How To Start A Property Management Company in 10 Simple Steps

If you have the grit, insight, and know-how to start a property management company but aren’t sure where to start, you’re in the right place. Building a successful operation from the ground up doesn’t happen by accident. It takes careful research, planning, and follow-through.

Lucky for you, we’re well-versed in property management (and the software it takes to make things run smoothly). To that end, we’ve broken down the process into 10 actionable steps. From getting licensed and picking insurance to landing your first client, we’ll walk through it all.

Give us a few minutes of your time and we’ll lay out the entire process for you, step by step. Whether you’re building from scratch or legitimizing what you already do, this guide will help you proceed with confidence as you start your very own property management company.

Why Start a Property Management Company?

If you thrive under pressure, juggle tasks with ease, solve problems quickly, and know how to keep properties in excellent condition, starting a property management company might be the career for you.

Turning expertise into a business enables seasoned professionals to convert their hard-earned skills into a steady income. Plus, you get all the benefits of being your own boss, and for many, the chance to own your time is enough to take the plunge.

If you follow the upcoming advice carefully, you can create a smooth, high-value experience for both tenants and owners while building a business that is primed to outperform the competition and generate consistent income, month after month.

How to Start a Property Management Company in 10 Steps

While starting a property management company may be your dream, making it a reality will take planning, structure, and follow-through. Here are the 10 essential steps to help you build a compliant, efficient, and profitable business:

Step #1: Study Up on Local Licensing Requirements

Does your state require a real estate broker’s license to manage properties for others?

Chances are, it does, as only six states — Idaho, Kansas, Maine, Maryland, Massachusetts, and Vermont — don’t list licensing requirements. However, licensing laws vary, so it’s crucial to verify the exact rules in your state before making your next move.

Most states require between 60 and 180 hours of coursework, comprehensive background checks, and classes that typically run between $300 and $600. You’ll also need to pass a thorough exam and complete an application through your state’s real estate licensing board.

While the licensing process can be time-consuming and costly, it ensures property managers understand local laws, protect owners and tenants, and operate responsibly. Completing the licensing process proves that you’re serious (and filters out those who aren’t).

Step #2: Choose a Business Structure

Before you start operating, you’ll need to decide how to structure your new business. The decision can feel overwhelming, but with enough research, you’ll find a setup that aligns with your goals and risk tolerance.

Here are a few common business structures for property management companies:

• Sole proprietorship: Not difficult to set up, but offers no legal separation between you and your business
• Partnership: Like a sole proprietorship but shared between two or more people
• LLC (Limited Liability Company): Popular choice for property managers due to liability protection and flexible taxes
• S corporation: Offers liability protection with pass-through taxation, but has more rules and filing requirements
• C corporation: Provides the strongest liability shield, but comes with double taxation and complex reporting

Compare tax implications, weigh liability exposure, and consider how each structure aligns with your long-term goals. Once you’ve decided, register your business with the state, obtain an EIN, and open a business bank account.

And don’t worry; you can always switch structures later as your company grows.

Step #3: Create a Property Management Agreement Template

A property management agreement template will define your responsibilities, outline fees, and set clear expectations with clients. Having one on hand before you start landing clients will save time, prevent misunderstandings, and make your business look more credible from the get-go.

To create your contract template, you’ll need to:

• Define your scope of services: List which duties are included and which are not.
• Set your fee structure: Pricing will likely vary from client to client.
• Include legal responsibilities: Cover compliance, fair housing, and local ordinances.
• Clarify termination terms: Explain how either party can end the agreement.
• Add signatures and dates: Make it legally binding with clear execution details.

Legal note: To ensure your agreement can withstand legal scrutiny, consult an attorney before going live. Leave room for customization so you can tailor your contract for different properties or ownership arrangements.

Step #4: Find Suitable Insurance Coverage

If your business isn’t insured, you’re exposing yourself to a litany of serious risks. A claim against one of your employees or contractors could ruin your reputation and destroy your bottom line. Get insured from day one to protect your company, your clients, and your future.

But what type of property management insurance should you choose? Here are the two most popular options worth considering:

• General liability: Covers injury or property damage claims tied to your business
• Professional liability: Protects against lawsuits over mistakes or contract issues

Shop around insurance companies, tweak coverage levels, get quotes, read reviews, and choose a policy that works for you and your business. Take your time here; you’ll want to partner with a provider that has your back, should things go sideways.

Step #5: Sign Up for Property Management Software

The final step you need to take before finding clients is to sign up for property management software to help tackle your daily chore list. Starting with the right tools from day one will save you stress, missed deadlines, and costly errors.

