How to start a property management business
Are you looking to start your own property management business? It is an exciting step but can feel overwhelming if you do not know where to begin. Often considered secondary to real estate sales, property management can be a more lucrative opportunity if you set up your business correctly from the start. You can easily build a profitable business by putting in place the right structure, plan, policies, processes, fees, team, technology, website and marketing.
However, you must get each step right to give yourself the best chance at success. That’s why we have put together eight things you should do when starting a property management business to help you through this often challenging time. From getting the right professional advice to planning your marketing strategy, here’s everything you need to know.
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1. Talk to a property management business consultant
Before you begin, you should take some time to talk with a property management business consultant. A property management business consultant’s job is to help create your goals, advise on your business structure, cultivate your team and provide strategies to improve. A good consultant is with you from the start of your business journey and can continue to assist as your business grows.
Hiring a consultant specific to the industry rather than one with a broad focus means you get tailored advice for your exact needs. One of the industry’s top coaches, Jo-Anne Oliveri, offers one-to-one consulting for start-ups to established property management businesses. Her expertise can empower you with proven strategies to overcome obstacles and help your business thrive. Starting with this step could be the difference between a property management business which succeeds and one that does not.
2. Prepare a business plan
The next step is to create your business plan. Putting together a business plan gives you a clear direction. It helps map out what you want to achieve, how you can achieve it and when you can achieve it. It can also be a useful tool to secure finance and attract the right people to start up your business.
Your business plan should outline a number of key areas. These areas include a company overview, industry and market analysis, customer analysis, competitor analysis, marketing strategies, operations plan, management team and financial planning. You should research data and statistics relevant to your region and make strategic decisions according to your findings. While there are many online templates available, it is a good idea to reach out to a dedicated property management business solutions company, such as ireviloution, to assist with developing your business plan.
3. Create your policies and processes
If you want your property management business to operate seamlessly from day one, you need to create good policies and processes. Your policies and processes should cover every task and workflow from start to finish. Since property management includes many different roles and responsibilities, you must ensure every area is covered.
Some of the key tasks you should create policies and processes for include the following:
Setting rents
Collecting rents
Adjusting rents
Screening tenants
Approving tenants
Renewing tenants
Vacating tenants
Evicting tenants
Managing property maintenance
Conducting property assessment inspections
Doing this step allows you to optimize your operations from the start. It ensures that your team carries out tasks the same way and to the same high standard every time. As a result, you can deliver a consistent and positive customer experience, which will help you stand out from other property management companies.
4. Determine your pricing structure
Setting competitive fees is vital when setting up your property management business. Do your research to determine what competing agencies in your market area are charging and how you want your brand to be perceived in comparison. For example, if you plan to lease out luxury properties, your fees should reflect your premium offering and service standards.
Since there are many fees you need to set, it is a good idea to list each one and outline them in your business plan. Common fees include your management fee, letting fee and marketing fee. You will also need to consider miscellaneous fees, such as lease agreement fees, lease renewal fees, eviction fees and routine inspection fees. Remember to keep your goals, brand and expenses in mind when determining your pricing structure.
5. Hire your team
Finding and hiring the right people is one of the most important steps you need to take when starting a new business. In addition to being qualified to do the role, the people you employ need to be a good brand fit for your business. The best place to start is by listing which roles you need to fill, whether they will be casual, part-time or full-time, and whether they are in-office or remote positions. Key roles you should consider are:
Property managers
Team leaders
Assistant property managers
Leasing agents
Payroll and accounts payable staff
Marketing specialists
Receptionists
Once you have decided which roles you need to fill, the next step is writing job descriptions and posting them in the appropriate places. When you hire team members, you need to induct them into your business. Spend time teaching new recruits about your brand, the culture you want to create and your policies and processes. Doing this will help you develop a cohesive team focused on delivering your brand promises.
What’s more, you should consider other contractual roles which are essential for your property management business’ success. For example, your team should also extend to an accountant, bookkeeper, lawyer, IT technician and maintenance providers, including electricians, plumbers, locksmiths and pest controllers, to name a few. Having a trusted list of contractors ensures that your business can run smoothly from launch.
6. Invest in technology
In this day and age, every business needs effective technology solutions. When it comes to your property management business, you should invest in technology which aligns with your culture, streamlines your operations and improves your customer service. No matter what area of your business you are looking into, there is a software solution that can optimize it.
Key areas to consider are your trust accounting, automated workflows, internal communications, customer relationship management, email marketing, social media scheduling, tenant screening, document signing and payment collection. However, don’t get caught in the trap of investing in every shiny object. Do your research and only choose solutions that fit your business, budget and brand.
7. Build your company website
Before launching your new property management business, you need to build your company website. With more and more agencies opting for a virtual storefront, you need to spend the time and money developing a website that makes you stand out from your online competitors. A good website should be aesthetically pleasing and deliver a good user experience.
Whether you build your own site through providers such as Squarespace, Weebly or WordPress, or work with a website developer, you should first outline what you want your site to do and achieve. Consider whether it will be a one-pager to get prospective customers to enquire or a multiple-page website that you can constantly update with new content. Your business structure, team size and budget should help drive these decisions.
8. Market your business
The final step is to plan how you will market your new property management business. Promoting your business means first considering whether you will manage this in-house or outsource it to a specialized real estate marketing agency. In this digital era, a strong online presence is critical. So, ensure you set aside time to prepare an effective marketing strategy.
You or your agency should develop a marketing strategy to launch your business, attract prospects, nurture customer relations and grow your rent roll. While there are many channels you can use, you should only select ones which most closely align with your marketing goals. The best advice is to invest in channels which will give you the best return on your investment. For example, your website, content marketing, social media, paid search and digital property portals are great places to start.
However, the most powerful way to market your property management business is by generating word of mouth. By delivering a high-quality service and positive customer experience, your clients can become your best advocates and help bring in new business. As a result, it is essentially free advertising that is more trusted than any other form of marketing.
If you want to give your new property management business the best chance at success, you should follow these eight steps when starting up your agency. While it is often a stressful time, it is equally exciting as it can be the start of a profitable opportunity. Take the time to work through these steps, so your start-up property management business can thrive from day one.
