Property manager starting up: Couple of questions!

Hi all,

I'm looking to go out on my own and start my own property management business and have a few questions for any experienced PMs out there!

1. Other than a real-estate agent license what other licenses are required to run the business, if any?

2. What problems did you come up against early on that you didn't expect?

3. What is the highest cost in running the business?

4. What are the most time consuming tasks?

5. If possible, can someone please provide a breakdown of costs incurred in running a PM business (happy for this to be via private message)

Thank you in advance!

Anthony

 

Anthony
Feel free to call me. Happy to have a chat or even catch up for a coffee. So much more to the business than the one paragraph answers I can provide here..
My details below.

My basic advice - go big! Rent rolls work on volume.

 

Do you have any experience in property management? From your questions it seems that you might not...?

 

1. Drivers licence, Poetic license
2. Drumming up business
3. Advertising (web) is more expensive than rent
4. Building a network, getting a reputation
5. TBA

 

Comments like these don't help anyone.

Anth. ignore all negative comments.

First they ignore you, then they laugh at you, then they fight you, then you win.

He's just asking questions as he is new; why do you have so much hatred towards new entrants? scared they will steal your business?

 

I'd probably start by working for an established agency. If you're a quick learner even 3-6 months would be enough time.

 

You simply can't walk in and get a licence out of a Corn Flakes packet (even if I did). VCat & TAFE are your first points of call as you need a licence and experience to operate an agency.

Otherwise it's:

 

Hi,

I'm also looking to start a rental management business. I have 3+ years experience so now just want some advice/mentor in starting a prop management business. Any help will be appreciated. I'm based in Sydney NSW.

Thanks all
Dan

 

If you have 3 years experience, what do you expect to get from here ?

You only need to sort out the names and lic and where to work from.

 

@D.T. recently started an agency so chime in with your pearly wisdom.

@Xenia is it wise to look at purchasing rent rolls and having someone manage it?

 

You will need a highly visible office preferably in a shopping centre, furniture, phone system, internet access, software and staff to name just a few items, have you given these needs any thought and how much it will cost?

 

Forgot to add enough cash to cover expenses for at least 6 months ...

 

No thanks

 

A REA/Property Management business is no different from a shop, you need clients/customers/walk-ins to survive, how would you find them unless you were visible?

 

Full lucky PM tips.....

Tip 1. Do not setup within cooee of Kmart

 

A property forum ?

I would not bother with a high visibility office in a large city. Would not be sitting waiting for clients.

 

Exactly this. Have a point of difference you're proud of; a reason people seek specifically you.

 

@Xenia is it wise to look at purchasing rent rolls and having someone manage it?[/QUOTE]

Are you looking at purchasing a rent roll Collin?

I think it's a fantastic asset class but there are a lot of factors determining it's value.
Discounted fees, clauses that allow early termination of contracts etc will diminish the value of a rent roll.
Attrition rate is naturally high due to sales and change if circumstances - landlords moving back into properties ect.

That means that new properties need to be added continuously otherwise the asset will just errode away.
If you factor in disgruntled landlords exiting due to bad management then you have a faster eroding asset and a more difficult one to build up.

Most new business comes from referrals so it's difficult to maintain a renrtoll with a high percentage of disgruntled landlords caused by mismanagement.

If you are going to buy a rent roll there are a lot of things to consider - age of properties (newer ones are better business), landlord with multiple properties are a huge discount factor on rent roll value, discounted fees, special needs landlords causing more time in handling them and their properties etc...

Another factor is that there could be an immediate 10-20% attrition immediately - the ones that just need to go because the rent roll has been sold to another agency. This can be minimised by looking at the overall management of the properties, mostly happy clients will stay... but there is always a small percentage who will exit.

This means you could end up with 80% of the rent roll you paid for.

Most of the big real estate companies I know 1000+ properties, have purchased rent rolls - it certainly is a way to get big.

For me personally, I'm happy to run a smaller boutique agency and grow organically so that we can handle any problems with landlords or tenants as they come in one at a time (not 200 at a time).

Happy to chat if you want to look at this as a business model

 

So do you regret buying yours Xenia or was that the right way forward at the time?

 

Awesome
What's stopping you right now?