Starting a Property Management Business

Are you wondering if a property management career is right for you? We’ve put together this step-by-step guide to becoming a property manager to answer your basic questions.

A Step by Step Guide

A Day in the Life of a Professional Property ManagerThere isn’t a typical day in the life of a professional property manager. Your career goals may lead you toward commercial management or residential management. Generally speaking, you’ll be a liaison between property owners and tenants. Most managers assume the responsibility of managing buildings and tenant relationships. Some managers take care of property still in the development stage and vacant properties in transition.

Professional Development and Skill AcquisitionTo be a successful manager, you’ll need a tool kit with a broad range of skills. Along with exceptional time management skills, property managers need to be well-organized. Here are a few ways property managers use their skills:

Strong communication skills allow you to interact with people who come from diverse backgrounds and have a variety of temperaments.

Good people skills help you build relationships with outside vendors, maintenance contractors and local law enforcement.

A well-connected property manager is a valuable resource for property owners because his or her skills help owners save money and capture a higher return on their investment.

Owners are looking for a competent partner to assume the day-to-day tasks associated with investment property. They’re looking for dependable, detail oriented professionals who are honest to manage their assets.

If this sounds like you, you are on your way to becoming a property manager.

Initial Investments: Licensure, Education and Start-up CostsStart-up costs are relatively low compared to many new business ventures. Although some states require a real estate license or other certification, most don’t require an advanced degree. A real estate license or practical experience in the real estate industry is helpful, but not required. Depending on the type of management firm you plan to open, and how many clients you plan to service, your initial investment will likely range from a couple of thousand dollars up to $10,000.

Estimating start-up costs is fairly simple. Make a list of services you plan to offer, then think about the equipment you’ll need to service your accounts.

Check with your local business licensing entity to find out if special permits are required. Add those fees to your list. If you find out you’ll have to take a class, add the course fees and any extras like books and lab fees.

A thorough list gives you a better estimate. Just to be sure you have the funds to cover unexpected items that may pop up, add 10% to your total estimate as a cushion. Better to have too much than fall short.

Getting Started

Step One: Make it LegalOnce you’ve gathered your cash, you’ll need to write a business plan and establish short-term and long-term goals. You can operate a small property management business as a DBA, using your social security number for tax purposes. Most people planning on a long-term business venture opt to establish either a Limited Liability Corporation (LLC) or file an application as an incorporated business. A real estate or tax attorney can help you, or there are self-directed options online.

Step Two: Office SetupWhether you’re working from a home office, or you plan to rent an office, you’ll need a quiet place to work where you can meet with clients and have uninterrupted telephone conversations. You’ll need a dedicated cell phone and/or a landline to communicate with your clients, tenants and vendors. If you have to choose one over the other, get the cell phone. Once your business is thriving, you won’t spend much time at your desk.

Bare necessities include computer equipment, a copier, scanner and fax machine. An all-in-one works great and saves space. You’ll also want to build a website, create a business-only email account and order business cards.

Step Three: Get the Right TechnologyDon’t skimp on technology and tools. We live in a digital world and as a start-up you’ll want to use technology to give yourself a competitive advantage while streamlining as much as possible for maximum growth potential. Property management software packages help you manage your accounts, keep your financial records balanced and track maintenance progress.

An exceptional software package is a great marketing tool that can help you optimize your listings and attract new owners and tenants. Prospective owners will appreciate online tools like on-demand statements and timely payment via ACH. Tenants expect an online portal to make payments and request maintenance 24/7.

A professional website is a must. In today’s market you must have an online presence to ensure new clients can find you. Make sure the design is clean and easy to navigate. Some software packages include a professionally designed website with their offerings, so do some research and decide the option that works best for you.

Step Four: Build Your Client BaseWord of mouth is still the best marketing tool around. If you want to build a thriving property management company, manage your people-connections. Contact top selling real estate agents in your area. They are usually the first ones to hear about property for rent and buyers looking for investment properties.

HVAC technicians, plumbers, landscaping contractors and bankers are also good resources. All of these business owners come in contact with property owners—your potential clients— every day.

Manage offline and online ad campaigns. Paid Google ads are one online option. Get your company listed on free business directories and add as many details about your business as possible. Listing your company on Yelp or FourSquare is free. Local print options include newspapers, community cable channels and free papers like the SuperSaver or Thrifty Nickel.

Rewarding and ProfitableBeing a property manager isn’t for everyone, but if you have the personality and skill set to take care of buildings and relationships it can be a very rewarding and profitable business venture.

If you're just starting out or want to grow, AppFolio property management software has all the features you need to run a modern and streamlined business, with features like:

Online RentalPayments

Easy VacancyPosting

Online RentalApplications

Accurate Accounting

Visit www.appfolio.com to learn more!