Start a Property Management Company in Missouri | 2024 Guide

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Missouri Property Management Company

Are you considering starting a property management company in Missouri? Property management is an excellent business opportunity for individuals with a passion for real estate who are detail-oriented and can effectively manage multiple tasks simultaneously. The demand for property managers continues to grow, making it an attractive and lucrative Limited Liability Company in Missouri.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before Starting a Property Management Company in Missouri, all the steps in this article must guide you.

How to Start a Property Management Company in Missouri

What is a Property Management Company?

A property management company in Missouri is a professional firm that handles the administration of residential, commercial, or industrial real estate. Such companies deal with all aspects of managing a property, from finding and vetting tenants to repairing and maintaining the property, collecting rent, and handling tenant issues. These companies are an asset for property owners who may not have the time or expertise to manage their properties effectively and efficiently.

Forming a Limited Liability Company (LLC) can be a strategic decision for those considering starting a property management company in Missouri. Starting an LLC provides several benefits, including the protection of personal assets. In an LLC, the owner’s assets are protected in case of any litigation or debt incurred by the company. It also offers greater credibility and potential tax advantages and allows for an easy ownership transfer. Starting an LLC involves filing the necessary paperwork with the Missouri Secretary of State and paying an initial filing fee.

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How to Start a Property Management Company in Missouri

Starting a property management company in Missouri can be a lucrative and rewarding business venture especially if you are in Jefferson City. With the right planning, resources, and dedication, you can create a successful company that caters to the needs of property owners and investors in your area. Here is the step-by-step guide to launching a property management company in Missouri.

Step 1: Understand Property Management

Property management oversees and operates real estate properties, including residential, commercial, and industrial properties. The role of a property manager is to manage the day-to-day activities of properties, ensuring that they are well-maintained and that rent is collected on time. Property managers also deal with tenant issues, repairs and maintenance, and marketing vacant properties.

Step 2: Evaluate The Market

Before starting a property management company in Missouri, you need to evaluate the local market to determine if there is a demand for your services. Here are some factors to consider:

  • Type of Properties: Determine the properties in Missouri, such as single-family homes, multi-family buildings, commercial properties, or vacation rentals.
  • Competition: Identify other property management companies and analyze their services, pricing structures, and market share.
  • Market Trends: Research the local real estate market trends, including rental rates, vacancy rates, and property values.
  • Potential Clientele: Determine the number of property owners and investors in your target area who may require property management services.

Step 3: Create a Business Plan

A solid business plan is crucial for the success of your property management company. Your business plan should include the following elements:

  • Executive Summary: A brief overview of your Missouri property management company, including its mission statement, goals, and objectives.
  • Market Analysis: A detailed analysis of the local real estate market, competition, and potential clients.
  • Services: Describe the property management services you plan to offer, such as tenant screening, rent collection, property maintenance, and marketing.
  • Marketing Strategy: Outline your marketing plan, including your target audience, marketing channels, and budget.
  • Financial Projections: Provide financial projections for your property management company, including revenue, expenses, and projected profits.

Step 4: Register Your Business and Obtain Licenses

To start a property management company in Missouri, you must register your business and obtain the necessary licenses and permits. Here are the steps to follow:

Choose a Business Structure

For starting a property management company, several business structures are available in Missouri. Each structure has its benefits and drawbacks, depending on your business goals, financial situation, and personal preferences. The common business structures you can choose from are:

  • Sole Proprietorship: This is the simplest business structure, which involves a single individual owning and operating the property management company. The owner has complete control over the business and is personally responsible for all debts and liabilities. There is no formal registration process for a sole proprietorship, but you may still need to obtain licenses and permits specific to property management.
  • Partnership: A partnership is a business structure where two or more people share ownership of the property management company. Partnerships can be general, limited, or Missouri Limited Liability Partnerships (LLP). Each partner contributes to the business and shares in profits and losses. Partnerships must file a partnership agreement with the Missouri Secretary of State and obtain necessary licenses and permits.
  • Limited Liability Company (LLC): An LLC is a hybrid entity that combines a partnership’s flexibility with a corporation’s limited liability protection. Owners, known as members, are not personally responsible for the company’s debts and liabilities. To form an LLC in Missouri, you must file the Articles of Organization with the Missouri Secretary of State and comply with any licensing and permitting requirements.
  • Corporation: A corporation is a separate legal entity from its owners, known as shareholders. Corporations offer limited liability protection and can issue stock to raise capital. There are two types of corporations: C Corporations and S Corporations. Forming a corporation in Missouri requires filing the Articles of Incorporation with the Missouri Secretary of State.
  • Professional Corporation (PC): This type of corporation is designed specifically for licensed professionals, such as real estate brokers, who wish to form a corporation for their property management company. Professional Corporation offers limited liability protection and must comply with all state regulations for the specific profession. To form a Professional Corporation in Missouri, you must file the Articles of Incorporation with the Missouri Secretary of State and adhere to any licensing and permitting requirements.

