How to start a Property Management Company & Get Business

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How to start a Property Management Company & Get Business

Zulf H.
Investor · Chicago, IL · Member since 2014 · 64 posts · 8 votes

Dear BP members:

Hope you all are doing well. I wanted to get some advice on how to start a property management company.

I am currently am a private investor with 10 properties. Most of these properties are managed by myself. I have a group of people that deal with maintenance related issues, plumbing, electrical, landscaping and snow removal. I also have an LLC open for some of the investment properties.

Since I have been doing this for a few years I wanted to get into the business of providing these services to a specific bldg. that owns about 20 units. This buildings relationship with the current property management will be over soon, i  think I will be able to manage this building. Before I approach them I have a few questions :

  • What is the process?
  • what is the best way to approach the building, I know their contract with the current property manager is about to end in a month. I am also in touch with one of the members 
  • What do such buildings look for from a property management company?  ( # of Manpower, Office, Insurance, etc..) -
  • Do I need to have any set experience before approaching a building with 20 units?
  • Can I show my other properties as a refernce for my experience in the property management area
  • Do I need to have aseperate business – I already own a company that have few of my properties
  • Do i need to have additonal reserve funds
  • Are there any podcast or tutorials that show how to run a successful management company.

Thanks a lot for your help!

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Account Closed
Retired Landlord/Author · Commerce Township, MI · Member since 2012 · 1k+ posts · 1k+ votes
11y

The first thing you need to do is be a Broker or have a license.  All Property Management has online this wonderful list of states that require licenses or Brokers License.  No sense to even go further if you do not have the appropriate license. You may want to go directly to this site as the columns are not showing up well after I upload it on here.  

Nancy Neville 

Talk to an expert, call 877-780-4510
Property Management Requirements by State Interested in becoming a property manager? Most states have specific licensing requirements that you'll need to meet before opening your business. Below is a quick guide to the basic certifications you'll need. For more detailed information, use the state links in the left-hand column.

State

Rental Real Estate

Community Associations

Alabama Property Management RequirementsReal Estate Broker LicenseNone
Alaska Property Management RequirementsReal Estate Broker LicenseReal Estate License
Arizona Property Management RequirementsReal Estate Broker LicenseNone
Arkansas Property Management RequirementsReal Estate Broker LicenseNone
California Property Management RequirementsReal Estate Broker LicenseNone
Colorado Property Management RequirementsReal Estate Broker LicenseNone
Connecticut Property Management RequirementsReal Estate Broker LicenseNone
Delaware Property Management RequirementsReal Estate Broker LicenseNational Board of Certification for Community Association Managers
District of Columbia Property Management RequirementsProperty Management LicenseProperty Management License
Florida Property Management RequirementsReal Estate Broker LicenseCommunity Association Manager (CAM)
Georgia Property Management RequirementsReal Estate Broker LicenseBrokers License and Community Association Manager (CAM)
Hawaii Property Management RequirementsReal Estate Broker LicenseState Registration required
Idaho Property Management RequirementsNoneNone
Illinois Property Management RequirementsReal Estate Broker LicenseNational Board of Certification for Community Association Managers
Indiana Property Management RequirementsReal Estate Broker LicenseNone
Iowa Property Management RequirementsReal Estate Broker LicenseNone
Kansas Property Management RequirementsNone for residentialNone
Kentucky Property Management RequirementsReal Estate Broker LicenseNone
Louisiana Property Management RequirementsReal Estate Broker LicenseNone
Maine Property Management RequirementsNoneNone
Maryland Property Management RequirementsNoneNone
Massachusetts Property Management RequirementsNoneNone
Michigan Property Management RequirementsReal Estate Broker LicenseNone
Minnesota Property Management RequirementsReal Estate Broker LicenseNone
Mississippi Property Management RequirementsReal Estate Broker LicenseNone
Missouri Property Management RequirementsReal Estate Broker LicenseNone
Montana Property Management RequirementsProperty Management LicenseNone
Nebraska Property Management RequirementsReal Estate Broker LicenseNone
Nevada Property Management RequirementsReal Estate Broker LicenseCertification by Commissioner for Common Interest Communities
New Hampshire Property Management RequirementsReal Estate Broker LicenseNone
New Jersey Property Management RequirementsReal Estate Broker LicenseNone
New Mexico Property Management RequirementsReal Estate Broker LicenseNone
New York Property Management RequirementsReal Estate Broker LicenseNone
North Carolina Property Management RequirementsReal Estate Broker LicenseNone
North Dakota Property Management RequirementsReal Estate Broker LicenseNone
Ohio Property Management RequirementsReal Estate Broker LicenseNone
Oklahoma Property Management RequirementsReal Estate Broker LicenseNone
Oregon Property Management RequirementsProperty Management License or Broker LicenseNone
Pennsylvania Property Management RequirementsReal Estate Broker LicenseNone
Rhode Island Property Management RequirementsReal Estate Broker LicenseNone
South Carolina Property Management RequirementsProperty Management LicenseNone
South Dakota Property Management RequirementsProperty Management LicenseNone
Tennessee Property Management RequirementsReal Estate Broker LicenseNone
Texas Property Management RequirementsReal Estate Broker LicenseNone
Utah Property Management RequirementsReal Estate Broker LicenseNone
Vermont Property Management RequirementsNoneNone
Virginia Property Management RequirementsReal Estate Broker LicenseCommon Interest Community Manager License
Washington Property Management RequirementsReal Estate Broker LicenseNone
West Virginia Property Management RequirementsReal Estate Broker LicenseNone
Wisconsin Property Management RequirementsReal Estate Broker LicenseNone
Wyoming Property Management RequirementsReal Estate Broker LicenseNone
Most states require that people engaging in property management activities have a real estate broker's license. This is confusing to some, because many state real estate statutes don't even mention the words "property management." However, they do describe activities that are typically undertaken by property managers as the types of activities requiring a real estate broker license.What does this mean in plain English? Depending on which state you live in, you may need a real estate license if you get paid to do any of the following activities:
  • Advertise the availability of rental property
  • Prepare or discuss a property management agreement with an owner
  • Negotiate leases or lease terms
  • Show a rental property
  • Drive or accompany a potential renter to a rental property
  • Collect rents

