How To Start A Property Management Company and Turn It Into a Success
You've got many aspects to consider before starting a property management business. From legal requirements, to how you will get clients, and how to provide good service for the properties you will manage. At Goodjuju, we work with thriving property managers every day. We've learned some of the most important things you need to consider when planning to start your company.
By Landon Murie
Updated Oct 10th, 2020
Our Updated List of The Most Critical Points To Consider When Starting a Rental Property Management Company:
1- Licensing requirements in your state
Depending on which state you want to start a property management company in, there will be different licensing requirements that you need to consider before worrying about anything else.
First things first. No point to invest your time on other things before you learn if you need a real estate or brokers license to manage rental properties legally in your state!
Click your state below to visit the local source of information about real estate licensing requirements in your state:
2- Study how to be a great property manager
In order to really grow a new property management company, the most important thing you need to focus on is providing great property management service. If you really want to know how to be a successful property management company, your clients success and satisfaction should come first.
The more happy your clients are, the easier your job will be. It will also in-turn lead to a better reputation, more referrals, and long term wins.
3- Coming up with company name and logo
For branding purposes, you want to start off right by choosing a name that reflects what you are about as a company. Your name is the very first impression people will have with your company, so you want to make it unique, and if possible, purposeful or catchy.
We recommend staying away from generic, overly used names like "pro property management", "reliable property management" etc.
Get creative, stand-out in a good and memorable way.
Uniqueness - Your brand name should set you apart from other local competitors so that people can easily differentiate your business from theirs.
Modern and Simple - Both your name and logo should be simple and easy to remember. You don't want to complicate things with the name and you don't want to make a crazy logo with too much going on or too much colors. Sometimes, less is better.
4- Setting up property management software
Staying up-to-date with modern technology and trends is a critical part of starting a winning property management business. Modern property management software options make tasks like rent collection, maintenance requests, tenant screening, and more very streamlined and efficient. Start your company out on the right foot by taking advantage of this. You will thank yourself later.
Some of the popular property management software's that our own clients at Goodjuju use include Buildium, Appfolio, and Propertyware.
Important considerations when comparing PM Software's:
Pricing - Software will have different pricing structures and possibly setup fees. They also may require a minimum number of properties managed.
Features - Make sure you understand the differences in important features (if any) and choose a software that fits the most important features your business model requires.
Integrations, Support - Does the software offer a widget to embed "for rent" listings on your website? How is their support when dealing with any software issues?
5- Have a stunning, modern website built
To get found online by property owners and investors, you should make sure that you have a stunning property management website.
This ensures that you really stand out from your competition and make an amazing first impression to show potential clients you are the company to work with.
Your website should be acting like your best salesman 24/7. Building trust, providing helpful content/answers, all while encouraging visitors to take action.
Modern Design - If your site looks old and clunky, how do you expect your potential customers to trust you and your business? If your website is modern and fresh and incorporates all of the essential design and lead capture elements, you have a great foundation.
Trust and Lead Capture - Your new property management website needs to build trust with potential clients and be focused on generating property owner leads. Make sure you are showing enough social proof, and that you have clear calls to action defined and prominently displayed.
6- Build Organic Search Momentum Early On
You have already thought about it. How will your potential clients find you when they are searching online? How can you improve your organic exposure so that leads come to you naturally?
In order to be found online by potential customers who are searching for your services you will need to have a proven SEO strategy, and you should definitely start building that momentum early on.
Search engine optimization is not an overnight deal, it's a long haul. The results and ROI can be amazing if done correctly, but it takes time, and you want to get a head start.
Local Search - To make sure that potential clients can find you online when they are typing in certain property management related keywords online, you'll need a solid focus on local search engine optimization strategies. Local SEO is a little different than organic SEO, and it's critical for a local business like property management.
Organic Search - Organic search results are where your website pages and content can be found for specific searches like "how to evict a tenant in texas?", for example. Content marketing is one of many strategies you can use by creating helpful, unique, SEO optimized content that provides answers to often searched questions, you can be found and seen as a trusted source.
7- Prepare to build-up your online reputation
When potential clients are trying to choose what property manager they want to hire, they are going to consider your online reputation, and use it as a major factor in their decision. There is no way around this, and it's becoming more and more important each year that property managers focus on building a positive reputation online.
Tenants will often be the ones to tear down your review scores, and you need to be proactive about getting happy property owners and tenants to share their positive experiences. Ideally you should have a good system or process for doing this consistently.
Start Early - People can usually smell fake or phony reviews, so you don't want to have all your friends and family doing reviews. However, anyone who does have a legitimate reason to vouch for you or your new company should be asked to leave a review. Start with your early clients, vendors, etc.
Systemize - As you start taking on clients and growing, it's going to get difficult to always remember to ask people to review you online, send them the links, follow up, etc. Utilizing a professional reputation management service can simplify and systemize most of that.
8- Your Management Style/Structure
Do you plan on being a one-man-show or being able to immediately hire staff members to help with the day-to-day property management and leasing tasks? There are different ways to structure your company and offer your services as you grow, and you will want to have an idea about this so you can present your company structure to potential property owners as an advantage to them.
There are typically two common structures of a property management company, which are:
Portfolio Style - In the portfolio style of property management, the property manager handles all aspects of day-to-day management for any properties they manage. They do the leasing, the advertising, handle calls, schedule repairs, etc. They also have direct communication with the property owner. This model is very personalized and provides a high level of intimate service, but be aware of the high task-load to avoid being overworked. Take advantage of systems and software to make your work load manageable.
Departmental Style - In the departmental style of property management you would need different staff members to manage different things like leasing, maintenance, reception, etc. This can be an efficient style of a management company but typically it's not possible when starting a new company unless you have enough capital to support hiring a few more staff members.
9- Your fees and pricing structure
Your pricing/fee structure is yet another thing that will set your company apart from your competitors. Look at other companies in your area to get ideas about what is being offered in your local property management market.
Initial fees - You need to consider what your up-front fees will be. These would be things like a setup fee and leasing fee. Companies usually have varying options for this to differentiate themselves from others. Check out the companies in your area to see what they are offering to help you understand your unique value proposition in your market.
Monthly fees - Property management companies will usually offer either a percentage based management fee (ex 8% of monthly rent price) or a flat fee (ex $75 per month regardless of monthly rent price). You need to consider you own company and your competitors to determine what would be the best route for you and your company
10- Build relationships with local vendors
Property managers can get a lot of qualified leads from local vendors who work with home owners and landlords. For example: real estate agents, painters, plumbers, and handymen are all contractors who have a lot of connections with property owners. Networking with these vendors is a great way to get referrals for your company.