How to start a property investment company

Written by allison dodge
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How to start a property investment company
Provide people with a place to call home while making money with a property investment company. (House image by Einar Bog from Fotolia.com)

Many people purchase a home or property to serve their own needs, such as a place to live. While most know that purchasing a home is an investment since many homes sell for more than they were purchased for, few consider expanding on this single purchase by buying more properties and establishing a business. However, those with an interest in working for themselves and having their own business can do so by learning how to start a property investment company.

Skill level:
Moderate

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Instructions

  1. 1

    Craft a business plan. Analyse the financial aspects of starting a property investment company by learning how much money is required to start the company as well as what potential for profit exists based on your location. Develop a plan for how you will market and staff your company while also expanding it and making it profitable. Include all of this information in a written business plan for your property investment company, which you can create using the business plan information available from the website of the U.S. Small Business Administration.

  2. 2

    Apply for funding. Access your credit report from one of the three credit bureaus to learn what credit score you have as well as review your report for any mistakes prior to applying for a business or commercial loan. Speak to a loan officer to find out if you qualify for a loan based on your credit report as well as the business plan you've drafted for your property investment company. Consider taking on a partner who has the monetary resources or capital you need to start the business if you can't qualify for loans on your own. Know thought that with a partnership, profits from your company will be split based on your agreement.

  3. 3

    Register your company. Obtain an employer identification number (EIN) from the Internal Revenue Service (IRS) by calling 800-829-4933 or completing the form on the IRS website. Determine what sales tax laws are in effect in your region and whether they apply to your business by visiting with a representative from the department of revenue at your state and city level. Comply with any sales tax regulations that exist as well as licensing regulations such as a local business license from your city government.

  4. 4

    Buy property. Determine if your company specialises in residential or commercial property or a combination of the two. Hire a commercial real estate agent to assist you in finding your initial property to start your company as well as subsequent properties to grow your business. Know how to check property values with your local property assessment office to ensure you aren't paying too much for a property. Consider getting your license as a real estate agent as this cuts down on your expenses since you don't have to pay a realtor for each property sold and purchased by your company.

  5. 5

    Purchase insurance. Speak with local insurance agents in your community to get quotes for insurance on your property investment company. Obtain both liability and property insurance since this protects your business from lawsuits from tenants injured in or on your property while also protecting the physical structure from damage caused by fire and natural disaster. Add additional insurance to your business as your company grows and you acquire more property.

  6. 6

    Hire staff. Find an office assistant to help you manage and operate your property investment company especially if you are out of the office frequently inspecting current properties and looking for new ones. Retain a lawyer to assist you in developing leases and contracts for your company. Employ a maintenance person or crew to make repairs, renovate outdated properties and maintain the landscape of the properties you own. Consider hiring a property manager as your grow to take over the daily management of properties and free you up as the owner to focus on growing and expanding the company.

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