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Property Management Company Business Plan Template & Guidebook

Are you looking to start your own property management company but don't know where to start? Developing a comprehensive business plan is an essential part of any new venture and there is no better tool than the #1 Property Management Company Business Plan Template & Guidebook. This all-encompassing guide will help you to create a detailed strategy and roadmap for launching and managing your property management company. With best practices, tips, and resources included in the guide, you'll be well on your way to achieving success.


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How to Write a Property Management Company Business Plan in 7 Steps:

1. describe the purpose of your property management company business..

The first step to writing your business plan is to describe the purpose of your property management company business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a property management company business:

The mission of ABC Property Management Company is to deliver best-in-class services to every homeowner, tenant, and property owner in our service area. Through our commitment to excellence and personalized approach, we will strive to provide responsive, reliable, and cost-effective solutions that are tailored to each client’s needs. We are committed to achieving the highest levels of customer satisfaction in all aspects of our business.

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2. Products & Services Offered by Your Property Management Company Business.

The next step is to outline your products and services for your property management company business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

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3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your property management company business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your property management company business includes the following elements:

Target market

Customer base 

Product or service description

Competitive analysis

Marketing channels

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

What equipment, supplies, or permits are needed to run a property management company business?

To run a Property Management Company business, you will need the following equipment, supplies, and permits:

5. Management & Organization of Your Property Management Company Business.

The second part of your property management company business plan is to develop a management and organization section.

This section will cover all of the following:

6. Property Management Company Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a property management company business varies based on many different variables, but below are a few different types of startup costs for a property management company business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your property management company business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your property management company business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your property management company business plan:

business plan for startup property management company

Frequently Asked Questions About Property Management Company Business Plans:

Why do you need a business plan for a property management company business.

A business plan for a property management company business is important in order to guide the overall direction and goals of the business. It helps to provide a roadmap for how the business will be operated and managed, as well as defining budgets, forecasting growth, and establishing key metrics for success. A business plan also helps to secure financing, attract investors, and recruit top talent for the company.

Who should you ask for help with your property management company business plan?

You should ask an experienced business consultant or financial advisor for help with your property management company business plan. They can provide advice on important factors such as market analysis, competitive analysis, financial projections, and strategies for success. They may also be able to provide you with templates to get started and resources to help you along the way.

Can you write a property management company business plan yourself?

While it is possible to write a property management company business plan yourself, it is strongly recommended that you consult with a professional who has expertise in property management and business plan writing. A professional can help ensure the accuracy and completeness of your business plan and provide invaluable advice on how to make your plan realistic and successful.

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I'm Nick, co-founder of newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. In 2020, I left my job to build media websites and share my knowledge through newfoundr. Join me on my mission to make entrepreneurial success easier.

business plan for startup property management company

Property Management Business Plan Template

Business Plan Outline

Property Management Business Plan

You’ve come to the right place to create your property management business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their property management companies.

Below are links to each section of your property management business plan template:

Next Section: Executive Summary >

Property Management Business Plan FAQs

What is a property management business plan.

A property management business plan is a plan to start and/or grow your property management business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can  easily complete your property management business plan using our Property Management Business Plan Template here .

What Are the Main Types of Property Management Companies?

Property management companies can either be a small to medium portfolio property management company or a large or departmental property management company. The small to medium property portfolio management company usually has one main point of contact with an admin team working behind them. The latter type of property management company manages 500 to 1000+ properties.

What Are the Main Sources of Revenues and Expenses for a Property Management Company?

The main source of revenue for property management companies are management fees and maintenance markups. Revenue is also generated from commissions, lease ups, and upcharges.

The key expenses for property management companies are payroll and contractor fees, rent, supplies, and utilities.

How Do You Get Funding for Your Property Management Business Plan?

Property management companies are typically funded through small business loans, personal savings and credit card financing.

What are the Steps To Start a Property Management Business?

Starting a property management business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Property Management Business Plan - The first step in starting a business is to create a detailed property management business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your property management business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your property management business is in compliance with local laws.

3. Register Your Property Management Business - Once you have chosen a legal structure, the next step is to register your property management business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your property management business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Property Management Equipment & Supplies - In order to start your property management business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your property management business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful property management business:

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How To Write a Winning Property Management Business Plan + Template

Business Plan

Creating a business plan is essential for any business, but it can be especially helpful for property management businesses that want to improve their strategy and/or raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every property management business owner should include in their business plan.

Download the Ultimate Property Management Business Plan Template

What is a Property Management Business Plan?

A property management business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Property Management Business Plan?

A property management business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Property Management Business Plan

The following are the key components of a successful property management business plan:

Executive Summary

The executive summary of a property management business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your property management business, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your property management firm, mention this.

You will also include information about your chosen property management business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a property management business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, a property management business’ customers may include:

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or property management services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

Operations Plan

This part of your property management business plan should include the following information:

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a property management business include reaching $X in sales. Other examples include increasing the number of customers by X% each year, or expanding to a new market.

Management Team

List your team members here including their names and titles, as well as their expertise and experience relevant to your specific property management industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

Sample Income Statement for a Startup Property Management Company

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

Sample Balance Sheet for a Startup Property Management Company

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

Below is a sample of a projected cash flow statement for a startup property management business.

Sample Cash Flow Statement for a Startup Property Management Company

You will also want to include an appendix section which will include:

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your property management company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

Our guide will help you organize your thoughts and make sure you haven’t missed anything important. Once you have a good outline, flesh out each section with more detail.  

Finish Your Property Management Business Plan in 1 Day!

Wish there was a faster, easier way to finish your Property Management business plan?

With Growthink’s Ultimate Property Management Business Plan Template you can finish your plan in just 8 hours or less!

Full Guide On Starting a Property Management Business

business plan for startup property management company

As the former Head of Content at Connecteam, Rea was responsible for helping clients build smart, effective employee management strategies and brings years of experience and knowledge to help improve employee engagement.

Updated on January 6, 2023

Guides Real Estate

Sort Out The Legal Framework

Create a business plan, get the necessary licenses & certificates, get an office & website, hire the right people, get the right software, create your pricing structure, create a marketing strategy, it’s all about networking, wrapping up how to start a property management business.

The numbers are in and it’s clear that from 2020-2025 , “the property management industry is expected to grow, along with rising rental costs and rising demand for floor space from US businesses.”

Seeing as how the property management industry is very lucrative and is becoming more popular makes it clear that now is a great time to learn more about how to start a property management business.

In addition, the industry is projected to grow by $23.63 billion by 2026 which just goes to show that even despite current situations, the time has never been riper to become your own boss. 

We Share Our Full Guide On Starting a Property Management Business In 9 Easy Steps, See More Below!

The first step to starting a property management company is to establish all the legal entities required. As such, you need to choose which kind of legal entity you want your property company to follow as this determines how much regulatory paperwork will be required to file, personal liability in terms of investment properties in your business, and also the taxes you need to pay.

Most choose to establish a Limited Liability Corporation (LLC) or file as an incorporated business (S-Corp or C-Corp). However, each comes with its own set of pros and cons so talk with your attorney to learn which legal structure is the right choice for your property management company.

After all the legal aspects of starting a property management business are completed, you need to choose a business name and logo and should find a bank to finance your business. 

After you have completed step one of how to start a property management business, you will next need to create a business plan that maps out your property business from start to finish. In essence, a business plan describes how your property business will evolve from beginning to end. 

Download our free business plan template to get started. 

As we pointed out in the first tip, if you are in need of financial support from an investor or a financial institution then you have to create a business plan. 

Entrepreneur lists in this article what you should include in your business plan .

As you continue starting your property management business, you need to see if the state you’re in requires a specific license as only six states don’t require any. You cannot work until you obtain up-to-date licensing. 

The following are the most common licenses you need to obtain: 

It can help build credibility if you also obtain some certifications, for example, if you are a certified property manager then it can help you to also have a real estate broker’s license.

Connecteam's guide on how to start a property management business

In addition, join some associations to gain even more credibility and to grow your team through development opportunities. Look into the following: The Institute of Real Estate Management (IREM), National Apartment Association (NAA), National Association of Residential Property Managers (NARPM), and National Association of Realtors (NAR).

Now you need to start with an obvious step on how to start a property management business. Set up an office so you can meet with clients, current and prospective alike. (If you’re looking to keep business costs low then you can work from home and then can move to rent commercial office space as your business grows.)

Ensure you have all the necessary equipment and supplies to organize your workstation such as a laptop or computer, mobile phone, scanner, printer, fax machine, copier, file cabinet, and more.

As you’re establishing a physical office, start working on building your website. In 2020, it has never been more important to create an online presence. Everything is online now so make sure your customers can find you in the click of a button! This gives you credibility, enhances your chances of traffic and potential clients, and makes it easier for you to advertise your business.

There are two types of employees you’re going to want to hire. 

First, you need contractors to help manage maintenance and repairs for numerous properties. Whether you hire a handyman or a fully licensed contractor, make sure you hire someone dependable and affordable as you’ll likely create a lasting working relationship with them. 

Second, you also need to hire:

Now that’s just a small list of who to hire, check out this detailed list here on staff you need to hire as your business grows.

Your property management company can only ever be as good as its team. Therefore, you have to hire people with the right qualities and ask the right questions during the interview process.  

Whether you’re just starting out or are more experienced at running a property management business, you need the right property management software to drive efficiency, productivity, revenue, and deliver more leasing units.

A property management app allows you to streamline processes, manage day-to-day operations, enhance communication, while also allowing you to get ahead of the competition through direct oversight on where your business stands so that you can execute smarter business decisions.

In fact, 42% of property managers want to adopt new technologies to keep their many properties relevant to tenants in today’s market.

Many property managers choose Connecteam’s all-in-one employee management app to effortlessly run their property management business. Connecteam offers many robust features so that property managers can focus on the bigger picture:

The best task management app for employers and employees

#1 Property Management App

Connecteam is the best solution for property managers and is an all-in-one app equipped with everything your business needs to run daily operations smoothly.

As we wind down the steps in starting a property management company, the next important step is to create a pricing structure that allows for consistent income but is also desirable in attracting new clients. Coming in too low or too high on the market will only keep clients away, no matter how great your property is. 

The best way to establish desirable pricing for your area is to do some research! Call other property management companies in the area so you can discover what the going rates are. 

These are the most common fees to consider when you’re setting up your pricing structure:

Always be aware of what your competition is charging for these services so that you can consider what your business will offer when creating a pricing structure. 

You need effective marketing to run a successful property management business. Therefore, ensure that you maintain the following to boost your credibility and increase visibility: 

We can’t discuss how to start a property management business without mentioning how valuable networking is. You have to be looking for clients regularly, it’s very rare that they just appear out of nowhere! Networking as often as possible is key. 

“ Virgin conducted a study and found that 84% say they prefer in-person meetings because they help to build stronger, more meaningful business relationships, allow for more complex strategic thinking and – most importantly – are a better environment for tough, timely decision-making.”

This shows that networking allows you to close 40% more sales. However, you must be strategic when participating in events. For starters, the event has to be worth it, don’t waste your time. Second, when at events, ask to be introduced to build credibility, and don’t forget that networking is a two-way street so be respectful of time, and find a reason to follow up with the person you’re talking to. 

If you’re looking for even more tips and insights on effectively running your property management business, be sure to read our valuable guide on just that. 

With all of the tips we outlined above, you are well on your way to successfully launching your own property management business. It’s important to do your research so you can ensure all the T’s are crossed and I’s are dotted to ensure your company brings in revenue, creates productive employees , and happy tenants.

All-In-One Property Management App

Connecteam is the employee app that connects everything a property management business needs from field to office, all in one place. In the click of a button, you can connect your staff, manage day-to-day operations, improve employee experience and engagement, and drive your business forward.

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How to Start a Property Management Company

A property management company is a business that maintains commercial properties that are used for long and short-term rentals. These companies may manage everything from office buildings to apartments and storage units. Read through our detailed, step-by-step guide If you are thinking about starting a property management company.

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Starting a Property Management Company — Checklist

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Property Management Business Plan — Free Template

Use our free template in MS Word format to create a compelling property management business plan.

How to Start a Property Management Business:

If you're passionate about properties and the work that goes into successfully managing them, you might be wondering how to turn your interests into a profitable business. We've formulated this guide to show you how to do precisely that.

Jot down your ideas.

Your property management company needs a name that is easily recognizable and memorable. As you begin creating your business, you need to decide on a name that will help you to stand out. Start by writing down your ideas.

Use NameSnack to find property management business name ideas if you need a hand.

Pick a name that inspires confidence in people.

Top property management companies like Pinnacle, Alliance Real Estate, and Lincoln Property Company have names that sound organized and professional. You want to choose a name that communicates a sense of trust.

Your target market will be able to help you do this. Consider posting questionnaires on your social media platforms and in property management groups to obtain feedback.

Trademark your business name.

If you have decided on a property management business name, make sure that you secure a trademark as soon as possible so that no one else takes it. You can register a trademark at www.uspto.gov .

Familiarize yourself with the key elements of a business plan.

A business plan should outline the purpose of your business and any practical steps that you intend to take to establish and grow the business. Writing a plan for your property management business will help you to organize your strategy and present your vision to potential investors or stakeholders.

Your property management business plan should include the following:

Your business plan can be a point of reference as you launch your property management company.

Formulate your business plan.

Once you're familiar with the contents of a good business plan, you can get to writing one of your own.

We've put together a free property management business plan template to help you do this. You'll find it toward the top of this page.

If necessary, you can adjust your management, marketing, or operational sections in response to new financial constraints.

Learn about the main business structures.

Your property management business needs to be set up as a legal entity. The structure that you choose is important for tax purposes.

There are four basic business structures:

Choose your preferred business structure.

You can run your property management company using any one of the aforementioned structures. However, there are distinct advantages to setting up a corporation . For one thing, you can avoid the hefty tax burden that you may encounter if you choose to operate as a partnership. Additionally, you may want to avoid any structure that leaves you with personal liability.

Consult a lawyer and a tax professional to determine which legal structure makes the most sense for your business.

Calculate your expenses.

Starting a property management company is not cheap. Your property management company will need money for things like:

We've rounded up the most common expenses associated with opening a property management business to help you get a sense of what you can expect to pay.

Explore a variety of loan options.

You'll want to explore multiple avenues when starting your property management company. You can meet with your local bank to find out more about small business loans, or you can find a qualified lender that offers SBA loans.

As long as the interest rates aren't too high, loans can be an effective way of adding capital to your business so that you can purchase whatever you need to get your property management operations up and running.

Apply for a business credit card.

Business credit cards are great for short-term cash flow. Interest rates for credit cards are high, but if you just need a short term injection of capital to pay bills, a business credit card or line of credit might be the best solution.

Find out which license and/or permit you need.

Your state probably has a license or permit that you will need to obtain for your property management business. For example, in the state of California, property management companies are required to obtain a real estate broker's license.

Find out what specific criteria you need to meet by visiting your state's small business website.

We've rounded up a list of common, state-specific licensing requirements to jump start your research process.

When you're ready, search your state's small business website using the terms "property management" or "real estate" to find out if there are any special property management company requirements that apply to your business.

Apply for the license and/or permit.

In most cases, you can submit and pay for your application online.

Determine what risks you'll be exposed to.

Property management companies operate in a space that is heavy with liability issues. Any group that is given the responsibility of maintaining a property must be aware that they are in the care of a valuable physical asset that could be destroyed or damaged by weather, fire, vandalism, or some other accident.

Purchase the relevant insurance.

Your property management company should purchase several types of insurance, including:

You can contact an insurance provider or broker to request a quote for your property management company. A representative will be able to give you more information based on the details that you provide them about your business.

Major business insurance providers like Liberty Mutual and The Hartford offer special real estate insurance packages that are designed for property management companies. You may want to ask about these.

Decide whether to work from home or a commercial space.

It might be possible to start a property management business in your home, but with photocopiers, phones, employees and records, you may find it easier to have a commercial office space.

Choose whether to rent or purchase a commercial space.

You can either purchase a building or rent an office. Most property management startups opt to lease space because it is more affordable and gives them flexibility if their needs change.

WeWork and similar companies offer a shared workplace solutions that are worth considering.

Search for an office.

Meet with a real estate agent or consult online listings to find out what is available. If you need an office that can be easily visited by customers, find a location that is in your local business district or town center. Property management companies are always dealing with tenants, utility companies, and tradespeople, so you will probably want an office that is easy for these parties to visit.

Create a company website.

Register a domain name and build a site that explains who you are and what you offer. Having a website will increase your visibility and legitimacy.

You can use a website builder to create your own website.

Set up social media accounts.

You can enhance your online presence by creating social media accounts for your property management company. Facebook and Twitter pages, in particular, will make it easier for people to engage with you.

Join your local chamber of commerce.

Membership in your local chamber will give you access to exclusive business events and business-to-business networking opportunities. You may also be able to access local business services at a discounted price as a chamber member.

Outline your staffing requirements.

A growing property management business needs employees in order to keep up with services and continue to scale. Possible property management positions include:

Jot down which of these and other positions you'll need to fill, and how many people you'll need to do so.

Advertise your vacancies.

Once you have a sense of which positions you need to fill, you can go ahead and advertise the vacancies.

Social media platforms and free job boards are great options worth exploring.

Comb through the applications.

Depending on the number of applications you receive, you can do this manually or by using an applicant tracking system.

Look out for free software, as well as free trials of paid software.

Interview the shortlisted candidates.

By now, you'll have a good sense of who the top applicants are. Interview each of them to determine which individuals possess the skills and values that would make for a good fit.

Appoint the best candidates.

