How to Start a Property Management Company in Florida
A property management company oversees residential, commercial or industrial properties (or a combination of these) owned by another person or entity. Acting on behalf of the owner, the property manager preserves the value of the property and helps to generate income.
The responsibilities of a property manager or property management company can include the following:
- Advertise rental properties
- Collect rent payments
- Ensure compliance with local landlord-tenant and real estate board jobs
- List, show and lease vacation rentals
- Oversee construction or contractor work
- Perform routine cleaning and preventative maintenance tasks
- Qualify tenants
Property management licensing varies from state to state. Property management laws in Florida require you to have a real estate broker's license when managing properties for others for pay. You do not need a real estate broker's license if managing property you own personally. There is no specific property management license in Florida.
To get a real estate broker's license in Florida, you must first complete at least 24 months as an active real estate agent within the five year period immediately preceding your application. If your experience is from somewhere besides Florida, you must include a certification of your real estate license history. In addition, you must do the following:
- Complete a 72-hour pre-licensing course approved by the Florida Real Estate Commission (FREC)
- Submit an application, application fee ($91.75) and fingerprints to the state
- Pass the Florida Real Estate Broker Examination with a grade of 75 or higher
- Complete Form DBPR RE 13 (BrokerTransaction Form) to activate the initial license
- Complete a 60-hour FRED-approved post-licensing course for brokers before the expiration of the initial license
Property management requirements in Florida do not mandate a business plan, but having one will guide you through much of your decision-making. Look online for a free business plan template specific to property management. If you're seeking financial help from investors or lenders, they'll want to see details of how you plan to run your business, with financial projections five years into the future.
Choosing a business structure and obtaining a business license protects your personal assets. If you're planning to hire employees, you'll need a tax ID number from the Internal Revenue Service (IRS). Similar to an individual Social Security number, a tax ID number is a unique identifier that you can get, free of charge, by completing an application on the IRS website.
Consider the following options for your business:
- Sole proprietorship: By default, any business enterprise involving a solo individual is deemed a sole proprietorship. You do not need to register as a business if using your own name. If using another name for your business, such as Breezy Shores Property Management, you'll have to pay a fee of $50 and register a "Doing Business As" name, or DBA. This is not the best option if you would like to protect your personal life/resources from liability.
- Limited Liability Corporation (LLC): You can be a single-member LLC and enjoy the legal protection of personal assets not afforded to someone who establishes their business as a sole proprietorship. Like a sole proprietorship, income and expenses from a single-member LLC get reported on your personal tax return.
- S Corporation: Also known as an S Subchapter, this business structure lets you pay yourself (and any employees) a salary plus receive dividends from any additional profits the corporation earns. You must file articles of incorporation with the state in order to receive the tax benefits granted to S Corps.
If you have any questions about the business structure that's right for you, talk with an attorney or an accountant.
Reach prospective clients by developing a solid marketing plan, which can include the following steps:
Create a website. It pays to hire a pro for this important step to advise you on search engine optimization (SEO), Google keywords and link strategies in addition to eye-catching, user-friendly content.
Use social media platforms. Facebook has 1.9 billion users worldwide. YouTube has a billion active users. Twitter, LinkedIn, Pinterest and Instagram have hundreds of millions of users combined. Tap into the potential of social media to reach prospective clients.
Make a Google+ business page. It's the 21st-century equivalent to the Yellow Pages, and a likely place prospective clients will go when seeking a local property management company.