Before choosing a business structure for your property management company in Missouri, consult with a Business Attorney in Missouri to discuss the best option for your situation. Remember that each structure has its tax implications and requirements, so it is essential to understand your choice’s financial and legal ramifications.

Choose a Business Name

Choosing a business name for your Missouri property management company is important to establish your brand identity and attract potential clients. Here are a few suggestions to consider:

  1. Missouri Premier Property Management
  2. Missouri HomeGuard Property Services
  3. Missouri Nexus Property Management
  4. Missouri BlueSky Property Solutions
  5. Missouri KeyPoint Property Management

Remember to check the availability of your chosen business name with the Missouri Secretary of State Business Services and ensure it’s not already in use by another company. There is a complete guide on Missouri Business Name Search for you to have a property management company name. You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for Missouri DBA (doing business as). 

However, before filing a DBA, you should know that you need to renew your DBA every five years, which costs $7.

Once you’ve settled on a unique name, you can hire a Registered Agent and obtain the required licenses and permits.

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Hire a Registered Agent

A Registered Agent is a person or entity designated to receive important legal documents and correspondence for your business. In Missouri, every business entity, such as an LLC or a corporation, must have a Registered Agent with a physical address within Missouri. The Registered Agent’s primary role is to ensure that your business complies with state regulations and be available to receive any legal notices or official government correspondence.

In Missouri, the cost of having a Registered Agent ranges from $50 – $150. However, suppose you are still wondering how to hire a Registered Agent. In that case, you can also serve as your Registered Agent, appoint a friend or family member, or hire the Best Missouri Registered Agent Services.

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File For Articles of Organization or Articles of Incorporation

If you form an LLC for your Missouri property management company, you must file the Missouri Articles of Organization, which costs $105. However, you must file the Articles of Incorporation if you form a Corporation for your Missouri property management company. The Articles of Incorporation filing fee costs $50 fo filing online, $105 for filing by mail. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

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Obtain an Employer Identification Number

You must first obtain an Employer identification number (EIN) in Missouri from the IRS if you will open a bank account or hire an employee for your Missouri property management company. 

The application of an EIN in Missouri can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

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Get the Necessary License and Permits

When starting a property management company in Missouri, you must obtain legal licenses and permits. Here are some common licenses and permits you may need:

  • Business License: Missouri requires businesses to obtain a Business License to operate legally. The business license fee in Missouri ranges from $50 – $300.
  • Real Estate Broker License: In many states, property management companies must have a licensed real estate broker or designate a licensed broker to oversee the business operations. Check with your Missouri Real Estate Commission or similar governing body for the requirements and application process.
  • Salesperson License (if applicable): If your Missouri property management company also engages in leasing or renting properties, you may need to have a licensed salesperson working under the supervision of a licensed broker.
  • State Tax Registration: Register with the Missouri Department of Revenue to collect and remit sales and use taxes and other applicable state taxes.
  • Local Zoning and Land Use Permits: Depending on the nature of your Missouri property management services and the location of your office, you may need to obtain zoning and land use permits. 
  • Workers’ Compensation Insurance: If you have employees, you’ll likely need to obtain workers’ compensation insurance by Missouri’s laws.
  • Professional Liability Insurance: Missouri property management companies should consider obtaining professional liability insurance (errors and omissions insurance) to protect against potential legal claims related to business operations.

Before starting your property management company, consult a Business Attorney in Missouri to ensure you obtain all the necessary legal permits and licenses. Failing to do so can result in fines, penalties, and even the closure of your Missouri business.

Step 5: Set Up Your Office

While starting a property management company without a physical office is possible, having a dedicated workspace can help establish your credibility and professionalism. Select a location that is convenient for both you and your clients. This may be a home office, a co-working space, or a commercial office space. Also, you will need basic office equipment such as a computer, printer, phone, and filing system.

Step 6: Market Your Property Management Company

Effective marketing is crucial for attracting clients and growing your Missouri property management business. Usually, the best way to market your property management company is to advertise in local newspapers, real estate magazines, and direct mail campaigns.

Step 7: Build a Team

As your property management company grows in Missouri, you may need additional staff to help manage your workload. Consider hiring property managers, administrative assistants, maintenance technicians, and marketing professionals. Ensure your team is knowledgeable, professional, and committed to providing excellent customer service. However, before hiring an employee for your Missouri property management company, you should obtain an EIN and open a bank account.

