FREE Training: How to Launch Your Property Management Company
In Massachusetts, there is a lot that goes into learning how to start a property management company. From obtaining a real estate broker’s license and registering your business to gaining a local client base, there is a long list of things that you will need.
Before you begin your own career in this field of property management, it is crucial to understand the wide array of responsibilities associated with the role and how they vary depending on the type of property being managed.
Above all else, being able to consistently provide excellent customer service is vital for thriving in this profession and growing your property management business.
At the end of the day, property managers act as the operational leaders for both residential and commercial rental properties.
What Does It Take to Be a Successful Property Manager in Massachusetts?
Successful real estate management requires the property manager to oversee various tasks and responsibilities, including:
- Overseeing lease agreements
- Managing the financial aspects of a property for property owners, such as rent collection
- Maintaining the property and keeping it in the best shape possible on behalf of the property owners
- Finding new tenants, filling vacancies, and marketing properties effectively
- Addressing tenant complaints, emergencies and maintenance requests promptly
Now, there is a lot more that goes into being a professional property manager, but those are the most common tasks that you will be faced with each day.
As a property manager, your objective should be to ensure that the rental property you are managing is being well-maintained, profitable for the property owners, and kept as a safe and satisfactory living or working environment for its occupants.
Good property managers will often also tailor their property management responsibilities according to the specific type of property they are overseeing.
For example, residential property managers primarily focus on housing units such as apartments or houses, placing significant importance on tenant welfare.
In the field of property management, exceptional customer service is the key to maintaining tenant satisfaction and retention. Keeping tenants happy long term is the best way to make sure that your property management business and your clients (the property owners) are always earning a revenue from the property.
Property managers must possess strong communication skills in order to:
- Address any concerns raised by owners and tenants in a timely manner
- Mediate disputes effectively
- Maintain positive, long term professional relationships with clients, contractors, and tenants alike.
This emphasis on customer service not only enhances the reputation of your property management company in Massachusetts, but it can help lead to long term success in the industry.
So, now that you know what it takes to be a successful property manager, do you still think that you are up for the challenge?
If so, keep reading to find out the exact steps that you will need to follow to start a property management company in the state of Massachusetts, from creating a property management business plan to securing your real estate broker’s license.
Step 1: Make Sure That You Are Qualified to Be a Property Manager
If you want to start a property management company in Massachusetts, attaining a foundational level of education is essential to make sure that you are properly prepared to handle all of the responsibilities that come along with the job and effectively manage properties.
Many states have requirements for property managers before they start to work in the field. Massachusetts, however, does not!
While Massachusetts may not require a particular license for property managers, such as a real estate broker’s license, it is advisable for individuals aspiring to enter the field to pursue educational courses in property management.
Formal education is recommended to make sure that you have all the foundational knowledge that you need in order to successfully provide top-notch property management services to your clients, the property owners.
Here are just some of the educational resources and options for property managers in Massachusetts:
High School Diploma or GED: Obtaining a High School Diploma or GED is the best first step for prospective property managers. This qualification lays the groundwork for your subsequent training in property management and real estate.
Higher Education in Real Estate: Although not required, pursuing higher education in real estate management offers a competitive advantage. Courses covering property management, real estate law, and business administration are extremely useful to anyone looking to work in real estate and managing properties. These courses are typically included in associate or bachelor’s degree programs offered by accredited institutions, equipping you with comprehensive knowledge and practical skills in the field.
Real Estate License:Although a real estate broker’s license is not mandatory for property management activities such as signing a lease and collecting rent, obtaining one in Massachusetts can be a significant benefit for your long-term success as a property manager. A real estate broker’s license provides you with a foundational understanding of real estate laws and practices.
- Certified Property Manager (CPM): Combined with a real estate broker’s license, attaining the Certified Property Manager (CPM) designation proves a property manager’s expertise and dedication to the industry.
- Certified Apartment Manager (CAM): For those specializing in managing apartment communities, obtaining the Certified Apartment Manager (CAM) credential is highly valuable.
Acquiring professional education and certification in property management and real estate is extremely beneficial for a prosperous and successful career as a property manager in Massachusetts.
So, even though Massachusetts does not require formal education the way that other states do, we do not think that you should skip these steps, as doing so could mean that you are not as prepared for the job as you could be.
