We will go through the steps you need to follow to establish your own property management firm.
What you will discover:
Following Step: Incorporate
Contracts to Protect You
Starting a property management company may be an exciting venture. Property managers manage residential or commercial properties or unoccupied land for individuals, families, or investment groups. The benefits include inexpensive start-up expenses and an extremely flexible schedule with passive revenue flowing in—sometimes independent of how many hours you labor.
The drawback is that property management is one of the most common causes of complaints to regulatory bodies throughout the country, resulting in ever-increasing licensing requirements and regulatory supervision.
Nonetheless, it is an appealing field. Starting your own property management business may be a great business venture for those with experience in real estate or property management (or better yet, both), offering the benefits of self-employment and a home office if desired (meetings with property owners, tenants, and contractors will almost always occur onsite, so a fancy office is not required).
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It is a good idea to investigate the regulations in your state before you begin. While you may normally “manage” your own properties without a license (in other words, be a “landlord”), many jurisdictions have severe regulations, including education and licensing, when it comes to managing properties for others for a fee or remuneration.
Some states demand knowledge of trust accounts, security deposits, habitability, carbon monoxide detectors, asbestos, lead-based paint, sensitive information handling, zoning, and agency. Here are the following stages if you already have the necessary background and are ready to proceed.
The Following Step: Incorporate
Before you begin operations, the first step will be to identify the legal form of your company. There are many fundamental structures from which to choose: Sole proprietorship, partnership, corporation (S or C), limited liability company, or non-profit organization. These may differ significantly depending on where you reside. Each legal structure has unique characteristics that influence your financial and legal concerns. Your state’s website may provide tools to assist you with this choice, or you may wish to seek the advice of a lawyer, CPA, or business expert.
Once you have established the best legal structure for your business, you can simply utilize our online incorporation tool to get started.
Contracts safeguard your interests.
You will deal with contracts on a number of levels as a property manager. First and foremost, you must protect yourself when you engage into contracts to assist property owners. A clear, properly designed Service Contract is crucial to your long-term success, and some states need a Property Manager Agreement to be drafted by a lawyer.
Alternatively, if you are just starting out as a landlord and want to manage your own property, we provide some landlord documentation as well as access to low-cost legal assistance.
Whether you are managing your own property or someone else’s, you will be dealing with a location where people live, therefore it is critical that you take some legal precautions to secure your legal protection and that your renters feel at ease.