First Things You Need to Do When Starting a Property Management Operation

Starting a property management company requires careful planning across legal, financial, operational, and technological fronts. This guide walks you through the essential first steps to build a compliant, efficient, and scalable operation from day one.

Legal Structure & Compliance

Choose your business entity (LLC, S-Corp, or C-Corp)
Register your business with your state
Obtain necessary licenses (real estate broker license, property management license)
Get an EIN (Employer Identification Number) from the IRS
Draft operating agreements and partnership documents
Set up trust accounting requirements per state law
Review local landlord-tenant laws and fair housing requirements

Banking & Financial Setup

Open a business checking account
Set up separate trust/escrow accounts for client funds
Establish accounting software integration
Create a chart of accounts specific to property management
Set up payment processing for rent collection
Establish owner disbursement workflows
Implement financial controls and approval processes

Insurance & Risk Management

General liability insurance (minimum $1-2M coverage)
Errors & omissions (E&O) insurance
Workers' compensation if hiring employees
Cyber liability insurance for data protection
Fidelity bond to protect against employee theft
Review coverage requirements in management agreements

Core Software & Technology

Property management software (see recommended starter stack below)
Communication platform for tenant and owner contact
Maintenance coordination system
Document storage and e-signature solution
Website with basic SEO and contact forms
CRM for lead tracking and owner acquisition

Staffing & Operations

Define roles: admin, leasing, maintenance coordinator, accounting
Create job descriptions and compensation structures
Establish onboarding and training programs
Set up payroll system
Build employee handbook and policies
Create service level agreements (SLAs) for response times

Quick Checklist

✓Business entity formed and registered
✓Licenses and permits obtained
✓Business bank account opened
✓Trust account established
✓Insurance policies in place
✓Property management software selected
✓Website live with contact forms
✓Standard lease agreements drafted
✓Management agreement template created
✓First client signed

Recommended Starter Tech Stack

All-in-One Platform

• Buildium (0-500 units)
• AppFolio (100+ units)
• TenantCloud (1-50 units)

Accounting

• QuickBooks Online integrated with PM software

Communication

• Built-in tenant portal from your PM software

Maintenance

• Built-in maintenance tracking, or Property Meld for advanced workflows

Marketing

• Zillow, Apartments.com, and your PM software's syndication

Pro Tip

Don't over-invest in software before you have your first 20-30 units. Start with an all-in-one platform and add specialized tools only when you feel the pain of not having them.