Property management requires a lot of knowledge and responsibility, and we recommend that you do everything you can to make sure that you are as qualified as possible before you start a property management business.
Step 2: Do Your Research on Massachusetts’ Rental Laws and Local Market Conditions
If you want to start your own property management company in the state of Massachusetts, you must be able to thoroughly understand the state-specific real estate laws and the intricate lease and eviction processes.
Just like any other state, Massachusetts property managers need to familiarize themselves with various real estate laws. This includes things such as zoning regulations, fair housing practices, and property codes.
Enrolling in property management courses and using online resources covering state-specific legalities can help you get started in this process.
To successfully manage the delicate balance between tenant rights and property owners’ responsibilities is difficult, but it is crucial to your success. Leasing laws include topics ranging from security deposit limits to mandatory disclosures.
For example, in Massachusetts, you can’t charge a tenant a security deposit that is larger than one month’s rent, and you have strict rules for handling repairs and maintenance.
In addition to your state-specific legal research on things like maintenance requirements, you will want to know as much as you can about your local Massachusetts rental market before you embark on your journey to start your own company.
Start by doing research on the standard prices of rental properties in your market. Take note of the location, the size, the type of property, the state of its maintenance, and the amenities.
What qualities and locations in Massachusetts warrant a higher rent price? What is your target demographic?
After you have researched the rental properties in your area, try looking into what your competitors charge for their services, including how they manage routine maintenance and coordinate with contractors.
This will help you in the future as you figure out how much you will want to charge for your own services, which we will touch on again later.
FREE Training: How to Launch Your Property Management Company
Step 3: Understand How to Structure and Register Your Property Management Business
When you start a property management company in Massachusetts, structuring and registering it involves several key steps
First, you will want to decide on the business structure—whether it’s a sole proprietorship, partnership, limited liability company (LLC), or corporation—considering factors like liability protection, insurance requirements, and tax implications.
Next, choose a unique and memorable name for your property management firm, ensuring it complies with state regulations and is distinguishable from existing entities.
Then, you can register the business with the Massachusetts Secretary of the Commonwealth’s Corporations Division, filing the necessary forms and paying any associated fees, and securing your business license.
As you navigate this process, we highly recommend using professional resources and working with a legal professional who specializes in real estate that help guide you through all of the confusing details that may come up along the way.
Step 4: Create a Strong Contract for Your Clients
As one of the state’s new property managers, you will want to make sure that you and your company are protected once you start working with clients and owners. You can do this by creating a detailed contract.
Property managers in Massachusetts can create a strong property management contract for their clients by including a few key elements.
First, clearly outline the range of services provided, detailing responsibilities such as rent collection, property maintenance, tenant screening, and how you will manage the lease administration.
You will also want to specify the duration of the management agreement and the initial lease term, including start and end dates, along with any renewal or termination clauses.
Include any relevant details regarding fees and payment terms, ensuring transparency and clarity regarding compensation. Address important legal considerations such as compliance with Massachusetts real estate laws, fair housing regulations, eviction procedures, and license requirements.
Finally, include clauses about insurance requirements for both you and the property owners, and ensure the contract is written in clear language to avoid misunderstandings. This is for the benefit of all parties involved with the contract.
Consulting with legal professionals experienced in Massachusetts property management law can help ensure the contract meets all necessary legal requirements and adequately addresses the needs of both the property manager and the client.
FREE Training: How to Launch Your Property Management Company
Step 5: Create a Business and Marketing Plan for Your Massachusetts Property Management Company
So, you have registered your business, gotten certified as a property manager, done your research and created a strong contract for your future clients.
So, what now? At this point in the process, we highly recommend creating a business and marketing plan.
Creating a comprehensive business plan for a property management company in Massachusetts involves a few important steps.
Begin by using your thorough market research to take note of the local real estate management landscape, including demand for property management services, competitive analysis, and target demographics.
Define your company’s mission, vision, and values, outlining the unique value proposition and your positioning in the market.
Specify the range of services that you will be offering, such as tenant screening, rent collection, maintenance, how you manage the lease life cycle, and financial management.
Then, you must develop detailed financial projections, including startup costs (like insurance and license fees), revenue forecasts, and profitability estimates.
Next, you will want to think about how you will attract clients and new property owners. Outline your marketing strategy, including your methods of gaining leads and building brand awareness.
