Starting a property management company can be a lucrative venture. In fact, the future of the market looks bright. The property management industry is estimated to be valued at $21.4 billion by 2025. However, it always best to do your research before jumping in. Often, an established franchise model may be the best fit for you.
WHAT DO PROPERTY MANAGERS DO?
Property managers are often brought in by real estate investors to handle the day-to-day activities within the building, especially if the investor isn’t local to the property. The main responsibilities of property managers are to take care of maintenance requests, to recruit to fill any open units, and to collect rent from tenants. Property managers will act as a local presence for the building, responding to any tenant questions, requests or (sometimes) complaints.
REQUIREMENTS VARY BY STATE
When starting a property management company, licensure will be required. You should acquire a property management license or certification. In some states, you may also need to have a real estate license in addition to your property management certification. Parts of the country have also been known to require property managers to also have a leasing agent license. Before getting too far into this new investment opportunity, it’s wise to understand what your state will require and how you can obtain the correct certifications.
STEPS TO STARTING A PROPERTY MANAGEMENT COMPANY
If you’re considering starting a property management company, see the below steps for where to begin.
GET YOUR BUSINESS PLAN TOGETHER
When starting a property management company – like all businesses – you’ll need to write a business plan. In your business plan you’ll want to answer the following questions:
- What does your business do?
- What is your value proposition? How are you differentiating yourself from competitors?
- Who is your target audience? How do you plan to reach them?
- When do you predict you’ll break even?
- How much money do you need to get started? What will the money be put toward?
You’ll need to be thorough, as these are questions potential investors will be asking you when you present your plan to them. If you choose to go the franchising route, you’ll benefit from the backing of the franchise when it comes time to secure funds. While we, at MY SALON Suite, do not offer in-house financing, it’s common for entrepreneurs who have partnered with a franchise to receive funding more readily than those who choose to start their business individually.
DETERMINE YOUR ORGANIZATIONAL CHART
Define the structure of your company. How many people will you need to start? What roles will they be filling? Will you be contracting any positions to save on salary expenses?
In the beginning, your staff will be smaller. As your business grows, so will your team. Have a plan for what positions will be filled next as you expand. When it comes time to hire more people, it’s imperative to have clear job descriptions for each role. Give people insight to what they’ll be doing and what your company culture is like.
A benefit of joining a salon suite franchise like MY SALON Suite is our model doesn’t require employees. MY SALON Suite franchise partners are the landlords of their salons and collect rent from their stylists or aestheticians. Some salons may have a full-time manager once established, but it’s not required to successfully run one of our locations.
RESEARCH THE SOFTWARE YOU’LL USE
This is very important. While it may seem easier to rely on an Excel document, your business operations should not rely on that. Research software options for your accounting, email marketing, pitching services to real estate investors, and collecting feedback from tenants. There are specific property management software services available – reducing the number of platforms you’ll need to run your business.
BUILD RELATIONSHIPS WITH REAL ESTATE OWNERS
Real estate owners are your clients! When start your own property management company, you’ll need to build your clientele by establishing relationships. When meeting with potential clients, learn what their needs are and set expectations of how you’ll meet those needs.
Should a real estate investor choose your property management business, be sure to keep all lines of communication open at all times. Make it a point to keep them in the loop of what’s happening at the property – be proactive in making suggestions. You’re their eyes and ears, and they rely on you to keep things in line and to notice any opportunities.
HOW FRANCHISING MAKES PROPERTY MANAGEMENT EASIER
Franchising since 2012, MY SALON Suite sits at No. 62 on Entrepreneur Magazine’s Franchise 500 list. With over 200 locations across the country, MY SALON Suite is a leader in the salon suite franchise industry. Our franchisees act as property managers – securing a space to build out their salons and renting out individual rooms to budding entrepreneurs in the health and beauty industry. Many of them only work about 5-10 hours a week on their business – making our semi-absentee franchise opportunity the perfect complement to other business ventures or full-time employment.
Coming in with an investment range of $680,771 – $1,794,913, we require potential franchise candidates to have a net worth of $1 million and at least $200,000 in liquid assets. In 2020, our locations saw an average EBITDA of *$131,319.
We provide ongoing training and support to our franchisees. We have the systems in place for you to follow, giving you the opportunity to focus on what’s most important: fostering an environment that encourages creativity, love for the business, and entrepreneurial spirit.
GET STARTED WITH MY SALON SUITE
Our team of industry professionals will teach you everything you need to know about how to start a property management company. From buildout to recruiting your beauty professionals, we’ve got your back every step of the way. We’re committed to your success as a franchise partner. To learn more about our franchise opportunity, request more information today.
*Includes two months of no business due to COVID-19 closures.