Can any one on this board give me sum advice?I'm looking at starting my own reantal PM company on the side of my realestate career. Can any ony help me out and give me some instite on how i go about starting my own pm company for myself???

OK, I'll just ask. What kind of company is a "PM" company?

I know this isn't the answer you are looking for, but presenting yourself in a professional manner is paramount in this business. Use spell check on anything you type. You don't have to know how to spell everything, just make sure you check it... Really not trying to bash, trying to help.

PM-Property Management.

Property management is high risk.Make sure you set up a seperate llc for it and have a seperate e & o policy.This is if you are the broker and own your own company.

If you are an agent or associate broker you need to ask your broker if they even ALLOW property management.Property management involves alot of lawsuits by tenants and landlords which makes e & o alot more expensive.

If there is litigation and you lose you can just drop the property management company and that e & o policy without it affecting your main brokerage.

LLC is the most commmon setup but other corporate entities might be better for you dependant on what your goals are.

I HATE property management personally and stay as far away from it as possible.Low pay,big headaches,and high litigation make it not worth it for me.Commercial leasing and management will earn you a far greater return with less headaches and no weekends if property management is your main focus.

no legal advice

Realestate_kid ---

Have a chat with your broker.

Perhaps he would let you run a property management division for the company.

Here's why:

* As mentioned above, property management is hard work. The biggest struggle when you are starting out is acquiring clients in the first place. If you were "under the brokerage", it would be far easier to attract those critical first properties. Other agents will certainly have business to send your way.

* You'll have greater credibility with both owners and tenants.

* You'll have infrastructure to support you. Good property management requires marketing (both to owners and tenants), bookkeeping, maintenance and availability. Often, you can leverage office staff to cover some of those elements.


What do you need to do to launch?

* First, get some good training. One of the best, in my opinion, is the National Association of Residential Properties Managers (www.NARPM.org). The offer online classes, seminars & conferences, lots of good materials, and designations. Well worth the membership.

* Second, figure out how to structure the business. You'll need some sort of corporate entity (for liability).

* Third, get some good property management software. Much of it is very expensive. And, from people in the business, more expensive programs tend to be better. One I once spent some time with is Property Boss (www.PropertyBoss.com). It handles your recordkeeping and also can drive a web site (a great way to cut marketing expenses).

* Systemize EVERYTHING. Have a checklist and set of forms for taking a new property on and another set for interviewing tenants. Have a process for background checks (VERY important). Also, you'll need a move-in and move-out procedure plus a process for maintenance. Each should consist of a list of action items and appropriate forms. Don't wing it!

* Put together a top-notch (and cost-effective) set of service providers. You'll need a plumber, heating/cooling person, a general handyman, painter and someone to do clean-outs. But, here is the problem: Most owners are kind of cheap. You'll need focus who price aggressively.

* One of the biggest problems in the industry is that many companies (depends to some degree on how your state regulates the industry) don't properly account for deposits, rents, owner expenses AND the income and bills of the property management company. In my opinion, you need three accounts: A trust account for security deposits. An owner's operating account for rents and owner expenses (and, from which you will pay yourself and the owners). Plus, a seperate operating account for the property management company (you'll deposit your fees and pay your expenses from this account). That seems overly complicated. It is not. I've known several companies where everything was thrown together. Before long, the owner discovered that they were losing money on property management and that they had spend the security deposits and the rent checks! Not a good situation.

* Finally, be very careful how you structure your pricing. In my area, I often see companies set up that try to build market share by underpricing their competitors. Most end up shutting down. The margins in the industry are just too tight to vary much from the norms (others may disagree). I personally think you are better off to mirror your competitors on price and outdo them on service, marketing, etc.

Hope the above is helpful.

PM is a different animal and IMO should only be done by someone doing it full time. I couldn't even imagine trying to do regular sales and property management at the same time. It seems very risky for the reward to me.

Mike ---

Your point is dead-on.

It is too complex and consuming to do as a sideline.

We have a property management company - it is a great business - Fairly consistant income also. It is probably one of the easier things ive done in real estate.

You always have exposure to law suits - if you push buggies at wal-mart you could eventually get sued. Once you accept this - things will be easier.

I would recomend finding an attourney or a pre-paid legal program to be part of. I use one that is great and it gets a lot of my legal questions answered and doesn't cost but about $75 a month.


Also - home owners and tennants are all liars - understanding that makes things easier too.

You cant just manage 10 properties and it be worth it. In most areas (depending on rents and your fees) once you get around 100 properties things are good.

At first it can be very time consuming - but once you get your systems in place - you can set it up to take up only a few hours a day to manage 100+ properties. Putting systems in place will be your most important job.

secret shop your competition to figure out what you need to charge to be competitive.

Our biggest problem is reliable and resonable repair services - I have a contractors liscense and can do most any repair and have fixed a ton of toliets - but my time is better spent in other places.


FYI -when sales are slow - property management gets BETTER. or that has been my experience