One of the best tips for starting a property management business is to learn the applicable real estate laws in the jurisdiction where a property management company is located and where its owners plan to manage real estate. Other tips include opening business banking accounts, hiring professional staff members, and purchasing the most recent and efficient property management software. Before starting a property management business, it is also important to properly establish a legal company and acquire a business license.
Whether starting a property management business to oversee a single residential property, an apartment complex or a commercial property, it is important to learn all of the laws and rules that apply to real estate management. Doing so assures that a business is being run within all legal guidelines and helps to minimize the risk of future lawsuits and penalties. Familiarity with real estate laws also helps a property management business operate more effectively, as there are uniform rules that apply to tenants, owners and management. In many areas, classes in property management, which include legal aspects, are taught at local colleges.
Starting a property management business to oversee a single residential property or even a small number of apartments can sometimes be done as a home business. Still, a small business must run professionally and, therefore, it is important to organize a legal entity specifically for property management. After a company has been created and a business license has been acquired, separate business banking accounts should be established for the management company. Experts recommend opening a checking account for depositing rent checks and for paying operating expenses, while a savings account should be designated for holding rental deposits.
As a business start-up, many people are attracted to the idea of property management because of the opportunity to "be your own boss." While starting a property management business does offer this benefit, it still may be necessary to hire other professionals to assist with the daily operation of the business. Depending on the size of the business, other professional staff may include rental agents, maintenance workers, security personnel, a bookkeeper and a front-office receptionist.
Being organized is one of the best tips for starting a property management business. To help with this effort, there are computer software programs to help track rental payments, vacancies, maintenance receipts, tax and other fee deadlines, and assist with various reporting duties. Investing in the right computer software when first starting a property management business can save time, as well as reduce or even eliminate costly human errors that may occur without a centralized computer system.