How to Start your Property Management Company

Starting a property management company requires you to be available to tenants so that the owner does not have to perform the day-to-day functions of caring for real estate investments. Property managers place tenants, collect rent, perform evictions, respond to complaints, arrange for repairs, contract with service companies, pay the bills and provide owners with a report each month. In compensation for all of the tasks performed, you are paid by charging the owner a percentage of rent collected or a flat monthly fee, if you choose that arrangement, instead.

Instructions

1. Check with your state department of real estate licensing about the requirements for property managers. Some states require you to earn your real estate license to work as a property manager or only if you plan to buy and sell real estate. Alternatively, some states require a property management license.

2. Understand rental laws in your area. Legalities of renting property varies widely. Join an apartment association to take advantage of the materials, such as standard state leases, and classes offered to educate property managers on the latest trends and laws in rentals.

3. Think of a company name and form your business structure, such as sole proprietor, corporation or limited liability company. Apply for a business license and fictitious name certificate in your jurisdiction. Obtain an employer identification number (EIN) from the IRS. You may be need an EIN whether or not you have employees.

4. Buy a reliable vehicle, since a majority of your job will be spent at different properties. Contact your insurance company and tell your representative the percentage of business use for your car. Ask if your current policy adequately covers you for damage and liability.

5. Join a property management association in your area. Make contacts that agree to mentor you and give you advice when needed. Also, other members can act as a replacement for you when you are sick or on vacation. Join the Chamber of Commerce to meet other business owners in your area. They may need your services or know of someone else who does.

6. Open bank accounts for each property, especially if you are paying the bills. One should be a checking account and the other for security deposits only. Update business records regularly.

7. Research background checking companies or use one referred by the apartment association. Make sure the have an active account set up before you start renting. Also, make arrangements with service vendors and barter reduced rates.

8. Advertise to owners online and in the local paper. Once you have a portfolio to manage, you can start running ads for tenants to fill your vacancies.

Tips & Warnings

• A degree in finance or real estate-related fields is helpful, but not necessary, when starting a property management company.

References

• Inside Jobs: Property Manager
• Oregon State Archives: The Oregon Administrative Rules contain OARs Filed Through May 13, 2011
• Walden University; How to Start a Property Management Business; 2011
• IRS.gov: Employer ID Numbers (EINs)
• Property Management Profile: Start a Property Management Business
• The Princeton Review: Property Manager