The property management business can be a lucrative opportunity for those looking to start their own business.

Property managers help to operate real estate, either commercial or residential. Property managers ensure properties are well maintained, help resolve issues for tenants and help with the leasing or renting of portions of the property. Among the tasks property managers undertake are background checks and tenant screening, marketing and advertising, rent collection, accounting and maintenance management.

If you’re looking to launch your own property management business, you can follow this step-by-step guide being ready for a productive and profitable career.

1. Know the Laws

There are several laws that govern key aspects of property management. Each state’s laws are different, so it’s important to educate yourself about the specifics in your area.

Landlord-tenant laws are very important. These laws or regulations determine how commercial and residential properties are rented. The laws dictate the laws that landlords and tenants must abide by during the relationship.

These laws apply to everything from anti-discrimination guidelines to what landlords must do to rectify damage or repairs within the space. They are very important for all parties to follow to reduce the risk of conflicts or lawsuits,

Eviction laws are another complex and challenging aspect of property management law. Eviction law covers cases where a landlord decides to remove a tenant from property.

Most laws cover specific steps that a landlord must take during the eviction process. A failure to follow these rules can be a costly error that can delay the eviction procedures and lead to messy legal issues.

2. Obtain Proper Licenses and Permits

Some states have regulations in place related real estate management. Individuals working in property management may need to obtain an academic degree, license or certification.

It’s likely that property managers need to obtain a Real Estate Property Manager License. That process provides the holders with detailed information about the work of property management and training on how to complete the tasks related to that profession appropriately.

Some professionals may also want to obtain a Real Estate Broker’s License. This license provides the holder with the knowledge to sell, lease and buy real estate.

It’s important to know the requirements in your state and sure that your credentials remain active and updated.

3. Form Your Business

Business formation is a critical element of launching a new business. One of the most popular business types is a limited liability company (LLC).

An LLC offers major advantages to business owners. With an LLC, for example, there are very few formal obligations. LLCs do not need to have a board or annual meetings.

In an LLC structure, you have some flexibility in how the business is managed. You can either choose to manage the business yourself or hire an employee to manage it for you.

An LLC structure simplifies the tax process. LLCs are considered “pass through” entities, which means that profits, as well as losses are passed through from the company to the owners’ individual income tax returns.

One of the major advantages of an LLC is that it provides broad liability protection. In the event of a legal decision against the company, the owners’ personal assets, including homes, autos and savings, are protected from creditors.

There are other business structure options available, including a sole proprietorship, partnership or corporation, but the LLC is a frequent option for many property managers.

4. Create a Business Plan

Working to build a business plan is an important step to take. There are extensive research tasks and insights needed to develop a comprehensive, valuable business plan.

Why create a business plan? It’s a useful step to help answer core questions about your business, create detailed plans and projections and formalize how you will run and grow your business. It’s also frequently a necessary step to take to secure financing for a small business.

While there is no uniform structure for a business plan, it usually includes the following components.

Executive Summary

This section is a concise overview of your business, including its name, purpose, scope and services offered. It often contains a list of leaders, roles and operations.

Products and Services

Here, the plan outlines the products and services that the business plans to offer to its customers, with descriptions of what differentiates your products and services from those of your competition.

Sales and Marketing

How do you plan to sell your products and services? This section identifies the channels and techniques that you’re going to use to promote your property management business. The section also illustrates the strategies and tactics that will be used when you are promoting your work.

Operations

How will your company be run? This section details how the day-to-day business will be done.

Competitive Analysis

Understanding your markets is critical for any business. The competitive analysis section lays out the key elements of your industry, market and customers.

Research can provide you insights on the real estate market in your target area. You’ll want to determine what the market will bear for pricing for services. This section also identifies key competitors, their strengths and how your business will be able to differentiate itself from other players.

Finally, you want to have a strong understanding of your potential customers. What do they need from a property management company and how can your company serve their needs? This market analysis helps you position and market your company to potential customers.

Leadership

Here is where you will provide the names, titles and backgrounds of key staff within your company. This section gives readers a clear sense of the expertise and knowledge they will bring to your business venture.

Financial Projections

These financial documents provide projections for your revenue and costs for the business. Typically, projections are done for 3-5 years.

This section often includes your pricing strategy, where you can lay out the prices you will charge for various services, from an ongoing management fee to per-item charges for leasing, renewals, evictions and paperwork filing.

The section also includes any existing financial statements if your business has already launched.

5. Secure Office Space

Your property management company will need space to operate. You may not need a large office space at first, but will need room for desks, conference rooms, storage, printer and other office equipment and a waiting area for visitors. The office space ideally would be scalable, allowing for growth as your business expands.

Having a professional office space lends credibility and allows you to have a venue for meeting with potential clients, tenants and renters.

6. Launch a Website

In today’s world, you want to have an online presence for your business. A website for your property management company can provide details on the services you offer, the types of properties you manage and how to obtain more information.

Many property manager’s websites also include portals that allow them to access property-specific information or pay bills.

In addition to your website, you may want to consider having a social media presence. Social media platforms vary greatly. LinkedIn, Facebook and Instagram are good options to consider for your social media posts.

7. Select Your Team

A property management company is only as good as the team in place. Choosing the right talent for your new business is a crucial task.

One of the first aspects of choosing your team is to determine what role you are going to play in the business. Knowing your strengths and experiences that will help the company succeed can inform what tasks you take on in the enterprise.

Then, you can hire complementary staff who will take on other needed roles within the property management company. At first, you may need to hire people who can complete multiple tasks, such as marketing, sales and maintenance. You may also choose to outsource some specialized, skilled tasks, such as payroll and accounting that do not require full-time staff.

Having a trusted legal advisor is an important consideration. An experienced real estate lawyer can draft master lease agreements or other legal documents you will need for your business. A real estate lawyer can also ensure that you’re compliant with relevant laws and taking the right steps to reduce your legal exposure,

8. Purchase Property Management Software

Helpful software solutions can ease the burden of running your property management business. Property management software can help automate and simplify business operations.

While there are many software options available with different features, the most common components are:

• Automatic payment processing
• Owner or tenant portals
• Work order management
• Property accounting
• Communication management
• Maintenance scheduling and tracking
• Budget coordination
• Customer service functionality
• Reporting
• Paperwork management

While software is not required to run your business, a robust software platform will drive efficiency and simplify core functions, especially externally facing interactions with clients and tenants. Cloud-based systems with mobile apps allow you to access key functions and data from anywhere, whether working on a desktop computer, laptop or smartphone.

A career in property management can be rewarding and fulfilling. By planning ahead, you can position your property management business for long-term success.