Property management is a surprisingly easy and affordable field to enter, requiring minimal education or experience, and almost no small business start-up capital. That said, it is a multifaceted business that involves liaising with many different types of people (landlords, tenants, contractors), understanding local landlord-tenant laws, and creating protocols that are both efficient and effective. It’s definitely not for everyone. There are many issues and responsibilities that come with buying rental property and becoming a landlord, and starting a property management business is no different. In fact, it comes with its own set of challenges and risks.
However, if you understand everything going in and enjoy managing real estate, a property management business can be very rewarding. Here’s how you can start one up.
4 Steps to Starting a Property Management Company
Step 1: Setting Up Your Business
As with all businesses, you’ll need to go through the process of setting up a legal entity (most property management companies are limited liability companies or LLCs), setting up a fax system and email account, an office, business cards, and so on. The good news is that you can do most of these simply and inexpensively, until your business takes off enough for you to afford more costly services.
You can set up an LLC yourself, without hiring an attorney. Go to your state’s official website and look up the process of filing an LLC in your state; then download their free Articles of Organization template, and file it (filing fees typically range from $50-150).
Setting up an office can be as simple as setting aside a room in your home for business, and possibly setting up a post office box for correspondence if you don’t want to publicize your home address.
You’ll need a phone number, and a fax line. You can use your mobile phone for everything; if you prefer, you can set up a separate business phone number through a variety of online services, which will automatically forward calls to your mobile phone. Additionally, there are many online services that provide paperless faxing for as little as $10/month.