How To Start A Property Management Company – Starting a property management company in Florida is often a complex process filled with legal and regulatory hurdles. Once you consider the various stakeholders you need to consider, finding the first steps to creating a property management company can be difficult.
Without proper guidance, research and resources, this process can be confusing and sometimes costly. To help you avoid the common pitfalls of first-time property managers, we here at Upkeep Media are going to break down how to start a rental management company in Florida.
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How To Start A Property Management Company
We’ll also break down the factors you’ll need to be successful, and the state regulations you must adhere to.
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A property management company manages different types of real estate holdings, generally on behalf of owners and landlords.
A property manager helps maintain the property and essentially acts as an intermediary between real estate owners and tenants.
As part of your day-to-day operations as a property manager, you will meet with various stakeholder groups, including the real estate owners, tenants, prospective tenants, and contractors hired to perform maintenance and repairs.
As a property manager, it is your job to manage these (sometimes competing) interests to ensure that the property is profitable, well maintained, compliant with the law, and comfortable for your tenants.
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There are a number of legal and ethical considerations for you to consider, but we will discuss these factors later in the article.
Property management companies can vary widely in size, from one-person operations to large property management entities that manage several large tenant complexes or resorts.
As a property manager, it is important to protect yourself from risk and run your business as efficiently as possible to maximize your revenue potential.
Still think property management is the right business opportunity for you? Here are our seven steps to creating a legal and compliant property management company.
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While these steps are by no means comprehensive, we hope they can guide you along your journey to becoming a successful property manager.
An important first step in establishing yourself as a credible property management company is choosing a name for your business and registering it legally.
Establishing a legal entity in Florida can be challenging and subtle for any business, so we encourage you to speak with a lawyer in your area.
In many places, your local Chamber of Commerce organization is an excellent resource for information about legally registering your business.
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Having a solid business plan will help you make critical decisions about the structure of your property management business and how you can protect yourself from personal and professional liability.
It is important to note that each state may have its own legal requirements for setting up a business, especially a property management business.
One of the requirements for becoming a certified property manager in Florida is that you must have a Florida State Real Estate Broker License.
As a general rule, most property management companies choose to set up either a Limited Liability Corporation (LLC) or an unincorporated business entity (often called an S-Corp or C-Corp).
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While there are advantages and disadvantages to both, it is best to speak with an attorney or CPA experienced in corporate tax filing to determine the best corporate structure for your business.
We strongly encourage all future property management business owners to do thorough research into the best type of business structure for their unique needs, keeping in mind that a property management company often requires a more complex set of legal responsibilities than other types of businesses.
Once you have registered and created a tax structure for your business, you can begin the necessary legal processes to protect your assets, your business, and yourself from liability going forward.
Once you’ve registered your company as a legal entity and started fleshing out your business structure, it’s time to create a strong, legally binding contract.
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Creating a strong contract with an attorney who specializes in property management companies will ensure that you and your company are protected from liability, fraud, and the many risks associated with bad clients.
As you move forward with setting up your business, it is important to keep short and long term goals in mind and create a plan to scale your business plans accordingly.
While these are the two most common structures for property management companies, it doesn’t mean you have to pick a structure and stick with it forever.
As their business grows and they start taking on more clients, this structure shifts to focus more on salaried employees and a well-established business hierarchy.
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By delegating some of these tasks, you can provide better service to clients and ensure that you, the business owner, can focus on the most strategic and timely tasks at hand.
There are also a few important contract based roles that are vitally important to any property management business. These roles include:
As a general rule, all vendors, full-time/part-time employees, and contractors should be properly registered with state and local authorities, be qualified to perform the roles for which they are hired for them, provide insurance and sign a contract outlining liability and responsibilities for your. company.
The quality of your employees and contractors reflects your business, so make sure you do your research here and only hire qualified and professional partners.
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As a property management company, there will be a number of competing priorities that come across your desk every hour of every day.
As a relationship-based business, it’s important to ensure you stay on top of those priorities in a responsive and professional manner. After all, your reputation as a property manager is your greatest asset.
For every business need, there is a software solution, and the needs of property management companies are no exception.
Choosing the right software can be overwhelming, and we recommend choosing a product that can be easily scaled to fit your current and future business needs.
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For rental managers, there are several SaaS (Software as a Service) platforms that help address your specific needs. Some great examples of all-inclusive rental management software include:
However, these more complex business management software are not your only option for managing your property management business, especially when you are just starting out.
With a little research, there’s a SaaS solution for almost every business need including tenant rent collection, maintenance order tracking, email scheduling, and document sharing.
While not as intuitive or efficient as all-in-one property management software, these standalone platforms are often much cheaper to run and can allow you to scale your business as it grows in your few months or first years of operation.
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One of the most common misconceptions made by businesses across all industries is the idea that marketing efforts stop once you start attracting and retaining clients. This is far from true.
Marketing your new property management business should be an ongoing task with dedicated resources and staff time. We strongly recommend that you invest in a solid marketing strategy straight away to ensure the short and long term success of your business.
In order to position yourself as a credible business, you must first create a strong digital and local marketing footprint. The main priorities in your marketing strategy should include:
These days, a high-quality website is the digital equivalent of your business’s front door. First impressions make all the difference. A professional, informative website that performs well can impact your ability to attract clients right from the start.
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While there are website hosting platforms such as WordPress, Squarespace, and Wix that allow you to create your own website from a ready-made template, we highly encourage you to consider bringing in the professionals to elevate your brand on -line and leverage your website as a revenue generator. for your business.
Marketing collateral can cover all other related marketing strategy items that help promote your business. This collateral could include social media posts or advertisements, business cards, brochures, digital information guides, blog posts, and other related marketing material.
This type of material should be secondary to your website but still be used to help establish professionalism and a strong brand identity for your new business.
We strongly encourage new property managers to network to get their names out there and make important industry contacts.
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Every real estate market is unique, and often, business comes from who you know and interact with on a daily basis. As a property manager, you should be working hard to build relationships with real estate professionals and property investors to cover potential clients and industry partnerships.
We recommend joining several professional organizations such as NARPM, VRMA, or NAA to take advantage of their industry insight, training, resources, and networking opportunities.
Once you’ve determined your business structure and started the process of attracting new clients, it’s time to set up your fee structure.
This is an important development stage for any business. Pricing that is too low can damage your credibility and will ensure that you are always running behind trying to make ends meet. Too high prices can make it more difficult to secure high quality clients.
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Understanding your local market and your competitors’ pricing is a critical first step in creating a fee structure that will earn sustainable income while also engaging clients.
If you are new to the real estate industry, understanding the
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