Address the operations of your business, such as staffing, technology infrastructure, and legal compliance, and how you plan to manage both residential and commercial properties.
Ask yourself these questions: Will you begin by outsourcing contracted work for your managed properties? Will you hire other property managers or in-house experts with a trade license to help delegate different responsibilities?
Then, you can continuously revisit and refine the business plan, especially if you obtain your real estate license or another professional license, as your property management company grows and adapts to changing market conditions in Massachusetts.
Step 6: Find a Property Management Software to Help Automate Your Operations
For property managers in Massachusetts, juggling competing priorities is a daily occurrence.
This is simply a part of the job of operating any property management company, and the sooner you are able to find ways to organize and automate all of your tasks, the better.
The truth is, maintaining professionalism and responsiveness is very important for property managers who want to build trust with their clients.
When it comes to meeting the needs of your property business, choosing the right software is crucial. While selecting from a long list of options that are on the market today may seem daunting, it is essential to opt for a solution that can scale with your company’s growth.
While comprehensive property management software like Buildium, Yardi Breeze, Hemlane, and RentManager offer all-encompassing features, they may not be the ideal choice for startups.
Fortunately, there are numerous Software as a Service (SaaS) platforms tailored to address specific property needs such as tenant rent collection, maintenance tracking, email management, and document sharing.
Though they may not be not as intuitive as the more all-in-one solutions on the market, these individual platforms are often more cost-effective and provide scalability, making them a great choice for starting your property management company.
FREE Training: How to Launch Your Property Management Company
Step 7: Determine Your Fee Structure
Once you have your business all set up, you will need to determine what your company’s fee structure will be before you start working with clients.
After all, you will need to know how you are going to be paid before you start providing services!
This process can be tricky, and it is important to strike a good balance when you are deciding how much to charge for your property management services.
Setting prices too low may compromise your credibility with potential property owners and leave you struggling financially. However, pricing too high could deter potential high-quality clients.
So, how do you find the right price for your property business? To craft a fee structure that ensures sustainable income and piques client interest, you will need to revisit the market research that you have previously conducted.
Take a look at what other property management companies charge, and use this information to gain more insight on what kind of pricing you can use to attract clients, remain competitive, and still generate income.
Consider the Following Property Fees When Structuring Your Pricing:
Setup Fee: A one-time charge for Massachusetts property owners to establish an account, typically ranging from $200 to $300.
Ongoing Management Fee: The primary source of monthly income, typically 3-10% of the property’s monthly collected rent, covering various operational costs.
Leasing Fee:A one-time charge equivalent to one month’s rent or a portion thereof, incurred when a lease ends and a unit becomes vacant, encompassing expenses related to tenant procurement.
Lease Renewal Fee: A less common fee, usually a small amount, implemented in competitive rental markets, paid by tenants upon renewing their lease.
Eviction Fee: An optional but advisable fee, particularly if you’re facilitating the eviction process on behalf of the property owner.
You can use these fees to tailor your structure to align with the property clientele you aim to attract. Regardless of your pricing approach, prioritize maintaining consistent, top-tier service across all clients to safeguard your business’s reputation and enhance overall profitability.
FREE Training: How to Launch Your Property Management Company
Step 8: Focus On Lead Acquisition to Continue Your Success
Now that your business is up and running, it’s time to get some leads!
Property managers need to use a wide range of marketing strategies to maximize the visibility of both their company and their rental listings. In today’s market, using online platforms is essential.
Additionally, incorporating social media campaigns and traditional methods such as flyers and local newspapers are pillars in a comprehensive marketing approach for anyone in the real estate industry.
Having a strong understanding of how to market your company goes beyond just gaining clients; it can also help you fill vacant property listings quickly.
At the end of the day, running a property management company involves maintaining a strong marketing strategy, not just at the beginning of your journey.
While it is always a good idea for property managers to learn as much as they can about marketing, you don’t have to do it alone!
Many property management companies enlist the help of professionals to help them set up a professional website, establish their branding, build their online presence, and more.
Luckily, we can help you do just that. At Upkeep Media, we work with property management companies to help strengthen their brand, attract clients, and create a website that can serve as a professional landing page for your business.
If you have any further questions about how you can get your license and start your Massachusetts property management company on the right foot, contact our team at Upkeep Media for more information.
