Property Management Firm Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Property Management Firm Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start an\ Property Management Firm business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
Your Business Planning Package will be immediately emailed to you after you make your purchase.
Product Specifications (please see images below):
- Bank/Investor Ready
- Complete Industry Research for the Industry
- 3 Year Excel Financial Model
- Business Plan (26 to 30 pages)
- Marketing Plan (24 to 28 pages)
- 425+ Page Funding Directory
- PowerPoint Presentation
- Loan Amortization and ROI Tools
- Three SWOT Analysis Templates
- How to Start a Business Guide
- Easy to Use Instructions
- All Documents Delivered in Word, Excel, and PowerPoint Format
- Meets SBA Requirements
Property management firms exist in order to provide real estate investors with the ability to own property but operate in a more hands-off capacity. In many states, property management firms are frequently developed in conjunction with a real estate brokerage. In fact, in most jurisdictions a real estate brokerage or property management firm can operate in either capacity. These businesses generate highly recurring streams of revenue on a monthly basis given that they usually take a fee equal to 10% to 15% of the aggregate rents generated. Specialized buildings – such as commercial facilities – typically receive higher property manager fees given the additional level of complexity that is associated with these types of properties.
The barriers to entry for a new property management firm are considered to be moderate to moderately high depending on the state. This is primarily due to the fact that an individual must be licensed as a real estate broker or specialized property manager in order to provide these services to the general public. Generally, an individual that is looking to get into this field typically has about two years to five years of experience with the ongoing management of properties or dealing with real estate sales. The startup costs associated with a new property management firm typically range anywhere from $50,000 to $100,000 depending on the amount of cash it needs to be on hand as well as the underlying operating expenses. The licensure fees and startup costs directly relating to getting up and going typically range from a $5,000 to $10,000 in filing fees. It is important that a new property management firm have a CPA as well as a qualified attorney on retainer in order to deal with ongoing issues that may arise from the management of properties. There is typically a fiduciary obligation on behalf of the property manager as it relates to the clients.
Given the highly recurring streams of revenue that are generated from monthly rental management fees – most banks, lenders, and private investors are willing to make a capital injection into a new property management firm. If an entrepreneur is seeking capital for the business than a property management firm business plan is going to be required. This business plan should include an expansive three-year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. As it relates to industry research, property management firms generate more than $75 billion in revenue per year provide jobs to about 800,000 people. There are approximately 250,000 companies that are actively operated as a professional property management firm. One of the things that should also be discussed within the business plan is whether or not the property management firm will be acquiring properties for their own account. In many cases, since these firms are already actively involved with the management of properties they will frequently take to purchasing real estate in order to generate income through rental income and appreciation. This is one of the fastest ways that a new property management firm can expand their wealth and operations over the life of the business.
Also included in the business plan should be a expansive demographic profile of the types of client that would be targeted by the company. This includes discussing what types of realistic investors the business will work with on an ongoing basis, their net worth, size the real estate portfolios, number of properties owned, and the anticipated annual rental income that’ll be generated on a yearly basis. As many people are actively involved in real estate investing, this demographic analysis can be somewhat broad given that many people want to own properties it will produce income for them over a significant period of time. Also within this aspect of the business planning documentation, a thorough competitive analysis should be included as well. This includes discussing the number of other real estate brokerages in the market, the number of properties management firms in the market, and the number of total real estate investors are rely on real estate and property management firms in order to produce income on a monthly basis.
A property management firm working plan needs to be developed. This marketing plan needs to be broad-based in nature given that obtaining new clients for a property management business is significantly difficult. For most, a large-scale online campaign should be undertaken so that the business can attract people that are searching for local property management services. This website should feature information about types of properties managed, the monthly percentage fees associated with services rendered, contact information, location information, and the distance in which the property management firm is willing to administer property at any given time.
This website should be listed among all major search engines. The more important aspects of online marketing is the use of social media. As there are now a number of communities and groups on places like FaceBook, Twitter, Google+, and LinkedIn – maintaining a presence on social media will ensure a substantial boost visibility from the business from the onset of operations. As many real estate investors will often confer with colleagues – they may recommend a specific property management firm via a social media page. As such, by maintaining information on these platforms the property management firm can be found much more quickly.
It is important to note that the cost associated with maintaining page on these platforms is very low and the return on investment can be phenomenal. Additionally, many property management firms also act in a real estate brokerage capacity when he property goes for sale. As such, the business can use their existing social media presence in order to potentially boost the visibility of a property that is being listed and represented by the property management firm.
As it relates to traditional marketing, it is important that the property management firm take out advertisements in real estate focused trade journals and circulars within the target market. This includes tissue beating flyers to known real estate investment firms throughout the target market radius as well as to real estate brokerages that do not engage in the business of property management. Many people that are in this field have extensive ties to the regional real estate programming community, and as such – they will call on their existing contacts in order to ensure that they can receive referrals for business on an ongoing basis. There can be some sharing of fees in a referral capacity among real estate brokerages and property management firms in certain states. If this is one of the ways that business is going to be drummed off at the onset of operations and an attorney should be consulted as it relates to fees that are being paid from the property management firm to a referring real estate broker.
A property management firm SWOT analysis should be developed in conjunction with the business plan and the marketing plan. As it relates to strengths, they are able to receive a percentage of fees from the management of residential and commercial properties. As stated earlier, the barriers to entry are considered to be moderately high and the startup costs are considered to be moderately low. This is one of a type of business that is not subject automation given the property management firm is very much a face-to-face business. Additionally, the demand for property management does not wane during times of economic recession.
For weaknesses, property management firms do have a large fiduciary obligation to the client and they can be held liable for any improper management of the property. However, provided that the owner has extensive experience in this field this is usually a very small risk. One of the other downsides to owning and operating a property management firm is at their is a always a significant amount of competition among regional service providers. As such, the entrepreneur is going to need to find ways to effectively differentiate their services from that of other companies. Most importantly, this can be done by providing services at a much more affordable rate were on a flat rate basis.
For opportunities, many property management firms will seek to occasionally provide real estate brokering services to their clients. This can be a substantial additional revenue stream for a number of different real estate companies that can into this market. Also, from time to time, owners of property management firms seek to divest their business to third parties. As such, a business broker can be hired to find opportunities that will allow the business to go through acquisition rather than organically.
For threats, there’s really nothing major that would impact the ways that these companies do business given that property management has been one of the mainstay industries within the United States for the past 100 years. It should be noted that there may be some changes in automation – however, a property management firm can be contacted at any time by a tenant that has an emergency. As such, these businesses are highly less subject to issues that may pertain to automation moving forward.
Property management is a difficult business to own and operate, but it can be very lucrative. These been businesses benefit tremendously from economies of scale given that it does not take too much more effort to manage several properties rather than just one property. Additionally, the access the capital for these firms is significant given that this is a real estate business and many of these businesses can grow by simply acquiring properties that they manage for their own accounts.