How to time management

The recent real estate "crisis" has caused a number of beneficial effects on the property management industry. There has never been a better time to consider starting a property management business than right now.

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.

How To Time Management

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."

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 also develops marketing products that help existing and startup Property Managers get more clients and learn the tips and tricks in operating a Property Management Business.

Patrick offers his own personal property management business plan free for download at PropertyManagementBusinessPlan.com.

See Also : Motivational Techniques Advertising Techniques Management Concept Style

Property management is a business that is regulated and requires a real estate license in many states. This first step requirement means that the potential buyer of an existing business would need to be qualified to run the business. They would also need to meet the same requirements to start one from the ground up.

One way to get experience in the business is go to work for a large management company and learn the ropes. At the same time you could be completing any educational requirements and prepare for taking the license required to professionally manage properties. Starting a company of your own will take some strong detective work to find a property that is looking for management or looking to replace the current management firm. This will entail a great deal of cold calling and phone work to come up with possible clients.

How To Time Management

At the same time you could get a web site built so you will have something to point people to when you are speaking with them on the phone. You would also mention the website in all communications or advertisements. All of this would come after you have decided on a company name and have a phone number and address for your business.

Knowledge and preparation are requirements for success. Whether you buy an existing business or start one up, you will need to gain experience and first hand knowledge of the business from some source. The best way to gain real experience is to work in the business for a year or so for a management company. The requirements in your state should be checked also to see what licenses are needed. There could also be educational requirements that you would have to obtain. A smart person would make sure they have all of these ducks out of the way while working for someone else. The real estate department of your state will be able to give you the information you need to know. There also could be an association of property managers in your area. Both of these sources are a place to start to find the information you need.

Finding property management companies that are for sale The Internet will quickly give you and idea of what is for sale and where they are located. Business brokers are another solid place to find listings of businesses that are currently on the market. You can also get questions answered about the way to buy one of these businesses. One important facet of the businesses for sale is the asking prices. This may be eye opening for you. You might also check out local newspapers and the local real estate association. Lawyers that specialize in real estate transactions may also know of management companies that are looking for a partner or are for sale. Once you have an idea of the capital needed to pursue a purchase you can begin to figure if you can make a deal. If you are going to need help with the money you will have to resolve that common problem also. The business brokers will have a good idea if the listed business is cash only or the current owner would consider terms. This type of information will speed up the process of finding a deal that you may be able to pull off.

Another aspect of property management is the properties handled. Are you going to only deal with large apartment complexes or single-family residences? The type of properties you wish to handle could determine the price of a management company.

Money makes the deal

Money talks when buying a business. The seller is usually anxious to sell and if a real money offer is made, they may bite even if it requires terms to complete. The point here is make an offer and see what the seller responds with. You never know what kind of help you may get from a motivated seller. Other ways to make up a short fall is a loan from the bank, a business lender found on the Internet, a partner and family or friends. Some deals take a great deal of creative financing to pull off. If the existing business has long-term contracts with their clients it may be easier to get a loan from a disinterested third party. The most common way to handle the short fall is to get the seller to take back paper to be paid in full by a set date in the future. Maybe they would remain a silent partner for a short length of time. The answer to this problem is how much you can put down and how long you would need to pay off the balance.

The only way you will ever know if a deal is possible is to make an offer and see what the counter offer looks like. The business broker in a deal can help in the negotiations and in many cases make it happen through their deal making skills.

If you come to a point in any deal that the final terms are too difficult for you to live with, then it is time to take a walk. Knowing when to walk a way in also part of good deal making. The wrong terms could make the deal a failure from the beginning. The last thing any buyer wants is to put a large down payment into a business and then watch it fail. The loss of this money could be the end of any possibility to own your own business. The thought process should go like this, this deal is not possible and there will be another chance down the road. Some times in the heat of negotiation the making the sale happen becomes the end in itself. This should never be the reason to make a bad purchase. This is a serious situation that needs to be well thought out.

Conclusions

Once you have the experience, education and licenses, the ownership of a property management company is possible. You can either start one up or buy an existing firm. The expense of buying one will be much higher than starting one from the ground up. Finding one you can buy will take effort and the willingness to commit a sizeable amount of money. The obvious way to start is through a business broker, as they will have a current list of business for sale. They should have a very good idea of what you will need to pay to buy a property management company Coming up with the money may be a problem for some buyers as the price of an existing successful firm will be higher than a startup. An existing management company's current customers will be a large asset, as they will supply immediate cash flow to the company. So the higher price is offset by the constant cash flow from contracted customers.

If you start a company from scratch, you will need to plan on a significant amount of cold calling, phoning and face-to-face meetings to find customers that need your help. This is a slow start but can be a reasonable way to get into the business

And now I would like to offer you free access to information on a powerful integrated system of marketing, sales & advertising so you can thrive instead of survive in today's economic environment.

Henthorn is president of Spiral Marketers, a marketing firm which includes a number of partnerships that range from cutting-edge software development, business and personal improvement coaching, online e-commerce businesses, and more.

He was formerly was president and principal broker of a resort / commercial real estate brokerage in Honolulu which specialized in representing sellers in transactions up to MM.

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