Finally, go ahead and extend job offers to the most suitably-qualified individuals.

Property management is a challenging but rewarding business. You can use these steps to guide you as you set out on your property management adventure.

Cost of Starting a Property Management Business:

Property management licenses by state:, property management metrics:, occupancy rate..

Property management companies need to maintain high occupancy rates in order to maximize their profits. Empty units or buildings represent an additional cost that is not offset by rental income. To calculate your occupancy rate, divide the number of units/properties you have leased or rented out by the total number of units or properties that you own.

Occupancy Rate = Units Rented Out / Total Units

For example , if you own 100 units, and 75 of them are rented out, you can calculate your occupancy rate using the formula:

Occupancy Rate = 75 / 100 Occupancy Rate = 0.75 or 75%

Tenant retention.

If a property management business has a steady turnover of tenants in commercial or residential units, it will be difficult for the business to have a steady, predictable stream of revenue. Your tenant retention rate shows you how well you are doing at retaining tenants. This rate can be calculated over a period of time, like a full calendar year.

(Current # of tenants / # at beginning of period) x 100 = Retention rate

For example , if you have 10 tenants at the start of the year, and there are 8 left at the end of the year, your retention rate looks like this:

Retention rate = (8 / 10) x 100 Retention rate = 80%

Tips on Starting a Property Management Company:

Property Management Firm Names

How much do property managers make?

Property managers make between $47,000 and $72,000 per year, according to our research. Property managers generally make more money as their years of experience increase.

What are some books about starting a property management company?

How much does it cost to start a property management company?

At a minimum, it costs approximately $3,000.00 to start a property management company when you consider legal fees, office space, insurance, licensing, and basic advertising expenses.

What are local SEM essentials for property management companies?

How do you start a property management business?

Which tools can i use to automate my property management tasks.

There are many different property management software solutions on the market that you can use to simplify the management of a property or properties. Great free options include Innago and TenantCloud, while leading, paid options include Buildium and Hemlane.

Do I need a real estate license to conduct property management?

It depends on what state you are doing business in. In some cases, the person who is responsible for managing properties and collecting rent must have a license. Consult your state's business website for more information.

How can I improve my property management company?

Being more profitable involves knowing how to grow a property management business. Growth is achieved by increasing your marketing spend to reach more customers, improving the efficiency of your workforce by employing multi-skilled property specialists or contracting services, doing thorough maintenance work to avoid frequent repairs, aiming for lease renewals and ensuring that you have good, steady tenants, and diversifying into commercial and industrial spaces.

Related Articles

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How to Start a Property Management Company: Step-By-Step Guide

Last Updated: February 2, 2023

What Is Property Management?

Property management: the most important consideration, be ready for start-up costs and other requirements , key takeaways, create a business plan, promotion of your business is important, build your client base and start networking.

Are you looking for a business opportunity with a high potential for growth? If so, starting a company that deals with property management may be the perfect venture for you. Property management is a rapidly growing industry , and there is always a demand for qualified professionals.

In this step-by-step guide, we will walk you through everything you need to know about how to start a property management company. Let’s get started!

Property management companies deal with the management, care, and control of real estate properties on behalf of the property owner . Property managers are responsible for finding tenants, negotiating lease contracts and fees, collecting rent, conducting maintenance on a property, and resolving any issues that may arise. The main goal of a property manager is to maximize the profit while minimizing the cost. They make sure that tenants are satisfied with their living experience and that landlords receive payment on time each month without having to deal with any issues themselves.

There are many things to consider when you decide on starting a property management company. Some of the most important ones are your ideas, goals , and the skills you need for dealing with such a business .

The first thing to consider when starting this business is the idea of what kind of properties you’d like to manage :

Make sure that your idea fits well into the geographical area you live and work in.

In order to start a property management company, you have to have both your short- and long-term goals figured out . Think about:

Additionally, having a plan B is always a good idea, just in case your original project doesn’t work out as planned.

When starting any kind of business, you have to make sure you have the skills required in order to succeed. Apart from knowing the landlord-tenant laws and how the leasing process works, you also have to possess good customer service skills, organization, time-management skills, and the ability to multitask for starting a property management business.

How to Start a Property Management Company?

The two most important things you should do before starting a property management company are:

This includes researching the level of demand for such a company in your area and discovering how many other companies are offering the same services. Your property management startup checklist should include price comparison, so you can see if you can undercut your competition by charging less, or if you can offer some different services than they do.

Starting your own property management company is not cheap. There will be start-up costs , ongoing expenses, such as marketing to get clients, and employees who need salaries paid regularly. You’ll also have to face legal fees for things such as license applications or incorporation paperwork.

When estimating your start-up costs, it’s important to remember that these can vary greatly depending on the size and location of your new company . When thinking about how to start your property management business, consider gathering estimates from multiple sources before starting down any path. You can also consult some books for starting a business, as they can offer plenty of useful advice.

Before starting any business, it’s important to have a solid business plan in place. This document will outline your goals for the company, strategies on how you’ll achieve them, and what resources (financial and otherwise) you’ll need to make it happen. Make sure your business plan includes the following things:

The work that you put into creating your business plan will help you obtain the skills you need , such as analyzing your competition and examining your finances, which will prove to be very important for your company’s success.

When you consider starting your property management company, you should also come up with an idea of how you will promote it locally or globally. Think about whether creating an online presence, either on your own or via a press release distribution service, will help in spreading the word about your business. Another point to consider is what type of advertisement will provoke more engagement from both landlords and tenants.

When setting up a property management company, come up with some catchy slogans or taglines which people can remember easily. You should also make sure that your company name and logo stand out from the others and are easily recognizable.

Once you’ve established your business, it’s time to start building up your client base. This means contacting other landlords or property owners who may be interested in working with someone like yourself (i.e., starting a relationship based on mutual trust). A good starting point might include attending local trade shows related specifically to those industries that could benefit from hiring professionals to manage their real estate investments. After opening a property management company, don’t forget to network with other businesses too. This includes real estate firms, banks, or any companies that might deal with tenants or landlords. The more people you know who are familiar with your business, the better.

Launching a property management business can prove to be a very profitable venture, but it’s important to remember that there are many things that need to be taken into account in order for it to stand out and succeed. By following the steps listed in this article, you should have everything you need to get started! Good luck!

If you want to set up a property management company, know that the barrier to entry is relatively low. The start-up costs are affordable, ranging from $2,000 to $10,000. No advanced degrees are required, and you can enter this business with little experience.

In order for your property management business to be successful, you must start by doing in-depth research about the industry and your competition. It’s also important to figure out your goals.

A NARPM survey showed that around 20% of the property management company’s revenue is profit. This makes thinking about how to start a property management company worthwhile, as it proves that property management is a great way to build residual income from real estate.

One of the biggest reasons property management companies fail is because of loose accounting. This results in inaccurate expenses, missing income, overdue payments, inaccurate rent rolls, and much more. Another reason is that many of them don’t research the market and its potential.


by Aleksandar Bošnjak

Alex is an IT wizz gone SEO gone fire-juggler. We’re not even joking. When he isn’t researching why one personal loan is better than the other and which piece of hardware you should buy next, he’s rollerblading or selling homes (because he does that, too, the smarty-pants).

Latest from Aleksandar

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business plan for startup property management company

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Property Management Business Plan

Are you thinking of starting a property management services We have prepared a solid property management business plan sample that guides you on every stage of your business plan writing

business plan for startup property management company

People buy multiple properties these days, it can be for investment or to act as a future home, office space, some dream project, or whatnot.

And as they have so many properties, they’ll surely need someone to manage them and deal with all aspects of having a property. Also, as most people are running short of time more often than not. Hence, they hire property managers to help them deal with their property efficiently and effectively.

So, it comes as no surprise that the property management business is growing. And if you are planning to get into it, all you need is a few tips and a property management business plan.

If you are planning to start a new property management business, the first thing you will need is a business plan. Use our sample Maxwell – Property Management Business Plan  to start writing your business plan in no time.

Before you start writing your business plan for your new property management business, spend as much time as you can reading through some examples of real estate-related business plans .

Industry Overview

The global property management market stood at a whopping market value of 13.88 billion US dollars in 2020 and isn’t going to slow down anytime soon.

The major reason for the growth in this industry is due to the requirement of mobility management as companies are promoting remote work due to the pandemic.

The other factors that have affected the property market are the adoption of technology, software services, and other such things which have brought about a change in trends in the real estate market .

Things to Consider Before Writing a Property Management Business Plan

Build relevant skills, join associations and build your network.

Networking is a crucial aspect in every field related to real estate, hence it is essential for your property management business too. Your network should be good and diverse and consist of a variety of people, even if they are your competitors. You’ll never know who might get you your next deal.

Use Technology

Build your website, chalking out your business plan.

Reading sample business plans will give you a good idea of what you’re aiming for and also it will show you the different sections that different entrepreneurs include and the language they use to write about themselves and their business plans.

We have created this sample Maxwell – Property Management Business Plan for you to get a good idea about how perfect a property management business plan should look and what details you will need to include in your stunning business plan.

Property Management Business Plan Outline

This is the standard property management business plan outline which will cover all important sections that you should include in your business plan.

After getting started with Upmetrics , you can copy this sample property management business plan into your business plan and modify the required information and download your property management business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

business plan for startup property management company

Business Planning Resources

We have plenty of  free business planning resources  available to help you with your planning. You can download our resources to learn all about business planning.


Not found what you are looking for? Explore our 200+ sample business plans to find match for your business.

business plan for startup property management company

DISCLAIMER: The business plans, templates, and articles contained on upmetrics.co are not to be considered as legal advice. All content is for informational purposes, and upmetrics makes no claim as to accuracy, legality or suitability. The site owner shall not be held liable for any errors, omissions or for damages of any kind.

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business plan for startup property management company

by Stephen Michael White

January 14, 2020

property management business plan

Welcome to the world of property management. Perhaps you’ve already been acting as a landlord to one property for a few months or years now, and you’re ready to expand. Maybe you haven’t actually bought any property yet, but you’ve been itching to be able to call yourself a landlord.

Regardless of how you ended up here, ready to flesh out your property management business plan, welcome to this exciting world!

While many people become landlords almost accidentally as they move houses and hold onto their former properties, there needs to be intention in your business as you grow and move forward if you want to succeed. Without a plan, you’ll be spreading your efforts ineffectively. That will hurt your bottom line.

To succeed in any entrepreneurial effort, you need to have a plan. Business plans can take many different shapes and forms, but the plan needs to be effective for you. Goals, progress points, and overall ambition can be harnessed and directed through a simple document.

Now, it’s time to learn how to create a business plan for property management your way. It’s time to pave your path to success!

A Table Of Contents For Creating Your Business Plan

What is a property management business plan, why you need a business plan, what to do before your write your plan, what to cover in your plan, evaluating and marketing properties.

what is property management business plan

There is no one-size-fits-all business plan model. In fact, property managers are all likely to have a wide variety of ideas about what their long-term goals are and how they will get there. Additionally, individuals have different short-term goals that act as waymarkers on their path to long-term success.

The business plan is a living document that outlines the idea of how to get from point A to point B. As things change, the document can change, too. If a great property suddenly becomes available when your short-term goals didn’t include a new property, it might be time to adjust the plan!

Part of the beauty and wonder of a business plan is that it should work and grow with you. Sticking to your plans is important, but it is also important to recognize that goals and best steps for success will change along the way. As long as you keep evolving, make sure that you keep your business plan up-to-date with you!

Note: Owner And/Or Manager

property owner manager

On the flip side, you might want to start a property management business that takes on investor clients. These clients own properties, and you manage them. Just as most people tend to do a little bit of both, this guide will cover a little bit of both, too!

There are a few key reasons that you need a business plan. First, you should want to have one to help guide you. Working on your own or with a small team can be overwhelming at times, and you may lose track of where to focus your energy.

When you have a business plan, you can turn to it to find guidance and get back on course.

Another reason that many new property managers want to figure out how to write a property management business plan is because they want to get a loan. Most financial institutions will not give loans to investors unless they have proof of business plans, so having a solid plan in hand can help you get the funds you need to kickstart your business.

Of course, there are many reasons that having a business plan as a property manager might be a good idea. There are even a few reasons that you might not need one right now! Let’s briefly review some of the primary pros and cons of creating your own business plan.

Organize Your Ideas

One of the biggest benefits of creating your own personal business plan is that you can organize your ideas and see how they all fit together. It can help you figure out how to get into this business at all !

Thinking through what you want to do with your business might lead you on twenty tangents; getting them all on paper can help you link up related and relevant ideas.

Regular Guidance

As mentioned, it’s easy to get lost in the world of property management. When you’re dealing with the day-to-day tasks of being a landlord and you also want to expand your investments, you might feel like you don’t have enough brainpower to do it all.

Having the guidance of a solid business plan to recenter and keep you on track is a golden ticket to success.

Pitch To Clients

Another huge benefit of having this document ready to go is that you will be able to bring in clients ASAP! Running a rental property management company will rely on you having a regular stream of investor clients that need their properties handled, so you want to be able to show them your plans and how you will help them succeed.

Adjust As You Go

Another cool thing about business plans is that they should always be written as a living document. A living document is a document that is meant to be changed and adjusted over time. As your business goals and needs change, your document can, too.

Secure Support

Do you want to get backing from a financial institution for your first big investment? Are you hoping to grow a small team to help your business grow? Using a business plan to secure these types of support is a great technique. When you show that you are planning for what’s next, you’ll be sure to find others to support your cause.

Plan Your Next Steps

Finally, writing a business plan can make you think ahead. Many people focus solely on what they want to do in the immediate future. It’s good to live in the moment, but you also need to think about your long-term investment payoff to ensure that the small steps you take today help you make a giant leap in the future.

Time Consuming

The biggest con about a business plan is that it can be very time-consuming to put together, but the time that you save by having this document available makes that investment well worth it for most. If you follow the rest of the guide that we’re sharing today, this process can even go a little bit faster than usual!

Some landlords find the prospect of writing out the one-month, three-month, or three-year future of the business to be very daunting. You should put a lot of passion into the plan’s creation, but you should also remember that the document will never be complete or uneditable. Let go of some of the stress by reminding yourself that adjustments can be made as needed.

Potentially Unnecessary

If you are just dabbling with the idea of becoming a landlord, it might not be necessary for you to dive deep in property management business plans just yet. Not every landlord needs to have a full-fledged rental property or property management business.

Managing just one property can be enough for many people, and those people won’t be needing a business plan to organize themselves.

If, however, it’s time to consider yourself a full business , it’s time to create your plan.

Before you write your plan, there are a few things that you should think about. We recommend getting a blank notebook and using this notebook to jot down any and all ideas that you have about the rental business. Do this for at least one week, and then re-read through the ideas for another week. Add more as you go.

If you aren’t feeling inspired enough to start from scratch, these questions might help you think more about what type of business you want to create and why:

These questions are in no way comprehensive of all the things that you could think about. The idea is that you want to create a brain dump of everything that has been circulating when you think about the business. With all of these scribbles, you can start creating your property management company business plan.

You now have a large list of ideas, thoughts, and dreams about your business. It’s time to formalize those ideas and get them into an organized and achievable plan.

In this part of the guide, we’re going to concentrate on the different sections that you should put into your property management business plan. It’s impossible for us to cover every single thing that you might want to include, but remember that you can be flexible about your plan. Adjust as you need to, but remember that all of these sections are included for a reason.

Our Services & Business Model

This section covers who your business is, what they do, and how they are generally structured. Is it strictly a management company, or is it also an investment company? This small profile should bring clarity to that question.

Our Mission & Goals

Next, outline your short and long-term goals for the business. If possible, it’s also great to create a general mission statement that you can use to pitch your business to clients.

Team Structure

What kind of positions will you have in the business, and what are the position’s responsibilities? Outline the structure of the team, and be sure to update this part of the document as your team expands.

Services Offered

What does the business offer clients? What comes in standard packages, and what must be paid for additionally to complete?

Fee Structure

Cover the general fee structure, and update the fees as soon as they change so that all information included in the document about your fees is accurate.

Finding Clients/Properties

This section should detail how you plan to pitch to clients, what your ideal market is, and what types of properties you expect to run or invest in.

How will your business determine the rental value of a client’s property and market it so that it stands out in a rental-heavy industry?

Screening Tenants

Detail your screening best practices, and be sure to include information about your compliance for federal, state, and local laws when screening. Including expected turnover rate can make for an interesting metric here.

Rent Collection

This section should explain the various types of rent collection that will be available, and it should also include information about how rent will be collected or transferred to the primary owners.

Inspections and Maintenance

A complete guide of inspections needed, maintenance schedules, and what needs to be done in the case of an emergency should also be included in the business plan.

Continuing Education

If there are skills that you need to learn or licenses that you need to get to operate the business legally, you will want to outline how you are going to accomplish these goals in the business plan.

Finally, it is important to give your expected cash flow and budget for each year as well as for sample properties and clients. By creating some basic projections based on old data where available, it will be a little bit easier to plan for the future.

You Can Find Success In A Plan!

Setting up a property management business plan just makes sense if you’re ready to expand your business by buying more property or bringing on more clients that need help with their properties. The only way to smoothly transition into a new phase of your career is to set up a clear plan!

