How To Set Up a Property Management Company

With the number of new small businesses hitting a record high in 2017, it looks likely to reach a similar figure by the end of 2018. In the past, you would need to seek out approval for a hefty bank loan or have a very different concept to sell. Nowadays, it is easier to start up your own business  – you need a good idea and an internet connection. Utilising using CRM software, social media and marketing automation – will all allow for minimal start up costs and no rented office.

Before you start up your own business, you must determine whether there is a need for your service. In these current uncertain economic times, many property owners are choosing to rent out their homes, rather than sell. There is also a huge rise in renting rather than buying  – the young would-be house buyers are named ‘Generation Rent’. Finally there is a rise in renting second homes. So this is a good time to take advantage of this increasing need with a property management company.

Property management is a people industry – so if you have the communication skills to deal with people from all walks of life, can work under pressure and have an interest in property, this is the industry for you.

You also need to carve out your niche in an already popular market. For example, the draw of property management to sunnier climes might appeal to you. Many people have holiday homes in France for example, but need someone to manage it for them and prepare it for guests – from grass cutting to building repair. Social media such as Instagram can be used to advertise the properties through the use of glossy photos and diary-like French lifestyle updates showing off the local area and cuisine.

Or perhaps you will add some luxurious additional services to your property management company for a high-end market via partners and contracts tailored to requirements.

What skills do property managers need?

Whether you are searching for contractors, dealing with difficult clients or negotiating prices, dealing with parties with conflicting interests or moderating – great communication is crucial.

The properties will likely be some of the biggest purchases your client will have ever made and they will have a lot of money tied up in them. Clients will be relying on your to make decisions on their behalf and they will trust you will who you choose to employ for the maintenance and repair of their property.

Step to setting up a property agency

1.Market research

Market research should provide you with:

  • Consumer information

Set up some focus groups with friends and family and via social media and find out what they would want and their past experiences with property management companies. Put your ideas to them and ask for an honest opinion – don’t be stubborn with your idea  – make sure you are flexible to change.

  • Industry information

You need to look at the latest trends in the property market – compare statistics.

Ask the right questions:

What areas are growing and what areas are declining?

Is new technology influencing the industry?

Can you see any new customers emerging in the future?

  • Know your competitors

Don’t underestimate the number of competitors out there on a local and national / international scale – keep an eye out for future competitors as well as current ones.

Take a look at property management companies which have many years of experience behind them and understand why they are so successful in their local community and how they have built up that trust with long-standing clients.

Understand your competitors strengths and weaknesses and look for opportunities. For example, you may think you can afford to undercut your competitors’ prices – until you understand why they have set these prices and what their costs are. If the company is publicly owned you can obtain copies of the annual reports. You can also research a property management company by visiting them in person.

2. Write a business plan

A business plan will highlight the legal structure of your business and how your business will grow and succeed. It will also explain what niche you are aiming to fill.

3. Decide if you need a business premises

Many property businesses now operate purely online and visit your clients for meetings and this will keep start-up costs low. However, some people will want a location where you can meet with clients. You may also want a location which will receive some footfall.

4. Market your property company

Your brand image is vital and will ensure that you are trusted and memorable. Property websites will be a great place to advertise – you won’t just be advertising properties, but also your brand image.

It is also a good idea to employ an SEO specialist – there is no point in having a flashy new website and great brand image if it is not seen by anyone and doesn’t rank highly on Google rankings.

5. Don’t forget about insurance

Having the right protection and insurance in place will ensure that you are trusted by clients. In fact, some will not work with you unless you have certain insurance policies.

These can include:

  • Public liability insurance – protecting you against claims from the public

  • Business interruption insurance

  • Professional indemnity insurance – this protects you if an employee or contractor is injured while doing the job you are given incorrect advice.

  • Personal accident insurance

  • Buildings insurance

Read here other types of self employed insurance.

Starting any business is hard – it usually takes a long time before you make any profit, it takes time to build up a good reputation and client base and initially at least your working hours will be exceptionally long. However, if you are working hard for yourself you will be the one to reap the rewards and getting to be your own boss and be self-sufficient is something that appeals to many.

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