The commercial property management business in Australia has a collective market size of over two billion dollars, while the residential property management business has a collective market size of over $6 billion.
These numbers are one of the main reasons why there are close to 3000 commercial property management companies and over 12,000 residential property management companies in Australia.
Many people have seen that this market has a lot of potential and have thrown their hat in the ring. If you’re one of those people that sees the potential in this business but don’t know where to start, then here’s our rundown of the basics.
What is property management?
Property management companies are hired by property owners in order to oversee their properties. These properties can vary from commercial warehouses to private apartment units and everything in between.
There are many reasons why people hire property management companies, but most often it’s because:
- the owners have too many properties to handle on their own,
- they’re unfamiliar with what their duties as a landlord are,
- or they would simply prefer to delegate these duties to someone else.
This is where the property manager steps in. As the name might suggest, their job is to manage the properties that they are assigned to and oversee any necessary maintenance and inspections, as well as collect rent from the tenants.
How much do property managers make?
The answer to this question is a bit tricky. There are sites like Indeed that put the average property manager salary at just over $70,000 a year, while sites like PayScale put it closer to around $50,000 a year. As you can see there’s a pretty big discrepancy between these numbers, and we haven’t even factored in the different variables:
- the size of the property management company,
- the city where it’s located,
- the number of clients that it has,
- the level of experience that the property managers have,
- the amount of time the managers have been with the company, and so on.
Setting aside all of the uncertain factors, it seems that the average yearly salary of a property manager in Australia is just around $60,000. However, depending on the company, the qualifications of the property manager, and the contract they sign, that salary can go up to six figures.
Getting started in property management
The best way to get started in any business is from the ground up. If you do plan to start your own property management company, but aren’t familiar with the business or the duties of a property manager, then that company isn’t going to last very long at all.
You don’t need a certificate to work as a property manager in most states. However, since property managers are required to be familiar with property laws and regulations, it’s recommended that each aspiring property manager complete a course in this field before looking for work.
There are plenty of online courses that just about anyone can attend which can give you all of the necessary knowledge. Additionally, after you take the course in either commercial or residential property management, you can also choose to undertake additional courses as well, which can help you learn more skills and may lead to a better position in the company you choose to apply to.
Starting your own company
If you’ve gained some experience as a property manager and think you know the business well enough to start your own company, then the first thing you’re going to need to do is register your business as an LLC (limited liability company). If you don’t have a lawyer, then you can simply go to your state’s official website and find the required documents that you need to fill out listed there.
Next up is either renting out an office, or simply using one of the rooms from your home as an office. Set up a dedicated company phone number, email, and even fax. Print out business cards with all of this information and give them out by the thousands.
One of the other benefits of spending some time working as a property manager is that aside from the job experience, you’re also very likely to have built a connection with some of your clients and developed a few ways of finding new potential clients.
Go ahead and contact the clients from your previous job, tell them that you’re no longer with the company, and ask them if they’d like to switch to your new company. Maybe not even two out of ten people that you ask will actually switch companies, but asking everyone still pays off.
After you’ve exhausted all of your known clients, start looking for new ones. Start attending property management conventions, start giving out your business cards, and do everything you can in order to increase the number of properties that you’re managing, and fast.
The main income for a property management company is the rental yield, so the first few months of looking to build up your client list and increase your rent roll can either make or break your company.
Running a property management company
Once you’ve actually managed to build up the number of properties that you’re managing, it’s time to get down to work.
The first thing that you’re going to need is the right property management software. The software that you choose is going to have a noticeable effect on making your job much easier, or much more complicated. So the best choice is to pick one that has a lot of features but is still easy to navigate and use.
Start looking for and hiring additional property managers when the number of properties grows too much for you to handle all of them alone. Make sure that they’re all properly trained in property law, customer service, and using the property management software of your choice.
And lastly, don’t neglect the accounting side of the business. Many businesses have gone belly up due to bookkeeping mistakes they made which were discovered in an audit, or because the rates they were charging weren’t enough to cover their management costs. Always make sure that you do your daily reconciliations, your end-of-month-close, and submit all of the necessary records of your account disbursements when needed.
The sheer number of property management businesses in Australia tells you just how easy it is to get started in the business. However, not every property management company stays afloat. Whether your company will persevere past a year, a decade or even the first two months in this business is ultimately entirely up to you and the business decisions that you make.