Running a property management company involves overseeing one or several commercial or residential properties that are used as short and long-term rentals. This could be anything from condos, single family homes and multi family homes, to storage units and office buildings. Landlords that don’t have the experience or time to manage rental properties themselves rely on property management companies. The role of a property manager includes advertising vacant units, screening potential tenants, collecting rent, overseeing property inspections, and handling maintenance issues.
A lot has been said about how to start a property management company. But what about what comes next? How do you ensure your company runs smoothly and successfully? The following are tips on how to run a successful property management company:
1. Brand Your Business
Good branding is very crucial for a successful property management company. The first thing you need to do is create a logo that aligns with your business name. The logo will be a visual representation of your company which can be added to posters, flyers, videos, business cards, websites, and brochures. If you cannot design the logo yourself, look for a professional graphic designer to get the job done.
Another important aspect of your branding is color. Colors can be used to influence mood, signal action, and even influence behavior. For example, white is commonly associated with innocence and purity, while yellow often represents energy and warmth. Be sure to choose colors that represent what your company stands for.
Related: Increase Brand Awareness for Your Real Estate Business
2. Write a Property Management Business Plan
To run a successful property management company, you need to have an elaborate business plan. This is a document that explains what your business is all about and what steps you plan to take to grow it. This will make it easy for you to present your vision to prospective stakeholders or investors. The business plan should include:
- An executive summary
- Company description
- Products and services
- Operation plan
- Marketing plan
- Management
- Financial projections
If necessary, the operational, marketing, and management sections can be adjusted in response to changes in the business.
3. Register a Legal Entity
When it comes to forming a legal entity, you can choose from the following options:
- Sole proprietorship
- Partnership
- Limited liability corporation (LLC)
- Incorporated business
It wouldn’t be advisable to go for the first option since all liability issues and taxes rest on the shoulders of the sole proprietor.
4. Get Financing
Running a property management company is not a cheap affair. You will need financing for things such as:
- Securing a trademark
- Incorporation
- Insurance
- Licensing
- Web design
- Office rent and supplies
- Building utilities
- Payroll
If you don’t have the cash to start off, visit your local banks and other lenders to get more information about small business loans. Alternatively, you could reach out to some investors that would be willing to fund your business.
5. Buy Insurance
Property management is a business that is prone to many liability issues. The rental properties being managed can be damaged or destroyed by vandalism, fire, weather or any other accident. Therefore, your property management company should have different kinds of insurance including:
- Commercial property insurance
- Liability insurance
- Automobile insurance
- Business interruption insurance
Most of the major insurance providers offer special packages for property management companies.
6. Hire the Right Employees
You cannot have a successful property management company without the right employees. Here are some of the positions you should consider:
- Maintenance coordinator
- Resident manager
- Office secretary
- Payroll administrator
- Sales representative
- Property manager
However, this does not mean that you must fill all of these positions at once. You can start with one or two people, and scale as your property management company grows.
Related: 8 Hiring Tips for Property Management Businesses
7. Market Your Property Management Business
Marketing is also very important for a successful property management company. The first step in property management marketing is to create a company website that explains who you are and what products or services you offer. Having a website will increase your visibility, boost your credibility, and attract property management leads. You can use a website builder to create the site yourself or hire a professional web designer.
You can also draw property management clients to your business by creating social media accounts for your company. Having accounts on Twitter, Facebook, LinkedIn and Instagram will make it easier to engage with prospects. Besides posting the usual social media updates, you could use paid ads in order to reach more potential clients and tenants.
Finally, consider joining the local chamber of commerce. This will provide a great opportunity to network with prospects at exclusive business events. As a chamber member, you will also have access to specific services at a discounted rate.
8. Leverage Property Management Tools
Software is a very important element in learning how to run a successful property management company. You can use the following tools for good property management:
- Property management software – This software can help schedule meetings, organize billing, store rental property information, and more.
- Accounting software – Long term rental and Airbnb accounting software comes in handy for tracking revenue, running payrolls, managing expenses, and generating financial reports.
- Maintenance management software – This can be used to track renovations and schedule repairs.
Related: 7 Best Property Management Tools for 2019
9. Find Investment Properties
Besides maintaining commercial and residential properties, property management companies can go the extra step of finding investment properties for their clients. The good news is that there is a wide range of tools that can be used to find different types of rental property. For example, Mashboard can help you locate properties that match your client’s goals in terms of property type, listing price, return on investment, optimal rental strategy, and market availability. You can even search for investment property based on metrics such as cap rate, cash on cash return, rental income, and occupancy rate.
Conclusion
Anyone can learn how to run a successful property management company. Apply the property management tips mentioned above to be a successful property manager. Though a property management career is very demanding, it can also be very rewarding.