Starting a property management company is a risky venture. It is impossible to eliminate the risks inherent in starting a new company. The real estate market is volatile and market conditions remain in a constant state of flux. New small-business owners can substantially increase the potential for success by careful planning and preparation. The state of Texas welcomes new small-business owners and offers classes, helpful advice and clear-cut rules and regulations to assist in the establishment of new business ventures in the Lone Star State.
Study for the state real estate license exam and pass the test. Contact the Texas State Real Estate Commission for a referral to an approved real estate school or class. To be eligible to take the exam, a candidate must be at least 18 years old and a citizen of the United States or a legally admitted alien. The candidate must also be a legal resident of Texas. All candidates must complete and pass the Texas Principles of Real Estate I & II, The Texas Law of Agency and the Texas Law of Contracts. Property managers who lease or list real estate for sale in Texas must possess a valid real estate broker's license issued by the state. A real estate license is not required by those managing a property or homeowners association. Individuals that only collect rent, run credit checks and provide property maintenance do not have to be licensed.
Analyze your market and determine your area of expertise. Property management companies are specialized and deal with residential properties, retail commercial space, apartment or condo management, warehouse space rental and management of agricultural rural properties. Plan your business to focus on the selected segment of the industry. Locate a suitable location for your business. If feasible, negotiate a property management contract with the owner of the location to manage the building for a portion of your rent. If you are the property manager for your own office space, you will have control of the visual appearance and structural maintenance of the building. A well managed property becomes a showcase for your management abilities.
Seek counsel from a lawyer or tax adviser to determine the organizational structure of your business. You may wish to operate as a sole proprietorship, partnership or corporation. Contact the Texas Corporation Commission to determine if your business name is available and to file papers of incorporation.
Contact the Internal Revenue Service to obtain an Employer Identification Number, also known as an EIN. Contact the Texas Department of Revenue to determine taxes that apply to your venture. You may have to file reports for sales tax, income tax, property tax and federal unemployment taxes.
Establish bank relationships. Your business will require a general business account and a separate escrow account to handle client funds.
Market yourself to potential clients. Telemarketing, Internet marketing, brochures and business cards are a way to present your professional skills. Join your local Chamber of Commerce and Better Business Bureau. Network and join community groups that involve property owners. Build a portfolio of referrals and recommendations from satisfied clients.
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