Benefits of Starting a Property Management Company

There are several benefits of starting a property management company in Missouri:

  • Steady Income: Property management is a growing industry in Missouri, and there is always a demand for qualified professionals to manage properties. This means starting an LLC property management company can provide a steady income stream.
  • Low Startup Costs: Starting a property management company requires minimal investment, as you do not need to purchase any property. You can start with just a few clients and gradually increase your portfolio.
  • Flexible Work Schedule: Property management companies offer flexible work schedules, allowing you to work around other commitments such as family and other business ventures.
  • Growth Opportunities: With the right marketing strategies, you can rapidly grow your property management company and increase your client base.
  • Diverse Client Base: Property management companies cater to a diverse range of clients, including landlords, tenants, and property owners. This means that there is always a demand for your services.

FAQs

What is the process to obtaining a real estate broker’s license in Missouri?
You need to complete 72 hours of coursework, pass a state exam, and fulfill additional requirements.
How much does it cost to obtain a real estate broker’s license in Missouri?
It costs several hundred dollars in fees and coursework expenses.
What are the insurance requirements for starting a property management company in Missouri?
Missouri does not have specific insurance requirements, but insurance is a good idea to protect your business.
Can I manage rental properties in Missouri without a broker’s license?
No, you need a broker’s license to manage rental properties in Missouri.
Is it necessary to have experience in real estate to start a property management company in Missouri?
It is not legally required, but it is helpful.
Do I need to have an office to start a property management company in Missouri?
Yes, you need a physical office space to start a property management company in Missouri.
Can I manage properties from out of state if I have a Missouri broker’s license?
Yes, but you may need to follow additional rules and regulations.
How long does it take to start a property management company in Missouri?
It can take several weeks or months, depending on how quickly you can meet licensing and registration requirements.
Can I apply for a broker’s license online in Missouri?
Yes, you can apply and complete coursework online, but testing is done in person.
What is the maximum broker license expiration time in Missouri?
The maximum real estate broker’s license expiration time in Missouri is three years.
Are there any restrictions to ownership of a property management company in Missouri for out of state residents?
As long as you have a valid broker’s license in Missouri, there are no ownership restrictions based on residency.
Do I need to register my property management company with the state of Missouri?
Yes, you need to register your company with the Missouri Secretary of State.
Can an individual/person own a property management business in Missouri?
Yes, an individual person or entity can own a property management business in Missouri.
What is the renewal process for property management license in Missouri?
Missouri did away with ongoing biennial license renewals in 2016.
How long does it take to get a Missouri property management license?
The process to get a real estate broker’s license can take several weeks or months, depending on educational coursework and testing.
How many continuing education hours are required for real estate brokers in Missouri?
Missouri brokers are required to complete 12 hours of continuing education every two years.
Do I need to be a resident of Missouri to start a property management company in Missouri?
No, you do not need to be a resident of Missouri to start a property management company in Missouri, but you will need to satisfy licensing and registration requirements.
Are there any additional licensing requirements for handling vacation rentals in Missouri?
Missouri has no additional licensing requirement for managing vacation rentals.
Are property management logos copyrighted in Missouri?
Property management logos can be subject to trademark and copyright protection in Missouri and should be vetted by a licensed attorney.
What is a Trust Account and is it mandatory to operate a property management business in Missouri?
Missouri law requires that rental deposits be held in a separate trust account to ensure security for landlords and tenants.
How much should I charge for management fees in Missouri?
Service fees vary, but some states maintain guidelines. Missouri state has no guidelines on passive service fees for your property management company.
Do I need to be bonded and o adhere to a code of conduct to start a property management company in Missouri?
You are required to adhere to a code of conduct, but there is no Missouri bonding requirement.
Are there tax obligations to follow when starting a property management company in Missouri?
You will need to either form a new LLC, and/or file for a Missouri DUNS number and tax ID number.
Do I need to have a written contract with landlord clients?
Having written contracts is strongly advised when working as a property manager with titles such as leasing/renting offices, flats, renting-insurance requisitions approved/not approved.
Should I manage my own property to gain hands-on experience before starting a property management company in Missouri?
It can be helpful to gain hands-on property management experience, but it is not a requirement to start a property management business.
Can property management fees be waived for first time clients in Missouri?
Yes, it happens often as a preliminary to incentivize prospective clients.
Are there any federal laws I should be aware of that may apply to starting/operating a property management business in Missouri?
Yes, federal laws, like the Civil Rights Acts of 1866 and 1968 and the Americans with Disabilities Act, may apply to property management businesses in Missouri.
Is Missouri a landlord- or tenant-friendly state?
Missouri is generally considered to be a balanced state whose rental policies and regulations are considered moderate and supportive of both landlords and tenants.
What are the requirements for starting a property management company in Missouri?
In Missouri, you need to have a real estate broker’s license to start a property management company.
How do I get a real estate broker’s license in Missouri?
