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This is a great time to start your own property management company. A study by Fortune Business Insights<\/a> projects that the property management market will grow from $15.10 billion in 2021 to $28.21 billion in 2028.<\/p>\n Property Management is the daily oversight, operation, control, and maintenance of residential, commercial, community association, student housing, or industrial real estate by a third-party property manager.<\/p>\n <\/div> Property owners rely on property management companies to keep people in safe, hygienic homes and businesses operating in safe and professional environments. Despite intermittent fluctuations, property management services are consistently in demand.<\/p>\n If you find yourself reading this article, you’ve probably been in the property management game for a while and are ready to build your own company from the ground up. Or, maybe you’re running or employed by a real estate business<\/a> and want to transition to property management.<\/p>\n Over the past fifteen years, our team has helped hundreds of entrepreneurs and small businesses start property management companies. We’ve mentored dozens of entrepreneurs in building and growing property management and homeowner’s association management companies. This guide shares the actionable insights, tips, best practices, and expertise we’ve developed after helping over one hundred thousand brands.<\/p>\n Navigating the transition between employee and property management entrepreneur can be tricky. If you’re ready to leap, we’re here to share everything you need to know about how to start a property management company.<\/p>\n <\/div> Starting your own property management company will be much easier to stand out from your competition (especially over the long term) if you specialize<\/em>.<\/p>\n Think about it. Would you go to a general practitioner or an oncologist specializing in lung cancer if you had lung cancer? You’d see a lung cancer specialist because they offer the best chance to solve your<\/em> unique problem.<\/p>\n The same is true for clients seeking property management services.<\/p>\n Clients want to feel confident that the people managing their property are doing it right. And knowing that you’re an expert in managing their<\/em> type of property will boost their confidence in your ability to get the job done right.<\/p>\n Receive six actionable guides, including a how to start a business checklist, detailed comparisons of LLCs, corporations, sole proprietorships, and partnerships to determine the best fit for your business, plus insights on crafting a compelling pitch deck to attract investors.<\/p> Receive six actionable guides, including a how to start a business checklist, detailed comparisons of LLCs, corporations, sole proprietorships, and partnerships to determine the best fit for your business, plus insights on crafting a compelling pitch deck to attract investors.<\/p> Receive six actionable guides, including a how to start a business checklist, detailed comparisons of LLCs, corporations, sole proprietorships, and partnerships to determine the best fit for your business, plus insights on crafting a compelling pitch deck to attract investors.<\/p> Property management companies that are specialists will appear most qualified to help and be most appealing to the clients with those needs.<\/p>\n You may find that your niche is obvious. For example, it may be where you have the most expertise. Or, it may be a property niche that needs to be filled in your local economy. For example, many highly paid professionals become real estate investors and buy rental properties in major cities. They don’t want to manage those properties and often look for capable and respected property managers.<\/p>\n Whatever niche you choose, don’t make the mistake of trying to be the right fit for every client. Marketing directly to the businesses that need your<\/em> expertise will deliver the best results.<\/p>\n Ensure that the niche you choose provides a meaningful opportunity. Once you assess your total addressable market<\/a>, you can evaluate whether the opportunity is sufficiently lucrative to be worth your time.<\/p>\n Finally, even experienced real estate brokers and property managers may need special training to deliver the best possible service in a specific property management field. So, take advantage of opportunities to improve your skillset – even if you’re already an expert. For example, tools like a short-term rental calculator<\/a> can enhance your understanding of pricing dynamics and help you optimize revenue management strategies for vacation rentals.<\/p>\n Receive six actionable guides, including a how to start a business checklist, detailed comparisons of LLCs, corporations, sole proprietorships, and partnerships to determine the best fit for your business, plus insights on crafting a compelling pitch deck to attract investors.<\/p> Receive six actionable guides, including a how to start a business checklist, detailed comparisons of LLCs, corporations, sole proprietorships, and partnerships to determine the best fit for your business, plus insights on crafting a compelling pitch deck to attract investors.<\/p> Receive six actionable guides, including a how to start a business checklist, detailed comparisons of LLCs, corporations, sole proprietorships, and partnerships to determine the best fit for your business, plus insights on crafting a compelling pitch deck to attract investors.<\/p> <\/a> So, what exactly does a property manager do?<\/p>\n Property managers take care of buildings, inside and out, on behalf of individuals or groups of property owners. Property management services may include:<\/p>\n It’s important to decide early which of these services you’ll offer. Potential clients will want clear guidelines of what they can expect of you.<\/p>\n And you’ll need to decide how many employees are needed to manage these services and what tools and supplies you’ll need to own to maintain your properties properly.<\/p>\n Your niche will help you determine if you can reasonably leave any of these tasks off of your list. For instance, residential property managers are more likely to provide mail\/package services than commercial property managers.<\/p>\n <\/a> People often make mistakes when they start a new property management company.<\/p>\n This is because they rush into things before considering their business from all angles.<\/p>\n A property management business plan isn’t mandatory. But, it can help you think many things through – including your services –\u00a0 and avoid many mistakes.<\/p>\n Studies show that entrepreneurs who take the time to write a business plan when starting a business are 2.5 times more likely<\/a> to follow through and get their business off the ground.<\/p>\n The work involved in creating a business plan helps new property managers build skills (like analyzing their competition and examining their finances) that will be important to their success.<\/p>\n But don’t get obsessed about getting every detail right in your business plan. You don’t even need to write a traditional 100-page business plan. Instead, do your research and create a one-page business plan<\/a>.