I recently got into the real estate world after beginning to listen to Bigger Podcasts during the Spring of 2016. I immediately started buying books and pouring through them to gain knowledge, but I know I needed experience. Thankfully, in May I landed a Property Manager position for a small property management company in the Marion / Gas City, IN area. There are two of us in the role at our small office, and our boss is the owner of the 292 properties we manage. We often get phone calls from property owners who want to rent out their investments but do not have the management tools, time or resources do so alone, but we turn these clients away because we only manage our boss' property.
Therefore, I have considered starting my own Property Management company on the side to manage a few of these properties we get calls about. (My boss knows I am an aspiring investor and that I, too, will own and manage my owner property while I work here, and he has no argument against that. Of course, there is no question that my first obligation would be to my current position and to my boss' assets.)
What should I know about starting a property management company? What are important factors to consider? Thank you in advance!
@Nate Estelle , great idea! I hope it works out well for you. Well the obviously things you need to know is all of the legalities. I am not familiar with your laws in Indiana, but here in Oregon there is an actual property managers license that is required to charge others to manage their properties. It sounds like if your co-worker/boss only manages his own properties, then he may not even have a license. So making sure you have the correct licensing is very important. Also, be aware of the hardships that come with being a property manager. It can be difficult sometimes to navigate some home owners and their expectations. I would suggest being a little picky with who's properties you manage.
Best of luck to you!
Thank you Chris! That is helpful info. I discovered that in Indiana you do indeed need to be a broker or be employed by a broker in order to be a property manager. Thanks again!
@Nate Estelle I did this recently and there are a lot of details. I will echo what Chris said about Licensing, check with the real estate board, but make sure you dig a bit sometimes there are ways to do it legally that are faster if you have to get a RE Lic. and take a bunch of classes. I recommend a good SW for tracking all the accounting and leases etc. I use Propertyware, its very comprehensive but takes a a while to get used to if your not an accountant.
Good luck and feel free to ask any questions!
@Christian Hansen @Nate Estelle @Chris Parrish
Hi guys, came across this thread searching for some similar answers. Question being, say you don't currently work for a PM, but want to start a PM business. Here in Illinois that requires a RE license, however when you obtain the license, don't you need brokerage sponsorship to use your license? What brokerage would sponsor you to allow you to run a business unaffiliated with the brokerage? Am I missing something here?
An important distinction needs to be made at this point as between community association management and property management activities and the role of the sponsored licensee. A sponsored licensee could decide to obtain a community association management license (if not precluded by contract) and set up their own business for the purpose of engaging in community association management activities. A sponsored licensee then could be compensated directly for those services. In contrast, a sponsored licensee cannot provide property management activities in the same fashion.
Property management activities include activities requiring a real estate brokerage license. Under the License Act a sponsored licensee is required to provide real estate brokerage activities through the managing brokers company. Thus, if your managing brokers company chooses not to provide property management activities a sponsored licensee cannot provide those services through a separate brokerage company established and operated by the sponsored licensee.
A sponsored licensee can establish a separate real estate brokerage company and own that company and hire a managing broker and the sponsored licensees necessary to operate that company. However, a sponsored licensee can not provide property management services through the separate company as these services would need to be provided by other licensed individuals.