Using a business plan might seem like an old school idea, but it is actually an incredibly invaluable idea that still has a lot of worth and merit in the industry today. What are you waiting for? It’s time for your future to be planned!

business plan for startup property management company

New York State

Full guide on how to navigate COVID-19 as a landlord or renter in NYS:   http://rentprep.com/landlord-tips/coronavirus-resources-new-york/

General Landlord Resources – https://hcr.ny.gov/ State Mortgage & Expense Forbearance Resource Page – https://www.dfs.ny.gov/ State Eviction & Nonpayment Resource Page – https://www.nyhousing.org/ State Rent Assistance Resource Page – https://access.nyc.gov/ Business Assistance – https://www1.nyc.gov/

Q: Can I still close on my property in state? A: Yes – https://www.cnn.com/2020/03/19/success/real-estate-coronavirus/index.html

Q: Do I still have to pay property taxes? A: Yes – https://portal.311.nyc.gov/article/?kanumber=KA-01253

Q: Do I still have to pay my water bill? A: Depends on the city you live in – https://www.politico.com/

Content here.

We earn commissions if you shop through the links below.  Read more

Back to All Business Ideas

How to Start a Property Management Business

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Updated on March 7, 2023

How to Start a Property Management Business

Investment range

$3,050 - $7,100

Revenue potential

$48,000 - $180,000 p.a.

Time to build

Profit potential

$43,000 - $72,000 p.a.

Industry trend

Property managers work for building owners to rent out rental property units, collect payments, and perform property maintenance. That might not sound like much, but it’s a $100 billion US industry expected to nearly double in the years ahead. You could start your own property management company with just a small investment and get in on the action. You’ll need either a real estate broker’s license or a property manager’s license, depending on your state, but you can acquire either within a few months and start making money. 

Becoming an entrepreneur, however, requires diligence and knowledge. Luckily, after reading this step-by-step guide you’ll have all the knowledge you need to launch a successful property management company.


Looking to form an LLC? Check out the Best LLC Formation Services .

Step 1: Decide if the Business Is Right for You

Pros and cons.

Starting a property management company has pros and cons to consider before deciding if it’s right for you.

Property management industry trends

Industry size and growth.

property management industry size and growth

Trends and challenges

Trends in the property management industry include:

Challenges in the property management industry include:

property management industry Trends and Challenges

Consumer spending

property management industry consumer spending

Demand hotspots

property management demand hotspots

Price differences across the country

property management price differences

How much does it cost to start a property management business?

Startup costs for a property management business range from $3,000 to $7,000. The main costs are for education and licensing, and a website. 

Education and licensing requirements vary by state but can usually be completed in a few months for under $3,000. You can also become a certified property manager through the Institute of Real Estate Management . You must have three years of experience to become certified. 

How much can you earn from a property management business?

A property manager earns 10% of the rent collected. If you’re working by yourself from home, your profit margin should be about 90%.

In your first year or two, you could manage 40 units at $1,000 rent each, bringing in $480,000 in total rent. Your annual revenue would be 10% of this amount, or $48,000. This would mean more than $43,000 in profit, assuming that 90% margin. As you grow your client base, you could start managing 150 units at $1,000 rent. At this stage, you’d rent a commercial space and hire staff, reducing your profit margin to around 40%. With annual revenue of $180,000, you’d make a tidy profit of $72,000.

property management business earnings forecast

What barriers to entry are there?

There are a few barriers to entry for a property management business. Your biggest challenges will be:

Related Business Ideas

How to Start a Property Management Business

How to Start a Rental Property Business

How to Start a Property Management Business

How to Start a Real Estate Business

How to Start a Property Management Business

How to Start a House Flipping Business

Step 2: hone your idea.

Now that you know what’s involved in starting a property management business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research property management businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a property management company that offers 24-hour maintenance. 

business plan for startup property management company

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as single-family rental management.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

First of all, you can decide whether you want to be a residential property manager or a commercial property manager. Either way, you should offer a full range of property management services to be competitive in the market. These services include:

How much should you charge for property management?

Property managers make between 8% and 12% of rents collected, for an average of 10%. You should check the prices of property management companies in your area to make sure that your prices are competitive. When working by yourself, you should aim for a profit margin of 90%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be developers and property owners. Your best bet is to find them on LinkedIn. Once you have partner properties, your target market will be potential tenants. You can spread out your marketing to include sites like TikTok, Instagram, and Facebook.

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

property management business idea rating

Step 3: Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

Powered by GoDaddy.com

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

what to include in a business plan

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

business plan for startup property management company

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to property management businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your property management business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

types of business structures

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have. 

Form Your LLC

Choose Your State

We recommend ZenBusiness as the Best LLC Service for 2023

business plan for startup property management company

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

business plan for startup property management company

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

Bank and SBA loans are probably the best options, other than friends and family, for funding a property management business. 

business plan for startup property management company

Step 8: Apply for Licenses/Permits

Starting a property management business requires obtaining a number of licenses and permits from local, state, and federal governments.

You will either need a real estate broker’s license or a property management license. Check with your state for requirements.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your property management business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

types of business insurance

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as appfolio , Buildium , or Property Matrix , to manage your portfolio, payments, scheduling, application, and leases.

Some of your business will come from the casual online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness. 

Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products: 

Kickstart Marketing

Take advantage of your website, social media presence, and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

You can create your own website using services like WordPress , Wix , or Squarespace . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your property management business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your property management business could be:

unique selling proposition

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a property management business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in property management for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in property management. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a property management business include:

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Start Making Money!

Property management is a booming industry, and fairly easy to get into. You just need to get the appropriate licenses and start finding real estate investors who need management services. You can start from home as a solopreneur, and work your way up from there, building a big portfolio of properties under your care. Having great networking skills would come in handy for this type of business, so be sure to brush up on those.

You’ve got all the information you need, so now it’s time to launch your new property management company and start your lucrative career!

Property Management Business FAQs

Yes, you can make between 8% and 12% of the total rent of all the properties you manage. You just need to offer great services both to the property owners and the tenants.

You can connect with real estate investors on LinkedIn and message them directly. You can also network with realtors, some of whom may be investors or who know investors.

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Step By Step Business

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How to Start a Property Management Business

Property management is exciting because there is always something that needs to be done. Normal maintenance can be scheduled; however, pipes may break in the middle of the night and emergencies can come up frequently. A property owner (landlord) can act as a property manager, or he or she can hire a professional property management company to take on full or partial responsibility for the management of a property or properties. The goal of a property management company is to reduce risks and maximize income for the property owners.

Ready to form your LLC? Check out the Top LLC Formation Services .

Learn how to start your own Property Management Business and whether it is the right fit for you.

Property Management Business Image

Start a property management business by following these 10 steps:

There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your property management business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

How much can you charge customers?

What will you name your business.

Luckily we have done a lot of this research for you.

What are the costs involved in opening a property management business?

There is little cost to start this business if the property management company manages a single building or a few units because most of the work is done onsite at the property and expenses for repairs and maintenance can be charged to the property owner. For this type of operation, the only expense is having a mobile phone and the time needed to manage the property.

If you want to expand to managing multiple properties then you will need an office and staff to help handle the workload. Real estate brokers who already have an office and staff can enter this business by simply adding more staff that is tasked to provide property management services for the property owners.

What are the ongoing expenses for a property management business?

If the company manages multiple properties, you will need to pay rent for a small office, pay for utilities, and pay staff to answer the phones and manage the workload. Typical office rent is around $2,000 per month. Utilities are around $200 to $300 per month, which includes electrical, telephones, and an Internet connection.

The amount needed for staff depends on the size of the company. Payscale reports that the typical pay for an administrative worker in this sector is about $30,000 per year. Assistant property managers make about $40,000 per year. Company managers and regional managers in this sector make about $73,000 per year.

Who is the target market?

The clients for this business are real estate investors that own rental properties. The can own a single property or be a large Real Estate Investment Trust (REIT) that owns thousands of properties.

How does a property management business make money?

Some property management companies charge professional fees for managing property owned by a third party, while other property managers acquire the properties they manage and keep all rents derived from their property. There are property management companies that do both. Starting out, it may not be possible to directly acquire rental properties unless partnered with a real estate investor that can provide funds to buy a property.

There are five popular business models in this industry sector, which are:

Property management companies that provide full-service management, which means the management company has full responsibility for the property, usually earn 10% to 15% of the rental income collected, with the balance paid to the property owners. This is the most common metric used in this business.

For example, a property management company has the contract to manage a multi-tenant complex with 100 units that rent for an average of $500 per month each. If they maintain an annual occupancy rate of 90%, which is really good, the annual earnings for the property management would be calculated as follows:

How much profit can a property management business make?

A staff of one manager, one assistant manager, and one administrative assistant with a modest office costs about $143,000 per year, employee taxes and benefits would be about 30% of the pay, which is around $34,000 and a small office costs about $27,000 per year. This means expenses for the year would be about $204,000.

To make a profit using our example given above for managing 100 units, the property management company would need to have 400 units under management that are similar to the example given. Gross revenues would be $216,000 to $324,000 per year. Gross profits before taxes would be $12,000 at the lower end of the scale (10% fee) and $120,000 (15%) at the higher end of the scale.

How can you make your business more profitable?

Besides managing the properties, you can provide the repairs and renovation services as a sideline business. Everything that needs to be done for the rental properties is a source of potential extra earnings as long as the price of the services is competitive with the local marketplace and full disclosure of the potential conflict of interest is made to the property owner.

A few examples of the possible sideline support businesses include:

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Property Management Business Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

It's very important to secure your domain name before someone else does.

Find a Domain Now

Powered by godaddy.com, step 2: form a legal entity.

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your property management business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).

You can learn more about small business taxes in these guides:

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Open net 30 accounts

Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.

NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

Recommended : Read our best net 30 vendors , guide and start building business credit.

Get a business credit card

Getting a business credit card helps you:

Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

In most states, you need to have a real estate license or a property management license. All Property Management provides a list of each state’s licensing requirement . 

In addition to broker licensing requirements, additional state permits and licenses may be needed to operate a property management business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Local licensing or permitting requirements may also apply. For more information:

Service Agreement

Property management businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.

Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your property management business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.

Broker License

Most states require property managers to have a real estate brokers license. Requirements for obtaining a broker’s license vary by state. These requirements typically include the prior attainment of a real estate agent license, hours in the workforce, coursework, and the successful completion of a broker’s license exam.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Learn more about General Liability Insurance .

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Recommended: Learn what business insurance for your Property Management Business will cost.

Business Insurance for Property Management Business

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a property management business

You prove the ability for your property management company to manage properties by doing it. Real estate owners notice this success and if your company does the job well for a single property, you will get plenty of offers to manage other properties.

Sending reports to property owners about your property management successes is a terrific way to find new business. The owners of properties and their contact information are easily found by simply searching the public tax records.

Going to seminars or conferences that real estate investors attend, networking with them, and handing out business cards is good. Joining business associations, social clubs, and the local chamber of commerce helps promote the business.

Networking online by using the LinkedIn social media system for business persons is a good idea. Having a website with high-quality content that is designed for search engine optimization (SEO) and using pay-per-click (PPC) advertising campaigns on the Internet to create web traffic to your website are also effective.

How to keep customers coming back

Property owners appreciate property management companies that keep everything rented. The goal is always to have a high occupancy rate. Owners also appreciate property management companies that are very successful at finding good quality tenants by conducting a credit and rental history search to make sure the rental applicants have a good history of renting from others, without any record of evictions.

A track record of proven, superb performance in managing buildings will help you retain your customers. This is also the attraction for other property owners to engage your company for managing their buildings and will help expand your operations. Real estate owners are always looking for great property management companies, so if you show a job well done you will retain your existing property owners and find many more property owners that will contract with you for property management services.

Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

Using our website building guides , the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Start a Property Management Business in your State

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Welcome to the Startup Savant podcast , where we interview real startup founders at every stage of the entrepreneurial journey, from launch to scale.

Is this Business Right For You?

Your company will be on-call 24/7 and you must enjoy dealing with all kinds of people. The best property management companies treat the properties as if they are the owners, which they also might be. They have full or partial responsibility for the building(s) that they manage and are good at screening tenants to find good ones, without discriminating. They are problem solvers and take appropriate and prompt legal action to evict destructive and/or non-paying tenants. You will have to stay calm and manage emergencies without getting overly stressed about the problems because there will be a constant stream of new problems to deal with.

Real estate brokers are good candidates for starting a property management company as either a division or a subsidiary because they already have many contacts with property owners, as well as relevant experience in the industry.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a property management business?

As an owner of a property management company, you will need to be able to manage properties remotely for routine matters and be on-site for matters that require personal attention, such as emergencies and showing vacant apartments or rental spaces if the building is a commercial one.

For example, if your property management company manages a large group of single family homes that are rental units you will be constantly checking on them. You will be working with the vacant ones to get them rented as fast as possible. You will be constantly inspecting properties to make sure everything is OK with them and any work needed is being done properly.

You will have an extensive list of to-do items, which changes every day. There is industry-specific property management software available that helps keep track of everything. You must be able to multi-task and constantly get the most critical things accomplished as fast as possible.

Rental properties need constant maintenance. Any vacant properties need to be cleaned up and repaired quickly to find a new renter. The main responsibilities are to keep everything in good condition, manage the tenant relations, and show the vacant places, which are made attractive to reduce the "down time" when the rental properties are vacant.

What are some skills and experiences that will help you build a successful property management business?

Because it is very difficult to remove a bad tenant, skilled property managers will need to be thorough and meticulous in their professional life. Being organized will not only make the job easier, but it will also help you respond quickly whenever issues do come up, whether it is trouble with a tenant, or with the property itself.

You should also be comfortable dealing with all kinds of people.

Having worked for about three years as a property manager prior to starting your own property management company is a very good idea.

What is the growth potential for a property management business?

A privately-owned REIT called Blackstone in the past years, after the real estate market collapse, bought about 50,000 single-family homes all across the USA, with the intention to convert those properties to rental units. A property management company that lands a contract with Blackstone to manage their rental properties would earn many millions of dollars each year.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

How and when to build a team

There needs to be an appropriate level of staff that is capable of managing the workload. Adding new staff when increasing the numbers of properties that the company has under management is fairly straightforward. The workload sets the pace and the income earned sets the price you can pay for the additional staff.

Get more ideas with our Business Ideas Generator .

Check out our How to Start a Business page.

Sign up at the Business Center to access useful tools for your business.

Useful Links

Industry opportunities.

Real World Examples

Further Reading

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Start a Property Management Company: Beginners Guide

The Beginners Guide to Starting a Property Management Business

Starting a property management company involves an incredible amount of hard work and knowledge in order to succeed. This is especially true in the real estate industry. When somebody decides to start a business of their own, they are committing to spending countless hours dedicated to succeeding. But although there are endless success-driven individuals who are willing to put in the work necessary to succeed, they may not even know where to begin.

If this sounds anything like you, you have come to the right place. Below, we have outlined the entire process of how to start a property management business. We also included some general information and tools that could benefit you along the way.

What is a Property Management Company?

One of the first things that you should be very familiar with when starting your property management company is: What are you going to be doing ?

In simple terms, a property management company is responsible for assisting landlords with various day-to-day tasks of real estate management. The company allows the landlord to not have to worry much about the mundane responsibilities that they deal with.

Now, different property management companies may provide different services, but many of them revolve around similar basic services, including:

Overall, your property management company could be responsible for all of these services, and maybe even more. These are only the basic responsibilities that landlords have to deal with, until they find a reliable property management company.

Still interested? Read on to familiarize yourself with the entire process of how to start a property management company.

How to start a Property Management Company

If you are already committed to starting your business, you are already one step ahead of everyone else. The next step is to gather the necessary knowledge and procedure to make sure that you can execute your idea.

Below, we have listed a comprehensive list of steps that, if followed correctly, will provide you with a robust grasp of what needs to be done to start a property management business.

1. Learn about your state's laws and legal requirements

This is an essential foundation that must be done before anything else in the company. In every state, there is a long list of laws that must be followed in order to avoid any legal conflicts with your business.

Although some of the laws are pretty self-explanatory, some of them can be confusing, and it is important to understand them to their full extent, especially the eviction laws and landlord-tenant laws.

Eviction Laws

In the real estate industry, an eviction is when a landlord forces a tenant to move out of the property. There are many steps that must be taken before carrying out the eviction as it could become a legal disaster. There are also many actions that a landlord is not allowed to take when carrying out an eviction. If the landlord were to break any eviction laws, they could face a heft lawsuit.

Not sure about your state's eviction laws? Find them here to find out exactly what they entail.

Landlord-Tenant Laws

Landlord-Tenant laws are laws and regulations that govern the way that commercial and residential properties are rented out. These laws apply to both the landlord and the tenant, and they should be followed by both parties as well.

As a property management company, it is important that your clients are aware of the legal requirements and regulations. These rules must be followed in order to avoid any legal conflict or lawsuits. If you want to learn about your state's landlord-tenant laws, visit this website to learn everything you need to know.

2. Acquire the necessary licenses and certifications

In most states, it is required that individuals involved in real estate complete a formal education or certification before beginning. Although it may not be required in your state, you should still get some sort of license or certification. This serves to attract more clients and be more knowledgeable about the business.

As a property manager, an important license to obtain before starting your business is the Real Estate Property Management License.  This license provides specific training on how to effectively act as a middleman between the property owner and the tenant.

Another license that may be useful to obtain before starting your property management company is a Real Estate Broker's License. This license, along with the coursework and exam, covers various topics like property management, insurance, leases, and many more.

There are only a handful of states that do not require such certification to become a property manager, so it is important that you make sure that you are up-to-date with your state's requirements and that you are following all of them precisely.

3. Write a Business Plan

Now that you have completed the homework for your business, it is time to actually start thinking about the functionality and framework of your company. This is a crucial step when starting up your business, as this is where you are going to describe every single aspect of your business, from marketing strategies, to a potential customer base, to your short-term and long-term goals.