To get a real estate broker’s license in Missouri, you need to have a high school diploma or equivalent, be at least 18 years old, complete 48 credit hours of real estate coursework, and pass the real estate broker’s exam.
Do I need experience before starting a property management company in Missouri?
In Missouri, there are no specific regulations regarding experience requirements, but having relevant experience can be helpful in starting a successful property management company.
Do I need to have a physical office to start a property management company in Missouri?
Yes, in Missouri, you need to have a physical office address in the state to start a property management company.
Can I start a property management company in Missouri with partners?
Yes, you can start a property management company in Missouri with partners. Make sure all your partners meet state requirements, including obtaining a real estate broker’s license.
Do I need to have a surety bond to start a property management company in Missouri?
Yes, in Missouri, you need to have a $10,000 surety bond to start a property management company.
Can an out-of-state real estate broker start a property management company in Missouri?
In Missouri, out-of-state real estate brokers can start a property management company, but they must first obtain a Missouri real estate broker’s license.
Do I need to be a Missouri resident to start a property management company in Missouri?
You don’t need to be a Missouri resident to start a property management company in Missouri, but you do need to have a physical office address in the state.
Do I need to pass a criminal background check to start a property management company in Missouri?
Yes, in Missouri, you need to pass a criminal background check before obtaining a real estate broker’s license to start a property management company.
Do I need to renew my real estate broker’s license every year in Missouri?
Yes, in Missouri, you need to renew your real estate broker’s license every even-numbered year by June 30th.
What is the cost to obtain a real estate broker’s license in Missouri?
The fee for a Missouri real estate broker’s license is $70.
Does Missouri have any regulations on property management fees that can be charged?
Missouri has no regulations on property management fees that can be charged.
How do I set up an LLC for my property management company in Missouri?
You can set up an LLC for your property management company in Missouri by filing articles of organization with the Missouri Secretary of State and paying a fee.
Do I need to get a tax ID number for my property management company in Missouri?
Yes, you need to obtain a tax ID number, also known as an Employer Identification Number (EIN), from the IRS for your property management company in Missouri.
Is property management considered a regulated industry in Missouri?
Yes, property management is a regulated industry in Missouri, but the regulations primarily focus on real estate brokers.
What disclosures do I need to make to tenants in Missouri?
In Missouri, you’re required to disclose the name and address of the property owner or the owner’s authorized agent, as well as rental payment terms and conditions.
Does Missouri mandate property managers maintain a trust account for tenant security deposits?
Yes, Missouri mandatesthat a property manager maintain a trust account for tenant security deposits.
Is it a good idea to have a lawyer review the lease agreement for my Missouri property management company?
Yes, it’s a good idea to have a lawyer review lease agreements for your Missouri property management company to ensure compliance with federal and state laws.
What permits or licenses do I need for my property management company in Missouri?
Other than obtaining a real estate broker’s license, there are no specific permits or licenses required for property management companies in Missouri.
Does Missouri require insurance for property management companies?
Unlike other states, Missouri has no specific insurance requirements for property management companies, but it is recommended to carry general liability insurance and professional indemnity (errors and omissions) insurance.
Do I need a property management software to run my business in Missouri?
It’s not required, but a property management software can help you streamline your processes and make your business run more efficiently.
Are there any zoning restrictions for property management companies in Missouri?
Zoning restrictions for property management companies can vary between local municipalities in Missouri, so it’s best to check with your local government for any specific regulations.
Can a property management company handle both commercial and residential properties in Missouri?
Yes, a property management company can handle both commercial and residential properties in Missouri.
Who enforces real estate broker regulations in Missouri?
The Missouri Real Estate Commission is responsible for enforcing real estate broker regulations in Missouri.
What happens if I violate real estate broker regulations in Missouri?
If you violate real estate broker regulations in Missouri, the Missouri Real Estate Commission can take disciplinary action, including fines and revocation of your real estate broker’s license.
Is it recommended for property managers to join a trade association in Missouri?
Yes, joining a trade association such as the National Association of Residential Property Managers (NARPM) or the Institute of Real Estate Management (IREM) can provide valuable resources and networking opportunities for Missouri property managers.
How do I market my property management company in Missouri?
The best marketing strategies for your property management company in Missouri could include developing an online presence, attending networking events, and word-of-mouth advertising.
Is there a bond requirement for property management companies in Missouri?
Yes, property management companies are required to maintain a $10,000 surety bond in Missouri.

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Conclusion

Starting a property management company in Missouri can be rewarding and profitable. By following the steps outlined in this guide, you can launch a successful property management business that meets the needs of property owners and investors in your area. Remember to stay up-to-date on industry trends and continually refine your services, marketing strategies, and customer service to ensure the long-term success of your property management company.

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