The emergence and rise of the Real Estate sector in our country over the last decade has necessitated the need for development of property management companies. These are companies that act on behalf of the landlord and act as a third party between the landlord and the tenant. Property management companies have played a very crucial role in the steady and fast rise of the real estate sector in Kenya and have ensured as a country we move in the right direction and in achieving our vision 2030. They have helped landlords navigate the real estate industry and create a friendly environment that improves the relationship between tenants and landlords.
Their duties are to ensure that a property (this could be residential, commercial or even industrial property) is kept in good condition and making sure it is safe for tenancy by running regular inspections, day to day repairs, security and upkeep of the property. They are to ensure a daily oversight of a property while maintaining and preserving the value of the property and ensure income generation.
1. MARKET RESEARCH – look into the demand for property management services in the area you are considering as well as the competition. This will help you gather information about potential customers and help assess the viability of this new business.
2. CREATE A BUSINESS PLAN – a business plan will help you define your target market, services and financial goals for the company. The business plan will be the foundation of your business. It will be the roadmap for how to structure, run and grow your company. It will be used to attract funding or even investors.
3. GET A PROPERTY MANAGEMENT LICENSE -This is mostly issued by the county governments in Kenya. This cements the legitimacy of the business as the government is aware of the existence of such a business. It helps protect your business and your staff legally and boosts credibility and might be used to apply for funding.
4. BRANDING – Branding is important because it creates a memorable impression and allows clients to know what to expect. It also helps distinguish you from other competitors giving you the competitive edge. The brand name and logo chosen should be catchy, easy and creative and should go with the modern styles and in line with culture. Setup is not expensive. One can start by just registering a Sole proprietor business which costs just 1050 ksh to register one such business. One can also decide to register a limited liability company [LLC]. Once this is done it will be easier to find clients for the company, since it brings a sense of legitimacy and formality to the client. Through networking and PR some people get lucky and get clients before they register the company, and this helps to jumpstart the company.
5. GET AN OFFICE - A physical location will help the company to be trusted. Some people do not use offices especially when starting out. An office will play a vital role in collaboration and creating an environment for collective innovation, productivity and wellbeing. An office communicates the identity of the company and helps you express your brand to clients and helps echo values. The office should act as a control center and service center and should be able to aid the team on the ground to navigate tasks. The office location should be well chosen to allow ease of access and flexibility in operations. Getting an office may necessitate creation of a company website or social media platform as they go hand in hand but these might come later.
6. CLIENTS – For one to start a company that is us and running you need clients. The number of clients the company has will dictate the size. If you have a lot of clients, you can expand the size of the team. Most people start by themselves in order to cut down on costs. Be flexible in the methods chosen to collect revenue from clients. Use a collection method that works with the particular client. Some landlords prefer collecting the money and providing account statements. Others can allow you to collect on their behalf.
7. SETTING UP THE BUSINESS AND OPERATIONS – When starting a property management Company one has to factor in the operations of the company which include rent collection, other collections and disbursement. Property management tasks which include: utility management, sorting any issues that may arise in the property, garbage collection management, security of the property, cleaning, and handling tenant relations. This will necessitate hiring of employees and support staff and purchase of necessary equipment that will get the company up and running.
8. COSTS - Mobility is required for success in this business. One will need to regularly follow up on what is happening on the ground. Some of our clients had to get motor bikes to enable them access every part of the region which their properties are. Cost incurred include the following: (1) Running costs. Transportation from the office to the properties. Phone costs. Office rent, internet, office equipment and other running costs. (2) Labor. This will depend on the size of your company. (3) Brokers may have to be paid. Around 2000 ksh for every tenant being onboarded and has been brought by a broker.
We here at BOMAHUT, offer software solutions to help property managers and landlord get more rental profits with less management effort. You may learn more about our services at www.bomahut.com.
Book a demo with us to learn how Bomahut can help you improve rent collection and save time on property management tasks.
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