Those unfamiliar with the real estate business are often surprised to learn the entities who own the property are typically not the ones managing it day-to-day. This is where property management enters the picture. Property management businesses work on behalf of owners to look after their investment. Whether it’s taking care of landscaping, screening tenants, collecting rent, hiring cleaning services, or arranging for repairs, property managers are the boots on the ground for protecting real estate investment. The most important aspect of starting a business, something that you cannot forget, is to make sure you get business insurance to be covered at all times.
If you’re interested in getting into the property management business, there are a few things you need to know.
The following are essential tips for the next great property management business.
Research the Market
Like with any business, market research is critical before getting into property management. As expressed by the real estate adage “Location location location”, the ins and outs of successful property management vary from one place to another. Climate, infrastructure, economy, and demographics are just some of the factors that play a significant role in how the business of property management will play out in a certain location. It’s important to assess the local real estate market to uncover these nuances. A four-plex in Denver may need a plowing contract during the winter whereas an office building in Tucson is going to need an air conditioning company on call at any time. The point is, know your terrain and market because the day-to-day of each market and type of property will vary drastically.
Take Time Management Seriously
Effective property management means recognizing ways to streamline the responsibilities and processes that come with the job. The most important property management skills tend to involve time management in some way or another. Whether it’s making the most of meetings, communicating better with tenants and vendors, or properly delegating tasks to others, knowing how to make the best use of time is critical for success. Once more than a few contracts are under your care you will need to hire and scale, how do you manage your time that is used to manage those people? That’s a common problem which is why documentation and process creation are so important.
Zero In on Property Type
Do you want to manage residential properties, office space, or industrial facilities? While it’s not unheard of for property management services to oversee different types of property, newcomers are probably not prepared to take on a diverse spread of real estate. Instead, pick one and start there. As your business grows and you gain more experience, branching out to multiple types of properties becomes easier and more practical. Often, someone gets into this industry because they buy something themselves and learn to manage their own assets before taking on others. Would you rather own an apartment building or an office building?
Build Strong Relationships with Great Contractors
Property management means overseeing the maintenance of buildings and the land they sit on. While it’s possible you’re able to handle a few problems yourself, chances are the majority of the tasks required are outside your wheelhouse. These will need to be delegated to outside experts. Landscapers, plumbers, painters, and general contractors will need to be hired when necessary. It’s important for property managers to build strong relationships with these and other contractors they choose to hire. This is especially true when they’ve found ones who do the job right at a fair price. Pay them on time, pay them what they’re owed, and don’t lose their contact information. In return, the reliable work they get through your property management business will keep them coming back and most importantly, knocking out projects quickly.
Be Ready for Odd Hours
As previously mentioned, time management skills are crucial for successful property management. With that said, it’s important to know property management might not always be a nine-to-five Monday through Friday type of job. Emergency issues with plumbing or other problems can pop up at any point and require immediate attention. It’s imperative for property managers to be prepared to work at odd hours. While it might not mean much more than showing up to let the repairman into the basement, you don’t want to be inaccessible when your presence is needed in an emergency.
Given the volume of real estate out there, property management is a potentially lucrative business opportunity. But it’s important to understand the business before diving in headfirst. Those who appreciate the primary responsibilities and skills of property management will prove to be the most successful.