Starting a PM company in Massachusetts.

19 Replies

First off let me introduce myself. My name is Matthew. I am looking for any help, advice, tips or anything anyone can give me in starting a PM business in Massachusetts. I have the start up funds necessary and have been doing my due diligence in the research aspect. Does anyone have any tips on securing your first clients, appropriate rates for the eastern Massachusetts area or any other aspects of the business?

ps I also plan on using Buildium PM software.

Thankyou in advance for anything you can offer.

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Originally posted by @Matthew Catanzariti :
No, to my understanding you do not need to be a licensed broker or agent in the state of Massachusetts to operate a property management company.

Where did you see this? I do no think that is correct, but can't say 100%.

I hope you are right since it is stupid for a PM to be an agent for anything other than leasing a place. Of course the biggest chunks of money are getting the leasing fee so without that I can't imagine it is a lucrative business.

"Real estate broker", hereinafter referred as broker, any

person who for another person and a fee, commission or

other valuable consideration, or with the intention or with

the expectation of upon the promise of receiving or

collecting a fee, commission or other valuable

consideration, does any of the following:- sell, exchange,

purchases, rents or leases, or negotiates, or offers, attempts

or agrees to negotiate the sale, exchange, purchase, rental

or leasing of any real estate, or lists or offers, attempts or

agrees to list any real estate , or buys or offers to buy, sells

or offers to sell or otherwise deals in options on real estate,

or advertises or holds himself out as engaged in the

business of selling, exchanging, purchasing, renting or

leasing real estate, or assists or directs in the procuring of

prospects or the negotiation or completion of any

agreement or transaction which results or is intended to

result in the sale, exchange, purchase, leasing or renting of

any real estate.

If you engage in the renting and leasing activities and it is not incidental to your being a property manager, then you must be licensed.

It sounds like you can collect the rent, enforce the rules and perhaps do the evictions. But you couldn't negotiate and execute the leases.

From

http://www.irem.org/File%20Library/Public%20Policy/proplicensing1.pdf

Massachusetts

Real Estate Board

239 Causeway Street, Suite 500

Boston, MA 02114

(617) 727-2373

http://www.mass.gov/dpl/boards/re

Separate License Required:No

Limited License Offered:No

Does not license property managers. Although renting and leasing activities are covered under existing broker/agent law, if a property manager's only involvement in those activities is incidental to his involvement as a property manager, the exemption from licensure would still apply.

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You are on a great path I think. Lots of benefits to having your own property management business. I own a small one in my city and we generate 6 figures in revenue each year. I would consider that pretty lucrative. you also have the chance to find lots of great deals along the way and build your own rental portfolio. I would however highly recommend getting your real estate license even if not required. It will open the door to even more deals and also give you a bit higher standing in the eyes of your clients.

Thanks Rhett I appreciate it. Is there any advice you could give me on starting up/owning a small property management business? How'd you get your first clients? What rates do you charge? Sorry for all the questions but you are in the exact spot I want to be in!

@Matthew Catanzariti

Not sure what experience you have please complete your profile.

PM is not just charging a fee to collect rents. Tenant and property issues are complex.

Go to IREM.org look up the training to become ARM certified that will add credibility to your business.

Perhaps you can get a position with an existing certified company and earn while you learn.

Paul

we got our start with our own personal rentals. started with 1 and built up from there. after a bit of doing it others began to ask for help with theirs when they saw our success with our own. I think getting some experience is key whether it be with another company for a few years or with owning some of your own rentals.

Account Closed is correct though, there are many many facets to this business. you need to be experienced in many things to provide top notch service. repairs, rent collection,construction,remodeling,eviction law, and much much more.

MA RE License is required for property managers with the following exceptions: 

- Your the owner of the properties that your managing

- Your a Salaried Employee of a property management firm

- Your a Hotel Reservation Agent 

Got this information off of the following site

http://www.mass.gov/ocabr/licensee/dpl-boards/re/ceu/continuing-education-subject-matter-curricula/re42r05.html

Hope this helps...

Jack

Almost every state you need to be a broker to own a property management company, however there are other ways you can do this:

#1 You can hire a broker to be broker of record but you will probably need to be licensed as an agent if you are doing any of the management side of the business.

#2 You can get your license as an agent and simply do property management with the blessing of your broker, I know Keller Williams & RE/MAX in my area will allow you to do such things and they will let you keep the majority of the profit.

In my state you would only need to be a property manager for about 3 years before you could be a broker (you would have to provide proof that you assisted in management and did leasing), so if you are motivated and take your brokers classes right after getting your licenses you could be a property manager in a few years depending on your state and in the mean time you could build up a book of business to take with you.

When it comes to answering the actual questions you asked here are a few tips for building the business:

You can pay for leads, company's like all property management will give you leads for a price.. Typically it ends up being $25-50 for good quality leads that will make you that money back in the first month.

You can call expired listings and listings that have been on the market for a while

You can market to agents (most agents want nothing to do with the business of property management)

You can be a vendor at local real estate clubs like REIA or ACRE

If you join a large company you can ask your broker for 5 minutes in your meetings to talk about property management to the other agents in the brokerage.

As for the other question I have never used that software, I have heard good things.. The only software I have used is propertyware but that is for larger businesses.

Good luck!

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