Are you interested in starting a property management company? Do you have passion for real estate investing but you don’t have the massive investment capital to venture into real estate development? Do you need a sample property management business plan template? If YES, then this article is for you.
If you appreciate being your own director and have an interest for real estate but you do not have enough money to develop a property or buy it, then you should consider opening a property management business.
Now property management, also known as real estate management is a very lucrative business that was fueled by a need to acquire or develop properties without having to deal with the day-to-day running and maintenance of the properties. As a property management firm or manager, your core task is to oversee a property, maintain it, increase its value and cash flow over time and make returns to the client or owner.
Starting a Property Management Company – Sample Business Plan Template
- Get the basic knowledge
Before ever you venture into any business, it is considered wise and advisable to first understudy such business and its industry as a whole. Don’t jump into any business blindly or on false assumptions. This rule is applicable to any industry including the real estate industry. To gain the needed knowledge, you can enroll for a property management course, or serve as an intern in a property management firms. The most important thing here is to get the knowledge.
1. Apply for a business license
To become a property manager or start a company, you need to apply and get a proper business license. There are so many types of business licenses but getting the appropriate one is very important. You can do this by contacting your local government agencies. They will instruct you on the aspect of license you will be needing to start the property management business in your state.
2. Advertise your business
You can accomplish this by buying ads in local newspapers, billboards, telephone books and even on radios and televisions etc. You can as well build a website for your business and advertise it on the internet. Every detail you need to excel is contained in this property management marketing plan.
3. Search for clients
Landlords and real estate investors can be found in large numbers at local real estate investment clubs. Join as many clubs as you can, be aggressive in networking, because this base is your bread and butter.
4. Recruit local property owners as your clients
Showcase to them that you are capable and willing to manage their properties and become the middle man between them and the prospective tenants. Discuss all pros and cons with the prospective client. Be kind and professionally inclined. A prospective client will not want a person who is inconsistent or flaky.
5. Be fair and transparent
Provide a fair and clear contract with your clients that is fully detailed of what is expected of you and them. Once a good contract is in order, then there will be no room for turmoil and misunderstanding.
To be a good property manager, you must always strive to minimize risk (such as risk of damage to rental units and litigation) and endeavor to maximize your clients’ profits (by slashing maintenance /repair costs and vacancy rates). You can achieve all this by offering incentives to the tenants under your management. You can start this by rendering simple offers such as low rent for tenants who will agree to longer-term their lease agreements.
Also note that it is bad for you as a property manager to be both proactive and reactive when dealing with your tenants, because some more issues can be wiped up easily if it is addressed immediately, but when you leave it to fester, they can result in lawsuits, payment defaults and damaged rental properties.
Finally, you will need several contractors on call to carryout maintenance and repairs. These should start from inexpensive handymen up to fully licensed contractors to handle the more intricate repairs.
In conclusion, the above information will surely guide you to venture into property management business. Judiciously follow these steps and I bet you will find it interesting because being a property manager is really profitable.