Are you thinking about starting a property management company or pursuing a career in the real estate industry? While property management may seem simple from the outside looking in, there are several complex factors that should play into your decision to manage property. After all, what’s the point if you’re not turning a profit off of your investments and hard work?
That’s not to say property management can’t be a lucrative endeavor – in fact, the earnings from a property management business can far exceed your family’s combined income if you approach your business with the right mindset. Keep reading to learn how you can start a successful property management business with strategies that are proven to work.
Buck tradition
The traditional property investment method – purchasing real estate to lease to tenants – is not synonymous with a business that yields a high cash flow. This is because each property requires significant upfront deposits (up to 25 percent for a buy-to-let investment). After all mortgage costs and management fees, you might break even or profit only 100 to 200 pounds per month. If you’re relying almost entirely on capital appreciation to make financial headway, you’ll be playing the long game.
If the traditional methods don’t work, then what’s left? Leveraging property you don’t own. This removes the deposit requirements and, when done right, have returns that are incomparable to any other investment method.
Tens of thousands of people are already using this method to earn their way to financial freedom. Right now, there are hundreds of thousands of short-term rental units across the United Kingdom, the vast majority of which are operated by people who don’t own the property. With so many people finding success this way, there’s nothing to stop you from doing the same.
Do your research
So you’ve decided to move forward with leveraging the rent-to-rent property management strategy to grow your portfolio and increase your income. What’s next? First, before you can do anything else, you must be sure you have quality connections that will help you achieve this, as well as all the legal information and documents in place.
The legal aspect of property management is one of the most crucial ones when it comes to starting a successful business. Ensure that you have the required real estate licenses or certifications to manage properties in the areas you are considering, and consult legal experts if you are unsure. Above all else, please ensure you check local regulations around short-term rentals in your area to ensure you are fully compliant with all local laws and policies.
If you have an existing relationship with a landlord or two, that’s great, but if not, don’t despair; as long as you prove yourself to be a trustworthy tenant who pays rent on time, those relationships will grow in no time. If you have a network of real estate professionals or other experts who can help you make connections, leverage that – it can never hurt! Reach out to real estate agents who are constantly in touch with landlords, as well as local lending institutions. Local contractors also interface with property owners on a regular basis, so seek them out for potential leads.
Invest in training
There’s nothing more terrifying than tackling a new venture with no idea where to start, and jumping into the deep end when there’s time and money on the line is no easy feat even under the best of circumstances. Investing in training like our Property Scale Up Accelerator program can not only give you access to the resources and education you need to equip your growing property management business for success, but can also provide you with connections to assist you in hitting the ground running.
Make the most of aesthetics
After the necessary connections and legal documents are in place, it’s time for the fun part: searching for, selecting, and investing in properties. When you tour the properties you are considering adding to your portfolio, it’s important to consider not only price and location, but also your potential ability to turn that space into a luxurious living area that will attract short- or long-term renters.
These aesthetic decisions will look different for everyone (pun intended), but the most important thing is to ensure that you’re spending money on high-quality décor, furnishings and amenities that will entice renters to spend money to stay at your properties. After all, all the legwork in the world is worthless if no one wants what you’re offering!
Brush up on your applicable skills
Managing property is just one facet of what you’ll have to do as a property management business owner; caring for and managing people is just as important. You’ll have to interact with current and prospective renters, real estate agents and landlords on a regular basis, so good communication skills are a must. As you grow and scale your business, you’ll also need to ensure your management skills are on lock – there will come a time where you must hire an employee to assist you in managing your business, and you’ll need to be prepared to delegate when that time comes.
Tens of thousands of people have achieved six-figure months on a regular basis, as well as healthy profit margins, by employing the rent-to-rent property management strategy. This method is proven to be the most effective for building a cash flow portfolio. With a bit of help, quality training and mentorship, and an entrepreneurial spirit, you’ll be well on your way to building a sustainable business that will provide financial security, stability and independence for you and your family.
James Murphy, Business Coach and CEO of Opulent Living Companies, strives to offer opportunities for real estate businesses to secure 3-5 year rental agreements. His vision is to offer short-term accommodations that compete with the best in service, design and comfort. James is also devoted to eliminating all of the stress of renting a property and improving profits for the property manager. For more information, please visit https://jameszmurphy.com/