Along with writing a business plan, it is important that you determine where you are going to conduct business, and with what financial resources. This means that you should make sure that you have a suitable workspace that suits your needs as a business owner. You should also set up a business bank account after choosing the legal structure of your company.

A very important aspect of your business plan is the legal structure of your company. Typically, a property management company starts as either a Limited Liability Company (LLC) or a Sole Proprietorship. It is important to know the differences between these two legal entities in order to choose the one that is best for you and your business.

Limited Liability Company (LLC)

A limited liability company is a business structure where the owners of the company are personally protected from the company's debts and liabilities. This means that the owners of the LLC can not be pursued in any way for repayment of the company's debts or liabilities, as it falls on the LLC itself. Also, an LLC does not pay taxes as the entity, as it passes the losses and gains to the members, who report them in their individual tax documents.

Sole Proprietorship

A sole proprietorship is a type of unincorporated business where there is only one owner. The owner of this company pays taxes for the company on their personal tax documents. This is the easiest kind of business to establish, as there is not much regulation, and it is freely set up.

4. Plan your Finances

Although this should be included in your business plan, it is important to continuously monitor every single cent that comes in and out of your business, from the beginning. Apart from recording your company's expenses, it is also vital that you have an efficient method in place for keeping track of all of your client's property expenses as well.

Some of the most common expenses that a property management company faces include:

Apart from planning for your expenses, it is also important to plan out what your future goals are in terms of profit, and form an effective pricing structure to compete with local real estate companies.

For a property management business, there are not a lot of upfront costs to begin managing properties, so a property manager could break even soon after starting the business. After that, it is all about making your business as efficient as possible and setting realistic financial goals to make sure that the company continues to be profitable.

If you struggle to keep up with these goals, or lose track of your company's ex

enses or profits, you may be interested in some sort of real estate accounting software to help you stay on top of your business's finances.

What is a Property Management Accounting Software?

A comprehensive accounting software could be very helpful for keeping track of all of the finances of your company and could help you determine future financial goals. It can also help you, as a business owner, determine what aspects of your business are not generating a profit and which ones are. Also, some accounting software, like DoorLoop , offer a plethora of services apart from accounting services that could help you, as a property manager, streamline your business by keeping track of every aspect of your business, all in one place.

5. Determining your Team

When you have every other aspect of your business settled, it is time to think about the people that you would want on your team.

This does not necessarily have to mean that these people are going to be doing the same work that you do. One single person could manage a plethora of properties by themselves, without the need for assistance. This team of people could refer more to a group of people that help you with external services that do not necessarily have to do with property management. These people do not have to be part of your payroll, or even part of your company, but they can provide services that could become very useful in certain situations.

For example, in the world of real estate property management, there are many chances for a lawsuit to occur. A Real Estate Lawyer, however, makes sure that your company is completely protected from any legal risk that may leave the company vulnerable to a lawsuit. A lawyer can also help you understand your state's laws and regulations and help protect your assets from becoming liabilities.

Other examples of people who you should consider adding to your team are contractors that you hire based on the services that the managed properties require, like plumbers or painters. It is important for you, as a property manager, to have a reliable team of contractors ready to service the properties that you manage.

6. Advertising your Business

One of the last, and most important, steps for kickstarting your property management company is effective advertising and marketing for your company.

There are various different methods for gaining exposure for your business, and it is important that you develop a specific marketing strategy that is catered to your company in order to grow your client base. When done correctly, your company's marketing strategy could kickstart your business and get some of your first clients.

What to include in your marketing strategy?

Although there is no concrete marketing strategy that works for all businesses, property managers who are starting a property management company should make sure that their marketing strategy includes:

Although most of the strategies listed are of the new age and involve the use of technology, the traditional word of mouth marketing method could also prove effective in the real estate industry. For example, you can approach a local real estate agent and inform them that you are a property manager and ask about properties for rent and any contacts of people looking to rent.

Any combination of these, with the right determination, is sure to significantly increase exposure for your company.

7. Invest in Property Management Software

Managing properties, with or without a team, is a complete hassle that involves numerous tasks that must be completed in a timely manner. It can get very difficult to handle all of these tasks by hand, so many property managers turn to property management software to ease some of the stress of having to handle all of these responsibilities themselves.

If you are not sure about what to look for as a property manager, we have outlined some of the most important features down below to help you begin with your search.

What to look for in a Property Management Software?

When looking into property management software, it is important to keep your business's needs in mind first. You want to look for property management services that cater to the tasks that your business is responsible for completing to make sure that you get the most out of your investment.

Some of the most important tools that come with property management software include:

These are all features that become very valuable for property managers and even more important for owners of property management companies. Although software is not required to complete all of these tasks, one that does all of these would really come in handy if you are someone wanting to start a property management company.

Which Property Management Software to Choose?

If you find yourself unable to choose between the plethora of property management software choices available, that's completely normal. It can be tough to know exactly what you are investing in, and you always want to make sure that you are making the correct choice.

To make your life easier, we have put together a list of the 15 best real estate software that you can use to ease the decision-making process.

If you are interested in an all-in-one property management software that offers all of the features mentioned above, and even more, check out DoorLoop for as little as $49/month for the first 20 units.

DoorLoop property management software

Bottom Line

Starting a business is nothing close to an easy task. It takes a special kind of person to successfully start their own business and stick with it while it grows over time. Over time, however, you become an expert at managing your properties and advertising your business to more and more customers. If you put the work in and follow the procedures listed in this post, you will find yourself surrounded by clients of a fully functioning real estate management company.

David Bitton

David is the co-founder & CMO of DoorLoop, a best-selling author, legal CLE speaker, and real estate investor. When he's not hanging with his three children, he's writing articles here!


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How to start a property management company the right way

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Published on February 7, 2023

The  property management industry is projected to surpass $26 billion by 2026. Growth like that makes the market appealing for property managers looking to start a property management company from scratch, take on more doors—or even real estate brokers looking to try it out.

Still, there’s a lot to think about before you dive headfirst into property management. That’s why we’ve put together a comprehensive list of what you’ll need to do before you open your business’s doors to owners and residents.

Read through the whole guide (or check out the video above) on how to start a property management business or jump to each section to get a picture of every bit of hard work that goes into starting your own property management business—and how to make each step easier.

How to Start a Property Management Company: Article Guide

Before you do anything else, you’ll need to be properly licensed, file your business name and create a business plan—which we recommend doing first so you can size up the opportunity in front of you.

How Do You Write a Property Management Business Plan?

A business plan serves as the framework for your entire property management business. The point is to plot out every aspect of your company from your startup capital all the way to breaking even.

Per the  Small Business Administration  (SBA), a formal business plan has these things:

The SBA also furnishes business plan examples for those writing one for the first time.

Pro Tip: A business plan for property management, specifically, will outline the types of clients you intent to target (multifamily, single-family, associations, etc.). It will also outline the services you will provide. For example, do you intend to operate as a boutique property management business offering concierge services, or will you target smaller owners looking for basic help with rent collection and leasing?

What Property Management Certifications and Licenses Do You Need?

There are only a handful of states that don’t require some kind of licensing for property managers . Before you set up your business, make sure you have the up-to-date licensing to practice in your state, especially since housing regulations tend to change fast these days.

Some certifications, while not required, will help augment your business. A certified property manager, for example, holds a real estate broker’s license and has completed coursework on property management topics.

Finally, there are associations, both national and international, that can help you network, give your business credibility and nurture your staff with continuing education and certification in property management. Those include:

Get a breakdown of licenses, certifications, and associations through our blog post:  Property management certifications that give you an edge .

How Do You File Your Property Management Business?

Next, you’ll need to file your business for tax purposes and choose a legal entity. This is critical so that your personal assets are protected and separate from your business.

Most property management firms are set up as an LLC, or limited liability corporation, but S-Corps and C-Corps are also strong contenders with more legal protections.

You will have to think about whether you want to file as a pass-through business like an LLC—where money passes through the business directly to you—or whether you want to file as a C-corporation and be paid as an employee.

C-corporations risk having a double taxation problem, but you shouldn’t have to worry about that if you have a good accountant who knows the laws. S-corporations pass through the taxes to the shareholders, so there is no chance for double taxation. The profits are taxed as personal income instead of business income.

Learn more about filing the tax status of your business  here .

Do you have a revenue goal in mind for your first fiscal year? If not, start thinking about one—it should be in your business plan. How much income do you expect? What are your expenses going to be? How much should you put aside for the unexpected?

Keep all of this in mind as you start planning out the financial future of your company.

How to Set Up Your Property Management Accounting

Keeping track of your owners’ properties can be basic as updating a spreadsheet (although we don’t recommend that). There are comprehensive property management accounting platforms , however, that can not only help you keep track of rent and fees, but can monitor expenses and pay regular bills.

They can also help you track money coming in and money going out. Income can include rent and other revenue streams received from renters, for example. While money going out can involve repairs and other payments to vendors for maintenance.

Pro tip:   Setting up your bank account structure  will create the foundation for disciplined accounting. First, you’ll always want to keep your security deposits in a  legally compliant trust account , with a separate account for your owners’ properties and yet another operating account for your business.

If you need an accounting refresher (like pretty much everyone), check out our Accounting for Non-Accountants 1)  webinar  and 2)  guide .

What Expenses Should You Expect?

Record every monthly, quarterly, and yearly expense you have. Don’t leave anything out. Keeping track of every penny that goes out the door will help you set realistic revenue goals and help you stay out of financial trouble.

Your expenses will most likely include:

Forecasting Revenue and Setting Goals

You can expect most of your revenue to come from management fees, which is usually a percentage of the rent charged. Some businesses, however, charge a  flat fee for basic services . Owners can then opt for more services for a higher fee.

Other income will come from late fees, key or lock replacement fees, finders fees for bringing in residents, maintenance bill mark-ups, and other smaller fees and charges. Check out a full list in this post: Income and Expenses: What Property Managers Need to Know .

Once you’ve laid the groundwork, it’s time to start getting the pieces together that will fuel your efforts—the people and the tech they’ll use.

How Should You Structure Your Property Management Team?

There are two basic models you can set up for your property management business. The first is to start off as a general property manager who handles all management responsibilities. That would include leasing, inspections, resident communications, owner communications, fees and rent collection, and maintenance.

The other option is to hire staff members to perform more precise roles. You may have one staff member handling leases and other managing maintenance, with repair specialists or contractors working with them.

In that case, you would have a more defined organizational chart, with tiers of staff members reporting up to you.

Defining Your Team

If you’re just starting out, your staff is going to be minimal. It may even just be you for the time being, and that’s fine. As you grow, you’ll organically bring on people to help you.

Your staff may be made up of full-time or part-time employees, or contract workers. The first step is to decide what kind of work you need done and then determine if it’s worth putting someone on the payroll or outsourcing.

Full- or part-time employees you may consider are:

And just because they aren’t on the payroll, doesn’t mean that a team member or company isn’t a dire need. Below are some contractors that property managers rely upon:

When hiring any vendor, make sure to get a copy of their license, insurance certificate, and bond certificate (if they have one) to protect your company if something goes wrong. Also, try to fight for a reduced rate for your property owners—they will appreciate that you worked hard to save them money.

Pro tip: There are software solutions that can be the hub for all your operations. Buildium , for example, provides a platform that helps you handle accounting, 1099 filing, communication and maintenance tasks, reducing the need for extra staff.

Property Management Staffing: Finding and Hiring the Right People

Once you’ve determined which full- and part-time positions you need, it’s time to find the staff that can make it happen. There are two steps to this process. First, you need to get strong candidates in the door for an interview. To do that, write clear job descriptions and use ads that really speak to the culture (and benefits) of your company. Post your ad in the right places for your audience.

Associations such as the NARPM have their own job boards for property managers and most mainstream job sites such as Indeed and ZipRecruiter also list related jobs.

Once you’ve hired the right people, you’ll want to keep them. You also want them to become evangelists for your company and culture. Remember, happy employees are one of the most powerful tools for attracting new talent, as well as representing your brand to residents and property owners. They’re the first to spread your reputation, after all.

To keep your employees happy and boost your business, create a  strong company culture  from the get go. Provide competitive benefits, stay connected with their needs, and push them to learn and pursue their professional development.

Building Relationships with Property Owners

It’s a no-brainer that valuing employee relationships can build a solid business, but so can relationships with property owners in your community.

Doing so starts with  setting expectations  before a property owner even becomes a client. Talk to prospective clients before you sign a contract to understand what it is they’re looking for in a property management firm and explain exactly what you can provide for them.

Keep the lines of communication open at all times, send monthly owner draw reports, and give them the opportunity to ask questions and share feedback. At the same time, you should feel confident providing your own proactive feedback to owners and identify opportunities for additional revenue streams.

You want to deliver  the best customer service  you can for your owners and the best living experience for your residents.

What Property Management Technology and Software Do You Need?

For every business, there is a software solution.

Quickbooks can manage all things financial for your business operating account, from invoices to P&Ls. You can also use it to manage taxes and audits.

Google provides web-based tools that rival Microsoft’s Office Suite. Create documents, spreadsheets, and even slide presentations. And you can store and share your documents on Google Drive.

MailChimp can help you organize your email, while SurveyMonkey can help you gather feedback from residents.

There’s no question you’ll need software tools to help you do business. Picking the right ones is a matter of listing out your business functions and researching which software tools can save you time, resources, and money.

For property managers, in particular, there are property management SaaS (software as a service) platforms that cater to the specific needs of your business without having to cobble together too many software solutions.

Buildium , for instance, gives you the power to  accept rent payments online , as well as centralize your property accounting. You can handle your maintenance requests, property inspections, and even renters insurance through it, as well.

For those who will often be out and about, using  mobile-enabled technology for property management  can keep your business agile and operating from anywhere.

A big part of getting your business to take off is your branding and marketing.

Your branding defines who you are and what you do as a company. It should be a direct representation of your culture and values. Are you a boutique property management company that provides specialized services? Do you focus on HOAs or luxury Class A properties? All of these factors contribute to your brand.

Once you define your brand, it’s time to start marketing. Whether you do it yourself or hire a firm, you should push your business actively through your website, social media, paid advertising, and local networking.

How to Grow Your Portfolio from Zero

At this point, you may have only one property in your portfolio, or none at all. You’ve got to bring in a lot of leads to start building your portfolio, something called “feeding the top of the marketing funnel.”

This is when you cast a wide net, pull in potential property owners and investors and then start talking to them about your services to gain their interest and bring them closer to signing with you.

But those leads don’t come from thin air. You need to start with a multi-faceted marketing strategy to attract potential clients. You can do that with the following tools:

Want to read more about filling up your marketing funnel? In this post, learn how to  up your lead generation game .

You have your first client. Congratulations! Now it’s time to talk about fees and get that contract signed. Here are some tips to help you determine your fee structure and how you should handle contracts.

How Do You Set a Pricing Structure?

It’s mandatory to do your research when it comes to setting fees. Check out what other property managers are charging for similar services on comparable properties. Look at your own revenue goals to see if you can offer more competitive pricing and consider the types of properties you are taking on.

Staying competitive may depend on the pricing structure and what’s bundled in your  ongoing management fee,  which includes your baseline service.

While most of the time this fee will bundle handling residents, accepting rents, staying on top of maintenance, and conducting inspections, you want to make sure you don’t assume a one-size-fits-all approach that makes it near impossible to turn a profit.

If you are already going in with a sizable portfolio, you’ll need to know how much you’ll pay each property manager. If you bring them on as independent contractors, will you compensate them by the number of units, gross rents, or percentage of rent collected? These are all tricky questions, again, that can be answered by knowing your market and its workforce.

That said are three common ways property managers usually set their ongoing management fee:

À la carte fees to consider are setup fees, leasing fees, late payment fees, vacant unit fees and eviction fees:

Again, knowing your market and having a firm idea of how you spend your resources will give you some more direction on how to best set your pricing, which will adapt over time. Learn more about setting pricing structure and fees  here .

Creating Solid Property Management Contracts

Remember that old saying, strong fences make good neighbors? Well, solid property management contracts make stable business relationships. A contract should spell out the roles and responsibilities of the property manager.

A  well-thought-out contract will include:

We recommend to always have a lawyer look over your contracts to make sure everything is locked down, and to put it together a template for all of your contract negotiations.

You and your team will interact with residents every day. Creating a memorable resident experience, where renters are engaged and happy, keeps your properties running smoothly, helps you attract other residents through word of mouth and builds your reputation with property owners.

To do that, target the right residents for your properties, foster a sense of community, and keep the lines of communication open.

Providing the Right Experience and Amenities for Your Residents

The kind of resident experience and service you provide will depend on the preferences of the residents your properties attract. Residents are looking for more than four walls and a roof. They want a convenient arrangement that lines up with their lifestyle—and feels like home. Apartments in the city may attract young professionals, but they may also attract retirees looking to downsize. Houses and condos may attract families.

Take your resident population into consideration for every aspect of your property management business, from emergency planning to facilities to run-of-the-mill communications.

For example, an older population may be more comfortable receiving communications via email or letters in their mailboxes. Their social media platform of choice is most likely Facebook. Meanwhile, a young family may prefer text notifications.

Pro tip: Use an online  resident center  (or a portal) so your residents can access the information they need, pay their rent, and communicate with you through the convenience of a mobile app.

If you are managing multifamily properties with communal spaces, have you considered the kinds of amenities you’d like to offer your residents? Perks such as an event calendar work spaces, outdoor fitness areas and mailboxes for Amazon packages help properties stand out.  Often, you often won’t be able to control what the amenities are, but you can create an amazing resident culture and control how you market them.

