Q: Want to start a Property Management Company in MI where I would purchase & rent the properties. What's required?
A: Business savvy and real estate management experience would be a good start. If you have those, you will be exposed to the various ownership entities real estate investors use to acquire and operate rental properties. You would have agreements and requirements for various independent contractors and trades who will work at your buildings to maximize the quality and accountability of their work, make sure they carry appropriate insurance coverages which contain additional insureds designations in your favor, and to avoid liability caused by poor work or mechanic’s liens for failure to pay subcontractors, suppliers, and materielmen. You would want to have a good lease between you and your tenants, to incentivize taking care of the property and paying the rent on time, while providing clarity for unwanted conduct and teeth to enforce violators. If you will be getting into residential or comemercial properties, or both, you’ll want to be familiar with the differences in what can be in a commercial lease, versus a residential one, and what types of insurance you should ask various types of tenants to carry and give you proof of. You would want to be familiar with employment law areas for whether you will have maintenance personnel who are independent contractors or employees, and how not to create employment liability, or workers comp liability where you don’t intend for it. You’ll want to work with a bank to possibly help you with an operating line of credit, so you can have access to financing to maintain liquidity and capital to do more deals for new properties. You’ll want to work with an accountant to do payroll, employment taxes, estimated tax payments for you, and income taxes for you and the business. And of course, you’ll need a lawyer to help you with all of these things.
These are some of the considerations in starting as a real estate investor. As to any specific legal requirements you’ll face, it depends. We don’t know much about your plans based on your question. So unfortunately at this point, I can’t be more specific with you.
As always, you get what you pay for. Be sure to talk to a qualified attorney about your specific situation before choosing to rely on information you get from internet discussion boards such as this one.
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