How to start a property management company in Ohio

Managing Property in Ohio

In Ohio, if you’re performing certain real estate activities for another person in exchange for a fee, you are engaging in property management. The state is specific about what this means, and if you plan to start a property management company in Ohio, you’ll need a real estate license. It’s not just about collecting rent; it’s about the full scope of managing a property on behalf of its owner.

According to Ohio Revised Code 4735.01, these activities include:

• Negotiating leases: This involves discussing or finalizing rental terms with tenants for an owner.
• Collecting rent: The act of receiving payments from tenants on behalf of the property owner.
• Advertising property: Marketing available units to find prospective tenants.
• Showing property: Giving tours of rental units to interested parties.
• Approving applications: Making the decision to accept a tenant on behalf of an owner.

Even performing one of these tasks for someone else for compensation triggers the need for an Ohio real estate license. With that in mind, the next question is what kind of license you’ll need.

Do You Need a Broker License to Start a Property Management Company in Ohio?

Knowing that a license is required, you might wonder if any real estate license will do. To own and operate your own property management company, the Ohio Division of Real Estate requires you to hold a real estate broker license.

A real estate salesperson license allows you to perform property management activities, but only while working under the supervision of a licensed broker. You can’t start your own company with just a salesperson license. Both the salesperson and broker licenses are issued by the Ohio Department of Commerce, Division of Real Estate and Professional Licensing. Think of the broker license as the key to running your own shop.

What Work Nonlicensed Staff Can Do in Ohio

Once you have your real estate broker Ohio license and are ready to build a team, it’s helpful to know what tasks your employees can handle without a license of their own. Under a broker’s supervision, nonlicensed, salaried staff can perform a limited set of duties.

These support tasks generally include:

• Coordinating maintenance and repairs with vendors.
• Handling clerical and administrative work.
• Showing residential rental units, as long as they don’t negotiate terms.
• Providing published, factual information about properties.
• Supplying and receiving applications and leases for the broker to review.
• Collecting rent and security deposits that are made payable to the owner or the brokerage, not to them personally.

Essentially, nonlicensed staff can support your operations, but the decision-making and negotiations must be handled by you or another licensed individual on your team. With these roles defined, it’s also worth knowing who is exempt from licensing altogether.

Who Is Exempt From Licensing in Ohio

While the rules for starting a property management company in Ohio are clear for third-party managers, not everyone who manages property needs a license. The state recognizes a few specific exemptions.

You are generally exempt from needing an Ohio real estate license if you are:

• A property owner: You can manage your own properties without a license.
• A W-2 employee of an owner: If you are a direct, salaried employee of a property owner, you can manage that owner’s properties.
• A court-appointed individual: Trustees, executors, guardians, or receivers can manage properties as part of their official duties.
• A public officer: An individual appointed by a court to manage property is also exempt.

These exemptions are narrow. The moment you decide to manage a property for someone who is not your direct employer, you step into the world of professional property management, and that brings us to the penalties for doing so without a license.

Penalties for Unlicensed Property Management Activity in Ohio

Understanding the exemptions helps clarify the rules, but it’s just as important to understand the consequences of operating outside of them. The Ohio Real Estate Commission can assess civil penalties for each day you engage in unlicensed property management activity.

Each separate action is considered an individual violation. For example, running an ad, showing a property, and negotiating a lease could be treated as three distinct violations, with penalties applied to each one. The expectation of receiving anything of value—not just cash—is enough to trigger these requirements. This strict enforcement underscores the importance of getting the right license before you begin.

Paths to Operate a Property Management Company in Ohio

Now that you understand the rules and risks, let’s look at the two paths you can take to legally operate a property management company in Ohio. You can either start with a salesperson license and work for a broker, or you can pursue a broker license to open your own business.

Salesperson License Steps

The salesperson license is the first step for many in the real estate industry. It allows you to gain valuable experience in property management under the guidance of a licensed broker.

To get your salesperson license, you must:

• Be at least 18 years old.
• Hold a high school diploma or equivalent.
• Complete 100 hours of approved pre-licensing education.
• Pass the Ohio real estate salesperson examination.
• Find a sponsoring broker to work under.
• Submit your application and fees to the Ohio Division of Real Estate.

Broker License Steps

If your goal is to be your own boss, you’ll need a real estate broker Ohio license. This license gives you the authority to operate your own brokerage and hire other agents.

The requirements for a broker license include:

• Holding an active salesperson license with at least two years of full-time experience within the past five years.
• Completing 120 hours of broker pre-licensing coursework.
• Completing additional post-secondary education or equivalent hours in business-related courses.
• Passing the Ohio real estate broker examination.
• Submitting your application and fees to the Ohio Division of Real Estate.

Once you have your broker license in hand, you’re ready to build the business itself.

Business Registration in Ohio

Your broker license authorizes you to manage property, but it doesn’t create your company. That’s a separate process. To legally operate, you must register your business with the state. This is a foundational part of any property management business plan.

