How to create a property management business plan: Step-by-step guide and free template

One of the first steps to starting or growing a property management business is outlining how you’ll get from where you are to where you want to be. That’s where a solid business plan comes in.

It might sound like a heavy lift, but this step-by-step guide breaks it all down—making it easier to organize your ideas, set your goals, and present your business in a way that clicks with potential partners and investors. You can even use the tips in this guide and our free template linked above to revamp or refine your existing plan and breathe new life into your business.

What Is a Property Management Business Plan?

Whether you’re starting a new property management company from scratch or expanding your property management services, a business plan can be a practical tool to help you grow the right way. At its core, a business plan acts as a roadmap for your company. It shows readers how you’ll turn your vision from a rough idea into something real. It can even help guide your own decision-making.

A successful business plan is often fairly detailed. It is meant to highlight your goals for the company and lay out your plan for achieving them. It should also provide details on your market positioning and what makes you stand out from the crowd. However, it needs to be accessible enough that people outside the industry, such as lenders or potential partners, can understand it easily.

If that sounds like a hard balance to achieve, don’t worry. We’ve got a free template available at the top of this post to help you get started. Keep in mind that a business plan is a living document. You can (and should) update it as your business grows and changes.

Why a Property Management Business Plan Is Important for Your Company

There’s no denying that growing or starting a property management company is not an easy undertaking. There are many decisions to be made and even more questions to answer along the way. A business plan becomes your cheat sheet, helping guide you through those uncertain moments.

The writing process will allow you to evaluate your business from various angles, including where you’ll find funding, how you’ll reach your target market, and who you’ll bring on to your team, among other factors.

Once you’ve looked at your business from all angles, you’ll have a much clearer idea of your overall strategy and how to move forward toward achieving your larger business goals. As an added bonus, having a well-thought-out business plan on hand will go a long way in making potential investors feel confident that you’re capable of growing your idea into a viable property management business.

Components of a Property Management Business Plan

When you’re ready to take the next step, here’s a closer look at what exactly needs to be included in your business plan:

Executive Summary

While the executive summary is the first section in a business plan, it should often be the last section you write—once you’re truly clear on your strategy.

This section provides a high-level overview of the rest of your business plan and is sometimes the only section that readers will consider. As a result, it needs to be concise and informative, but it should also spark interest and make them want to learn more.

Here’s some more specifics on what to include:

• Mission Statement: Your mission statement defines what your company does, how it serves your potential clients, and what sets it apart from the rest of the industry. It should be succinct and use powerful verbiage to engage the reader.
• Business Goals and Objectives: This section gives you a chance to explain what your company intends to accomplish. Speak to existing problems in the property management industry and position your company as the prospective solution.
• Core Values: Your core values are a chance to reiterate how your company provides value to its customers and why it’s the best choice out there. Use this section to be authentic about what matters to you while also creating a compelling story.

Market Analysis

The market analysis section of your business plan is your chance to use industry research to find distinct opportunities for your company. It should demonstrate that you have a solid understanding of the market and that you’ve chosen a niche big enough to grow a sustainable business.

A market analysis has a few distinct components:

• Target Market Identification: This part of the market analysis is where you get specific about your ideal potential clients. Be sure to include demographic information, such as age and income level, as well as the total size of your target market and how you intend to reach them.
• Competitive Analysis: As you might imagine, the competitive analysis is where you have the chance to identify your direct and indirect competitors, as well as their strengths and weaknesses. Direct competitors will share the same target market as you while indirect competitors will also be in the property management business, but will serve a different audience.
• SWOT Analysis: In the business world, “SWOT” stands for “Strengths, Weaknesses, Opportunities, and Threats.” This analysis is the place for you to illustrate how you stack up to the competition. As you put it together, be as honest as possible about what your company does well and where you’re edged out by your competitors.

Organizational Structure

The organizational structure section of your business plan will provide a framework for how your property management company will operate. It should define how activities such as employee supervision and task allocation will be handled. It should show how your structure supports your long-term goals.

Here’s a look at what this section should focus on:

• Ownership Structure: This section details how the business is owned and controlled. It will include information on the business entity structure, or whether its a limited liability company (LLC), corporation, or partnership, as well as including the names of any owners, their level of involvement, and their percentage of ownership.
• Management Team: Here, you can focus on defining your management team’s structure and highlighting the key individuals who will manage the business. Be sure to include professional bios for each team member, defining their roles and responsibilities, as well as their relevant skills and experience.
• Staffing Requirements: Use this section to outline the number and types of roles that you need to hire for to round out your staff. Get specific about the responsibilities, skills, and experience that you’ll ideally expect to find in each role.

Service Offerings

The service offerings section of your business plan is where you can get into the finer details of all the services that your property management company will provide. Aim to explain your services clearly—without slipping into industry-speak. You want to lay out your service offerings so that anyone can follow along, whether they’re in the industry or not.

