Propertyscouts Property Management
The Pros and Cons of Buying a Property Management Franchise

The Pros and Cons of Buying a Property Management Franchise National Propertyscouts

Tired of working for someone else? Ready to pave your own way in the world and be your own boss in property management? How do you get started? 

There are a few different ways you can start your own property management business, including starting from scratch or purchasing a franchise. Both options come with various opportunities and challenges. 

So, without further ado, here are some of the pros and cons of buying a property management franchise to help you decide which option is the best fit for you and your goals. 

Pros of buying a property management franchise

Higher success rate: In NZ, it’s been estimated that 80% of new businesses fail in the first year, however, the success rate for franchises is known to be over 90%. This alone makes buying a franchise a very appealing, lower-risk option.

Turnkey business: Buying a franchise gives you a turnkey business with a successful business model and established processes. You can dive straight into generating an income without having to spend precious time building the foundations first. You may even have the opportunity to purchase an existing, fully operational franchise that provides you with cash flow on day one

Established brand: Franchises come with established brand awareness on day one - making it easier to start growing your customer base.

Unparalleled training, support, and guidance: Franchises often have comprehensive training programmes, operations manuals, and expert ongoing support to help you succeed in your business venture. Franchises also sometimes include optional centralised admin services - giving you more time to spend on growing your business. 

Affordable start-up options: Starting a franchise from scratch in a new location can be an affordable way to get into business. Property management franchises in particular can be extremely affordable due to low set-up requirements (meaning very few initial or ongoing costs on top of the purchase price). There are no large investments to be made into inventory or plant and equipment as there often are in other businesses. If you have a suitable vehicle, a mobile phone, and a computer, you virtually have everything you need to run your business.

Work for yourself, but not by yourself: Even though there are certain established systems and processes you must adhere to when buying a franchise, you still retain independent control of your business. You have the ability to work for yourself, with the guidance and support of the franchisor. Not to mention a network of other franchisees in the same boat as you!

Cons of buying a property management franchise

Limited income until you gain clients: purchasing a ‘start-up’ franchise means you are responsible for building your own property management portfolio and there will be little or income until you start gaining new clients.

Entry costs can be expensive: Purchasing an ‘established’ property management franchise with an existing client base  (called a ‘rent roll’) can be costly and will require an investment that is dependent on the size of the property management book purchased. However, because franchises often come with a successful business model, banks will usually be much more willing to lend you funds to buy a franchise than to start your own business.

You must follow franchise rules: Despite retaining independent ownership of your franchise business, as part of your franchise license and agreement, you must follow certain rules dictated by the franchisor. Rules may include following certain processes, using set systems, and adhering to brand guidelines.

Ongoing fees: On top of the initial franchise license fee, there are ongoing fees that must be paid to the franchisor. Fees vary depending on the type of franchise you buy but generally, property management franchise fees include a royalty fee, a website fee to cover costs associated with hosting, domain names and maintenance, property management software fees, and a group marketing fee. 

The bottom line

The idea of setting up your own property management business can be appealing, however, there’s a lot to think about and a lot that can go wrong. Becoming a franchise will give you all the satisfaction of building your own business, without the risk and frustration of starting from scratch.

If you are detail-oriented, good at following directions, and comfortable with established systems, franchising provides a quick and easy way to become a business owner. Whichever option you’re leaning towards, the most important thing to consider is this: will you have the fortitude and enthusiasm to make your business a success? 

Still want to be your own boss in property management? We can’t tell you it will be easy, but when you purchase a Propertyscouts franchise you will have full support from the franchisor to grow your business. To date, every one of our franchise businesses has been and continues to be successful. Learn more about becoming a Propertyscouts business owner.




DISCLAIMER: The above advice is written by Propertyscouts New Zealand (2020) Limited and is intended as a broad guide for educational purposes only. The advice should not be regarded as legal, financial or real estate advice. In all instances, you should make your own inquiries and seek independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions.


More national news »