I am currently working on a project in Entrepreneur Finance Class. We have to come up with the pro forma numbers for financial statements of a start-up company and we chose Property Management Company. I have no experience in estimating these numbers before, so I think it's a good place in this Forum to ask.
Can you help me to come up with estimation of the 1st year, maybe the 2nd year and 3rd year of a Property Management Company for the following costs:
- operating capital
- salaries and wages
- insurance premiums/prepaids
- legal fees
- accounting fees
- rent deposits
- utility deposits
- office supplies
- office equipment
- Income from rentals (percentage of gross rent)
- Income from agents
- Income from property mgmt. services (finders fee, tenant placement, evictions, collections, repair management, etc.)
- Other income (late fees, interest)
- Accounts receivable
- Accounts payable
- Long-Term loans
- Prepaid expenses
- Office furniture
- Office equipment
- Other fixed?
Any short, long answer appreciated.
Most people who start out in property management dont start out with everything you have. It takes time and years to truly build it up to what you call a normal business.
Some guys rent an office for $500 per month, very small and the furniture is included.
Good luck, thats a lot of details!
I agree with Curt - we plan for all these things but most of the businesses I have seen in the startup phase do not have all the above in place, simply because they can't! Unless you are well funded (not easy to get capex for startups) you will have to start out very small and sometimes by the seat of your pants.
i have been running a PM business out of my house for over 4 years now. I manage 80 properties and rarely have had a need for an actual office location. What I did just last year finally was get a mail box service with Regus a company that has high end looking office buildings in downtowns across the country. For only 100 bucks a month I can use their location as my official business address and a place for my tenants and or landlords to drop off rent and documents. They are open from 9 to 5 and have receptionist working there and they will act like they work for you when someone comes in to drop off mail. Sweet deal. They also have conference room and offices they rent out when needed. Pretty cool deal
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing