How to Start & Manage Your Property Management Company
Starting and managing a successful property management company is a difficult task, requiring great attention to detail, negotiation and interpersonal skills. This venture can also be very rewarding, especially for those who enjoy working for themselves, working from home and interacting with many different types of people. You must have a thorough understanding of your state's laws, your area's real estate market and the major responsibilities of property management.
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Instructions
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Get Started
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Research the legal requirements for property managers in your state. You may need to get a real estate or property management license.
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Establish a separate phone and fax line for your business. Make sure to have an answering machine dedicated only to your business. Purchase necessary computer software, especially word processing and basic spreadsheet software. Purchase a filing cabinet to store important paperwork. Many people start their property management companies from home to keep overhead costs to a minimum.
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Now that your basic office is set up, get a post office box. This ensures that tenants and property owners have a consistent address to mail paperwork, checks and other important documents. This also secures your home privacy.
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Discuss legal issues and paperwork with a lawyer. Make sure that you have a good understanding of all of the paperwork required for your job---creating property management agreements, writing leases, evicting tenants and hiring maintenance personnel.
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Create a website for your business. In today's technological age, you must have a strong presence on the web to establish credibility and market yourself.
Get Marketing
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Network with local real estate organizations. Tell local agents about your services and establish a professional relationship with them.
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Contact local property owners to inform them of your new business. Emphasize specific skills that help you stand out from other managers. Do you have strong relationships with reliable local repairmen? Do you have a keen eye for design that can improve rental units to attract tenants willing to pay higher rents? Follow up with every property owner you speak with every few months.
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Be creative in marketing and acquiring new properties. Use a combination of e-mail, direct mail and cold call marketing to reach new properties. Always look for undiscovered markets. If you live in a college town, for example, consider managing housing owned by students' parents. This is an unusual market, but would give you valuable experience and happy customers who will refer you to others.
Manage and Grow your Business
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Now that you are managing properties and tenants have moved in, the work is far from over. You must collect rent in a timely manner and continually assess the tenant's satisfaction with the building. You need to develop an open relationship with tenants to communicate effectively. You must evict tenants who do not pay rent.
Remember that tenants appreciate good management and will recommend a reliable and helpful management company to their friends and families.
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Care and maintain for the building and outside space, including electricity, appliances, landscaping and plumbing. Once tenants leave the property, you must clean the unit thoroughly and, if necessary, paint. If you do not have the time or capacity to maintain all of the physical aspects of the property, you must hire and supervise repairmen.
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You must keep highly detailed and organized records for liability reasons. State and federal laws have certain jurisdiction over management business; maintain clear and complete records of taxes, rent payments, profits and losses.
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Manage rental rates by conducting continual research of the market. Compare your rental units with similar ones in the area and determine the right rate for your properties. Adjust the rates once leases expire. This will keep your rental properties attractive to potential tenants and profitable.
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Manage your finances and budget strictly. Report financial statements and your long-term financial strategies to property owners often. Determine the most efficient marketing campaigns and implement them.
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Tips & Warnings
Take a marketing, real estate or finance course to learn more about your how to grow your business.
References
- Photo Credit Apartment building image by Christopher Dodge from Fotolia.com
