Start a Property Management Company in Montana | 2024 Guide

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Montana Property Management Company

Are you considering starting a property management company in Montana? 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 Montana.

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

How to Start a Property Management Company in Montana

What is a Property Management Company?

A property management company in Montana 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 Montana. 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 Montana Secretary of State and paying an initial filing fee.

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How to Start a Property Management Company in Montana

Starting a property management company in Montana can be a lucrative and rewarding business venture especially if you are in Helena. 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 Montana.

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 Montana, 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 Montana, 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 Montana 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 Montana, 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 Montana. 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 Montana Limited Liability Partnerships (LLP). Each partner contributes to the business and shares in profits and losses. Partnerships must file a partnership agreement with the Montana 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 Montana, you must file the Articles of Organization with the Montana 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 Montana requires filing the Articles of Incorporation with the Montana 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 Montana, you must file the Articles of Incorporation with the Montana Secretary of State and adhere to any licensing and permitting requirements.

Before choosing a business structure for your property management company in Montana, consult with a Business Attorney in Montana 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 Montana property management company is important to establish your brand identity and attract potential clients. Here are a few suggestions to consider:

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

Remember to check the availability of your chosen business name with the Montana Secretary of State Business Search and ensure it’s not already in use by another company. There is a complete guide on Montana 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 Montana DBA (doing business as). 

However, before filing a DBA, you should know that you need to renew your DBA every five years, which costs $20.

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 Montana, every business entity, such as an LLC or a corporation, must have a Registered Agent with a physical address within Montana. 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 Montana, 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 Montana Registered Agent Services.

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File For Articles of Organization or Articles of Incorporation

If you form an LLC for your Montana property management company, you must file the Montana Articles of Organization, which costs $70. However, you must file the Articles of Incorporation if you form a Corporation for your Montana property management company. The Articles of Incorporation filing fee costs $70 for filing online.. 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 Montana from the IRS if you will open a bank account or hire an employee for your Montana property management company. 

The application of an EIN in Montana 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 Montana, you must obtain legal licenses and permits. Here are some common licenses and permits you may need:

  • Business License: Montana requires businesses to obtain a Business License to operate legally. The business license fee in Montana 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 Montana Real Estate Commission or similar governing body for the requirements and application process.
  • Salesperson License (if applicable): If your Montana 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 Montana 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 Montana 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 Montana’s laws.
  • Professional Liability Insurance: Montana 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 Montana 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 Montana 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 Montana 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 Montana, 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 Montana 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 Montana:

  • Steady Income: Property management is a growing industry in Montana, 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