Entity Formation With the Secretary of State

Most property management companies in Ohio register as a limited liability company (LLC) or a corporation. You’ll file the necessary paperwork with the Ohio Secretary of State to create your business entity. This step gives your company a legal identity separate from you as an individual, which is important for liability and taxes. Your business name must also be unique and available for use in the state.

Federal and State Tax Registration

Next, your new business will need an Employer Identification Number (EIN) from the IRS. Think of it as a Social Security number for your company. You may also need to register with the Ohio Department of Taxation, especially if you plan to hire employees and need to handle state withholding taxes.

Local Business Registration Requirements

Finally, don’t forget about local rules. Some cities and counties in Ohio have their own business registration or permit requirements. Before you open your doors, check with the local government where your office will be located to make sure you’ve covered all your bases. With the business legally formed, it’s time to set up your financial accounts.

Operating Account and Trust Account Setup

With your business registered, the next step is to set up your bank accounts. Because you’ll be handling money that belongs to other people—your property owner clients—you can’t just use a single account. Ohio requires a separate property management trust account for client funds; operating funds must not be commingled with trust monies.

You’ll need an operating account for your business income and expenses, such as management fees and office rent. You will also need a separate trust account to hold client funds, including tenant security deposits and rent payments. Mixing these funds, known as commingling, is a serious violation that can lead to penalties, so keeping them separate is a must. This separation is key to maintaining financial transparency and trust with your clients.

Required Records and Retention

Setting up the right bank accounts goes hand-in-hand with keeping detailed records. Proper documentation is your best friend in property management. It protects you in case of disputes, helps with tax preparation, and proves your compliance with state laws.

You should plan to maintain organized files for:

• Signed lease agreements
• Move-in and move-out checklists
• Rent payment records
• Property management agreements
• Maintenance logs and inspection reports
• Financial transaction records

Ohio law requires you to keep complete and accurate transaction records for at least three years. Whether you use paper files or a digital system, the key is to have a consistent process for organizing and storing these important documents so you can find them when you need them.

Ohio Leasing Rules That Affect Operations

Your record-keeping system will be put to the test as you navigate the day-to-day work of leasing properties. Ohio owner-tenant law sets specific rules for lease agreements, security deposits, and renewals. Understanding these regulations is central to running a compliant operation.

Required Lease Terms

For any lease lasting longer than one year, Ohio law requires a written agreement. While it’s a good practice for all leases, these written documents must include key information to be valid.

Make sure your leases contain:

• Names and addresses of all parties
• A description of the property
• The rent amount and due date
• Lease start and end dates
• Terms for any late payment fees
• The security deposit amount and terms
• Responsibilities for utilities and repairs
• Rules for entry and inspection

Security Deposit Rules

Ohio does no maximum set a maximum limit on security deposit amounts. However, if a deposit is greater than one month’s rent and the tenant stays for at least six months, you must pay interest on the excess amount. After a tenant moves out, you have 30 days to return the security deposit, minus any documented deductions for damages.

Renewal and Month-to-Month Transitions

When a lease term ends, if a tenant remains in the unit without signing a new lease, the tenancy generally converts to a month-to-month agreement under the same terms. Your lease agreement should clearly state the notice period required for either party to terminate or renew the lease.

Notices and Timelines You’ll Need to Follow

The end of a lease cycle leads directly to the topic of notices. Whether a tenant is moving out or you need to address a lease violation, Ohio has specific timelines you must follow.

If a tenant doesn’t comply after the notice period expires, you can file a case in the local municipal or county court. The court then serves the tenant with a summons and schedules a hearing. Following these procedures correctly is important for a smooth legal process.

Required Disclosures and Fair Housing Compliance

Beyond notices, property managers have a duty to provide certain information to tenants and to treat everyone fairly. Before a lease begins, you must give tenants the name and address of the property owner or managing agent in writing.

For properties built before 1978, federal law also requires you to disclose any known lead-based paint hazards. This involves giving tenants an EPA-approved pamphlet on the topic. Just as important is compliance with the Fair Housing Act, which prohibits discrimination based on:

• Race
• Color
• National origin
• Religion
• Sex
• Familial status
• Disability

These rules apply to all your interactions, from advertising and showings to tenant selection and daily management.

Entry Notice for Inspection Rules

Fair housing compliance is about respecting people, and part of that respect involves honoring a tenant’s right to privacy. In non-emergency situations, Ohio law requires you to give at least 24 hours notice before entering a tenant’s unit.

Your notice should state the date, time, and reason for the entry. It’s a good practice to keep copies of all entry notices you provide. This simple step creates a clear record and helps maintain a professional and respectful relationship with your tenants. Of course, even with the best processes in place, you still need to prepare for the unexpected.

Insurance Categories for Property Management Companies

That’s where property management insurance comes in. Running a business involves risk, and the right insurance coverage is your safety net. It protects your company’s assets from claims related to accidents, errors, and other unforeseen events.

Consider these common types of property management insurance:

• General liability: This covers claims of bodily injury or property damage.
• Errors and omissions (E&O): This protects you from claims of professional mistakes or negligence.
• Cyber liability: This covers costs related to data breaches.
• Workers’ compensation: If you have employees, this is required to cover work-related injuries.
• Business personal property: This covers your office equipment and furniture.

