Have you considered making money through real estate? If so, you should consider starting a property management company. This is a smart business that’ll help you earn money from managing prime real estate.
But how do you get started? How do you manage to break into the highly competitive property management industry?
This short guide will show you how to get started with a property management company.
Let’s start with licensing:
Licenses for a Property Management Company
Most states require a property management company to obtain a license to manage real estate. You must always keep your license updated.
You’ll need to take a property management course and pass an exam to receive your initial license. This license is the Property Manager’s License.
You can also apply for a Real Estate Broker’s License. You’ll have to take an exam and study the real estate market and how property management works.
You should also strongly consider Yardi Voyager training if you want to stand out as a property manager.
Starting a Property Management Company
As a small business owner, you’ll have to decide what business structure works best for your needs. In most cases, however, a property management company works best as a Limited Liability Company (LLC).
You can also choose an S-Corp or C-Corp if you’re looking for stronger legal protections.
It’s always best to hire a lawyer to advise you on the ideal business structure for your company. You must hire a lawyer who already has experience assisting property management companies.
Make sure you also familiarize yourself with the laws, regulations, and taxes of your jurisdiction. You want to choose a state that has a business-friendly attitude toward property management companies.
Prepare for Expenses
You want to make sure you have enough cash flow and savings to handle your company’s expenses.
The first step is to make sure you hire a great accountant to keep track of your company’s financial health. They’ll advise you on the best ways to keep your expenses low. They’ll also help you maintain your cash flow.
The usual expenses include:
- Office space and associated costs
- Membership fees in property management organizations
- Software fees and other online services
- Payroll fees
- Vendor fees
- License fees and permit fees
- Employee wages
You want to make sure you have an abundance of capital to start your management company. It’s an expensive business to run and you’ll need lots of capital to keep it afloat.
Start Your Property Management Company
Now you’re ready to start your property management company and succeed as a small business owner!
Your first step is to acquire the right licenses and permits to run your business. This process will likely take a few months so plan ahead.
Next, you want to hire a lawyer to set up your business structure. Afterward, you’ll want an accountant to help you prepare for upcoming expenses. Once this is done, you’re ready to start finding your clients!
You can find more tips on running a property management company on our website.