Operating your business from home can be incredibly rewarding. For starters, you have personal freedom, you get to keep most of the money you make, you’re more productive, plus you’ll have more time for friends and family.
But what makes a property management business such a great option for a home-based business? Well, to start with, it’s one of the many businesses that has low barriers to entry. Startup costs are affordable ($2,000-$10,000). You also don’t require an advanced degree. And while having a background in real estate is helpful, it isn’t essential.
Thinking of starting your property management business? Let’s get into the details.
Registering your business
As with all businesses, you’ll need to go through the process of setting up a legal entity. Luckily, registering a property management business is easy. Different states have different processes.
Generally speaking, you can register your business online – a lawyer isn’t necessary. Next, you have to make sure that your business has a physical location. In this case, your home. Also, you need a dedicated phone line. “Dedicated” meaning it’s just for your business and nothing else.
Also, it may be important for you to narrow down to one specific property management niche when starting out. Some of the areas include:
- Construction
- Real estate brokerage
- Land management
- Non-residential property management
- Residential property management
- Commercial leasing
- Real estate property management
Technical and manpower details
A standard property management company employs the following staff:
- A front desk officer
- An accountant
- Sales and marketing firm
- A business developer
- Head of assets management, acquisition and disposition
- Admin and HR manager
- Company lawyer/secretary
- Project manager
- Chief Operating Officer
However, when starting out, you only require a computer and an internet connection. You only need to outsource for such services when required.
Choosing a location
In real estate, location is important. But with a property management business, it’s possible to manage various properties that are spread out across different cities. When starting out however, it’s important to choose locations that aren’t saturated with property management companies.
You should position your business in a place known to be safe and suitable for people to live and conduct their business, a place that people move to in search of jobs, or better living.
The barriers to entry
Low barrier to entry is one reason that makes property management such a perfect home-based business. Unlike other businesses, you don’t require an advanced degree and the minimum educational requirement is a high school diploma.
A little experience would also help, as it’ll help you know the ins and outs of management and make valuable connections.
The required skills
Property management isn’t for everyone. While an advanced degree isn’t required to start, a certain set of skills is necessary if you’re to be successful in this highly competitive business.
So, what are the best traits of a property manager?
We asked Mousa Ahmad, the owner of Own It Detroit, this exact question.
Here are his answers:
- Detail oriented. If you’re detail oriented, you are able to protect your clients. For example, you need to perform regular inspections to know the condition of the property you’re managing to avoid injuries that could lead to lawsuits.
- Organized. The life of a property manager is extremely tasking. There’s always something to do. Without organization, something important will fall through the cracks.
- Professional. A level of professionalism is required when dealing with vendors, clients, tenants, employees, and so on.
- Knowledgeable. Solid financial skills are key. This is because you’ll be responsible for creating revenue and managing expenses. Taking short courses in real estate, business and accounting will definitely help.
Growing your home-based property management business
One advantage a home-based business has over others is the ability to undercut the prices of more established businesses. This is essentially because you have less expenses to worry about.
With the extra profits, you may want to invest it back into your business in order to grow. So how do you grow from one client to the next?
- Have a website set up. Then get an SEO expert to boost its local discoverability in search engines.
- Affiliate with local businesses to boost marketing reach.
- List services on your website so owners can easily hire you.
- Invest in content marketing to provide insightful information to clients.
- Advertise your services both online and offline.
- Use rental ads as leads.
Revenue projection
The national average salary is around $38,000 per year for entry level property managers to $53,000 per year for experienced managers, according to recent reports from payscale.com. More experienced property managers can make up to $70,000 per year or more.
Property management is a surprisingly easy and affordable field to enter, requiring almost no start-up capital, and minimal experience or education. However, it’s a multifaceted business that involves creating protocols that are both effective and efficient, understanding both state and local landlord-tenant laws, and liaising with many different types of people.
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