Having a solid property management insurance plan is just as foundational as having your business license.

Core Processes to Set up on Day One

With your legal and insurance protections in place, you can focus on building the operational side of your business. Documented processes help you work consistently, stay compliant, and train new team members as you grow. Think of these as the playbook for your company.

Leasing Operations

Your leasing process is how you turn a vacant unit into a source of revenue. It covers the entire cycle from marketing to move-in.

This includes:

• Listing and advertising properties.
• Responding to inquiries and scheduling showings.
• Processing applications.
• Preparing and executing lease agreements.
• Conducting move-in inspections.

Payments and Accounting

A clear process for handling money is a must. This is where you’ll track income, manage expenses, and maintain financial health.

Your financial workflow should cover:

• Setting up online payment options for tenants.
• Recording rent receipts and tracking balances.
• Posting late fees according to lease terms.
• Reconciling bank accounts monthly.
• Generating owner statements.

Maintenance and Inspections

Keeping properties in good shape protects the owner’s investment and keeps tenants happy. A structured maintenance process is key.

This involves:

• Receiving and tracking maintenance requests.
• Dispatching vendors or staff to handle repairs.
• Documenting all completed work.
• Scheduling routine property inspections.
• Recording the property’s condition over time.

Owner Reporting and Documents

Your clients, the property owners, need to stay informed. A consistent reporting process builds trust and shows your value.

Plan to have a system for:

• Providing monthly or periodic financial statements.
• Sharing updates on occupancy and leasing activity.
• Storing and organizing property documents securely.
• Communicating about maintenance needs and upcoming expenses.

With these core processes mapped out, you can decide how to price your services.

Property Management Fee Structures

Figuring out what to charge is a big part of your property management business plan. Most property management companies use a mix of fees to generate revenue.

Common fee types include:

• Management fee: An ongoing monthly fee, often a percentage of collected rent or a flat rate per unit.
• Leasing fee: A one-time fee for placing a new tenant.
• Renewal fee: A smaller fee charged when an existing tenant signs a new lease.
• Setup fee: A one-time fee for onboarding a new property.
• Maintenance markup: A percentage added to vendor invoices for coordinating repairs.

Your fee structure should be competitive for your market while reflecting the value you provide.

Statewide Versus Local Rental Registration in Ohio

While you determine your own fees, some government bodies will have their own requirements for you to follow. Ohio does not have a statewide rental property registration program, which simplifies things a bit.

However, several cities and municipalities have their own local rental registration, inspection, or licensing rules. Cities such as Cleveland and Dayton require property owners to register their rental units. As a property manager, you’ll need to be aware of these local ordinances and help your clients stay compliant.

Marketing and Owner Lead Sources

Once you’re set up for compliance and operations, your focus can shift to growth. Finding property owner clients is how you’ll build your portfolio.

Common marketing and lead generation methods include:

• A professional website: This is your digital storefront.
• A Google Business Profile: This helps you show up in local searches.
• Online reviews: Positive feedback from early clients can build trust.
• Industry associations: Networking with groups like NARPM can lead to referrals.
• Referral programs: Encouraging other real estate professionals to send business your way.
• Lead generation networks: Using platforms that connect property managers with owners looking for help.

Build a Compliant and Efficient Operation With One Platform

Starting a property management company in Ohio involves a series of connected steps, from getting your broker license and registering your business to setting up compliant operational and financial systems. Each piece builds on the last, creating a solid foundation for a professional and successful business.

• A real estate broker license is required to own and operate a property management company in Ohio.
• You must register your business as a legal entity and set up separate trust and operating bank accounts.
• Ohio landlord-tenant laws dictate many of your daily operations, from leasing to notices.
• Clear, documented processes for leasing, accounting, and maintenance are key to staying organized and compliant.

Property management software can bring these different processes together into a single, organized workflow. For example, a platform like Buildium helps you manage everything from trust accounting and lease tracking to maintenance requests and owner reporting. To see how you can button up your operational systems before you scale, schedule a guided demo or sign up for a 14-day free trial.

Frequently Asked Questions About Starting a Property Management Company in Ohio

Do Community Association Managers Need a Real Estate License in Ohio?

No, Ohio does not require community association managers to hold a real estate license for association management activities alone, as these duties typically do not involve leasing or selling property.

Is There a Separate Property Manager License in Ohio?

Ohio does not offer a standalone license; property management activities are covered under the state’s real estate salesperson and broker licenses.

How Often Do Ohio Real Estate Licenses Renew and What Continuing Education Is Required?

Ohio real estate licenses are renewed every three years. Licensees must complete a set number of continuing education hours during each renewal cycle to maintain their license.

Can a Salesperson Own a Property Management Company in Ohio Without a Broker License?

No, a salesperson cannot independently own or operate a property management company in Ohio. You must hold a real estate broker license to do so.

Does Ohio Require a Statewide Rental Property Registration?

There is no statewide rental property registration requirement in Ohio, but several individual cities have their own local registration and inspection programs.