Do you want to know exactly how much it cost to start a property management business? If YES, here is a detailed cost analysis for starting a property management business and raising finance.
Having provided you with a:
- Property Management Industry Overview
- Market Research and Feasibility
- Property Management Business Plan
- Property Management Marketing Plan
- Property Management Firm Name ideas
- Property Management Licenses and Permits
- Cost of Starting a Property Management Company
- Real Estate Management Firm Marketing ideas
We will consider how much it cost to start a property management business from scratch including the operating costs.
There are few factors that influences the start – up cost of a property management business and of course renting or leasing an office facility tops the list. When it comes to starting a medium scale property management company, the following expenditure should guide you:
How Much Does It Cost to Start a Property Management Company?
- The Total Fee for incorporating the Business: $750.
- The budget for Liability insurance, permits and license: $2,500
- The Amount needed to acquire a suitable Office facility with enough space for 6 months (Re – Construction of the facility inclusive): $40,000.
- The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al): $5,000
- The Cost of Launching your official Website: $600
- Budget for paying at least two employees for 3 months and utility bills : $10,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al): $2,500
- Miscellaneous: $1,000
Going by the report from the research and feasibility studies, you will need about $71,000 to set up a medium scale property management company in the United States of America
If you want to settle for a small scale –neighborhood property Management Company, then you can as well operate from your home or share office with a friend or rent a virtual office. Also you can run the business alone thereby eliminating the cost of paying employees.
With that you can spend less than $12,000. But if you are considering launching a large scale property management company, then you should be ready to spend well over $150,000.
Financing Your Property Management Business
If you choose to start your property management business on a small scale, you might not need loads of money to launch the business, but if you decide to start on a large scale, you will sure need to raise the required start – up capital to launch the business.
If you are starting your property management company on a large scale, you will need a decent office space, office equipment and furniture, and money budgeted for the payment of salaries and utility bills for at least a period of 3 months. In essence you are expected to generate your start – up capital.
When it comes to financing a business, one of the first thing and perhaps the major factors that you should consider is to write a good business plan. If you have a good and workable business plan in place, you may not have to labor yourself before convincing your band, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for start – up capital for your property management business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Applying for loan from your bank / banks
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends.