How You Can Start A Property Management Company Today<\/h1>\n

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Diving into business can be complicated sometimes. In order to make your business successful, you have to search and look for guides that will eventually help you. Before opening your business, it\u2019s essential to think about the necessary steps and risks that come with this type of venture.\u00a0<\/span><\/p>\n

Luckily for you, CORE Member<\/b>, we have compiled a comprehensive list of what you\u2019ll need to do before starting a property management company! <\/span>Remember, you can read blog post after blog post about starting something new, but until you actually get up and take action, no matter how small, nothing will change.<\/span><\/p>\n

Now, let\u2019s go into the first step.<\/span><\/p>\n

#1: SETTING UP YOUR PROPERTY MANAGEMENT COMPANY<\/b><\/h2>\n

Before beginning any marketing endeavor, make sure you have a name to represent your business and an online presence. We recommend taking steps before proceeding past that time, as you’ll have a better understanding of what awaits you.<\/span><\/p>\n

Write a Property Management Business Plan<\/b><\/h3>\n

A business plan is the blueprint for your entire property management business. The point is to plot out ev<\/span>ery aspect of your company from its initial capital, all the way to profitability.<\/span><\/p>\n

As per the Small Business Administration, a formal business plan has Executive Summary, Company Description, Market Analysis, Organization and Management<\/span><\/p>\n

, Service or Product Outline, Marketing and Sales, Funding Request, Financial Projections and Appendix.<\/span><\/p>\n

Licenses and Certifications You Need to Be a Property Manager<\/b><\/h3>\n

You need a Real Estate Broker’s license to make real estate transactions happen. To do this, you have to take classes such as property management and taxes and pass an exam.<\/span><\/p>\n

And you will also need a property manager\u2019s license. This license also requires coursework and an exam.<\/span><\/p>\n

Some certifications, not required to go into business, are designed to help you with specific areas of your business. A certified property manager, for instance, holds a real estate broker\u2019s license and has completed coursework on property management.<\/span><\/p>\n

File Your Property Management Business<\/b><\/h3>\n

With this litigation, it’s important to file your business for tax purposes. And you’ll also want to choose a legal entity so that personal assets are protected and separate from what belongs to your business.<\/span><\/p>\n

S-Corps and C-Corps are both a viable option for property management companies.<\/span><\/p>\n

You will need to consider whether you want to file as a pass-through business or if you want to file as a C corporation and be paid like an employee.<\/span><\/p>\n

A C-corporation could have a double taxation problem if they work with an accountant who doesn\u2019t know the laws. However, S-corporations aren\u2019t as affected since their profits are taxed as personal income. Instead of business income, these taxes are part of the earnings from personal effort from the company, so you don’t need to worry about any double taxation.<\/span><\/p>\n

#2: ORGANIZING YOUR FINANCES<\/b><\/h2>\n

Do you have a goal for the first fiscal year of your business? If not, start thinking about one, which should be optional but may also be required for filing. For instance, do you expect how much income you will make and what are going to be your expenses as a whole. Remember to put aside at least as is needed for the unexpected.<\/span><\/p>\n

Consider these ideas as you plan for the future of your company.<\/span><\/p>\n

Set Up Your Property Accounting<\/b><\/h3>\n

Rather than manually tracking all your rental properties, tasks such as accounting for rent and expenses can be done easily with a spreadsheet. There are specialized property management software packages that not only help you keep track of your rentals, but monitor expenses and facilitate timely billing. <\/span><\/p>\n

Business expenses can now be tracked in so much more detail than ever before. Money coming in can include rent and other revenue streams, while money going out can include repairs and other payments to vendors for maintenance.<\/span><\/p>\n

A good tip for your business is to set up a security deposit, separate accounts for your owners’ properties, and then an account where the profits from your business are deposited.<\/span><\/p>\n

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Expenses You Should Expect<\/b><\/h3>\n

Track every penny you spend on a monthly, quarterly, and yearly basis so that you know where the money is going and can set realistic revenue goals. Having all your expenses organized will help you keep out of financial trouble.<\/span><\/p>\n

Your expenses will most likely include:<\/span><\/p>\n

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1. Payroll and Vendor Fees<\/span><\/li>\n
2. Overhead- This includes supplies as well as rent and utilities for brick-and-mortar locations.<\/span><\/li>\n
3. Other Service Fees- These Other fees include software used for managing my business.<\/span><\/li>\n
4. Membership Fees<\/span><\/li>\n<\/ol>\n

   Forecasting Revenue and Setting Goals<\/b><\/h3>\n

   Your revenue will mostly come from management fees, which is a percentage of the rental rate. Some businesses, however, charge a flat fee for basic services. Owners can then opt for more services at a higher rate.<\/span><\/p>\n

   Additional income will be generated from late fees, key or lock replacement fees, finders fees for bringing in residents, maintenance bill mark-ups, and other smaller fees and charges.<\/span><\/p>\n