How to Handle Complaints, Requests, and Disputes

For every  complaint, request, and dispute , hear out your residents and let them know that you take their issues seriously. If it’s something you can resolve or fix, do so as quickly as possible and give your residents a timeline.

If it’s something you can’t fix, explain why.

How to Create Emergency Plans

Property managers need emergency plans for everything from fires and burst pipes to earthquakes and hurricanes. Your plans should be clear, detailed, and tailored to the kinds of emergencies and natural disasters common in your area.

Learn more about creating emergency plans  here .

Once you decide—or the market decides for you—which kind of properties to target (single-family, multifamily, condos, etc.), it’s time to start thinking about the requirements you’ll need to meet to manage them.

Handling Maintenance and Repair

Choosing to offer maintenance and repair services could be a big sell for potential clients who don’t want to deal with the time and cost of maintaining their properties or fixing unexpected issues. And it’s a win for your business, too, since you can mark up the cost of repairs while taking one more worry off your property owners’ plates.

Here are some things to keep in mind if you choose to offer those services:

Assembling Your Leasing Services

A big value add that many property management companies offer is filling vacancies. Clearly, you’ll want to minimize unoccupied units that will cost you and your owners money in lost rent.

Likewise, you’ll want to make sure you have a lean and mean process to get high-quality residents into their homes quickly, efficiently, and with a strong first impression from lead to lease. Technology can deliver in spades here. Below are all the ways technology can be the rocket fuel for your leasing process.

How to Remain Compliant

And speaking of building codes, compliance is a very big part of your job that can’t be overlooked. It will be up to you to stay on top of rules and regulations on things like elevators, sanitation, and building permits. You will also have to pass regular inspection with the fire department, which will look for property placement of smoke detectors, extinguishers, and signage for fire exits.

Learn more about legal considerations and compliance  here .

To win in property management, you’ll need great customer service and project management skills. You’ll need to keep on top of industry trends as well as local rules and regulations.

You will have to know how to market your business and your properties, pull potential clients and residents down the marketing funnel and get contracts and leases signed. It seems overwhelming right?

You don’t have to go it alone. If you’re serious about learning how to start a property management company, take it piece by piece and always surround yourself with people you truly trust. The only way to go is to build the right foundation for your business that will help you scale up with confidence.

business plan for startup property management company

Laurie Mega

Laurie Mega has planned, written, and edited content on a variety of subjects. Her work has been published by HomeandGarden.com, The Economist, Philips Lifeline, and FamilyEducation, among others. She lives in the Greater Boston Area with her husband and two boys.

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How to Start a Property Management Company

How to Start a Property Management Company


What are the Key Segments of the Property Management Industry?

What external factors affect the property management industry, what are the key customer segments in the property management industry, what are the key costs in the property management industry.

Helpful Videos

Additional resources in the property management industry.

If you’re looking to start a property Management Company, you’ve come to the right place. Since we’re going to show you exactly how to do it.

We’ll start with key property management industry fundamentals like how big the market is, what the key segments are, and how revenues and profits are generated.

Then we’ll discuss keys to not only starting a property management business, but succeeding in it!

Download our Ultimate Property Management Business Plan Template here

How Big is the Property Management industry?

According to IbisWorld, there are 239,987 property management company in the U.S., that generated $61.8 billion in revenue last year. This represents an annual growth rate of 1.6% over the past 5 years.

The Property Management industry includes companies that primarily handle the maintenance of commercial, industrial and residential real estate. Residential property management is, by far, the largest source of revenue for the industry. This is followed by non-residential property management and a mix of other property management accounts for the remaining portion of revenue.

A number of factors affect the performance of the property management industry. These drivers include:

Office rental vacancy: Office rental vacancy rates measure the extent to which office space is occupied. The office rental vacancy rate is expected to fall in the coming year, representing a potential opportunity for industry operators.

Rental vacancy rates: Rental vacancy rates measure the percentage of total US residential rental properties without tenants. When the residential vacancy rate is high, industry demand falls, and vice versa.

Per capita disposable income: As per capita disposable income falls, consumers tighten spending habits, discouraging businesses from expanding or causing them to close branches. This trend, in turn, reduces demand for the leasing of commercial space.

Finish Your Business Plan Today!

The largest customer segment in the property management industry are households, followed by commercial properties.

Wages – Wages, are, by far the largest expense category for industry operators.

Purchases and marketing – Purchases estimated to account for 6.1% of revenue. Marketing costs are minimal and estimated to account for about 2.2%.

Rent, utilities and depreciation – Rent and utilities costs vary widely in the industry. Depreciation costs are low in the industry, as very little depreciable equipment is needed to run a property management company.

Other costs – The industry attracts a number of other costs. This includes interest expenses, agent and broker fees, and legal and insurance fees, though some of these costs are associated with purchases due to their necessity in managing property.

What are the Keys to Launching a new Property Management?

What are the Typical Startup Costs for a new Property Management Company?

The cost of starting a property management business is dependent upon size and a host of other factors. Starting a property management business usually costs $2,000-$10,000.

For additional information on the property management industry, consider these industry resources:

How to Finish Your Property Management Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Property Management Business Plan Template you can finish your plan in just 8 hours or less!

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how Growthink’s business plan consulting services can create your business plan for you.  

Other Helpful Business Plan Articles & Templates

Business Plan Template For Small Businesses & Entrepreneurs

How to Make a Property Management Business Plan [+Template]

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Whether you’re looking for funding, planning your goals for the next 18 months, looking to expand into new markets, or simply want to get control over your budget, putting together a proper business plan is crucial for a professional vacation rental manager.

And with the vacation rental property management industry becoming increasingly competitive, making sure you have a solid plan for success is more important than ever. 

And that means ensuring your budget and projections are on point as you plan your next 18-24 months in business.

But we know that writing a business plan for your own property management business from scratch can be a real challenge, especially if you got into hospitality to make guests happy, rather than because you’re an expert at making financial projections or setting KPIs! We get it.

Follow our five-step process to create a business plan that’s perfectly tailored to property management, including everything from your mission and vision to marketing and revenue.

A great plan will help you take control of your business goals, so you can invest in the best for your property management company for true long-term success. Start here.

Creating a plan for your property management business?

We interviewed hundreds of property managers on how they plan to purchase tech from now until 2023. See what they said.

Why should vacation rental operators have a property management business plan?

01_Airbnb screenshot business plan

A great business plan will help set you up as a professional manager vs just another Airbnb hobby host | Credit: Airbnb.com

Creating a killer business plan is a major starting point for any professional property manager who wants to differentiate themselves from the hobbyist Airbnb host.

Maybe you’re looking to secure funding or a loan, and you need to show others proof of your goals. Maybe you want to plan your next few months in business and need a strategy to budget correctly, set the right rates, and make accurate financial predictions.

Perhaps you have big ambitions for your business such as adding new properties to your portfolio, expanding into new markets, or paying off your mortgage on your existing units. 

Maybe you want to get all your ducks in a row internally, and you’re looking to bring more of your vacation rental operations in-house (such as cleaning and laundry), or hire a manager to manage the day-to-day, and automate your systems so you can expand without hiring a ton of new staff. 

Or maybe your goals are more personal, such as fully funding your summer vacations with income from their short-term rentals.

Whatever your dreams for your property, setting down a proper plan is the starting point for making them a reality—not only for investors or outsiders but for you too.

How to create a business plan for property management: 5 steps

02_financial projection dashboard

Creating a business plan is useful for investors and good for you

There are almost as many different types of business plans as there are businesses, but we recommend starting with this five-step plan to keep things simple.

Use these next five steps as your business plan template and “fill it in” by answering the questions as you go.

The mission and vision

The current market analysis and expansion plans, how the business operates, marketing plan, financial projections and revenue management.

03_the vision and the mission - lightbulb on sky

The mission part of the business plan helps you lay out your overall goals and vision

This is the time to lay out your overall goals for the business, why you started it, and what you ultimately hope to achieve. It’s as much to clarify your own goals and plans over the next 12-36 months, as it is to detail them for possible outside investors.

This is the section where you can think big, but don’t forget to include important, tangible details on how you plan to make your dreams a reality, such as: 

Who you are, your background, and your training. Some states require you to have certifications to manage properties legally, so be sure to add that if relevant to you and your business.

Who are your ideal clients; who are you targeting (and who are you definitely not)? Both in terms of property owners, and guests or renters? 

What is your long-term vision for the business, and how are you going to ensure it’s sustainable and profitable?

What you’re working on in the next few months, what are your tangible goals?

What property management services will you provide that will mark you out as different or better?

How will you measure success specifically over the course of the plan? You can refer to your KPIs here and go into more detail later in the plan.

04_Current analysis - The Wyman website screenshot

What else is out there within the hospitality market - such as The Wyman, here?

This part of the plan is where you want to demonstrate that you understand the current market, and understand the context in which your business fits.

You’ll want to include:

A brief assessment of your major competitors and what already exists out there that could arguably be seen as similar to your business. For example, is your business similar to the high-tech urban pads offered by Sonder ? Or charming-but-modern like The Wyman ?  

Businesses that you see as inspirational or complementary to yours (without replacing the need for your business)—for example, lean start-up Jurny, or digital nomad specialist Mint House ?

Clearly stating what marks your business out as different, and what your unique selling points are compared to what’s already out there—are you targeting a specific type of clients, such as CozyHaus and its “creative thinkers”? Or are you launching a new kind of platform, such as hotel-STR hybrid Locale ?

You can also include your plans for expansion in this section of your business plan and reference how you intend to evolve or grow your business to differentiate from others in the field.

Related Post: The Urban Butler Calms Nervous Residents with Operto-driven Security Measures

05_Business plan how it works - visual plan

This section contains the main information about how your business actually operates

This section of the plan should include the ‘nuts and bolts’ of your business, so readers can see how it actually operates. 

This means including more information on your business model, what your day-to-day operations look like, your org chart and staffing structure, and your KPIs (key performance indicators) that you use to measure your outcomes.

Business model

How does your business actually work? What model does it use, and what is your strategy to run it and generate revenue? 

This might include definitions and structures such as: 

This section demonstrates the structure of your team and the staff that actually run your business.

Be sure to mention:

Your current staff structure and who does what. How do you assign tasks and ensure the team operates smoothly?

How could your org chart progress in the next 6-12 months? What are your plans, where do you need to hire or develop roles?

What is your plan for the staff operations? Do you want to bring more roles in-house, or work with more external freelancers or specialists? How will you budget for this?

Systems, software, automations, and processes

06_What systems do you use- Operto Guest screenshot

Demonstrating or planning the systems you will use over the next 12-36 months is crucial

The modernization and digitization of hospitality means that it’s more important than ever to detail the systems and software you use or plan to use.

Leveraging powerful platforms and hotel management softwares that connect seamlessly with each other means you can automate tasks that would otherwise have been done manually, freeing up time and mental space. 

Ingenious, intuitive software also enables you to operate your space remotely, and empower staff to get out from behind a front desk and go where they’re most needed. 

Switching your guest operations to digital also massively improves guest satisfaction, as all the usual awkward stumbling blocks and frustrations (such as check-in issues, stresses in case of delays, or possible difficult communication with hosts) are eliminated. 

You’ll want to include details like:

What PMS, if any, will you use to manage bookings and collect guest data?

How will you manage remote check-in and check-out and guest management?

How will you verify guests’ IDs, check backgrounds, and protect against fraud? 

What tools will you use to set prices and ensure dynamic, competitive rates?

How will you ensure security, secure locks, and vacation rental safety ?

How will you enable easy guest check-in and check-out?

How will you facilitate communication with guests?

How will you enable upsells and extra payments?

What will you use to communicate with cleaners to coordinate your vacation rental cleaning , and let guests know when their rooms are ready? 

What will you do to draw up a vacation rental property management checklist and ensure high-quality cleaning and sanitization at all times?

How will you monitor maintenance and levels of cleaning supplies and other vacation rental amenities ?

How will you use smart tech to monitor noise and occupancy levels?

Will you empower guests to manage their own in-room conditions such as lights or temperature?

What tools will you use to communicate with staff and delegate tasks across your team?

How will you ensure guests leave good feedback and reviews?

Want to automate processes, save time and effort, and improve the guest experience?

Ingenious, hyper-connected software platforms such as Operto help you do all of this and more.

Platforms such as Operto pick up where your PMS leaves off, and make it simple to automate processes—even if you’re not tech-savvy and don’t have the time or patience to learn a new platform.

With powerful integrations such as Hostfully or WebRezPro PMSs, NoiseAware noise monitoring, Yale Airbnb smart locks , Autohost ID checks, Tado thermostats, and more, highly-connected platforms such as Operto house everything under one digital “roof” and keeps switching between platforms at a minimum. 

Showcasing how you’ll coordinate all of your digital tools like this is a must-have part of any forward-thinking hospitality business plan.

Setting big goals and leveraging powerful tech is important, but making sure you’re measuring your business progress is crucial. 

Deciding what metrics (or Key Performance Indicators) you’ll track over your plan timeline will give your business direction, and enable you to see what’s working and what needs tweaking.

As business author and expert Peter Drucker said, “you can’t improve what you don’t measure.”

Depending on your business goals, you may want to set KPIs for: 

Total revenue

Revenue per channel

RevPAR (revenue per available room; your average daily rate x occupancy rate)

Occupancy rate (number of nights booked divided by number of nights available)

Average length of guest stay

Website traffic and hits

Views per channel

Word of mouth referrals

Social media engagement

Guest messages or inquiries sent per channel

Percentage of bookings per channel

07_marketing online and socials

Planning how you will market your business and attract new clients is a major section

Demonstrating your basic marketing intentions should also feature in your business plan.

This will depend on your goals and business model, and who you are trying to attract, but in this section, you’ll need to answer questions such as: 

For owners and guests: 

How are you going to attract them? 

How will you grow your audience and/or owner portfolio?

What’s your niche or target market? 

Who do you want to attract (and who do you definitely not want to)?

How will you generate leads?

How will you convert leads and inquiries into bookings? 

For guests only

What channels will you list on?

How will you diversify your booking channels and get more direct bookings?

How will you gather data, and will you use email marketing + automated messaging? 

What will you do to get more owners? 

How will you vet owners and ensure they’re right for you? 

What will your onboarding homeowners process be?

How will you update and please existing owners so they stay in your portfolio long-term?

08_Wheelhouse website screenshot

Will you use a tool such as Wheelhouse to help plan your finances?

Finally, your business plan should include some financial projections, budget considerations, and your intentions for cash flow and revenue management. 

This will include extra details on your budget plans—as already mentioned earlier in sections such as new staff members and expansion details—as well as extra information on any dynamic pricing platforms (such as, say, Wheelhouse) that you plan to use to ensure competitiveness.

Here is the time to answer questions such as:

How will you budget/manage revenue? Will you use a dynamic pricing platform?

How will your budget allow for unexpected repairs or maintenance?

What budget will you allow for extra costs such as training, or extra investment in tech?

Any more details on the financial KPIs you may have mentioned in the last section.

Creating your property management business plan

Overall, if you follow these five steps, your business plan will contain everything needed to demonstrate your overall goals and concrete plans to make your goals a reality. 

From your vision to current market analysis, to business operations, marketing, and financial projections, planning out your budget and business goals will enable you to stay ahead of the curve, and invest in modern tools to ensure you stay profitable, competitive, and elevate the guest experience. 

Lean staffing, smart tech, guest automation, and digital operations will become of increased importance between now and 2023, as our research shows, and creating a rock-solid business plan will ensure you’re more than ready for what’s ahead.

Frequently asked questions about property management business plans

What is a property management business plan.

A property management business plan lays out your business goals and strategy over the next 12-18 months, including your mission and vision, current market analysis, your future goals, how the business operates, staffing goals, your marketing strategy, financial projections, and how you will measure success and tweak if needed.

How do I start a property management company?

Starting a property management company means getting clear on your business plan, which in itself will differentiate you from the Airbnb hobbyist. Make a proper plan that helps you get clear on your mission and vision, current market analysis, your future goals, staffing, marketing, and business model. For example, will you lease properties, co-host, or something else? How will you attract owners or acquire new units? 

You also want to check the local laws in your country, state, or city, and ensure you have the right qualifications, property management licenses, or permissions from local authorities and/or your lender or bank.

How much do property management companies make?

How long is a piece of string? It depends on your goals, your financial projections, revenue plans, geographic location, types of properties, and more. It can vary hugely, but recent reports from salary insights group payscale.com suggest that in the US, the national average salary for property managers is around $50,928 per year for entry level to $75,000 per year for more experienced managers.

What are some things property management companies do?

Depending on your business model, a property management company will likely list, manage, run, and operate everything involved in opening properties, units, or rooms up to short-term guests. This may include everything from staging, photographing, listing, pricing, booking, cleaning, and maintaining the properties, to managing bookings, reviews, marketing, and more.

A management company, as opposed to a ‘hobbyist’ Airbnb host, will take each of these tasks to a professional level, and use property management software such as a PMS or guest communication platform that small-time hosts would not. A property management company will almost certainly get better ROI on a STR unit than a hobbyist or individual host.

What are the different types of property management companies?

Business models vary considerably depending on the way the company operates, but they may include styles such as:

What are the steps in starting a property management business?

First, get clear on your business plan. Outline your mission and vision, current market analysis, your future goals, staffing, marketing, and business model, and go on from there.

You also want to check the local laws in your country, state, or city, and ensure you have the right qualifications, licenses, or permissions from local authorities and/or your lender or bank.

What are some requirements for a property management company?

Depending on where you are in the world and the type of company you have, there may be certain laws or requirements that you must fulfil. For example, in California and Europe, there are data protection laws that you must adhere to if collecting data. 

