Advice to start a property management company

[Kenneth Bentley]

Good Afternoon,

I have seen a lot of people need a property manager lately and I am thinking about starting my own company to do it. I have managed a property for someone that lived in Connecticut before. I didn't have a contract or anything but I did it for 8 years. I own 3 rentals and manage them myself. Do you guys have any advice on going about this? Any and all advice is appreciated. 

Kenneth Bentley

[Tiffany Colvert]

Most states will require you to have a real estate license for managing other people's properties. Also, there are a lot of financial regulations when it comes to security deposits and rent collections. I recommend starting with licensing and educating yourself on PM laws in your state.  

[Account Closed]

As Tiffany said, many states require licenses or a broker. I would also look into property management franchises like Grand Welcome, Itrip & others.

Here are some specifics on those restrictions:

No restrictions:

• Alaska, California, Colorado, Florida, Georgia, Idaho, Maine, Massachusetts, Mississippi, Oregon, South Dakota, Tennessee, Texas, Utah, Vermont, Washington

Requires Real Estate License:

• Arkansas, Connecticut, Washington DC, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma

Requires Real Estate License & Principal Broker:

• Alabama, Arizona, Delaware, Hawaii, Michigan, Missouri, Nevada, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Virginia, West Virginia, Wisconsin, Wyoming

[Kim Tucker]

Missouri requires a license,

[Chris S.]

Quote from @Account Closed:

As Tiffany said, many states require licenses or a broker. I would also look into property management franchises like Grand Welcome, Itrip & others.

Here are some specifics on those restrictions:

No restrictions:

• Alaska, California, Colorado, Florida, Georgia, Idaho, Maine, Massachusetts, Mississippi, Oregon, South Dakota, Tennessee, Texas, Utah, Vermont, Washington

Requires Real Estate License:

• Arkansas, Connecticut, Washington DC, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma

Requires Real Estate License & Principal Broker:

• Alabama, Arizona, Delaware, Hawaii, Michigan, Missouri, Nevada, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Virginia, West Virginia, Wisconsin, Wyoming

Alaska requires you to be a licensed agent and work under a broker unless if you are an on site manager and reside in the building, or if you manage less than 4 units for another person. No additional requirements besides being licensed. 

Reference: I am a property manager in Alaska, I just wanted to make sure the correct Info was out there. 

Property management is a tough gig, but if you do a half decent job you will outshine the majority of managers out there and it won't be hard to get work. 

[Susan Maneck]

I'm pretty sure you are wrong about Mississippi. Last I checked you had to be real estate agent for a year before you could be a property manager unless you are employed directly by an LLC.

[Richard F.]

Aloha,

In addition to starting by checking local Real Estate Licensing laws, it largely depends a great deal on what else is in your background. As a PM for Client Owned property, you expose yourself to a lot of responsibility and liability. There are a myriad of laws that must be followed, at Federal, State, and local levels. "I didn't know about that" will definitely NOT save your bacon WHEN a new issue arises. You do not need to know ALL the answers, but you certainly do need to know MOST of the Questions, and more importantly, where to get them answered with authority.

There is no "app" for PM, contrary to many posts on these forums. There are data management tools; there are services that for a profit to themselves will perform certain tasks, most notably "screening" both people and animals; you can outsource accounting, admin tasks, service and repairs; you can "market" on whatever the latest hot site is; but if you do not fundamentally understand WHAT is being done, how it should be done, and what a good result looks like, you will be throwing some of YOUR profits away. Your education will likely be costly.

I know nothing more about you than you posted, so no offense intended, but 8 years dealing with 3 units totals 288 unit/months of experience. Personally, I have exceeded 100,000 unit/months of experience, and still learn or experience something new in the PM arena pretty much every month. That experience is on top of the required yearly "Continuing Education" that licensees are typically required to take in order to stay abreast of national and local laws that affect RE, and other related topics. It is also on top of prior career and life choices that significantly added to my personal body of knowledge in this field over the prior 20 years. It is an ever-changing landscape (pun intended), which, honestly, has been part of the appeal to me as a career choice.

[Brett Merrill]

Hi @Kenneth Bentley. Here are some actions steps I would consider. Hope this helps. 

1. Research and Develop a Business Plan: Conduct research on the property management market in Alabama and develop a detailed business plan that clearly outlines your company's goals, target market, services, pricing, and expenses.

2. Choose a Business Structure: Determine the legal structure of your company, such as a sole proprietorship, LLC, or corporation, and register your business with the Alabama Secretary of State.

3. Obtain Licenses and Permits: Obtain all necessary licenses and permits required by the state of Alabama and local authorities.

4. Build Your Team: Build a team of experienced professionals capable of handling property management tasks such as maintenance, leasing, bookkeeping, and legal compliance.

5. Develop Marketing Strategies: Develop marketing strategies to promote your business and attract potential clients.

6. Establish a Reliable Network: Establish connections with real estate agents, contractors, and other professionals in the industry.

7. Secure Insurance: Obtain insurance to protect your company from potential liability issues.

8. Set Up Your Office: Set up your office space and acquire the necessary equipment and software to manage your properties efficiently.

9. Implement Processes and Procedures: Develop processes and procedures for managing properties, handling clients, and maintaining financial records.

