Residential Property Management

Property management companies manage rental properties for owners who don't want to be landlords.

You handle tenant placement and screening, rent collection, maintenance coordination, inspections, lease enforcement, accounting and owner reporting, and regulatory compliance.

You can manage single-family homes, small multifamily, or build a portfolio of managed properties.

Success requires real estate knowledge and licensing (required in many states), systems for operations and tenant management, contractor and vendor relationships, customer service for both owners and tenants, and business management skills.

Pricing typically includes 8-12% of monthly rent for full management, potentially one month's rent for tenant placement, leasing fees, and markup on maintenance coordination.

Managing 50 properties at $1,500 average rent with 10% fee = $7,500 monthly revenue.

Startup costs include property management licensing and education (varies by state), property management software (Buildium, AppFolio, $100-400 monthly), business formation and insurance, marketing to property owners, initial operating capital, trust accounts for tenant deposits, and potentially office space totaling $5,000-20,000.

Building client base involves marketing to out-of-state or busy property owners, real estate investor networking and groups, offering services to agents' landlord clients, content marketing about property management benefits, potentially starting with owners of multiple properties, taking over problem properties from struggling landlords, and excellent service generating referrals.

Revenue comes from monthly management fees, tenant placement fees, lease renewal fees, potentially maintenance coordination markup, late fee splits, and property inspections.

Operating costs include software subscriptions, insurance (E&O, general liability), marketing, potentially office and staff, contractor coordination time, accounting and trust account management, and administrative costs.

Challenges include managing difficult tenants and owner expectations, responsibility for tenant issues and maintenance, thin margins until reaching scale (need 50-100+ properties), regulatory compliance and fair housing, emergency calls and availability requirements, and liability for mistakes or tenant issues.

Success requires excellent systems and processes, thorough tenant screening (preventing problems), responsive maintenance coordination, clear communication with owners, growing to sufficient scale (economies improve significantly with more properties), potentially specializing in property type or price range, building strong contractor network, and treating both tenants and owners as customers.

Property management is service business that scales with portfolio growth.