Help! What should I know before starting a property management company?

Question

I have several rental properties that I along with a very small team manage but have been running around the idea of starting a PM company and managing other people's rentals along with my own. Long term I want to be a more hands-off investor and would like to build a system for myself along with others to help make investing a little easy.

What are some ideas you have for this system?

What do you look for In a PM?

Who should I include in my team/staff?

What are some things you have been able to autopilot?

Any other tips or information you may find helpful?

Thanks!

Drew Sygit · Answer

@Miles Goodwin you don't know what you don't know.

If you're a risk-taker or have no other options, that can be a good thing.

Otherwise, as you get in over your head and problems never seem to stop coming, it can ruin your life - personal & business.

There's not much in this business you can "auto-pilot".

What you can do is bulk-actions for scales of efficiency - and delegate it to staff.

As already posted, you need at least 100 doors to generate enough income to make a living. If you want to be hands-off you can direct this income to staff, but that's at most 1 to 1.5 people. They will have to everything:

AccountingApplicationsCommunications with owners, tenants, vendors, cities, etc.Delinquencies & EvictionsInspections & MaintenanceLease RenewalsMarketingYou'll really need to get to 200-300 doors to effectively be able to delegate enough, so it's not a full-time job for you.

Nathan Gesner · Answer

You first need to get a license and work under a Broker: https://www.dos.pa.gov/Profess...

You can't operate on your own until you have three years experience as an agent, 240 hours of Broker education, and pass the exam.

You have to really consider the costs. You will need to get a license, then operate under a Broker that will charge you a portion of your income. You generally need to manage around 100 units to make a decent living.

You would be better off getting a job with an existing PM company that already has healthy inventory, established policies and procedures, forms, etc. You'll make a good living right away and you'll learn from professionals instead of trying to learn as you go, which can take 5+ years to do.

Mitchell Luban · Answer

@Miles Goodwin Like some have mentioned above. Likely you will need to be licensed at least with a real estate license and work under a broker or get your own brokers license.

I did the very thing you're talking about. I had my own portfolio. Started managing for some clients and started a small management company. The biggest thing that most people don't understand is that management is a lot of work. I think most people think you're overpaid when in reality you will probably feel underpaid.

The biggest thing I think is transparency. You're handling other people's money. The more concentrated of a service area the easier it will be for you especially in the beginning. At least that was my case. When doing showings, and checking on properties etc.  It will also allow you to keep your vendor list smaller.

Obviously a good CRM system will be beneficial. We have used Rent Manager and it works for us. I am managing under 100 doors myself with no help besides outsourcing for showings at times. But clear systems and procedures are crucial as well.

Best of luck with whatever decision you make.

Richard F. · Answer

Aloha,

In most states, you are required to have a Real Estate Brokers License or be a Licensed agent under a Broker in order to manage other people's rentals. Check your local laws.

Help! What should I know before starting a property management company?

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