10. Launch Your Business: Once you have everything in place, launch your property management business in Alabama, and continuously evaluate your performance and make necessary adjustments.

It's always advisable to consult with a lawyer or any other relevant professional for specific business advice in your local area.

[Pat Heidingsfelder]

Quote from @Account Closed:

As Tiffany said, many states require licenses or a broker. I would also look into property management franchises like Grand Welcome, Itrip & others.

Here are some specifics on those restrictions:

No restrictions:

• Alaska, California, Colorado, Florida, Georgia, Idaho, Maine, Massachusetts, Mississippi, Oregon, South Dakota, Tennessee, Texas, Utah, Vermont, Washington

Requires Real Estate License:

• Arkansas, Connecticut, Washington DC, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma

Requires Real Estate License & Principal Broker:

• Alabama, Arizona, Delaware, Hawaii, Michigan, Missouri, Nevada, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Virginia, West Virginia, Wisconsin, Wyoming

 Just for reference, Mississippi DOES require you to be a licensed salesperson working under a licensed broker that approves of you managing property.  You are free to manage as many properties as you want as long as you own them.

[Drew Sygit]

@Kenneth Bentley you'll need at least 100 doors to make a bare living at it.

At least 50, so you can hire someone to help, but then you won't be able to draw a paycheck.

150 minimum to make a living and hire someone to help.

[Frank Barletta]

There is a reason the barriers to entry for real estate are high.

knowledge in laws, function, customer success, finance, business, maintenance an technology are key in this industry. Being able to know what you’re good at and what you should hire someone for is even harder.

if you’re jumping in, do it with eyes and ears open and read/watch as much as you can because there is a learning curve.

[Chris Davidson]

@Kenneth Bentley How much do you know about the business? If I was starting a business I would want to know a lot about it and the industry. Managing a friends property is one thing starting a business and managing random people properties takes a whole different level of commitment.

Figure out if its your jam or not, and maybe work at a PM for a bit. You won't see a whole lot with just 4 doors, and it is a different game when you are trying to do everything at scale.

[Patrick Pendley]

Quote from @Account Closed:

As Tiffany said, many states require licenses or a broker. I would also look into property management franchises like Grand Welcome, Itrip & others.

Here are some specifics on those restrictions:

No restrictions:

• Alaska, California, Colorado, Florida, Georgia, Idaho, Maine, Massachusetts, Mississippi, Oregon, South Dakota, Tennessee, Texas, Utah, Vermont, Washington

Requires Real Estate License:

• Arkansas, Connecticut, Washington DC, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma

Requires Real Estate License & Principal Broker:

• Alabama, Arizona, Delaware, Hawaii, Michigan, Missouri, Nevada, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Virginia, West Virginia, Wisconsin, Wyoming

Texas requires a Realnestate Licence and for your trust account to be in your principle brokers name
. 

[Tim J.]

Managing 4 properties (3 for yourself and one for a friend) is nowhere near enough experience to jump in.  If you are serious about doing property management (I would not want that job) then go get a job at a PM company and learn the ropes.  There is A LOT to it that you will not find out about by just managing 4 SFH units.

If you find that you are good at it and love it, then great, but be diligent and do some research first.

[Aaron Schrader]

Quote from @Account Closed:

As Tiffany said, many states require licenses or a broker. I would also look into property management franchises like Grand Welcome, Itrip & others.

Here are some specifics on those restrictions:

No restrictions:

• Alaska, California, Colorado, Florida, Georgia, Idaho, Maine, Massachusetts, Mississippi, Oregon, South Dakota, Tennessee, Texas, Utah, Vermont, Washington

Requires Real Estate License:

• Arkansas, Connecticut, Washington DC, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma

Requires Real Estate License & Principal Broker:

• Alabama, Arizona, Delaware, Hawaii, Michigan, Missouri, Nevada, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Virginia, West Virginia, Wisconsin, Wyoming

 South Dakota requires a 40 hour course and passing a license test at 75% or better.  

[Gavin Little]

Quote from @Kenneth Bentley:

Good Afternoon,

I have seen a lot of people need a property manager lately and I am thinking about starting my own company to do it. I have managed a property for someone that lived in Connecticut before. I didn't have a contract or anything but I did it for 8 years. I own 3 rentals and manage them myself. Do you guys have any advice on going about this? Any and all advice is appreciated. 

Kenneth Bentley

@Hunter Terryn

[Melanie Thomas]

Hi, most have said above. Check your state licensing requirements. Find a mentor already in the business and join NARPM! They are a wealth of knowledge for PM company owners. So many legal pitfalls you could potentially fall into if you don't do it right. They are such a great resource. I urge you to check them out and sign up. Good luck and happy investing! 

[Wale Lawal]

@Kenneth Bentley

Here are the steps needed to start your new rental management business below.

Research Locations
Learn the Law
Choose a Name
Set Up Banking
Get Educated and Licensed
Hire a Team and Embrace Technology
Get the Word Out
Network

Read this article for more information https://www.baymgmtgroup.com/b...

All the best!

[Mark Jones]

I have owned a PM company for several years.  Happy to talk with you about it.  Feel free to message me.