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But, how do you get started? If you’ve already done some research into becoming a business owner, you’ll know that there are a few different ways you can start your own property management business. You can start from scratch or you can purchase a franchise. Both options come with various opportunities and challenges. 

To help you make a decision in regards to your next steps, here are a few pros and cons of starting a property management business from scratch.

Pros of starting a property management business from scratch

You are the boss, only you: When you start your own property management business, you are the boss. You get to make every decision - whether it is how you operate or when you operate, the beauty of being your own boss is that you don’t have to follow someone else's agenda. 

Flexible work, life balance: Being your own boss means you get to set your own schedule. Although property management is typically a 24/7 job, starting a business from scratch means you can decide what hours you do or don’t do and set your own priorities. Kids need to be picked up from school at 3pm? Schedule meetings outside of those times. Want to largely have Fridays off? Set your official business hours accordingly and be on call for the rest. You can also choose to work from home - saving you from a daily commute to and from an office and allowing for more flexibility to attend to personal matters.

Continue with your day job: Depending on how quickly you want to grow your property management business, you may be able to continue on with your day job while you ease into business ownership. However, if you’re already in a property management role you may be restricted by a restraint of trade which can prevent you from doing this. Make sure to review your contract carefully before making any decisions. 

Lower entry costs: When you start from scratch, you don’t have to worry about financing the purchase of a franchise license (Propertyscouts franchise licenses start at $22,500 +GST) or an existing franchise (depending on the size of the client base you are purchasing, this can be quite expensive). You can start with minimal funds and work your way up. 

Cons of starting a property management business from scratch

High risk of failure: As appealing as starting your own business forms scratch may sound, doing so comes with a high risk of failure - in New Zealand roughly 80% of new businesses fail in the first year. 

No support or training: Starting from scratch means starting with nothing. You might have some funds behind you to get started but you won’t have any established support or training regimes to help you get started. Sure, there will be privately run courses you can take to upskill in all things business management (and property management if you aren’t already in the industry), but these come with extra costs that may not be within budget when you’re just starting out. 

Slower growth: As a start-up, you will have no established brand awareness to help you propel your business forward and generate an income. You will need to put in the work to first create your property management brand and then spread the word to generate leads you can convert into paying clients.

It can be lonely: Building your own business can be a very lonely and isolating process. You will likely need to work long hours to get it off the ground, and, besides friends and family, you won’t have any additional support or companionship to help you along the way. 

Self motivation is critical to success: Starting your own business requires a lot of self-motivation. If you’re not very self-motivated, you’ll probably struggle to get your business off the ground in the first place - not to mention, when things aren’t quite so new and shiny, you may lose interest and find it hard to keep things ticking along. 

The bottom line

There’s a lot to think about when it comes to setting up your own property management business. 

If you’d prefer to build your own processes and systems from the ground up without having to follow a pre-set path, starting from scratch might be your best bet. However, if you’re risk averse, starting your own property management business from scratch may not be the right path for you. Ultimately, the most important thing to consider is this: will you have the fortitude and enthusiasm to make your business a success? 

Still want to be your own boss in property management? We can’t tell you it will be easy, but when you purchase a Propertyscouts franchise you will have full support from the franchisor to grow your business. To date, every one of our franchise businesses has been and continues to be successful. Learn more about becoming a Propertyscouts business owner. 

 

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DISCLAIMER: The above advice is written by Propertyscouts New Zealand (2020) Limited and is intended as a broad guide for educational purposes only. The advice should not be regarded as legal, financial or real estate advice. In all instances, you should make your own inquiries and seek independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions.

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