How to Start a Property Management Company

Your property management company needs a name that is easily recognizable and memorable. As you begin creating your business, you need to decide on a name that will help you to stand out. Start by writing down your ideas.

Top property management companies like Pinnacle, Alliance Real Estate, and Lincoln Property Company have names that sound organized and professional. You want to choose a name that communicates a sense of trust.

If you have decided on a property management business name, make sure that you secure a trademark as soon as possible so that no one else takes it. You can register a trademark at www.uspto.gov.

A business plan should outline the purpose of your business and any practical steps that you intend to take to establish and grow the business. Writing a plan for your property management business will help you to organize your strategy and present your vision to potential investors or stakeholders.

Your property management business plan should include the following:

• Executive summary.
• Company description.
• Products and services.
• Marketing plan.
• Operational plan.
• Management.
• Financial plan/projections.

Your business plan can be a point of reference as you launch your property management company.

Once you're familiar with the contents of a good business plan, you can get to writing one of your own.

Your property management business needs to be set up as a legal entity. The structure that you choose is important for tax purposes.

There are four basic business structures:

• Sole proprietorship: A business that is owned and operated by just one person. All taxes and liability issues are the personal responsibility of the sole proprietor, who will likely need to use a schedule C form to report profits and losses.
• Partnership: Two or more partners who share the business's tax burden through individual tax returns.
• Limited liability corporation (LLC): An entity that assumes liability but still passes taxes on to the owners. May use corporate tax rules in some situations.
• Corporation: A distinct legal entity that assumes all liability and is taxed as a business at corporate tax rates. Has members and shareholders.

You can run your property management company using any one of the aforementioned structures. However, there are distinct advantages to setting up a corporation. For one thing, you can avoid the hefty tax burden that you may encounter if you choose to operate as a partnership. Additionally, you may want to avoid any structure that leaves you with personal liability.

Starting a property management company is not cheap. Your property management company will need money for things like:

• Office rent.
• Payroll.
• Supplies.
• Building utilities.
• Maintenance equipment.
• Background check services.

You'll want to explore multiple avenues when starting your property management company. You can meet with your local bank to find out more about small business loans, or you can find a qualified lender that offers SBA loans.

Business credit cards are great for short-term cash flow. Interest rates for credit cards are high, but if you just need a short term injection of capital to pay bills, a business credit card or line of credit might be the best solution.

Your state probably has a license or permit that you will need to obtain for your property management business. For example, in the state of California, property management companies are required to obtain a real estate broker's license.

Find out what specific criteria you need to meet by visiting your state's small business website.

In most cases, you can submit and pay for your application online.

Property management companies operate in a space that is heavy with liability issues. Any group that is given the responsibility of maintaining a property must be aware that they are in the care of a valuable physical asset that could be destroyed or damaged by weather, fire, vandalism, or some other accident.

Your property management company should purchase several types of insurance, including:

• Liability insurance.
• Commerical property insurance.
• Business interruption insurance.
• Automobile insurance.

It might be possible to start a property management business in your home, but with photocopiers, phones, employees and records, you may find it easier to have a commercial office space.

You can either purchase a building or rent an office. Most property management startups opt to lease space because it is more affordable and gives them flexibility if their needs change.

Meet with a real estate agent or consult online listings to find out what is available. If you need an office that can be easily visited by customers, find a location that is in your local business district or town center. Property management companies are always dealing with tenants, utility companies, and tradespeople, so you will probably want an office that is easy for these parties to visit.

Register a domain name and build a site that explains who you are and what you offer. Having a website will increase your visibility and legitimacy.

You can enhance your online presence by creating social media accounts for your property management company. Facebook and X pages, in particular, will make it easier for people to engage with you.

Membership in your local chamber will give you access to exclusive business events and business-to-business networking opportunities. You may also be able to access local business services at a discounted price as a chamber member.

A growing property management business needs employees in order to keep up with services and continue to scale. Possible property management positions include:

• Resident manager.
• Maintenance coordinator.
• Payroll administrator.
• Office secretary.
• Sales representative.
• Property manager.

Jot down which of these and other positions you'll need to fill, and how many people you'll need to do so.

Once you have a sense of which positions you need to fill, you can go ahead and advertise the vacancies.

Depending on the number of applications you receive, you can do this manually or by using an applicant tracking system.

By now, you'll have a good sense of who the top applicants are. Interview each of them to determine which individuals possess the skills and values that would make for a good fit.

Finally, go ahead and extend job offers to the most suitably-qualified individuals.