You may also need to be aware of elements such as electrical check certificates, adherence to fire regulations, owner insurance, rent insurance, liability insurance, and permission from your money lender to sublet your property.

What are some qualifications for being a property manager?

This depends on where you are and what you’re planning to do as a business owner—for example, will you rent your units full-time, or only during a few months or weeks a year? Are you operating professionally? Is your business your main source of income, or is your property your main home?  

Depending on these criteria, you must check the local laws and requirements for STRs and vacation rentals, as some cities, states, and countries require you to have licenses, register with local authorities, or have certain real estate property qualifications before you can legally manage properties.

For example, to name but a few—in London, hosts can legally only rent an entire property out for 90 days a year on a platform such as Airbnb; while in California and Europe, there are data protection laws that you must adhere to when collecting customer data for marketing purposes.

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Starting a small business as a Property Management Company

If you’re ready to start your small business as a Property Management Company, the first thing you need to do is get started with a Business Plan for Property Management Company. To achieve success, you must plan for it.

As a business owner you will need to understand all aspects of your business in order to keep it running like a well-oiled machine. Your business plan will organize every element of your business strategy and provide you a clear map for you to follow for the lifespan of your business.

This free business plan builder template will help you develop your own Business Plan for Property Management Company. The business plan template is an interactive tool that will quickly and easily create a custom business plan just by having you answer questions about your business. The result is a clean, professional plan that is both informative and convincing.

If you want your Business Plan for Property Management Company to be even better after you’ve completed the free tool, you can always get in touch with a business plan or a funding advisor to get a bit more help and guidance.

This is the perfect way to get a Property Management Company Business Plan created for free!

Other entrepreneurs who have successfully used the free business plan template tool have been able to create a District Government Office, Endodontist, Wallpaper Store, Exporter, Consultant, and for many more different business types.

Using the free business plan template tool to create a business plan for an a Property Management Company

The free business plan template builder is divided into a few easy to follow steps.

Step 1. Enter your business information

As you develop your business plan for a Property Management Company with the free business plan template, it’s important to answer the questions about your business such as; what your business is, what your products/services are, who your customers are and what your goals are.

A clear explanation of the products/services the Property Management Company business offers and what you intend on charging to make revenue is very important to ensuring a properly developed business plan. The free business plan builder tool helps you do exactly that by guiding you step by step.

Step 2. Entering your expected revenues

Sales and revenue figures are a critical step to any business plan. So, what do you think your business will make from each of its products/services? Simply list your products/services, enter the appropriate financial figures (costs and expenses).

If you don’t have the figures, in many cases it is recommend doing a bit more research on other Property Management Company business locally and within your own province to get an idea of potential revenue. You can do your best to estimate the figures and growth potential.

Step 3. Discuss your market

As a Property Management Company business, a clear explanation of the market you are in, the industry and the competition will help you take your business to the next level.

Explain your location of business, share specifics about your customers, showcase your competition and explain the advantages you have over your competition.

A properly developed business plan will go in detail and explain each of the above.

Step 4. Discuss the future plan

Getting your Property Management Company business off the ground is important and in order to ensure a solid business plan, it’s important to discuss how you intend on achieving success with your business. This means explaining your marketing plan, your sales strategy and clearly outlining a growth plan for the next few years.

Be sure to break this down step by step to show how you intend on making sure your Property Management Company business can grow each year.

Keep in mind that often business plans are focused around key people. Be sure to discuss yourself, your role and any other key figures in the business as well.

Step 5. Enter the financials

A critical piece to any business plan is the financials. No matter if you are seeking funding for your business or not, financials are a must. The business plan builder tool makes it easy to develop your financial charts by simply entering your expected revenues per month and year.

If you don’t have the figures as it’s a new business be sure to project the figures based on your expectations.

A clear breakdown of your funding needs is also recommended in case you are seeking funding and this free business plan template will help you with exactly that.

The above 5 steps are recommended steps to follow in order to develop a proper business plan. While there are other key points that are a must, the free business plan template will help you start.

Be sure to request a professional to review your business plan , to answer any questions you may have and to help you with the funding search once you’ve done the initial free template. You can request this directly via CanadaStartups.org and through the Small Business Startup Platform .

If you are considering other options aside from a Property Management Company business, consider some of these popular business’s others have chosen to startup.

It takes 30 seconds to learn more about small business funding and if your small business in Canada may be eligible for government funding.

Fill out the form below for more info or give us a call at  1-800-288-9691

Home » Business ideas » Real Estate Industry » Estate Management

How to Start a Property Management Company in 16 Steps

Do you want to start a real estate management company? If YES, here is a guide on how to start a property management business with no money or experience; plus a sample property management business plan template and property management marketing plan. Property management which is a subset of the real estate industry is perhaps one of the easiest and affordable real estate businesses to start.

This is because it is basically about; lease contracting or accepting rent using legal documents approved for the area in which the property is located. In a nutshell, property management companies are responsible for taking care of and managing buildings and other real estate properties for individuals (landlords) or for groups of owners.

In the united states, states such as Texas, New York, and Colorado, makes it mandatory for property management companies to be licensed real estate brokers, if they are going to be involved in collecting rent, listing properties for rent or helping negotiate leases and doing inspections as required by their business. Although, a property manager may be a licensed real estate salesperson but generally they must be working under a licensed real estate broker.

A few states, such as Idaho, Maine, and Vermont do not require property managers to have real estate licenses. 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. Washington State requires property managers to have a State Real Estate License if they do not own the property.

Landlords who manage their own properties are not required by the law to have a real estate license in many states; however, they must at least have a business license to rent out their own home. It’s only landlords who do not live close to the rental properties that may be required, by local government, to hire the services of a property management company.

Table of Content

1. Understand the Industry

2. conduct market research and feasibility studies, 3. decide which niche to concentrate on, 4. know your major competitors in the industry, 6. know the possible threats and challenges you will face, 7. write a business plan, 8. choose a suitable location for your business, 9. hire employees for your technical and manpower needs, 10. write a marketing plan packed with ideas & strategies, 11. work out a reasonable pricing for your services & products, 12. develop iron-clad competitive strategies to help you win, 13. brainstorm possible ways to retain clients & customers, 15. create a suppliers/distribution network , 16. tips for running a landscaping business successfully, what does it take to start a property management company.

Interestingly, the minimum educational requirement for any one that wants to start his or her own property management business is a High School Diploma and hands on the job experience. It is one of the many businesses that an individual can start with from his or her home and basically with just a business card.

Since property management business is all about managing property / properties on behalf of your clients, then you may not need a huge financial base to be able to launch the business except you just want to start pretty big.

As a property manager, your core business responsibility is to liaise with landlords, tenants, and in some case various contractors and for you to effectively conduct your business, you are expected to have a full grasp of the law when it comes to landlord and tenants relationships et al. As a property manager, it is your responsibility to create efficient and effective protocols that will make you relate well with your clients (landlords, tenants and contractors).

For example, you are going to be responsible for the full and proper screening or testing of an applicant’s credit, criminal history, rental history and ability to pay his or her rent when due. If you can get that aspect of your job / business right, you will sure enjoy your business.

Property management companies are also involved in mitigation and remediation regarding any maintenance issues, generally within a budget, with prior or conveyed consent via a Limited Power of Attorney legally agreed to by the property owner.

In fact, there are numerous aspect of the profession and some of them include helping their clients in managing the accounts and finances of the real estate properties, and participating in or initiating litigation with tenants, contractors and insurance agencies.

No doubt, if an aspiring entrepreneur who intends starting his or her own property management business has the right connections, networks, managerial skills, and takes delight in managing real estate for clients, then he or she is going to find property management business very rewarding and lucrative.

16 Steps to Starting a Property Management Company

In 2009, statistics has it that the total revenue as recorded of the property management industry in the United States of America was about 59 billion U.S. dollars. Regardless of the widespread expectations of slowing rent growth in 2015, the industry still experienced growth. In the 3 rd quarter of 2015, apartment growth hit an all – time high in the United States. This is as a result of escalating prices from the West Coast.

Interesting Statistics About the Industry

Although the sales generated from other industries of Property Management Services are less than those from Residential Property Managers, but beyond every reasonable doubt, this line of business is still experiencing steady growth.

The property management industry is highly fragmented and statistics has it that the top 50 property management companies generates less than 25 percent of the total revenue generated in the industry; smaller and medium scale property management companies accounts for the rest.

For example, in 2014, the federal government of the United States of America spent a total of $189,718,950 on Residential Property Managers basically for coordinating repairs of government facilities. The federal government awarded about 273 contracts to 47 companies, with an average value of $4,036,573 per company – majority of the companies that got the contracts fall within the top 50 property management companies in the United Stated of America.

Going forward, the Operating conditions for the Property Management industry are projected to remain positive over the next five years, and thereafter, it may likely slow down at some point in the future. Which is why in the next few years, the value of residential construction will experience huge growth due to improved consumer confidence and low interest rates, causing an increase in the housing stock.

It is also important to note that, the US home ownership rate will also experience increase. In essence, fewer consumers will require property management services. So, it is important for property management companies to start positioning their companies to diversify now so as to remain in business in the future.

Accommodation is amongst the top needs of humans which is why people do all they can to secure a roof over their heads or a place to run their business from. This is perhaps one of the factors that influence people to start their property management companies. They know that if they are well positioned and they have good relationship with property owners, they are likely going to generate huge properties from the business.

Other factors that influence people to venture into the property management industry is the fact that you can start the business with minimal start – up capital and you can make good returns from the business within a short period of time.

In most countries of the world, you can only be permitted to rent an apartment when you are 18 years and above. It means that if you are running a property management company, your target market demography should be from 18 years and above.

Aside from renting apartments to people who are 18 years and above, you should also ensure that you rent apartments or properties to those who are qualified. Most countries of the world don’t allow property management companies to rent apartments to migrants who are not well documented.

In essence the demographic compositions of those who need the services of property management companies are people who fall into the following groups; working class / corporate executives, business people, corporate organizations, documented / legal migrants, campus students, and household / families et al.

There are several areas in the property management trade that you may consider carving a niche in. Some of these areas include:

The Level of Competition in the Industry

It depends on where you choose to pitch your business tent, but on the average property management industry is open to all and sundry and it is indeed highly competitive.

If you choose to start your property management company in a small town, few miles from busy cities, you are likely going to face fewer competitions as against locating your property management company in cities like New York City, Las Vegas, Los Angeles, Maine, and Boston et al.

The competition in these cities is pretty tough. You must develop good sales and marketing strategies to penetrate the market if you are a newbie property management company. Over and above, the demand for properties (leasing, renting et al) is driven by commercial real estate occupancy levels and to a larger extent, profit generation by property managers depends on their creativity and their network base couple with the top notch service delivery.

One thing is certain in the property management industry; the larger your company, the higher your competitive advantage. The truth is that, big property management companies have good leverage points when it comes to performing a wide range of management services in multiple markets.

On the other hand, small property management companies can compete effectively by specializing in the neighborhood marker or the local market as the case may be.

There are property management brands that have done pretty well over the years. These people know what it takes to have started humble and build a successful business within record time. Here are some of the leading property management companies in the United States of America and in some parts of the world:

Economic Analysis

If you are considering starting your own property management company in the United States of America, you can be rest assured that you wouldn’t have to spend a fortune to get the company into full swing operation. As a matter of fact, you can start a property management business from the comfort of your home or from a very moderate office space; it could be shared office space or virtual office space. The bottom line is that the start – up cost is low and the turnover can be pretty high.

It is important to note that the economy of a nation has a major influence on the property management industry of that nation. If the economy is unhealthy, the property management industry will experience struggle and if the economy is booming, the property management company will boom as well.

5. Decide Whether to Buy a Franchise or Start from Scratch

One of the thoughts that may crop up in your mind when you try to build your own property management business might be buying a franchise. But the question is; are there really property management business franchise available?

When it comes to starting a business, in most cases your best bet is to start from the scratch especially if you have a long range vision of the kind of business you want to build; except you are an investor who is interested in expanding your investment portfolio and to make more money.

Also if you don’t have the experience of starting a business brand from the scratch and you are scared of taking the risk of building a new business brand, then you can opt for franchise. Starting a property management company is not as tedious and demanding as other aspects of the real estate industry; which is why most people will prefer to start their own property management businesses from the scratch.

You can start the business on a small scale, from your home and managing one or two properties and then grow the business to as big as you want it to be. In a nut shell, starting from the scratch is the best option when it comes to starting a property management business.

No matter the part of the world a business is located and whatever the nature of the business is, there will always be challenges and threats.

When it comes to property management, some of the threats and challenges that you are likely going to face in the United States of America and of course other parts of the world are unfavorable government policies, global economic downturn, arrival of bigger and well – structured property management companies and unreasonable tenants et al. No doubt; unreasonable tenants can be a pain in the neck for property managers.

If you can successfully pen down your business concept and the strategies you intend working with to achieve your business aims, goals and objectives, then you would successfully create your business blue – print. This is not only needful when you want to set up a conglomerate or multi – million dollars corporations; but also ideally it is important to do this, if you call what you want to do a serious business.

This means that so far as you have decided to start a business, you must have a detailed Business model to fly with. Here is a sample property management business plan template to help you get started.

A Business plan is the blue print of your business; it is a business document can aid you to successfully set up a business and also administer / manage the business. It is not enough to just write a business plan for the sake of writing one, your business should be able to pass reality check; you must put relevant facts, figures and statistics into consideration when writing your business plan.

The truth is that, the main idea of writing a business plan is not just for the sake of having a business document in place; but to have a detail guide on how to effectively set – up, run and manage your business. Your business plan should outline and cover strategies on how you intend to operate your property management company.

When writing your business plan, ensure that you are moderate when it comes to setting projections on income generation et al. It is better to be on the safer side which is why when you are calculating your future income, you should be underestimating and make your plans based on it than to overestimate and get yourself into tight corners when things don’t work as planned. Please ensure that these key areas are covered when writing your business plan;

Executive summary and Company’s descriptions: you are expected to write about the concept of your business, descriptions of your company, your company’s vision statement, and mission statement, where your company will be located, the problem you intend solving and perhaps why people should patronize your services.

Other key components that should not be missing in your property management business plan are your product offering, SWOT analysis, marketing and sales analysis / strategies, pricing, costing and financial projection, management techniques, expansion strategies, publicity and advertising strategy, budget and start – up capital generation.

As regards choosing a location for property management business , you may have your office in one part of the city and manage properties all across the cities and even across the country; the numbers of properties you manage and the locations where they are located is to a larger extent dependent or your relationship with property owners and also your business network.

So, when it comes to choosing a location for your property management business, ensure that you choose an office facility that is visible, a location where people driving pass or walking pass can easily spot your office. You should also choose a location that is not saturated with property management companies, except you have a unique selling strategies and competitive advantage.

Please do not make the mistake of locating your business in a place where majority of the residence are retired people and they live in their own retirement apartments; of course you will struggle to make headway in such areas. You should position your property management business in a busy city, a place that people move to in search of jobs, or better living; a place known to be suitable, peaceful and safe for people to live and conduct their business.

Computer (software) and the internet are the major technical tools you would need to run your property management company. When it comes to securing an office facility, your financial capacity is part of what you need to consider before choosing between renting and leasing an office facility.

If you intend starting on a small scale, then you should consider starting from your home, sharing office with someone or renting a virtual office space.

In order to successfully run a standard property management company you should get set to hire a minimum of 8 employees. These are the key roles that you should look for qualified professionals to occupy in your property management company;

Your ability to market and convince people to patronize your services will go a long a way to help you grow your business. This is why a property management marketing plan is one of the most important documents you need to succeed.

When it comes to property management business, networking is an effective tool. You can build your client base with your business network; so ensure that you network with real estate clubs and also chambers of commerce in your locations. You can also network with real estate brokers who are constantly in touch with landlords and properties owners.

When it comes to business partnership, as a property management company, local lending institutions; the truth is that most often, they have properties for which they are responsible for and also to outsource such properties to property management companies in some cases lenders sometimes find themselves stuck with rental properties, and are not in the business of property management, so they tend to outsource it to property management companies.

You should also look towards partnering with local contractors since they also interface with property owners regularly. Lastly, don’t forget to leverage on the power of the media by advertising your services using both online and offline platforms.

For instance, the phrase “property management companies” is searched about 90,500 times monthly in Google in the U.S alone and the phrase “property management firms” is searched about 30,100 times monthly, which is why you should ensure that you run paid search campaign to capture property owners and even potential tenants who are searching on this subjects within the area that you operate.

You can as well utilize the following avenues to market your property management business;

It is a little bit difficult to determine the price of a property or the commission that you want to get from a property management business deals except when it involves other services like, maintenance, reconstructions, Waste Management et al.

The truth is that the real estate industry is based on commissions and properties are valued by professionals based on the area the facility is located, the type of facility and other factors. No property management company can directly control the pricing system in the real estate industry, although they can influence it to a certain degree, but they would have to abide by what is obtainable when it comes to pricing structure in the industry.

Part of what you need to do when it comes to cutting cost is to reduce to barest minimum all maintenance cost by renting / leasing any property under your care to responsible tenants who won’t cause damage to your facility and also ensure that you request for several quotations before awarding any maintenance contract to a contractor; with that you will be able to analyze and come up with a pocket friendly price.

Some factors that will give you competitive advantage in the property management industry include; trust, honesty, good network and excellent relationship management. Most property owners usually look for these traits and qualities before handing over their properties to a property management company.