So, how can property management software lighten your load as you get your business off the ground? It can:

• Advertise client properties: Post listings across multiple sites with one click.
• Schedule showings: Automate tour availability and track appointments.
• Send and receive rental applications: Accept and organize applications digitally.
• Screen potential tenants: Run credit, background, and eviction checks.
• Generate state-specific lease agreements: Create compliant leases regardless of location.
• Coordinate maintenance: Track requests, assign vendors, and fulfill invoices.
• Collect rent: Accept online payments and automate rent reminders to ensure timely payments.
• Handle accounting and bookkeeping: Track income, expenses, and generate reports.
• And more: Manage maintenance requests, store documents, and communicate with tenants from a single platform to increase efficiency and organization.

Sign up for a free TurboTenant account today to get started. No credit card required; just the tools you need to get up and running fast.

Step #6: Build Your Brand & Online Presence

Now that you’ve registered, insured, and automated your business, you’re going to need some clients. But how will you find them? Building a brand and establishing a strong online presence signals to potential clients that you’re credible, professional, and ready for action.

To start, create a basic website that outlines your services, showcases your expertise, and makes it easy for potential clients to contact you. Then claim your Google Business Profile and set up social media accounts to boost visibility and build credibility with potential clients.

Once you’ve established the foundation for building an online presence, focus on branding, publishing valuable content, and collecting reviews from past clients or employers. Make it easy for leads to reach out, and consider offering a small incentive to spark interest and generate leads.

Step #7: Work Your Leads and Land Your First Clients

Once your online presence and branding kick in, you should get some nibbles from rental property owners interested in your services. Nurture these leads carefully, as they could become your very first clients and set the foundation for your growing portfolio.

When leads reach out, respond promptly and professionally. You only get one first impression, after all. Ask thoughtful questions, share your strategy for managing their property, and show them why you’re the best option to help protect their real estate investments.

These first conversations may feel high stakes (and that’s because they most certainly are). Landing your first client will prove that your sales process is effective and provide a solid launching point to grow your portfolio with confidence.

Show up prepared, earn trust, and secure that first management agreement.

Step #8: Customize Pricing and Fee Structure

After you’ve reached an agreement with a client, it’s time for the fun part: negotiating the dollars and cents of the deal. You’ll need to clearly define your pricing and fee structure in the contract template you created earlier, making sure expectations are crystal clear from the start.

Most property managers charge landlords between 8% and 12% of the monthly rent. Where you land in that range depends on your duties, the local market, and your negotiating skills. When building your contract with a client, factor in setup fees, leasing costs, and maintenance markups, if applicable.

Know your value and don’t undercharge just because you’re a newcomer. Even a small discount in your fee — just a fraction of a percent — can cost you thousands over the long term. Set fair but competitive rates that reflect your experience, workload, and the results you deliver.

Step #9: Build Systems for Daily Operations

Once you’ve dialed in pricing and signed your contract, you’ll need to coordinate closely with your client to create workflows for your daily operations.

• Who handles maintenance requests?
• How will rent collection and owner payouts work?
• What’s the process for tenant communication?
• How will you document property inspections?
• How will you manage lease renewals and upcoming move-outs?

These are the types of questions you’ll need to answer to build efficient, repeatable systems that keep your operation running like a well-oiled machine.

In addition to developing these systems, you’ll also need to guide clients through onboarding and clarify any remaining expectations. The key here is to build systems that enable you to deliver consistent results without getting bogged down in day-to-day tasks.

Step #10: Stay Compliant and Continue Growing

As your client list expands, you’ll undoubtedly stay quite busy. However, don’t let your momentum cause you to lose sight of legal and operational compliance. Laws change rapidly, so check for updates regularly, renew licenses on time, and stay informed to protect your business.

Scale responsibly, property managers.

Consider hiring legal assistance on a retainer to stay ahead of changing regulations. One slip-up or lapse in compliance could throw your operation into a tailspin (yet another good reason to let property management software automate the mundane so you can stay on top of changes).

Conclusion

If you came here wondering how to start a property management company, we hope we’ve made the process as straightforward as possible. At TurboTenant, we understand that building a lasting property management company requires consistency, adaptability, and all the right tools.

Whether you need help advertising properties with one click, generating legally binding leases, or automating maintenance requests, our low-cost software will take the tedious work off your plate, allowing you to focus on delivering undeniable results.

Sign up for a free TurboTenant account today to put your property management company on autopilot right away.

How to Start a Property Management Company FAQs