Property management is a business that handles every aspect of a rental home — from marketing vacant properties and signing leases, to collecting rent and calling for repairs. Property managers work with rental property owners in supervising daily operations and marketing their real estate properties, while attending to any concerns their tenants may have. According to Entrepreneur’s feature on property management businesses, it is a good investment because rent prices and the demand for rentals have been increasing recently. Even vacation rentals, like Airbnb, are starting to overtake hotel bookings – albeit before the start of the pandemic. In addition, technology has been making it much easier to handle than ever before, with property management platforms like Guesty for short-term rentals and Buildium for long-term rentals.
This is why, although property management can be time consuming, it can be very worthwhile — even in today's turbulent times. If you're planning on starting your very own property company, here are some tips to get you started.
Before starting any business, it’s crucial to define your goals, as they are the foundation businesses are built on. Chron’s article on property management goals starts off with getting advanced education as a property manager, like an MBA or a master’s degree in real estate management, which is what rental business owners would prefer. You should also look into overseeing bigger properties and multiple complexes to gain experience to add to your portfolio. Getting licensed and earning professional certifications from institutions, like the National Association of Residential Property Managers, should also be part of your goals, so you can demonstrate your credibility and expertise, and set yourself apart from your competitors.
Deciding on a location is crucial, as you’ll want to make sure you’re investing in the right areas. And California is one of them — having a strong job market, low property taxes, high rental demand, and increasing home values. Starting a Californian property management company is undeniably profitable, with property managers earning around $58,760 per year. It also helps to network and establish connections with realtors in your chosen area. Also consider joining industry groups, like the California Apartment Association, for some motivation. If you're operating here in Tennessee, then The Realty Association and the Tennessee REALTORS are good places to start.
A previous feature here on Realty Biz News points out the importance of having excellent knowledge when it comes to the surrounding area as well. You should be well informed about its history, local economy, average house prices, statistics, schools, public transportation system, and future building plans.
Once you’re done with your research, it’s time to lay out your business plan with different sections focused on property management. First, you should identify your business model. For example, Property Week’s article on property managers highlights the importance of adopting new business models, such as the integrator model. With this model, landlords employ the property manager to act as the main point of contact between the landlord and tenants, but not as a key part of the hierarchy.
Next, you should state your company mission and goals, as discussed earlier. Then, you need to outline the team structure to identify your staff’s different roles and responsibilities. After that, you must enumerate the services you offer and the corresponding fees. Lastly, you need to put into detail how you plan to pitch to clients, what your ideal market is, and what types of properties you’re targeting.
A successful marketing strategy has a lot to do with the overall success of a business. Answering the question, “what’s your unique selling point?” is the pillar for your brand promotion. Small Business Trends’ list of real estate marketing tips emphasizes the need for a unique marketing strategy, as it can be tough for new businesses to set themselves apart from the already established and successful ones.
First, you’ll need basic online and offline marketing tactics to boost visibility for your business. You can build a website and create valuable real estate content, including walk-through videos. Meanwhile, distributing business cards can be a good start. Eventually, you may level up to hosting local events, like a simple happy hour or networking gathering for people looking for homes.
Next on your marketing strategy, you need to be creative in coming up with ways to stand out from the competition. Finally, you need to create valuable partnerships with rental business owners and people looking to rent properties to expand your brand promotion.
Starting a new property management business can be challenging, and it may be difficult to attain success right away when going against more established businesses. Hopefully, these simple tips can give you a good start and allow you to build a reputation for your new business that can eventually be on par with the recognized businesses in the industry.