It is also very important to be flexible in your business strategies; you should have plans to take care of smaller clients as well as bigger clients. Another strategy that you should employ is to ensure that your employees are well taken care of, and their welfare package is amongst the best in the industry. With that, they will be more than willing to build the business with you and help deliver your organizations’ set goals and objectives.

If your customer service delivery is top notch, you are good with relationship management and the properties under your management are well maintained and with competitive prices, you are sure going to retain your tenants and also attract new tenants.

14. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Any business that wants to grow beyond the corner of the street it operates from must be ready and willing to utilize every available means (conventional and non – conventional means) to advertise and promote the business. Boosting your brand awareness will a go a long way to endear you to both property owners and tenants as well.

Below are some of the platforms that you can leverage on to boost your brand awareness and also to create a corporate identity for your property management business;

In building a robust supplier and distribution network, you have got to be very vibrant when it comes to networking. Do all that lies with you to meet new people, as well as maintain and nurture existing relationships. Why is this important, you just might ask?

This is important because you have to be connected with the right people in order to build your business to an enviable and successful state. One of the strategies that you need to employ in order to stay in business is to continue to expand your network base.

When it comes to property management business, the size of your network has a major influence on the revenue you generate from the business. So, ensure that you maintain a healthy network with real estate clubs, chambers of commerce in your location, real estate brokers and of course landlord / Property owners’ association et al.

If you run a standard property management company, you are expected to meet with your employees every morning, or once or twice in a week to review performance and to set new targets for the week or for the months; regular meetings and of course trainings in as integral part of a successful business. Basically, some of the daily activities of standard property management companies revolves around:

Generally, it is true that if you want to make huge returns on investment, then you must be ready to work hard and smart. One of the areas through which you must learn to work hard and smart in building a successful property management business, is by engaging in only those activities that can bring about good results.

As such, you and your team members have to be determined to cut back on those activities that they be using up resources like money, and yet brings about minimal results.

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How to Start a Property Management Company

How to Start a Property Management Company

This is a great time to start your own property management company. A study by Fortune Business Insights projects that the property management market will grow from $15.10 billion in 2021 to $28.21 billion in 2028.

What is property management?

Property Management is the daily oversight, operation, control, and maintenance of residential, commercial, community association, student housing, or industrial real estate by a third-party property manager.

business plan for startup property management company

Property owners rely on property management companies to keep people in safe, hygienic homes and businesses operating in safe and professional environments. Despite intermittent fluctuations, property management services are consistently in demand.

If you find yourself reading this article, you’ve probably been in the property management game for a while, and you’re ready to build your own company from the ground up. Or, maybe you’re running or employed by a real estate business and want to transition to property management.

Over the past fifteen years, our team has helped hundreds of entrepreneurs and small businesses start property management companies. We’ve mentored dozens of entrepreneurs in building and growing property management and homeowner’s association management companies. This guide shares the actionable insights, tips, best practices, and expertise we’ve developed after helping over one hundred thousand brands.

Navigating the transition between employee and property management entrepreneur can be tricky. If you’re ready to leap, we’re here to share everything you need to know about how to start a property management company.

How to Start a Property Management Company:

Choose your niche, define your services, write a business plan, decide your legal business structure, fill in the business blanks, crunch the numbers, develop your brand identity.

Find the right help

Build an online presence, spread the word.

business plan for startup property management company

When starting your own property management company, it will be much easier to stand out from your competition (especially over the long term) if you specialize .

Think about it. Would you go to a general practitioner or an oncologist specializing in lung cancer if you had lung cancer? You’d see a lung cancer specialist because they offer the best chance to solve your unique problem.

The same is true for clients seeking property management services.

Clients want to feel confident that the people managing their property are doing it right. And knowing that you’re an expert in managing their type of property will boost their confidence in your ability to get the job done right.

Here are common niches in the property management industry:

Property management companies that are specialists will appear most qualified to help and be most appealing to the clients with those needs.

You may find that your niche is obvious. For example, it may be the area where you have the most expertise. Or, it may be a property niche that needs to be filled in your local economy. For example, many highly paid professionals become real estate investors and buy rental properties in major cities. They don’t want to manage those properties and often look for capable and respected property managers.

Whatever niche you choose, don’t make the mistake of trying to be the right fit for every client. Marketing directly to the businesses that need your expertise will deliver the best results.

Ensure that the niche you choose provides a meaningful opportunity. Once you assess your total addressable market , you can evaluate whether the opportunity is sufficiently lucrative to be worth your time.

Finally, even experienced real estate brokers and property managers may need special training to deliver the best possible service in a specific property management field. So, take advantage of opportunities to improve your skillset – even if you’re already an expert.

brand identity grader hero

So, what exactly does a property manager do?

Property managers take care of buildings, inside and out, on behalf of individuals or groups of property owners. Property management services may include:

It’s important to decide early which of these services you’ll offer. Potential clients will want clear guidelines of what they can expect of you.

And you’ll need to decide how many employees are needed to manage these services and what tools and supplies you’ll need to own to maintain your properties properly.

Your niche will help you determine if you can reasonably leave any of these tasks off of your list. For instance, residential property managers are more likely to provide mail/package services than commercial property managers.

People often make mistakes when they start a new property management company.

This is because they rush into things before considering their business from all angles.

A property management business plan isn’t mandatory. But, it can help you think many things through – including your services –  and avoid many mistakes.

Studies show that entrepreneurs who take the time to write a business plan when starting a business are 2.5 times more likely to follow through and get their business off the ground.

The work that goes into creating a business plan helps new property managers build skills (like analyzing their competition and examining their finances) that will be important to their success.

But don’t get obsessed about getting every detail right in your business plan. You don’t even need to write a traditional 100-page business plan. Instead, do your research and create a one-page business plan .

For insights and free downloadable business plan templates, read this definitive guide on how to write a business plan . And take a look at these business plan tips for more insights. 

There are many different types of legal business structures for various business entities. (Note: These legal business structures differ from your business niche.)

For new property management entrepreneurs, choosing the best business entity for your business can feel overwhelming. So don’t rush yourself into deciding to register your business immediately.

For example, while a sole proprietorship or partnership might be quick and inexpensive in the short term, it might expose you to more financial and legal risk, create an unfavorable tax treatment, and lead to problems for you in the long term. 

A limited liability company (LLC) is a strong choice for most property management companies. Still, a corporation could make sense for bigger property management companies, especially if you have investors.

So, read about each possible entity your business might fit into.

Then, consider which business structure is most helpful for your business; and how each can help you accomplish your business goals.

And remember that most states require you to register your company with the secretary of state or county clerk in the county in which you operate if you run your business under a different trade name than your legal business name.

This is an easy problem to solve. Just register your actual trade name with your state (and/or local government) by filing a “doing business as” (DBA) certificate.

DBAs are also commonly called “assumed name,” “fictitious business name,” or “trade name.”

Here’s a terrific resource that explains what a DBA is, the DBA state requirements, and how to file a DBA for your property management company in all 50 states and U.S. territories.

While it’s easy to get caught up in the excitement of becoming your own boss, it’s essential to give equal attention to the less glamorous aspect of business ownership – following the rules.

If you don’t operate legally, your new property management business may get shut down before it has a chance to grow. So, let’s talk details.

After determining your business’s legal structure, you must file the necessary paperwork.

The U.S. Small Business Administration tells us that some form of license or permit is necessary to operate virtually every business type legally. Their website has all the info you need to determine what sort of license or permit you’ll need to start a property management company in your state.

In addition to any basic business licenses or permits you may need to operate legally in your state, you will also need some licenses specific to the property management industry.

Property management licenses

Many states require specific real estate and property management licenses or paperwork to legally operate a property management business.

So, check out your state’s real estate commission or licensing board website for the details relevant to your business.

But, some requirements are universal. You, and your employees, may be asked to acquire the following licenses:

For more details on these licenses, read this helpful article .

And this list is not exhaustive. You may need to complete other paperwork as well. For instance, in addition to the licenses required for individual employees (listed above), you may also need to acquire separate licensing in your business’s name.

Finally, check out associations that can help you network and pursue continuing education and certification in property management. A few notable associations include:

Insurance for property management companies

You may need (or want) to carry many different types of business insurance to protect your property management business.

All businesses should carry general liability insurance to protect them if someone gets hurt (or property gets damaged).

And the law requires businesses with employees to carry worker’s compensation insurance to cover any work-related accidents that occur on the job. But that’s only the tip of the iceberg. 

You may also want to consider adding the following:

It’s wise to protect your business by investing in the strongest coverage you can reasonably afford.

Getting to know all of the necessary legal and logistical considerations of starting a property management business will create a strong foundation for your company’s successful future.

Property management is a financially complex business.

As with any business, you’ll need to track your revenue. But there’s so much more to think about.

You’ve got to track the billing expenses and rent payments for each tenant in each property you manage, building expenses, and client revenue. But, before you can get there, you’ve got to start at the beginning –  with your start-up costs .

Start-up Costs

Your start-up costs are the one-time expenses you’ll need to pay to get your business operating.

Each business is unique. But many property management companies share similar start-up costs.

Start-up expenses and costs for a property business may include the following:

Once you’ve outlined your start-up costs, it’s time to consider what your recurring expenses will be.

Recurring costs for a property management business may include:

Research ahead and run smart calculations to determine how much it will cost to start and run your business. This will allow you to plan for additional financing assistance (if needed) and think about pricing.

Once you know how much it will cost to start, you’ll want to assess your finances and compare the two. 

Assess your existing finances

Assessing your existing finances is crucial.

When starting a property management company, you’ve got to know exactly how much money you have to invest into the project.

Setting up offices, acquiring maintenance tools, employee salaries, and insurance payments… it all costs money. You’ve got to know if you have enough.

And you may discover that you need help with your business financing. If you do, there are many business financing options for small businesses .

If you don’t understand the numbers, you’ll have difficulty building a sustainable, profitable business. Most of your strategic decisions will be impacted by your cash flow.

And to help you project your cash flow, you’ll need to outline your prices.

Set your prices

Your pricing strategy is a key factor in the success of every property management business. And, it isn’t a simple matter.

There are several factors to keep in mind when setting your prices.

The hard numbers

To create a competitive pricing structure, you have to start by knowing how much it costs you to run your property management business (your recurring operating costs). While there may always be unexpected expenses, the recurring costs you know should all be considered.

But your operating costs are only a starting point.

Your time has value, and you need to make a living wage.

And it’s essential to bake some profit into your prices as well. Otherwise, it will be challenging to sustain your trucking business over time.

So, make sure your prices are high enough to cover the cost of doing business and deliver some profit.

Your competition

Your potential clients are most likely doing research – and that research includes your competitors, too.

Consciously or not, people gather data about what services like yours should cost and what they’re willing to pay. That means you must be aware of what your competitors are charging, too.

You might feel your services are worth more or charge new clients less than your competitors. And that’s okay.

But, if you’re unaware of what your competitors charge and their ongoing management fees or lease renewal fees, you may miss the mark completely – either costing you profit if you charge too little or business if you charge too much.

Perceived value

Perceived value is the amount a client thinks a property management service is worth. 

And your competitor’s prices are a part of that perception – but not the whole picture.

The services you offer and the perceived quality of those services play a big role. Clients care about the tangible results your property management company delivers for them and the tenants in their buildings. The more they stand to gain, the higher your perceived value.

And your branding influences how your property management services are perceived, as well. A professional logo and high-end brand positioning will have a higher perceived value than a cheap logo and discount branding. Clients, especially new clients, may be willing to pay more if they trust your brand.

So, remember to consider your brand, how you present your services, and your competitors’ pricing when creating your pricing strategy.

It’s hard to build a successful property management business unless you take branding seriously.

Branding provides a reassuring level of professionalism that new property management companies sometimes struggle to establish. So, don’t think you can afford to leave your brand identity to chance.

people around a table discussing logo design concepts

Clients trust property management companies with hundreds of thousands (sometimes millions) of dollars in real estate. A weak brand identity will undermine clients’ trust and make them reluctant to hire you.

So, before you reach out to your first prospective client, ask yourself these critical questions as you develop your brand strategy :

Your answers to these questions (and others like them) will build the core of your brand.

All of your future branding decisions should expand on these ideas. For example, your company name, logo, and website design should grow from the concepts you laid out here.

So, take the time to think – really think – about your brand from the start.

Real estate is a competitive industry. And it’s the property management companies with clear, authentic brands that survive and thrive.

Important branding elements for a property management company include:

And if you’ve already started your property management company, but are struggling to grow it, maybe it’s time to consider a rebrand . It’s possible that your existing branding is holding you back more than you realize.

The cost of brand design

Before you decide that you should put off building a strong brand identity because your budget is tight, rethink that plan.

You don’t have to spend thousands of dollars building a strong brand identity.

Here are a few pricing guides that can help you identify the sweet spot for pricing:

The above guides describe free, cheap, affordable, and expensive options. So, you’ll find a price point that will fit your budget, regardless of the size of your budget.

Get property management software to manage your business

Property management (commercial or residential) requires you to keep track of a million important details.

Which tenants have leases ending soon? When does the elevator inspection certificate expire for Tenant XYZ’s suite? Which tenants pay for their own HVAC repairs?

From regular building maintenance to upgrades and renovations to tenant billing and lease details, you need a single source of truth to keep it all straight.

A good property management software will store the unique data from each tenant’s lease contract, automate processes like tenant billing and rent collection reminders, run financial reports, and more.

But, property management software is not one-size-fits-all.

You’ll want to choose software that is designed specifically for your niche. Two options to consider are software from SparkRental and Yardi , an industry leader in commercial real estate software.

Take the time to research several options to find the right property management software for your business. You’ll be living with it and relying on it every single day.

Finding the right help will be key to building a strong property management business.

As you gain clients, you’ll need to hire employees to take tasks off of your plate so that you can focus on managing and growing your business.

But employees must be paid. So, first, you should only hire for positions that will provide the most immediate benefit to your business.

In a property management company, consider the following types of part-time or full-time employees:

After that, consider what aspects of the business pose the most significant challenges.  

Does it make sense to hire maintenance professionals rather than relying on outside contractors? What about hiring brokers to show and lease vacant units?

You’ll know what your business needs as it evolves.

Building a robust and well-rounded team will create a stable foundation for your business. And you’ll sleep better knowing you’ve got a team in the trenches with you that you can rely on.

The legal stuff

Of course, hiring employees for your commercial or residential property management company means you’ll have to deal with all sorts of legalities and paperwork. This isn’t an area where you should “wing it.”

You should :

Get an Employer Identification Number (EIN) by applying on the IRS website (you’ll get your number immediately after applying!). You’ll need an EIN for many things, including to open a business bank account for your trucking company. Register with your state’s labor department. Fill out paperwork to withhold federal taxes from your employee’s wages. Set up workers’ compensation insurance if it is required in your state.

You’ll also need to decide whether you’re hiring full or part-time employees. Part-time employees cost less and require less paperwork to get set up. So you may want to start with part-timers. Then, as the business grows and you can afford it, you can expand their hours. 

A website is active online, promoting your business 24/7 – even when you’re onsite doing building inspections or showing vacant units.

So, put this vital business tool to work for your property management business.

Start by ensuring that your website design truly embodies your brand. Visitors should understand who you are and what your company is about when they arrive.

Do you specialize in full-service commercial property management?

Maybe your property management company provides white-glove service for the tenants in your residential properties.

Communicate important brand differentiators (things that set your property management company apart from your competition) like these on your website.

And your website’s visual design and marketing copy should protect your business’s personality and identity, too.

Here are some suggestions:

Besides helping people to get to know your property management brand – increasing the likelihood that they’ll hire you (now or in the future) – your business website is also an excellent venue for showing off your success stories.

Consider sharing testimonials from past satisfied clients and tenants.

Finally, a strong website design will lend credibility and legitimacy to your business.

And don’t worry that you have a brand new website and business. You can overcome that obstacle too. Mandi Ellefson, CEO of The Hands-Off CEO, told us that:

I could take a brand-new company and spin up a website and a logo and make it look like they’ve been around for 10 years.

Perception is everything.

To learn more about excellent website design, check out Grow Your Small Business With These 7 Website Design Best Practices and 11 Biggest Web Design Trends for 2022 .

Marketing is essential , especially for new businesses. You need to find a way to get in front of potential clients. 

Whether you’re managing vacation rentals, commercial buildings, or residential buildings, it’s your job to figure out how to let potential clients know you exist.

So, build a game plan for selling yourself and your property management services.

Your marketing efforts will mean the difference between success and failure. So, opt for tactics you can implement daily without taking too much time from your core business – property management.

Here are three tips to get you started:

Take time to develop and rehearse an “elevator pitch” (explaining exactly what your company does, what it does best, and why it’s the best choice) until you can deliver it comfortably and confidently to anyone, anywhere. This 20-30 second explanation of what you do should be interesting and descriptive. After all, you’re the expert in property management – not your potential client. Check out MindTools’ guide to Crafting an Elevator Pitch .

Practice overcoming objections. No matter how excellent your services are, clients and potential clients will always have reservations – after all, their money is on the line. For example, how do you answer questions about your maintenance track record or vendor contract negotiation skills? So, brainstorm as many possible objections as you can think of.  Then practice putting those concerns to rest.

Develop and execute a list of day-to-day tactics that will keep your sales/marketing efforts moving forward. If you’re not selling your services, then it’s likely that no one is. So, make sure to make marketing a part of your daily tasks.

Here are a few ideas…

However, you approach it, plan to seek new business proactively – and then stick with it.

Before you go...

For the brave men and women who dare, starting a property management company may be the most rewarding, life-changing decision ever.

Will you join them and start a property management company of your own?

business plan for startup property management company

We regularly update this guide to keep it current. We most recently updated this guide on February 26, 2023.

