move to obtain a license for your real estate management business in the state you want to establish it. Once your business’s legal entity is completed, choose a name or logo for your business. You may also decide to find a bank to finance your startup.
Step 2: Set Up Your Company’s Office and Pick the Right Technology
After step one has been taken care of, the next thing to do is to find a quiet place where you can quickly meet with your clients and have an uninterrupted conversation. Many new business owners tend to work from home at first, then rent a commercial space for an office as the business grows.
But what is more important is putting a face to your business, which means developing a responsive and user-friendly website for your property management company. In today’s technological world, digital marketing and Google searches have made it critical to have an online presence, which will so boost the business.
Step 3: Hire a Skilled and Proficient Property Manager
The magnitude or kind of responsibility placed on a property manager’s shoulders grossly hinges on the contracted struck with a landlord of a real estate property. Therefore, you may decide to hire a skilled property manager or run the business by yourself.
It must be noted that clients hire real estate companies with a team that includes a real estate lawyer, an accountant, and contractors. These people help you get a successful head start, which will lead you on the right path.
Step 4: Get a Suitable Property Management Technology
This step is as important as the previously mentioned ones. Since we live in a digital world now, there is every need for property management companies to leverage automation solutions and other tools to gain a competitive edge and make managing these real estate properties less challenging.
There are many Property Management Systems (PMS) to pick from. So, research a few to learn about their pros and cons and how they can help you stay on top of your competitors while they streamline your daily operations.
Step 5: Determine Your Pricing Structure
The pricing structure to adopt must be income-rewarding and competitive enough to appeal to clients to hire your real estate management company for their properties. The pricing structure will prevent your company from operating on a low or too expensive rate. Therefore, careful thought must be given to this aspect.
Step 6: Set Up a Marketing Strategy
Clients are meant to be persuaded. It would be best if you appealed to their conscience by promising good services through marketing. Having a responsive website is one of the coolest ways to appeal to clients. You can use Google ads and the pay-per-click techniques to drive quality organic traffic to your website. More so, social media platforms offer an excellent channel for reaching your first client.
The Final Thoughts
Property management is a daunting task that may not be for everyone, except you are good at working and managing people. This article is to prepare you for the property management trade, but it will take utter dedication to become a successful property manager. Learn more about the profession, and you shall see how lucrative owning a real estate firm can be.-