Property management license requirements - A comprehensive guide

Property managers play an essential role in local real estate markets. Once sales are done, the property managers take care of the building and grounds. They also handle the building’s budget and may recommend rental and sales rates to the owner.

Many property managers obtain specialized certifications to help them gain new skills and stand out from competitors. However, eight states and the District of Columbia require official licensure from a government agency.

This article will discuss if licensing is required in your state, license requirements and an overview of starting your own property management business.

Jump ahead to learn about:

• Working as a property manager
• Do you need a license to be a property manager? 
• How to get a property management license
• Starting your property management business
• How NEXT helps property managers get the insurance they need

Working as a property manager

Property managers may work for residential or commercial properties. They typically handle all aspects of on-site maintenance, as well as the financial aspects of the complex. That includes collecting rent, handling payroll, showing the property to prospective renters and paying the bills for repairs and landscaping.

They also handle all complaints from tenants or members of the community. The property manager is the first point of contact for most issues with the building, including building repairs, compliance with anti-discrimination laws regarding unit accessibility and entering into tenancy contracts.

Do you need a license to be a property manager?

Yes, but it depends on the state. Property managers must get a specific license in Alaska, Delaware, Florida, Georgia, Hawaii, Illinois, Nevada, Virginia and the District of Columbia.

The requirements vary according to each state, but typically, you must have a real estate agent license or a real estate broker license before working as a property manager. You might also have to get property management training and coursework, depending on where you want to work.

Take Nevada as an example. Before applying for a property manager permit, you must have a Nevada real estate license and complete 24 hours of pre-licensing education for property management. By law, those 24 hours of classroom instruction must include specific topics that cover the legal, administrative and financial aspects of being a property manager.

In Florida, you need a real estate license to be a property manager, but no specific property management license exists.

In California, you do not need to be a real estate agent to be a property manager, but the California Association of Realtors offers an optional Property Management Certification designed for real estate agents who want to develop a property management business.

If you are a property manager who also buys or sells real estate, you must have a real estate license — regardless of where you live in the U.S. If you try to work without a license where that is required, you may face legal action, including fines or penalties. You can be fined in Nevada for acting as a property manager without a license.

Real estate certifications

Although you may not need to get a property management license, you might opt to get certification through an organization like the National Association of Residential Property Managers (NARPM). Certificate holders can access a network of fellow professionals and a leg up when seeking employment in the industry.

The Institute of Real Estate Management (IREM) also offers a Certified Property Manager (CPM) designation. Getting the certification involves taking eight courses and passing an exam.

How to get a property management license

To become a property manager, you should contact your local state real estate division and ask how to get a property management license.

You can typically find this information on the state attorney general’s website or through the state’s real estate commissions. Getting a license usually entails a few specific components:

• Completing specific education
• Passing a licensing exam
• Passing a background check
• Filling out a state application form
• Paying a fee

You will have options of where to get your education. However, many state commissions and boards will have a list of authorized schools that offer online and offline courses.

Start with your state’s list of approved schools for real estate management licenses. You can then select one that allows you to get your property management license online if that’s your preference.

Starting your property management business

Once you have determined how to become a licensed property manager, you may want to consider running your business. Many managers join an existing property management firm or real estate brokerage that manages property to learn the ropes before striking out on their own. Here are some things to consider:

• Understand legal requirements. Aside from looking up the legal requirements of starting a property management business, you’ll also want to inquire into what’s needed to operate.
• Develop a business plan. Figure out your business niche, target market, services, pricing and financial projections. A plan can help you attract potential clients and investors.
• Build a real estate network. A large part of being a property manager is connecting with others. You’ll want to build relationships with real estate agents, contractors, landscapers and other local businesses. These relationships can help you find clients and reliable service providers.
• Prioritize customer service. Clear communication and responsiveness help build trust with property owners and tenants alike. When both are happy, it often leads to referrals.

Get tips for starting your own property management company.

Purchase business insurance

Getting property management insurance is a good idea to protect yourself and your business activities. Consider the following types of business insurance to protect against various common risks.

Workers’ Compensation. If you hire employees, you may be required to buy workers’ compensation insurance by the state. This policy can help cover you for losses that range from employee injuries to loss of income in case your business is interrupted for a period of time.

General Liability. General liability insurance helps give you coverage for several different types of liability. This may include if you unintentionally damage another person’s property while on the job, or if someone gets hurt while visiting your business.

How NEXT helps property managers get the insurance they need

Every business is unique. At NEXT, you can mix and match policies to create a customized property management insurance package based on the specific needs of your business. Choose from general liability, workers compensation, error & omissions, commercial property and commercial auto policies.

Our online application makes it easy to review coverage, get a quote and purchase a policy in less than 10 minutes.

If you have questions or need help during the process, our licensed, U.S.-based insurance professionals are available to help.

Get your free online quote today.