<\/p>\n For insights and free downloadable business plan templates, read this definitive guide on how to write a business plan<\/a>. And take a look at these business plan tips<\/a> for more insights.<\/p>\n <\/a> There are many different types of legal business structures<\/a> for various business entities. (Note: These legal business structures differ from your business niche.)<\/p>\n Choosing the best business entity for new property management entrepreneurs can feel overwhelming. So don’t rush to register your business immediately.<\/p>\n For example, while a sole proprietorship or partnership<\/a> might be quick and inexpensive in the short term, it might expose you to more financial and legal risk, create an unfavorable tax treatment, and lead to problems for you in the long term.<\/p>\n A limited liability company<\/a> (LLC) is a strong choice for most property management companies. Still, a corporation<\/a> could make sense for bigger property management companies, especially if you have investors.<\/p>\n So, read about each possible entity your business might fit into.<\/p>\n Then, consider which business structure is most helpful for your business; and how each can help you accomplish your business goals.<\/p>\n <\/i> Hire an expert to form your company and save time.<\/span> Our trusted partners can help: Northwest ($39 + state fee)<\/b><\/a> or Bizee ($199 + state fee)<\/b><\/a>. Remember that most states require you to register your company with the secretary of state or county clerk in the county in which you operate if you operate your business under a different trade name than your legal business name.<\/p>\n This is an easy problem to solve. Just register your actual trade name with your state (and\/or local government) by filing a \u201cdoing business as\u201d (DBA) certificate.<\/p>\n DBAs are also commonly called \u201cassumed name,\u201d \u201cfictitious business name,\u201d or \u201ctrade name.\u201d<\/p>\n Here\u2019s a terrific resource that explains what a DBA is, the DBA state requirements, and how to file a DBA<\/span><\/a> for your property management company in all 50 states and U.S. territories.<\/p>\n <\/a> While it’s easy to get caught up in the excitement of becoming your own boss, it’s essential to give equal attention to the less glamorous aspect of business ownership – following the rules.<\/p>\n If you don’t operate legally, your new property management business may get shut down before it has a chance to grow. So, let’s talk details.<\/p>\n You must file the necessary paperwork after determining your business’s legal structure.<\/p>\n The U.S. Small Business Administration<\/a> tells us that some form of license or permit is necessary to operate virtually every business type legally. Their website has all the info you need to determine what sort of license or permit you’ll need to start a property management company in your state.<\/p>\n In addition to any basic business licenses or permits you may need to operate legally in your state, you will also need some licenses specific to the property management industry.<\/p>\n Many states require specific real estate and property management licenses or paperwork to operate a property management business legally.<\/p>\n So, check out your state’s real estate commission or licensing board website and real estate agent review sites<\/a> for the details relevant to your business.<\/p>\n But, some requirements are universal. You, and your employees, may be asked to acquire the following licenses:<\/p>\n For more details on these licenses, read this helpful article<\/a>.<\/p>\n This list is not exhaustive. You may need to complete other paperwork as well. For instance, in addition to the licenses required for individual employees (listed above), you may also need to acquire separate licensing in your business’s name.<\/p>\n And you may need to pay various taxes. For example, when operating a property management company, you may encounter transfer taxes<\/a> during property transactions. Consult with a tax professional to understand applicable transfer taxes based on your business’s legal structure.<\/p>\n Finally, check out associations that can help you network and pursue continuing education and certification in property management. A few notable associations include:<\/p>\n You may need (or want) to carry many different types of business insurance to protect your property management business.<\/p>\n All businesses should carry What is property management?<\/h2>
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<\/div>\nHow to Start a Property Management Company:<\/h2>
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<\/div> <\/a> Step 1<\/div>Choose your niche<\/h2>
One of the keys to running a successful property management company is identifying and embracing your niche. If you specialize in one property type and do that better than anyone else, you'll find it easier to attract those specific clients reliably. <\/div>![](\"https:\/\/images.crowdspring.com\/blog\/wp-content\/uploads\/2020\/03\/27125439\/logo-pink-blue.png\"\/){kind=logo}
<\/div>\nFree Business Startup Kit<\/h2>
Get your free startup kit<\/i><\/a><\/div><\/div><\/div>Free Business Startup Kit<\/h2>
Get your free startup kit<\/i><\/a><\/div><\/div><\/div>Free Business Startup Kit<\/h2>
Get your free startup kit<\/i><\/a><\/div><\/div><\/div><\/p>\nHere are common niches in the property management industry:<\/h3>\n
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Free Business Startup Kit<\/h2>
Get your free startup kit<\/i><\/a><\/div><\/div><\/div>Free Business Startup Kit<\/h2>
Get your free startup kit<\/i><\/a><\/div><\/div><\/div>Free Business Startup Kit<\/h2>
Get your free startup kit<\/i><\/a><\/div><\/div><\/div><\/p>\nStep 2<\/div>Define your services<\/h2>
The types of services you plan to offer will impact the resources you'll need to operate, the number of employees you'll need, and many more aspects of your property management business.<\/div><\/div>\n\n
Step 3<\/div>Write a business plan<\/h2>
Once you've thought through your niche and services, you can start to flesh out your business plan. Creating this document will help you think through all of the details of your new business - helping you to avoid pitfalls along the way.<\/div><\/div>\nStep 4<\/div>Decide your legal business structure<\/h2>
Your legal business structure affects everything, from how you file your taxes to your personal liability, and whether you need to comply with any special additional requirements at the local, state, or national levels. Think carefully about the type of business entity you will register. <\/div><\/div>\n
Pay just $39 + state fees and you'll get a free year of registered agent service, articles of organization, privacy, and client support from local experts.<\/p><\/div><\/p>\nStep 5<\/div>Fill in the business blanks<\/h2>
Property management companies require special licenses, permits, and insurance. Navigating these legal and logistical hoops properly will set your new business up for success. <\/div><\/div>\nProperty management licenses<\/h3>\n
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Insurance for property management companies<\/h3>\n