Did you know that from 1950 to 2000, the median monthly gross rent in America increased every ten years?
Or, that according to recent figures, 88 percent of property managers reported raising their rental rates within the past year?
What do these numbers mean if you are considering property management as a business venture? They indicate that it is a great way to build long-term streams of residual income in 2023.
But like any other new venture, taking the leap into property management can feel scary. Especially since there is no way to know for sure whether or not you will be successful. That is where tips from the experts can help. A lettings agency and property management company can give you some great tips if you want to learn more.
Continue reading for tried and true advice that will put you on the fast track to success when starting your own property management business.
Understand Property Management Business Basics
Before we dive into particulars, let's start by exploring what a property management business looks like and what property managers do.
Property management refers to the supervision and oversight of one or more types of rental properties. These can include everything from student housing to community associations, commercial properties to residential units.
Sometimes the owner and manager are the same entity. But, oftentimes, a real estate investor hires a property manager to handle the day-to-day aspects of a given property. Especially if the owner lives out of town or doesn't have time.
Create Standardized, Repeatable Processes for Tasks
As a property manager which types of activities will you be tasked with? These can include managing buildings or individual real estate properties for individuals or groups.
You'll also be tasked with communications between tenants and landlords as well as handling the marketing of vacant units.
Additional responsibilities include:
- Showing properties
- Collecting applications
- Collecting rent
- Getting leases signed
- Conducting move-in inspections
- Conducting move-out inspections
- Overseeing overall property maintenance
Ways to Jumpstart Your Entry into the Property Management Business World
When it comes to starting your own property management business, it comes with some clear advantages. First and foremost, the barrier to entry proves low.
What do we mean by this? You don't need advanced degrees to get into this field.
Heck, you don't even need lots of experience in the beginning. While it's helpful to have a background in real estate, it's not necessary.
That said, some states do require property managers to have a real estate license or other certification.
For a property management certification, you may need to take a few courses to get started. But these courses will clue you in on things such as finding clients, building a property management business, and remaining compliant.
In other words, if you don't have very much experience in the business world or the real estate industry, these classes could prove helpful, whether or not your state requires them.
What's more, they're a great place to network with individuals in the industry. As you'll read a little later, networking proves a crucial tool when it comes to succeeding as a property manager.
Ready for a detailed guide to launching your career in the property management sphere? Check out this post on property management to get the inside scoop.
Other Factors You Need to Consider When Starting a Property Management Company
As for startup costs? They prove negligible. For as little as $2,000 to $10,000, you can get in the game and start marketing your business to real estate investors and property owners.
Remember that you need to set up your property management company as you would other types of commercial enterprises. This requires creating a legal entity such as an incorporated business (Inc.) or a Limited Liability Corporation (LLC).
While you can do this online, it often pays off to hire an attorney instead. It's also good to have an attorney's number on hand should other problems arise down the road.
Besides creating the legal entity that is your business, you also need to set up an operating space.
Most new property managers work from home. So, dedicate an area to your business and then fill it with the necessary equipment.
This includes:
- A computer
- A scanner
- A copier
- A fax machine
- A company landline (or your cell phone set up for company business)
Hone These Skills to Ensure Your Success in the Industry
When it comes to the necessary skillset for building management companies, you must be highly organized. It's also important to remain responsive to a variety of urgent situations.
In terms of people skills, you need to hone the ability to empathize and connect with others. You'll also have to develop a thorough network of contractors that can handle special requests and maintenance issues.
The best property managers also set themselves apart by remaining proactive when it comes to property upgrades and enhancements. They help the investors and owners that they work with make valuable updates while minimizing costs.
Whether you're interested in apartment management companies or other property management businesses, you'll also need effective communication skills. This line of work involves lots of communication between contractors, landlords, and renters.
Besides communicating clearly and remaining organized, develop the ability to work independently while remaining highly detail-oriented. After all, landlords outsource this job to you so that they don't have to be involved.
Marketing Your Property Management Business to the World
Networking represents an essential part of drumming up new property management business. The beauty of working in property management remains the high number of networking moments that happen during day-to-day transactions.
But you shouldn't stop there. Reach out to local real estate clubs and connect with organizations, such as the Chamber of Commerce, to get in touch with business owners and investors.
Other great ways to find property leads? Reach out to local lending institutions, real estate agents, and contractors. This approach lets you kill two birds with one stone, both generating leads and ramping up your network of industry professionals.
Ready for more great tips to help you launch a wildly successful small business? Browse our blog now for the helpful advice you need to succeed. Visit the Real Estate section of our business blog to learn more about starting a property management business or real estate investing venture.
