As I write this article in November 2009, I must say that there is no better time to start a property management business than right now. The real estate crisis has caused a number of effects on this industry:
1. Houses are not selling, therefore homeowners that need to move and/or investors are forced to rent their units out; thus increasing the rental property supply chain.
2. Houses are foreclosing by homeowners and being bought by investors that in turn rent the property out. This increases the amount of supply as well.
3. The homeowners that were foreclosed upon will now be renters. Thus increasing the rental pool and increasing demand.
The above items create a perfect storm for the Property Management Business Industry. The purpose of my article is to present and discuss the 6 categories that are paramount in developing your property management business plan:
1. Executive Summary
2. General Company Description
3. Description of Services
4. Marketing Plan
5. Operational Plan
6. Budget
1. Executive Summary – Include everything that you would cover in a five-minute interview. Who are the owners, what is their experience in this industry? Explain the fundamentals of your business. What do you think the future holds for your business and your industry? Make it enthusiastic, professional, complete, and concise.
2. General Company Description – This includes your mission, vision and company commitments, Who is your target market (higher/lower end residential, multi-family, commercial), what price range of properties will you target, what area(s) will you target, who are the prospective tenants and what’s the future of your industry? Form of ownership, what factors will make the company succeed? What strengths do you personally bring to the business? Long term: What are your plans for the future of your business? Growth? If so, at what rate and how will you achieve it?
3. Description of Services – Describe in depth your property management service structure. What will you perform on a monthly basis for your property owners? What will be your monthly fee structure? What additional services will you offer such as evictions, project management, maintenance and what will your fee structure and profit center look like?
Much of your service offering will be developed by performing a complete competitive analysis. Your offering needs to be correctly place in the marketplace to make yourself unique. You should know your competitions monthly fee structure, how many properties they manage, number of managers, etc.
4. Marketing Plan – Bottom line: Your plan for how to attract clients. How will you get your company and offer in front of your prospective property owners. How will you utilize the following: (website, seo (search engine optimization) plan, online marketing, signs, advertisements, associations, relationships, networking, direct mail campaigns, signs, yellow pages, calling for rent by owners, etc.)
By the way, there are methods that are much more effective than others for a start up real estate management company. Be sure to do your proper research before you unnecessarily spend money.
5. Operational Plan – Explain the daily operation of your business; (its location, equipment, people, processes, and surrounding environment.) If you are starting out opening your own prop mgt business, you will want to spend the majority of your free time in marketing techniques.
6. Budget and Financials – Includes your start up expenses, capital expenses and expected monthly recurring expenses. If you are starting out a your business with 0 properties as I did, you will want to start with a minimal budget in mind. Keep your costs as low as possible. What is your expected income based on your predicted growth rate?
Conclusion: Properly developing your property management business plan is the key to your success. Starting a property management business can be very rewarding, however not having the right direction and foresight from the beginning can blind you and your business. Remember; “Failing to properly plan is properly planning to fail.”
About The Author
Patrick Rogers is the owner of Rents2Riches, a Property Management Business Coaching Company that is dedicated to the phenomenal development and growth of the Property Management Industry. Patrick and his wife also own an extremely successful property management company in Oregon.
Patrick offers his own personal property management business plan sample free for download at the following website: http://www.rents2riches.com/ezinearticles.
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If you’ve been keeping up with my blog posts lately you’ll know I’ve come to adding a few news posts from around the web on this subject. I’ve got a couple more today that are new and updated, so let me know what you think of em…
Lunchtime reading: Oregon Business magazine says ‘No relief yet …
They are Clackamas County Bank of Sandy, Lewis & Clark Bank of Oregon City, MBank of Gresham, Willamette Valley Bank of Salem and PremierWest Bank of Medford, whose stock recently fell below $1 and has been warned that it faces …
Events for May 13-20 | OregonLive.com
PLANT SALE: 9 a.m.-3 p.m. Sponsored by the Fairview-Rockwood-Wilkes Historical Society. Benefits the Heslin and Zimmerman house museums. Zimmerman Heritage House, 17111 N.E. Sandy Blvd., Gresham; free; 261-8078. SOUTHWEST PORTLAND FUCHSIA CLUB SALE: 9 … NATIVE PLANT SALE: 10 a.m.-4 p.m., continues Sunday. More than 100 species of Oregon wildflowers, shrubs and trees. Audubon Society of Portland Sanctuary, 5151 N.W. Cornell Road; www.audubonportland.org or 292-9453 …
To submit an item, simply send the information to Dateline, The Gresham Outlook, P.O. Box 747, Gresham, 97030; e-mail to chall@theoutlookonline.com; or fax it to 503-665-2187 at least 10 days before the event or meeting. … Adult Day Services 101: Educational Workshops for Family Caregivers – 6 to 7:30 p.m., Emerson House, 3577 S.E. Division St., Portland. Learn what adult day programs role in the continuum of care and discover what activities and techniques can be …
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Portland, Oregon is often referred to as a big city with a small town feel. If you are looking to relocate to a city with breathtaking scenery, mild weather and a great location, Portland could be the place for you.
One of the major reasons you should consider living in Portland is the lowing housing costs. In fact, Portland boasts the lowest housing costs of the major metropolitan West Coast cities. Compared to Seattle, Los Angeles, San Francisco and San Diego, Portland is a bargain of a place to live offering all the urban amenities at affordable prices.
In addition to the low housing costs, Portland’s real estate market offers a wide variety of housing options to choose from. Whether you’re looking for a high-rise condominium or a classic Victorian style home, Portland has it all, and all within close proximity to central destinations.
The up-and-coming areas of South Waterfront and Pearl District, near downtown Portland, offer a variety of urban living options. These areas have real estate options such as high-rise condominiums and hip brownstones.
Portland also offers a variety of housing options for those who are looking for something a little more traditional. Portland has many historic, tree-lined neighborhoods with Victorian and Craftsman quality. There’s also a selection of new housing options to be found.
If you’re not looking to invest in a home, Portland also offers an assortment of apartments to choose from throughout the city and surrounding areas. In the downtown area, you can find historic buildings that feature trendy Manhattan-style lofts. In the city’s suburbs, you can find larger and more affordable apartments.
If you’re looking for affordable housing in city with its own unique character, Portland may be the right place for you.
Tony and Libby Kelly, MBA, M.Ed. ranked in the top 1% of REALTORS in Portland If you are looking for a property. They specialize in providing a superior level of professional real estate services combining today’s technology with yesterday’s hands-on personalized care. As top producing listing and marketing specialists, they will provide you with the best prices for purchase and sale of your property. They are also the member of Portland Million Dollar Club. Their main aim is the satisfaction of their customers. If you are looking for homes for sale Portland then Tony and Kelly would be the right persons for you to meet.
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