As always, there are exceptions to these rules - individual states regulate real estate activities, and they are not uniform in their treatment of property management. Some states (such as Idaho, Maine and Vermont) do not require a real estate license to engage in property management. Other states (such as Montana, Oregon and South Carolina) allow property managers to work under a property management license rather than a broker's license. However, the vast majority of states require a property manager who is engaging in renting and leasing activities to have a real estate broker's license, or to be a real estate salesperson working for a real estate broker. To become a licensed real estate broker, states typically require that you meet certain requirements:

  • Age: Depending on the state, you need to be at least 18 or 19 to be eligible to be a real estate salesperson, which is typically a required step in the process of becoming a real estate broker. Some states require that brokers be at least 21.
  • High School Diploma: Most states require that you have your high school diploma or equivalent.
  • Experience: To get your broker's license you'll need to demonstrate 2-3 years of experience (in recent years) as a real estate salesperson, or show that you have the equivalent experience (such as having been a real estate attorney for a certain amount of time.)
  • Residency: You must be a U.S. citizen. Some states also require state residency.
  • Real Estate Education: You must take certain classes required by the state, at a state approved educational institution.
  • Exam: You must pass the real estate broker's exam.
  • Trustworthiness: You must submit evidence of your trustworthiness. This usually consists of a criminal background check, and infrequently a copy of your credit report.

The experience requirement is often waived for attorneys or equivalent experience. In addition, individual states often soften the requirements for real estate salespeople and brokers who are licensed in other states, or offer reciprocity. For more information about these possibilities, please check with the state real estate commission.

Many states require real estate companies to designate a "managing" broker. This is usually someone who will have day-to-day responsibility for managing and overseeing the real estate office. Typically the requirements to be licensed as a managing broker are more stringent than for being a regular broker - for example, to be a managing broker, applicants are often required to take a "Broker Management" course and to take additional management questions on the licensure exam. For more information, please check with your state real estate commission.

Property management companies that are LLCs, corporations, or other business entities, and that engage in real estate activities in their business name are often required to obtain a broker's license in the name of the firm. This is a requirement that varies depending on the state. You should be able to search for a company's license on the state license search/lookup page as well as the individual broker.

Most states have license applications available for viewing and print out on their websites. It is a good idea to review these applications before you start the process of getting a license so you have an idea about the information you will be required to provide.

The information below should be considered a general guideline only. Information should not be considered to be all-inclusive, and should not be taken as legal advice. Always contact your state real estate commission before making any decisions or taking any actions to make sure that the information you have is current and accurate.

IMPORTANT: This information is intended for informational purposes only and under no circumstances should it be considered legal advice or relied upon without first confirming its contents with your state real estate commission. Laws are updated frequently, and this information may not reflect the current law in your state. To confirm the specific requirements for each state, please contact your state real estate commission.

If you see any errors in this information, please contact us.

Property Management Requirements Main Page

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