VRBO, Airbnb, Booking.com, HomeAway, TripAdvisor… what do all of these have in common? They are all vacation rental websites, especially tailored for short-term vacation rental properties. With such a large presence online, the need for property management companies has grown exponentially over the years.
If you are considering starting a property management company, then you should follow simple guidelines to help you know how to start a property management company the right way.
1. Decide the Name, Search the Name, Brand the Name
The first step to start a property management company is to think of a name. You will need to search the name and make sure it is available, and you may want to consult a lawyer to incorporate the name.
Once the name has been established, you need to design a logo to attach to your brand.
Have you ever been able to identify a business name simply because of its logo? This is evident of how important branding and logo design can be. Turn your property management company into a brand name that people know as soon as they see the logo.
2. Research Legal Requirements
Check your state’s legal requirements to determine what your state requires to start a business. There may be insurance requirements or other formal procedures to follow when forming a new business.
3. Educate Yourself
As you will be managing multiple areas of vacation rental, you will want to familiarize yourself with various laws, insurances, and recordkeeping. You will want the property management company to be licensed in real estate in the state it is located. This way, you will be allowed to legally broker activities between the owner and the renter.
4. Open a Business Bank Account
To keep your business expenses separate from your personal expenses, set up a business bank account. This business bank account will not only function on a day-to-day operation, but it will also keep your business records organized when it is time to file annual income tax returns.
5. Establish a Phone Number, Business Space, Website or Social Media
Before you publish your newly established property management company, you need a way for clients to contact you. Establish a phone number, business or office space, and an online platform for clients to get in touch with you. Make sure to put this information in print on business cards and advertisements.
During this process, you can also determine your fee schedule and services you will offer to provide.
6. Start Networking
In the real estate world, word of mouth is essential to building a clientele. To build your clientele, begin networking in your area. You can discuss your property management company with local real estate agents, brokers, or lending agencies. Create business cards to leave at various offices in the community.
There are also various associations you can join to network and promote your business.
7. Create a Post Office Box
Collecting money will be how you stay in business, so you need a way to collect payments from your clients. While most clients will prefer to pay fees online, you may have a client who prefers to mail you a check. Create a post office box for your business, and give that post office box information to your clients.
8. Use Property Management Software
Property management software will organize all areas of the property management world into one functional program.
You will be able to organize calendars, listings, payments, scheduling, and automated communications.
9. Find Clients
Don’t be afraid to ask a homeowner of a short-term vacation rental if they need a property management company to manage their property. Open-mindedly discuss fees, services, and contracts with the client to perform a service that is beneficial for both you and the client.
Takeaways
- To start a property management company, create a name, brand the name and design the name
- Train yourself by taking classes, attending meetings, and becoming licensed
- Create a business bank account, phone number, office space, and online website
- Open a post office box to receive correspondence and payment directly related to your business
- Network, network, network. Make business cards, advertise, and join associations
- Set your fees and define your services. Don’t be afraid to tailor the services and fees personally for each client.
- Use property management software to organize the many areas of property management for your clients.
Conclusion
Today, property management companies are on the rise because of the millions of properties available for short-term rental worldwide.
Starting a property management company can be a simplified process if you know the steps to follow.
All of these steps are important in their own way. While it is important to brand your logo for identification and networking purposes, it may be considered more important to make sure you are licensed and certified to manage real estate in the state you live.
Each of these steps needs to be followed through when starting a property management company, and each step deserves its own time and attention.
While designing a logo sounds more appealing than reading laws and taking a certification test, you cannot afford to skip over this important step.
One way to simplify the process is to consult a professional to help you with the process. If you personally know a real estate agent or lender who works closely with property management companies, don’t be afraid to ask their opinion on how to start a property management company. If they do not know the answer, they may be able to direct you to someone who does.
Property management companies are definitely playing a role in the success of short-term vacation rental properties. If you have considered entering the world of property management, the available market of over 2 million properties is a good market to start a company in.