Why should I start a property management company in Montana?
Montana is one of the fastest-growing states in the country, with a strong and growing real estate market.
How do I qualify to start a property management company in Montana?
To start a property management company in Montana, you need to have a real estate license, industry experience, and a strong business plan.
What are the licensing requirements for starting a property management company in Montana?
You need to have a real estate license in Montana to operate a property management company.
Can I operate a property management company in Montana without a real estate license?
No, you must have a real estate license to operate a property management company in Montana.
How long does it take to obtain a real estate license in Montana?
It takes around one to two months to obtain a real estate license in Montana.
What is the cost of obtaining a real estate license in Montana?
The cost of obtaining a real estate license in Montana is around $810.
How much capital do I need to start a property management company in Montana?
The amount of capital you need to start a property management company in Montana varies based on your business plan.
What is the legal structure of a property management company in Montana?
You can structure your property management company in Montana as a sole proprietorship, partnership, LLC, or corporation.
What kind of taxes will I have to pay as a property management company in Montana?
You will have to pay state sales tax, federal income tax, and payroll taxes as a property management company in Montana.
What is the job market like for property management companies in Montana?
The job market for property management companies in Montana is strong and growing.
How will I find new clients for my property management company in Montana?
You can find new clients for your property management company in Montana by networking, advertising, and partnering with local real estate agents.
What types of properties can my property management company in Montana manage?
Your property management company in Montana can manage residential, commercial, and holiday properties.
What are some common challenges that property management companies face in Montana?
Some common challenges property management companies face in Montana include weather-related maintenance issues, tenant turnover, and adapting to changing market trends.
What kind of insurance will I need for my property management company in Montana?
You will need liability insurance and workers’ compensation insurance for your property management company in Montana.
How much should I charge for property management services in Montana?
Property management fees in Montana vary depending on the market and the specific services provided.
How do I hire employees for my property management company in Montana?
You can hire employees for your property management company in Montana by engaging with local recruiting firms, posting ads on job boards, and conducting personal interviews.
Can I work from home while managing properties in Montana?
Yes, you can work from home while managing properties in Montana, but it may be necessary to visit properties occasionally.
What kind of software should I use to manage properties in Montana?
You can use property management software like Appfolio, Buildium, and Yardi for managing properties in Montana.
What is the process for evicting a tenant in Montana?
The process for evicting a tenant in Montana includes providing a notice of eviction, filing a notice of lawsuit, and going to court if necessary.
How can I ensure I am complying with Montana tenant laws?
You can ensure compliance with Montana tenant laws by staying current on changes to the laws, consulting with legal professionals, and reviewing lease agreements.
Do I need to develop my company based on the specific market of Montana?
Yes, you will need to develop your property management company based on the specific market of Montana.
Are there services I can outsource for my property management company in Montana?
Yes, you can outsource services like property maintenance, cleaning, and legal counsel for your property management company in Montana.
What are some ways I can make my property management company competitive in Montana?
You can make your property management company competitive in Montana by offering competitive pricing, high-quality services, and strong customer support.
How can I measure the success of my property management company in Montana?
You can measure the success of your property management company in Montana by tracking key performance indicators like occupancy rates, tenant retention rates, and revenue growth.
Are rental properties in Montana hard to come by?
Rental properties in Montana are generally not hard to come by, but vacancies depend on the specific location and market.
How do I know what the demand is like for rental properties in Montana?
You can determine the demand for rental properties in Montana by researching localized vacancy rates, analyzing population growth, and studying market trends.
Are there preferable times that I can launch my property management company in Montana?
There are no perfect times to launch a property management company in Montana. Timing will depend on the nature of the business and the market.
What impact could tourism in Montana have on my property management company?
Tourism in Montana could have a positive impact on your property management company since guests would require lodging accommodations.
What are the requirements to start a property management company in Montana?
In Montana, property managers are required to hold a broker’s license.
Do I need to have experience in real estate to start a property management company in Montana?
Yes, you must have an active and valid Montana broker’s license which requires experience in the real estate field.
Is there a maximum amount of properties a property management company can manage in Montana?
There is no set maximum for the number of properties a property management company can manage in Montana.
How much does it cost to start a property management company in Montana?
The startup costs for a property management company vary but you will need at least $7,000 to start this business in Montana.
Do I need to have insurance to start a property management company in Montana?
Yes, to legally operate a property management company in Montana, you must obtain appropriate insurance policies.
Are there any state-specific regulations to follow when starting a property management company in Montana?
Yes, property management companies in Montana should be familiar with Montana’s landlord-tenant laws, property, and real estate regulations.
Do I need to file any paperwork to set up a property management company in Montana?
Yes, all businesses in Montana legally need to complete the appropriate paperwork with Montana’s Secretary of State.
What types of companies can become property management companies in Montana?
Any registered business type in Montana may become a property management company, such as a limited partnership, corporation, or limited liability company.
What kinds of property commonly get managed in Montana?
Property managers in Montana commonly manage residential properties while many also manage multi-family buildings.
How much do property managers charge in Montana?
Property managers typically charge between 8% and 12% of the rental income in Montana.
Do I need to get a business or employer identification number for my property management company in Montana?
Yes, the IRS requires you to register for a business or employer identification number for your property management company in Montana.
What’s the average property management salary in Montana?
Property management salaries in Montana span from roughly $31,962 to $43,000.
How do I find trustworthy maintenance vendors and other specialists to work with in Montana?
Asking colleagues for word-of-mouth recommendations is a great start, try using sites such as Thumbtack to get a quick list of professionals in Montana.
Do I need to join any professional organizations to start a property management company in Montana?
Joining a professional organization isn’t required in Montana, but The National Association of Residential Property Managers offers great value for all property managers.
Are there any scams or frauds that I need to watch out for as a property manager in Montana?
Property managers in Montana can be subjected to scams including fake renter scams, fake invoices scams, fake governmental body scams, fake compliance scams and many more.
Is there a specific age requirement to be a property manager in Montana?
Montana does not enforce a specific age requirement, but a must need valid broker license to operate an ethical, fully-compliant property management business.
What should I do if a tenant breaks the lease agreement in Montana?
In Montana, if a tenant breaches the lease agreement, you may have the option of terminations, eviction notice, lawsuits or also you may choose to collaborate with your renters prior sticking anything.
Are there anything Montana-specific I need to be aware of taxes-based obligations to be aware of with starting a property management company?
Yes, you need to be aware of sales and use taxes and also the apply of taxes based on income derived from property rentals in Montana.
Do property managers need to have their own website in Montana?
Having a personal website can herald extra business in Montana.
Is there a need to conduct background checks in Montana?
At most stages through the renting stage in Montana history, and credit checks are required in order to be a trustworthy manager.
How can I keep tenants from breaking lease often?
To stop tenants from breaking leases yourself of strict measures such as strong and informational-handbook policies.
Do duties of a property manager in Montana extend to evicting a tenant?
Property managers in Montana may engage in the Eviction Process, but judicial authority with lawful work permitting needs to be obtained first.
Is a phone needful as a property manager Montana?
It is prudent if landlords want to be reachable with calls at any hour, texting and emails.
Do you need to have licenses as a maintenance contractor in Montana?
Most often yes if maintenance contractors in Montana occupy professions that require licensing in order to enter into contracts.
Is there a way to be a property manager remotely in Montana?
Yes, potentially by establishing long-term trustworthy relationships with a maintenance association that help customers in Montana with disputes or feedback.
What is the availability of property management courses online in Montana?
Montana doesn’t inherently provide its own courses, but pursuant training platforms inclusive of online publications which pertain to property management exist in Montana.
Is social media a real need to observe as a Montana property manager?
Using and marketing a social media profile allows for a business to directly interact and associate with customers and competitors.
Can former felony bring issues while registering for a business in Montana?
Yes, having felonies impacted can make the legalising requirements for businesses proceedings more strict effectively
Can unoccupied properties impact responsible landlords in Montana?
Unoccupied rental properties may not be insured in Montana due to increased possibility in loss prevention, therefore landlords must proceed cautiously and invoice monthly required maintenance functions (regardless of vacancy).
What are things a new Montana property manager should avoid doing?
Avoid these common mistakes

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Conclusion

Starting a property management company in Montana 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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