Insights and Tips for Starting a Property Management Business (2024)

Jack Findaro, co-founder at Vetted Biz and Visa Franchise, recently interviewed James Schrader, Franchise Developer at Property Management Incorporated. Founded in 2008, PMI has become the largest property management franchise in the U.S., with 350 franchises nationwide and additional locations in Costa Rica, Malta, and Puerto Rico. James shares insights on PMI’s unique business model, franchisee support, and the franchise’s recession-resistant appeal.

PMI’s Franchise Model: A Pillar Approach to Property Management

James describes PMI’s “pillar” system, which enables franchisees to manage various property types: residential, commercial, vacation rentals, and associations. With the U.S. rental market at its highest in over 50 years, PMI stands out by offering franchisees the tools to scale their businesses as large as they want. “We are the only franchise that has a management system specifically for associations,” says James, emphasizing PMI’s distinctive approach.

Franchisee Support for All Experience Levels

Most PMI franchisees have no prior property management experience. PMI provides comprehensive support, including help with marketing, operations, and ongoing business coaching. James notes, “We have about 65 people on our franchisee support team. You’re not on your own with PMI.” Each franchisee is assigned a dedicated business coach who works with them weekly, from securing their first contract to managing 1,000 properties, ensuring they have guidance every step of the way.

The Consistency of Revenue: A Recession-Resistant Business

James highlights that one of the biggest draws to the property management industry is its revenue consistency, which he describes as “recession-proof.” For example, a franchisee managing 100 rental properties can rely on predictable monthly income, providing stability even during economic downturns. As James puts it, “Having a roof over your head is one of the standards of living,” making property management a resilient industry.

PMI’s Extensive Revenue Streams and Competitive Edge

PMI franchisees benefit from 56 different revenue streams, a stark contrast to the typical three to five streams most property managers rely on. This diversity allows PMI franchisees to be highly competitive in pricing and services. “If we have to be competitive on price, we can; if we have to be competitive on services, we can,” James explains. PMI’s broad revenue model allows franchisees to maximize their earning potential and adapt to market demands.

Leveraging Technology for Efficient Management

PMI places a strong emphasis on technology to enhance its services. From rent collection to digital marketing, technology is central to PMI’s operations. Franchisees benefit from in-house departments, including accounting and compliance, ensuring streamlined processes. “When you’re part of the PMI team, you’re working with your business coach weekly, your marketing department monthly, and have access to operations support,” says James, underscoring PMI’s commitment to franchisee success.

Territory Flexibility and Market Reach

PMI defines territories as marketing areas, allowing franchisees to advertise within their assigned region while managing properties throughout the state. This flexibility is crucial for investors who often seek management for their entire portfolio. For example, a franchisee in Miami-Dade County can market throughout the county and manage properties across Florida, providing a comprehensive service offering to clients.

E-2 Visa Program Success at PMI

PMI boasts a 100% success rate with E-2 visa candidates. Franchisees operating under the E-2 visa can support international clients in finding, purchasing, and managing properties. This service is especially appealing to clients who invest in vacation rentals, as they can generate income from short-term rentals while using the property when visiting the U.S. “You get to work with people in your local market and back in your home country,” James explains, highlighting the cross-border business potential.

Thriving Through COVID-19

While many industries struggled during COVID-19, PMI experienced its best growth year ever in 2020, adding record numbers of residential contracts and franchises. James attributes this success to PMI’s ability to operate remotely and facilitate social distancing through its tech-driven approach. “The growth was phenomenal,” he says, reflecting PMI’s resilience and adaptability in challenging times.