Starting and managing a property management company is just like setting up any other business entity. If you have enough for the business start-up capital and enjoy managing real estate, you could find the property management business to be quite profitable. Here’s how to start and manage your property management company.
How to Start
First, establish a legal entity. Use either an incorporated business entity (Inc.), or a Limited Liability Corporation (LLC or Ltd.). Next, set up an office. You have the option of initially working from your home office before establishing a website, opening a business email account and distributing business cards. Use your cell phone to communicate with potential clients and contractors because you’ll likely spend most of your time outdoors.
Advertise your property management company using both offline and online means. Hire a professional to help you design business cards with a logo that is simple, but unique enough to make your business stand out. Furthermore, run a paid, search campaign to capture property owners in your area to boost the amount of traffic to your company website.
Secure a Client base
Networking is the most effective way of building a new client base. Join local real estate clubs to connect with local business organizations. Find acceptable applicants to sign a rental agreement that specifies terms, such as the amount of rent payable, due date for rent collection, and conditions for renting the property. Likewise, look for real estate agents and lending institutions that stay in touch with landlords. They may be useful if you wish to outsource some property management functions.
Secure Qualified Contractors
Property managers must find several qualified contractors ready to work on call. Find a qualified group that ranges from inexpensive handymen to licensed contractors for serious repairs. Try out several different contractors to help you find the more competent and affordable ones. Consider getting referrals from property management companies and trusted colleagues that have long-term ties with qualified contractors.
Successful property management companies always strive to reduce risks, while maximizing returns. The most common ways of doing this is by reducing any risks of litigation, regulating maintenance or repair costs and offering incentives to tenants with long-term leases. For incentives, employ point-based systems that allow for redeemable awards in the long-run.
Stay Active and Organized
Be a proactive and reactive property manager when dealing with your clients to help clear up any issues. Most real estate issues are solved much faster if addressed immediately. However, if postponed, they can result in payment defaults, damaged property and severe lawsuits. Make a habit of filing all documents and notices concerning the rent. This will prove useful, especially when handling evictions that involve filing with courts to have law enforcement remove a tenant that does not leave by a pre-agreed date.
If you have both a love for dealing with people and the ability to handle sudden changes in lease agreements, then property management is for you. You can either do it yourself online or hire an attorney to guide you through the process.