Do you think you know how to take care of a home? If so, managing property may be the business for you.
The good news is that there is plenty of work to go around. Real estate is still considered one of the best investments around, so plenty of people are still getting into the market.
If you’re starting a property management company and don’t know where to start, this post will help. Keep reading to learn all the steps you need to take to start a management company the right way.
1. Get Your Legal Documents in Order
Taking care of another person’s home doesn’t come without risk. If you don’t get all your legal documents in order, then you’re going to open yourself up to trouble. Before you start your business, make sure you’re covered on all angles.
The first step is to create a business entity. Your business is what will protect you on a personal level in case someone decides to sue you. Only your business assets will be at risk.
After getting your business set up, you need to get insurance taken care of. You and the people you work with will need to be covered. You need to be protected in case accidents happen when you’re at a work site.
2. Get the Right Licenses
After you protect yourself in case of problems, you need to figure out the licenses you need to work as a property manager. The requirements will vary by state, so check with your local websites to find all the information you need.
The next question is whether the people you work with need licenses as well. If you hire in-house, you will need to vet your potential hires on their qualifications. If you work with third-party vendors for repairs, you need to make sure they have the licenses and insurance required to work on a home.
3. Find the Right Partners
You won’t be able to run a property management business on your own. You’ll need to find a reliable group of people or companies to work with. Make sure you find these people before you start any work.
If you decide to work with individual contractors, put out a job posting on the classified sites online. You will want to figure out the requirements for the job and determine if the people you talk to are a good fit for the job.
You can also work with other home repair companies. Talk with the companies in your area to get quotes for the typical repairs you will come across. You want to find a business that offers the best value for the money.
4. Figure Out Your Pricing
Coming up with pricing for managing property isn’t as simple as you think. In most cases, you aren’t going to charge a flat fee for your customers. Most property management companies charge a percentage of the rent they collect as their fee.
You need to look in the area you’re operating in to figure out what the regular going rate is. You won’t want to go much higher than this if you’re going to get new customers. Likewise, if you go too much lower, it will be hard for you to cover the expenses of your business.
If the area you operate in doesn’t provide much revenue per unit, you’ll need to find a way to cut costs in other areas so you can stay in business.
5. Get Technology in Place
You’re making more work for yourself if you don’t take advantage of technology today. There are products out there that can help you in every part of your business.
The first key area to tackle is your billing. How are you going to take payments from the tenants?
Sure, you could have them write you a check. But then you have to manage paper checks and make sure they’re all cashed. It’s easier to set up a payment portal online where people can make payments from home.
Your next task is on the management of your properties. Luckily, there are project management tools out there that will let you manage everything. You’ll be able to assign tasks to workers and plan out projects in your software.
6. Learn How to Do Customer Service
You aren’t going to stay in business long if you can’t keep your customers happy. Unfortunately, you have more work than most.
You need to take care of both your property clients and their tenants. You’ll lose customers if you can’t make everyone happy.
To start, you need to find quality people to work with. When you hire your property managers, make sure to reach out to their references to gauge how they performed in their past positions. You need to find people who work well with others.
The next step is to make sure the people doing repairs also provide excellent service. It isn’t enough to do a good job and have a great price. They need to be pleasant to work with, as well.
7. Start a Website
It’s hard to talk to a potential customer when you aren’t working. Unfortunately, you can’t have someone on the phone at all times. You need a way for new customers to learn about your business without you needing to be present.
A website is what helps you do this. It acts like a salesperson that’s available at every hour of the day. Anyone can visit your site to figure out almost everything your business does.
You can also use your website to capture potential clients in email lists. Doing this allows you to keep in touch with prospects. Even if someone doesn’t work with you now, they could do so in the future.
Make sure to learn more about effective property management websites so you can get yours set up the right way.
Starting a Property Management Company Isn’t As Easy As You Think
Now that you know more about starting a property management company, you’re ready to get started. Make sure you do the legwork before getting started, so you reduce the risk of running into problems down the line. The more you prepare beforehand, the easier time you’re going to have.
You need to start getting customers once you get your business off the ground. Head back to our blog to learn more about how to do that.
