The downside is that property management is also one of the biggest sources of complaints to regulatory agencies in various states, resulting in ever-increasing licensing requirements and regulatory control.
Still, it is an attractive field. For those with experience in real estate or property management (or better yet, both), starting your own property management business may be a great business venture—offering the benefits of self-employment and a home office if you desire (meetings with property owners, tenants, and contractors will almost always occur onsite, so a fancy office is not required).
Before you begin, it is a good idea to research the requirements in your state. While you may generally "manage" your own properties without a license (in other words, be a "landlord"), when it comes to managing properties for others for a fee or compensation, many states have strict requirements including education and licensing.
Some states require knowledge pertaining to trust accounts, security deposits, habitability, carbon monoxide alarms, asbestos, lead-based paint, handling of confidential information, zoning, and agency. If you already have the required background and are ready to go, here are your next steps.
Next Step: Incorporate
The first step will be to determine the legal structure of your business before you begin operations. There are basic structures that you can choose from: Sole Proprietorship, Partnership, Corporation (S or C), Limited Liability, or Non-Profit. Depending on the state you live in, these may vary slightly. Each legal structure has features that affect your financial and legal risks. Your state's website may have resources to help you with this decision, or you may want to find a lawyer, CPA, or business consultant.
Once you've determined the appropriate legal structure, you can simply use our online incorporation service to get started.
Contracts Protect You
As a property manager, you will be dealing with contracts on a variety of levels. First and foremost, you'll need to protect yourself as you enter into contracts with property owners to serve them. A clear professionally drafted Service Contract is a critical component of your ongoing success and some states require that a Property Manager Agreement be drafted by a lawyer.
Alternatively, if you are starting out as a landlord and plan to manage your own property, we offer some landlord documents and access to affordable legal help.
Whether you're managing your own property or someone else's, you'll be dealing with a place that someone calls home so it's important that you take these legal steps to ensure you're legally protected and your tenants feel at home.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.