The great thing about building a property management business is that you don’t need much money, experience, or special education to get started and make it successful. The basic operation of the business revolves around managing various stakeholders of your business, such as the contractors, landlords and tenants. You also need to have an interest in real estate, the local economy and understand the local laws concerning landlords and their tenants. Although there is virtually no upfront investment for starting this small business, there is still a lot of work involved so be prepared for that. If you’re still up for the task, then continue reading to learn about how you can build your business successfully.
Below are the 5 steps in building a successful property management business.
1) Forming the Business Entity
Before you can conduct business legally, you need to create a legal entity for your business. This means registering your business legally. You can find most of the information regarding business registration here at the UK government website. As a small business, you will have a choice of being a sole trader, limited company or partnership. In the case of running a property management business, you will likely want to form a private limited company. This separates you and your finances from the company’s finances and those who work in it. At the same time, you get to keep all the profits after taxes. Also, depending on the province or city where you live, you may be required to get a license too.
2) Set Up Your Office
The next step is to set up the office of where you will be running your property management business. This might be a home office or some commercial office space that you rent out. If you want to look professional and have your clients come to your office in-person, then you’ll want to use commercial office space. That way, your clients will trust you more and feel comfortable with doing business with you.
3) Find Property Owners
Now you need to start finding property owners and real estate investors who have houses, apartments, or condos that they want to rent out to tenants. This will involve networking through real estate investment organizations and online real estate investor groups. You could also attend real estate seminars and make a lot of connections there too. Be sure to have plenty of business cards available that you can pass around and gain leads from. Building trust and authority is crucial and that depends a lot on how effectively you develop the business branding plan. You can go a long way to set yourself up as an expert by offering useful advice to the property owners on how to save utility bills, how to manage property taxes or how listed building need a specialist insurance policy. As soon as you build a portfolio of property owners who want to hire your company as their property manager, your business will have gained significant momentum.
4) Find Tenants
Once you have property owners as your clients, the next step is to find tenants for their properties. The first thing you will do is advertise in physical, online newspapers and classified ads. If your business is located in a university town, you can also contact university’s administration and get your listings posted in the student portals. As you start to get phone calls and emails from prospective tenants, you will have to sort out the good ones from the bad ones. This means evaluating their financial position, doing credit checks, contacting their references, and so forth. Eventually, you will find suitable tenants for your other clients and then set them up on the properties.
5) Manage the Business
Steps three and four will always be an ongoing process if you want to continue to expand your business and earn more revenue. However, you still must manage the existing tenants for your clients and address their concerns as they arise. If repairs are needed, then you will need to contact the landlord about these issues and then transmit what they say back to the tenant. Often the property management businesses collaborate with plumbers, painters, and electricians to offer the property owners a comprehensive managed service. Like previously mentioned, managing this business is mostly communicating with tenants and landlords. So, it is important that you’re a people person if you’re going to be successful in this business.
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