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What’s in this article?

15 steps to start a property management company.

 1. Create a business plan  

2. Research your market

3. Choose a business name and legal entity  

4. acquire the necessary certifications and licensing requirements.

5. Make sure your business is legally protected

6. Get business insurance

7. Identify the best pricing structure and set fees

8. set up your property accounting and financial projections.

9. Design well-planned agreements and contracts

10. Create and set up your business website

11. Invest in advertising and marketing strategy

12. Hire passionate people

13. invest in property management software.

14. Network and grow your business

15. keep an open mind, take the plunge, into your own property management company, frequently asked questions about starting a property management company, what is the first thing you should do when starting a property management business, how do you start a management company, what are the steps in starting a property management business, what are the duties of a property management company.

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business plan for startup property management company

Tips For Starting A Property Management Company

Last modified on January 5th, 2021 By Brittany Benz

Thinking about starting a property management company or taking on a career in the industry? Before you dive headfirst into property management, you need to make sure you have the right skills and knowledge. Being in property management may seem simple to those with little experience looking in from the outside, but it is in fact very complex.

If you’re already in property management and are looking to grow your business or make the most of the latest leasing technology, take a look at these helpful resources:

Fill Vacancies Faster: 10 Proven Rental Listing Tips to Convert More Leads

How Online Rent Payments Benefit Property Managers & Residents

How to Make Virtual Showings a Win-Win for You & Your Prospects

Below we’ll take an in-depth look at what a day in the life of a property manager looks like, what is required to start a property management company, and how you can set yourself up for success.

What Is Property Management?

Property Management is the oversight of one or multiple residential, student housing, community associations, or commercial properties. The owner and manager can be the same individual, or the properties can be run by a property management company if the real estate investor doesn’t have the time or experience to manage the properties himself.

What Do Property Managers Do?

Property managers take care of and manage buildings and other real estate properties for individuals or groups of owners. They are classic middle managers that connect owners to renters and also take care of vacant rental properties. Responsibilities of property managers include marketing vacant units, showing the properties, collecting applications, getting leases signed, collecting rent, overseeing maintenance on the properties, conducting move-in/out inspections , and more.

One attraction of property management as a new business venture is that the barrier to entry is low. Startup costs are affordable ($2,000-$10,000), no advanced degrees are required, and you can get into the business with little experience. Having a background in real estate is helpful, but not essential.

Some of the most important traits of a great property manager are the ability to be well organized, to connect and empathize with people, and to be responsive to many types of urgent situations. You’ll have to interact with residents and prospects on a regular basis, so it’s essential you have strong customer service skills.

You will also need to have the skills to form positive working relationships with vendors, as you’ll need a network of contractors to handle maintenance issues, as well as special requests. And ideally, you’ll be proactive in identifying ways for property owners to make valuable enhancements to their properties as well as to save money where appropriate.

Most of your daily tasks will involve working with landlords, residents, and contractors, so your ability to communicate and deal honestly with them is most crucial. Property managers must also be detail oriented, dependable, independent, and consistent. Owners are outsourcing this task so they don’t have to be involved. The successful property manager is a creative and effective problem solver. Finally, you need to have a working knowledge of local, state, and federal housing laws and regulations, as well as a basic understanding of finances.

What Do Community Association Managers Do?

Like property managers, community association managers oversee properties, but these properties are inhabited by homeowners. The homeowners may or may not live in the units they own, and the entire community is run by those homeowners who are elected to the board of the association. The board members are volunteering their time to ensure that their community is the best place for the residents to live in.

If you’re an established community association manager, then take a look at these articles to further enhance your association: 

How to Provide a Standout Experience for Your Homeowners & Board Members

4 Ways to Drive Efficiency for Your HOAs & Condos

Back to those who are starting out — property managers can help community associations by processing the monthly homeowners’ dues payments, tracking violations, coordinating maintenance as needed, and communicating with the board and homeowners in addition to other tasks. While there are self-run community associations, a property manager can be a tremendous asset to take busy work off of the board members and streamline communication to help the association run smoothly.

How Much Do Property Managers Make?

According to recent reports from payscale.com , the national average salary for property managers is around $50,161/year for entry level to $75,000/year for more experienced managers.

How to Become a Property Manager

Once you’ve decided you want to get into the property management game, it’s easy. Many states require you have a real estate license, so check to see if your state is one of them. Like with any new industry you’re entering, you’ll have to start out as an entry-level employee and work your way up. Over the years, you’ll learn the ins and outs of management and make some valuable connections, and eventually, you could branch out and focus on starting a property management company of your own.

Do I Need a Property Manager License?

Although many states require a real estate license or other certification, most don’t require an advanced degree. A real estate license or practical experience in the real estate industry is helpful, but not always required. However, having a real estate or property management certification can still be beneficial if you intend to start working for an established property management firm.

How To Get Property Management Certification

There are a number of programs in the U.S. that offer courses for licensed real estate agents and brokers to get certification in property management. The courses teach you how to establish and build a property management business, find clients, and remain compliant. Here are a few of the most popular courses currently available: 

NAA Certified Apartment Manager Credential Program

IREM Certified Property Manager Course

NARPM Residential Management Professional Designation

How to Start a Property Management Company

Starting a property management company is similar to setting up any other type of commercial enterprise. You need to establish a legal entity – normally a Limited Liability Corporation (LLC) or an incorporated business (Inc.). You can hire an attorney or you can do it yourself online.

It’s also a good idea to draft a business plan . Having a solid business plan can help you to make better decisions, stay focused, and to take a methodical approach when starting your company.  When creating your business plan, consider your short- and long-term goals. Where do you want your business to be in 1,3, and 5 years? What kinds of services do you want to provide to your residents? How do you want to structure your team? How do you plan to handle maintenance? When you’re finished, you’ll have a comprehensive roadmap to successfully run your property management business. 

How to Market a Property Management Company & Get Clients

Networking is an effective way to begin building your client base. Find local real estate clubs and connect with local business organizations like the Chamber of Commerce.

Reach out to real estate agents who are constantly in touch with landlords. Local lending institutions are also good sources of leads. They may have properties for which they are responsible and outsource the property management function. Local contractors also interface with property owners regularly, so seek them out for possible introductions.

Finally, advertise your services using both on and offline channels, and be sure to run a paid search campaign to capture property owners searching for property management companies in your area.

How to Run a Property Management Business

Once you’re all set up and have some properties to manage, it’s in your best interest to employ a property management software to keep you efficient and organized to successfully run your business. Daily tasks can be streamlined, so you can focus next on growing your business and making more money.

And while your property management company may start out small, be sure to look for a software solution that scales as your business grows. By doing so, years from now when your business is booming, you will be comforted in knowing that you aren’t going to outgrow your software.

Once you manage 50 or more units, consider implementing an all-in-one property management solution, like AppFolio that gives you the ability to run your business, stay connected, and communicate with customers — from anywhere. For more information on how AppFolio Property Manager can help optimize and grow your property management business check out this helpful guide.

Being a property manager can be challenging, but for the right type of individual, it can be an extremely rewarding career.

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Thiago daLuz

Our property management company in Huntington Beach CA does a pretty good job informing clients about their responsibilities, but a little extra insight never hurts. Thanks for putting this together.

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Great article, Aimee. Thank you for the tips. One question I have that was touched on but not explored in more detail (local laws, etc.) is the licensing requirements some states have in place. How onerous can the licensing requirements get?

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Collin, each state is different. Call your state’s real estate commission and ask if a license is required. It is in NC!

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Good description, the company I work for in south Florida does a pretty good one running the extra mile and providing the owners/investors financial statements for monthly control of their assets.

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Nice, Simple, straight and Amazing Article !

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I have recently retired from a very large property management co. based in NYC and am looking to start my own co in south Florida. My old co managed over 500 major malls (including Simon Properties) across the US and many high rise buildings in NYC.

Do you recommend partnering with another upstart?

Florida has licensing requirements. Not a big deal.

What do you think the difference is between Property Mgt. and Facility Mgt. Do you recommend combining both as a startup.

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Hey Mike, I just came across this article and your post. Curious to see about your progress and what part of Florida?

Sorry for the delay in responding…..I am in south Fl. Palm Beach to Miami. Lots of competition. There seems to be only a few BIG companies with most of the business. I have had little success cracking the managing end, however, I am inundated with the “DO IT” side. Lots of unqualified management people few hands on. Most with little or no formal education. ( I’m an odd ball with a masters in engineering) Easy to get certified here ….20 hrs or so course, test and wa-la I’m A Facility Manager.

However, I have been able to build a nice fix-it business, however, I do find it hard finding qualified tradesman and people with experience with contracts, accounting, budgeting, and project management. Really spreads me this sometimes.

There are some good trades man around, most without work permits and green cards. A potential sink hole. However, I’m moving along and will continue to try to crack a few of the mid-sized properties.

I try and keep you posted.

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Thank you for the article. Here in KY a person within the firm must have a valid real estate license and I understand that more states are adding that to their licensing requirements.

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Aimee Miller

Glad this article was so helpful — here are a few additional resources that will help you learn more about starting your company: + Educational articles — http://www.PropertyManager.com + Industry Associations focused on property management: http://www.IREM.org ; http://www.NARPM.org ; http://www.NAA.org There are often local meetings for members as well as certification and education to help you ensure you’re meeting the requirements, laws and best practices.

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These sound like great tips of advice! Personally, I found the article helpful, informative, and insightful! Thanks for sharing!

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business plan for startup property management company

Small Business Trends

How to start a property management company.

how to start a property management company

Looking to start a business offering property management services? Remember there’s an overlap between what a property manager and real estate agents do. They both work in the real estate industry. And have some of the same requirements.

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The future looks good . The property management market will be worth 21.4 Billion USD by 2025. So, if you are looking at how to make money in real estate , property management is one sure way to do it.

What is a Property Management Company?

Absentee landlords hire them for managing properties.

How Much Does it Cost to Start a Property Management Company?

17 important steps to starting a property management company, 1. research other property management companies.

Before you can start your own property management company, you need to know what you’re up against.

2. Choose a Name and Brand Your Property Management Company

3. write a property management business plan, 4. form a legal entity and register, 5. open a business bank account, 6. make sure you have the licenses and permits required in your state, 7. create a business website and choose a location.

A business email hosting service is good. The setup fee should be low .

8. Consider Ongoing Costs and Fees

9. get your taxes in order, 10. purchase business insurance, 11. plan your accounting system, 12. set up your business phone system, 13. hire staff, 14. finalize your services and pricing structure, 15. consider property management software, 16. market your business, 17. expand your portfolio.

business plan for startup property management company

Property Management Business Plan

If you are starting a property management company, you may need a business plan in order to acquire third party financing, or better understand how to enter your market. Generic business plan software makes you perform the effort and many business plan writers are simply underqualified. Pro Business Plans is a professional and diverse team that takes the time to understand your business model to create a fully custom property management business plan for internal planning and strategy.

Building a property management company is not simple, it requires the ability to acquire clients and establish a custom operational plan based on the unique qualities of your company. If you are seeking third-party investment to start or grow a property management company, the financiers will request to know how your company is different from others on the market. In many cases, this will require an innovative marketing strategy, strong management background, or other differentiating factors that qualify you to run a property management firm. Pro Business Plans has worked with several companies in the real estate industry to sprout and grow through custom business plans.

Business Model

The business model in a property management business plan constitutes the majority of the content. It explains your unique approach to the market and how you will outperform other companies in year area. This may entail forming strategic partnerships, outlining a strict operations process for managing properties and handling clients, or implementing some competitive edge that other companies have difficulty competing against. Pro Business Plans has worked with many property management companies within the United States and abroad to construct and communicate their business models.

The marketing plan section of the property management business plan is among the most important for new companies seeking to quickly establish a client base. This often outlines an approach to win new property management contracts through a combination of marketing channels including traditional sales, digital media, and strategic partnerships. Pro Business Plans has analyzed what has worked for similar companies in the past and leverages the competitive edge of your business model to produce a custom marketing plan.

Financial Projections

The financials of a property management business plan should reflect two primary components that depend upon the business structure. In some cases, small family office employees work to manage the properties directly to receive a dividend or have intentions to sell the company later on. In other cases, all employees are hired and managed by the owner or a full-time management employee. Each condition will have an impact on the expense structure of your company, along with the anticipated client portfolio and fees charged, which will range depending on the location and complexity of the managed properties. Pro Business Plans has created the financial projections for property management firms in the past and collaborates with your team to determine reasonable assumptions about its future performance.

What is Included in Our Custom Business Plan?

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Pro Business Plans is a team of professional researchers, writers, designers, and financial analysts. Speak with an advisor today.

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How to Create a Property Management Business Plan

Property management is one of the most lucrative real estate ventures that you can set up in 2019. An increasing number of real estate investors are opting to delegate property management to professionals. Consequently, there has never been a more ideal time to start a property management business. But how to become a property manager ? And what are the steps to creating a property management business plan? In this article, we will explore the nuts and bolts of how to start a property management company and teach you the basics of writing a property management business plan .

The Importance of a Property Management Business Plan

A business should be built on a solid foundation, and the first step of laying it begins with a coherent business plan. This is essentially a document that encapsulates your business and outlines the essential aspects of your activity. More importantly, a business plan is a legal requirement in most states. It is also worth noting that the specifics of how the business plan is structured vary from one state to another. But generally speaking, here are the main points that should be included in a property management business plan proposal:

After going over the basics, let’s delve into further details on how to craft a property management company business plan.

What You Have to Know When Creating a Property Management Business Plan

As you can see from the points discussed above, a property management business plan does contain a wide range of elements. Having a firm grasp of all of them is essential for ensuring state law compliance. Here is a brief look at what you need to be aware of when creating a typical residential property management business plan.

Related: 10 Things Every Rental Property Manager Needs to Know

1- State laws

The first step of creating a property management business plan is familiarizing yourself with state laws. Proceeding without checking local regulations can lead to several compliance issues. For example, some states (like New York and Florida ) only allow licensed real estate brokers to become property managers . Conversely, other states have more lax laws when it comes to property management eligibility. In addition to this, the property manager should also be aware of all the laws that pertain to the tenant-landlord relationship.

2- Education requirements

Besides reflecting the business, the property management business plan must also reflect the managers themselves. This is why you have to include relevant education credentials in the plan. Moreover, some states will require you to take several classes before granting you a property manager’s license. To avoid any unnecessary delays, make sure to take the classes before the set deadlines.

3- How to get property management clients

The client is the cornerstone of the management business. These are the investment property owners that managers seek to service. Needless to say, the ability to generate property management leads has to be reflected in the plan. The most effective lead generation methods for a start-up property management company are still networking and paid ads.

Related: How to Get Property Management Clients in 2020

4- How to find tenants

Finding clients is only half of the equation. The other half is finding the tenants that will occupy the rental properties that you are managing. The rental properties business plan must contain a section that outlines the manager’s prospecting ideas. Luckily, there is a wide array of options when it comes to finding tenants. This includes everything from online listings to word of mouth.

Now that you’re familiar with the prerequisites for creating a property management business plan, let’s take a look at how you should structure one.

How to Structure a Business Plan

how to structure a property management business plan

Most business plans follow a similar template and feature no more than five sections. Here is an example of a simple and intuitive property management business plan structure:

Section 1: A general overview of the business 

The first section should focus on some basics aspects of your real estate management business as well as its overall objectives. This is where you need to identify the ownership of the business and provide a basic overview of what you want to accomplish.

Section 2: Details about the property management company

This section is where you will be adding more details about your property management company. You will have to define several aspects of your activity. This includes a thorough description of your business model, a SWOT analysis , and your long-term and short-term goals.  

Section 3: How your business operates

This section of the property management business plan is dedicated to the operational side of the company. In other words, you need to specify everything that pertains to the day to day running of the business. Examples of this are the services you offer to clients and tenants, your fee structure, and the organizational chart of your company.

Section 4: Your marketing plan

As we mentioned earlier, a property management business plan must contain a comprehensive marketing plan. This section should feature as much detail as possible since every aspect of the business needs to be covered. Make sure to expand upon lead generation and client retention strategies.

Related: 4 Real Estate Marketing Strategies to Find Tenants Quickly in 2019

Section 5: Your financial projections

Creating financial projections is an integral part of a property management business plan . Since this section reflects the financial side of the company, you will have to create a balance sheet. Additionally, you will need to do a profit and loss projection for the first year of operation.

The Bottom Line

Creating a real estate property management business plan requires a fair amount of work. Having said that, the process becomes more streamlined and enjoyable once you have grasped the basics outlined in this article. Just make sure to pay close attention to every detail and avoid rushing through the steps.

Once you have set up your property management business, you’ll be glad to know that there are several tools that can help you do your job! Head over to the Mashboard and start using the best tool for property managers .

business plan for startup property management company

Yassine Ugazu

Yassine is a versatile content writer who enjoys crafting compelling copies and articles about the various facets of real estate.

How to Use Price to Rent Ratio in Real Estate Investing

Colorado housing market 2020: interview with real estate agent joe mivshek, related posts, buying an investment property is a smart investment in 2018, how do i find the best real estate agents near me for investment properties, successful real estate investors are not born, they are made. how do you become one, how to become the best airbnb property manager in your city, 6 best tips for starting a property management company, achieve financial independence with real estate investing, how can obtaining a real estate license boost your real estate investing business, the future of real estate investing: coliving buildings, tips for an accurate real estate comparative market analysis, 5 must-read books for the multi family investor, 4 reasons why property management businesses are thriving, 7 ways to give your property management career a boost.

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  10. How to Start a Property Management Business

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