Do I need a real estate license to start a property management company in Texas?


You must have a broker's license if you will perform any of the tasks requiring licensure (collecting rents, leasing, showing properties, and so forth, see the definition of broker here. This an even more difficult license to obtain than the regular sales-person license.

So if you want to start a management company and you're not a real estate broker, what do you do?

  • Become a broker
  • Find a broker to partner with
  • Hire an outside management company
  • Invest in an outside management company

Even LLCs have to register with the Texas Real Estate Commission and must have a licensed broker as one of the officer's of the LLC.

But, what if you want to use a two company structure and don't want to become / hire a broker?

You can net lease the property to an operations company, have that company pay your holding company rent, and then have the operations company sub-lease to a sub-tenant. Since the operations company will be leasing out it's own leasehold interest, it won't need a licensed broker as an officer under current law. This structure is less flexible than an actual management company in that the operations company has to pay the rent to the Holdings company whether the real estate is vacant or not; but, it should have more liability protection as opposed to naming the operations company as the Holding LLC's manager.