Since 2014, the US real estate sector has grown by 4.8% per year. In 2019, it is expected to generate 165 billion dollars.
Clearly, the industry is on a steady growth path, particularly after the aftermath of the 2008 financial crisis. So if you are looking to start a real estate business, there couldn’t be a better time to get started.
However, starting a profitable real estate business is easier said than done. In fact, the vast majority of real estate businesses fail.
Do you want yours to be a success story?
Read on for tips on how to start a real estate company that will make you big money.
1. Understand how the real estate industry works
To be successful in any industry, you need to have a good understanding of how it works. Real estate is no different.
This means that you have to spend a lot of time researching the real estate market in the country. Understand the different factors that affect its growth and identify the most profitable niches.
But let’s face it: if you’re not already a real estate insider, the research can’t go far yet. This is why the best way to understand the industry is to become an insider.
How? ‘Or’ What? You ask.
You can for example opt for a real estate agent activity. While this will require you to take some real estate education and be licensed to practice in your state, it will give you the best opportunity to dive up to your knees and understand the industry.
2. Decide which real estate business you want to start
The real estate industry is large, which means that there are several areas that an aspiring entrepreneur like you can specialize in. Here’s a look at some of the best real estate business ideas:
- Become an owner / invest in a rental property
- Running a property management company
- Run a home flipping business
- Running a home staging business
- Establish a real estate agency or brokerage
- Managing a real estate development company
What idea appeals to you?
Well, we all want to own a home, but it’s not always the best idea or even the most achievable. To choose the best one, you need to consider a number of factors, including your expertise, access to capital, and regulatory requirements.
For example, to invest in rental properties, you need a lot of capital to buy or build rental units. It also takes time.
On the other hand, if you are already a real estate agent, you have the expertise to run a real estate agency. Moreover, this idea is not capital intensive.
Either way, the idea you choose will go a long way in determining your success as an entrepreneur.
3. Draw a business plan
Once you have a perfect real estate business idea, the next step is to make a business plan. The details of your plan will vary depending on the idea, but it should flesh out the following details:
- Executive summary (Short presentation of the company)
- Company objectives (Mission, vision, objectives)
- Product / service (such as rental units)
- Market analysis
- Commercial and marketing strategy
- The organization and management teams
- Capital requirements and other financial projections.
Even if you are looking to start a small real estate business at low cost, it is important to make sure that your business plan is properly developed.
If you skip this step or rush into the plan, you will only be setting yourself up for trouble down the road. If you’re unaware of capital requirements, for example, you could easily underestimate the amount of money you need to start the business and keep it running until it turns a profit. sustainable.
What if you don’t have any expertise in writing business plans? Don’t hesitate to hire a small business consultant to help you.
4. Secure the required capital
Did you know that lack of adequate capital is one of the main reasons many small businesses fail?
As such, you should get started with raising the amount of money you need to start and operate the business. If your capital requirement is $ 30,000, make sure you have at least that amount before proceeding to the next step.
One effective way to raise the required capital is to partner with a like-minded entrepreneur. There is no limit to the number of partners you can have, but the fewer the better. You can then pool some funds and start the business.
Another option is the bootstrap. If you have money in a savings and / or retirement account, you can withdraw it and use it. It’s a risky move, yes, but entrepreneurship is about taking calculated risks.
Loans are also ideal, especially if you are planning to invest in rental property. If you have a good credit rating and income, you can get a mortgage to buy rental housing.
5. Register your business and set up an office
In most states, it is a legal requirement to register a new business with the relevant local department. You may also need to obtain specific real estate licenses before starting operations.
After fulfilling the registration requirements, set up your company office. This involves purchasing basic office furniture and equipment, and you may also need to hire a secretary or office manager.
6. Market / Advertise your business
Although the real estate industry is growing rapidly, the competition can be fierce, depending on your niche. If you have rental housing, for example, the tenants won’t just show up. Heck, they won’t even know your property exists.
This is where marketing comes in.
Build a professional business website that can double as a real estate lead generation machine. Also, create social media accounts and invest in paid digital advertising campaigns.
It’s time to start a real estate business!
The real estate industry is one of the safest places to invest your money, but you need to make wise choices. With this guide on how to start a real estate business, you are now in a solid position to build a successful real estate company.
Need more real estate advice and ideas? Keep reading our website!