Here’s the type of information you should be including in the services sections of your property management business plan:

• Property Types Managed: Be specific about the types of properties that will make up your portfolio. There’s a big difference between working with individual landlords who own single-family homes and managing larger community associations. You should clearly define where your company positions itself on that scale.
• Maintenance and Repairs: Lay out how you intend to handle managing maintenance tasks for the properties in your portfolio. Do you plan to hire staff to handle these tasks or outsource to third-party contractors?
• Tenant Management: Clarify how you’ll take care of each aspect of tenant management, from lease signing to rent collection and ongoing communication. Discuss how your team will manage these responsibilities alongside other, larger projects.
• Additional Services: If you plan to offer any additional services, such as digital marketing for listings or professional photography for listings, discuss how those services will be managed.

Marketing Strategy

The marketing section of a business plan is where you’ll discuss how you plan to reach your target consumers and how you’ll engage with them. You’ll want to describe your entire sales model in detail, as well as explain what you plan to do to retain clients on an ongoing basis.

Your marketing plan should include the following information:

• Branding and Positioning: Branding refers to your company’s identity, both visually and through narrative storytelling, while positioning determines what makes your company unique among its competitors. Make sure you have a strong sense of the qualities and aesthetics that your brand embodies, as well as what makes it stand out from the crowd.
• Marketing and Advertising Channels: Think about how you intend to reach your potential clients. Will you build a robust social media strategy, focus on search engine optimization (SEO), prioritize more traditional methods (such as networking and print media), or use a mix of channels?
• Client Acquisition Strategies: Client acquisition strategies refer to the methods you’ll use to turn prospects into paying clients. This can include strategies, such as building a referral network, soliciting feedback or reviews, or providing initial consultations with prospects for free. Whatever your process looks like, be sure to describe each step prospects will take as they sign on with your company.

Operations Plan

Your operations plan breaks down the day-to-day—how you’ll keep things running and support bigger goals along the way. It focuses on detailing how you will execute your everyday tasks, and how completing those tasks will help you achieve your larger business goals.

Here’s an overview of what this section will contain:

• Office Setup: Think about what kind of office setup you’ll need for your company. Where will your office be located and how will you lay it out to ensure that it’s conducive for your employees, landlords, and tenants alike? Will you implement a remote work system and, if so, what will your workflows and team communication policy look like?
• Day-to-Day Operations: This section should be the largest part of your operations plan. Take the time to describe specific processes for how your team will complete its day-to-day operations. Be sure to include specific action steps, as well as timelines for how often each task will be completed.
• Technology and Software Needs: Compile a list of the resources that you will need to complete your daily tasks. For example, a property management software platform such as Buildium can help you manage everything from accounting tasks to maintenance requests, while also delivering analytics and insights to help you track and improve on important objectives and key results (OKRs).

Financial Plan

Your financial plan should provide both an in-depth look into your company’s current financial situation and projections for your long-term growth plan. Ideally, this section of your business plan should be updated annually, alongside your budget, to help you better prioritize your financial resources in a way that aligns with your goals.

A comprehensive financial plan needs to explain the following:

• Revenue Streams: Start by detailing any revenue streams that will be integral to your company. Think about ways to diversify your revenue, other than simply filling vacant units. What additional services can you offer to help you bring in more income?
• Pricing Strategy: Next, lay out your pricing. Be sure to include information on where your pricing fits in with your competitors and provide your analysis for how your approach to pricing will be more effective than the rest of the market.
• Financial Projections: Provide common financial statements, like an income statement, a balance sheet, and a cash flow statement, that forecast your company’s financial performance over the next few years, as well as any data sources that you used to come up with the numbers. These documents are important for attracting investors or receiving funding from a lender.

Compliance and Risk Management

Finally, starting or growing a business always comes with some level of risk—especially in a fast-moving industry like property management. The compliance and risk management component of your business plan is meant to show how well you’ve identified any risks that stand in your way and should also provide a clear framework for how you intend to mitigate them.

This section ought to cover the following:

• Legal Requirements and Licensing: Depending on where you’re located, your business could be subject to certain legal requirements or have specific licensing needs. Typically, your state’s Secretary of State website will outline these requirements, so make sure to do your research.
• Insurance Needs: Every business with employees is federally required to have certain types of insurance coverage, including unemployment insurance and workers’ compensation insurance. Depending on the size and location of your property management company, there may be other requirements as well. Work with a broker or insurance agent to fully understand the coverage you need and consider insurance options specific to the industry.
• Risk Mitigation Strategies: Once you’ve identified the risks facing your company, outline the strategies you’ll use to reduce the potential for negative outcomes. Include any ongoing prevention measures and contingency plans that you intend to implement.

Resources to Help with Your Property Management Business Plan

While your business plan should always provide a clear picture of where your company currently stands, it’s also meant to outline a long-term vision for how you plan to grow and expand your business over the next few years. If you can bring together both of those pieces, you’ll have a detailed blueprint that can help guide your decision-making and incentivize lenders and partners to invest in your success.

However, a business plan isn’t the only tool that can help you succeed in starting or growing your property management business. Purpose-built property management software such as Buildium makes it easy to tackle all of the tasks on your to-do list. From helping you streamline the lead-to-lease cycle to providing you with growth-oriented insights, Buildium has all the features you need to manage your portfolio.

If you’re ready to see how Buildium can make a difference for your business, start your risk-free 14-day free trial today or schedule a guided demo of the platform.