Table of Contents Hide
- What is a Real Estate Business?
- Types of Real Estate Business
- Is Real Estate Business Profitable?
- Before You Start a Real Estate Business
- How to Start a Real Estate Business With no Money
- Real Estate Business Ideas
- Related Articles
Starting a real estate business is not for the faint-hearted. Not only are there a lot of risks associated with it, but you also don’t get to make sales regularly like every other business. Nonetheless, those who know how can make a lot of money from it.
As a matter of fact, there are over 86,000 real estate brokerage firms operating in the U.S. (based on the most recent census numbers from the 2012 and 2007 economic censuses). This means that the competition is high and you need to get your game right.
Although its not an easy task, you can still get to the climax with proper information and guidelines. And the best part is we have the right resources to help you succeed in your quest.
So, go through this article and discover the best ways to start your real estate business at no cost.
What is a Real Estate Business?
A real estate business is a business whose focus is centered around buying, selling, management, or investing of real estate properties. Also called real property.
Wikipedia says that real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water.
Real estate is different from personal property, which is not permanently attached to the land, such as vehicles, boats, jewelry, furniture, tools, and the rolling stock of an agricultural farm.
Over the years, due to lack of investment or poor investment, less than five percent of Americans have a well-crafted retirement plan. So, if you don’t wanna be 65 and thinking of the next opening at McDonald’s to apply for, then you can consider starting a real estate business. And yes, it is profitable.
Types of Real Estate Business
There are four types of real estate business. They are;
- Residential real estate
- Commercial real estate
- Industrial real estate
1. Residential real estate
This type of real estate involves the construction, renovation, and resale of residents (homes). The most common type of residential real estate is single-family homes. However, there are also duplexes, high-value homes, vacation homes, multi-generational homes, condominiums, town-houses, quadplexes, and triple-deckers.
2. Commercial real estate
Commercial real estate involves properties that are used for commercial purposes. Its category include shopping malls, hotels and offices, medical centers, strip malls, and educational buildings.
Apartment buildings can also come under this category since they are owned to generate income.
Land, according to Wikipedia is the surface of the earth that is not permanently covered by water. It includes empty land, farms, and ranches. Under empty land, there is undeveloped land, subdivision, site assembly, development, or reuse.
4. Industrial real estate
This type of real estate property is used for industrial purposes. Categories under this include manufacturing buildings and warehouses. Other categories include buildings that are used for research, storage, and distribution of goods.
Is Real Estate Business Profitable?
This has got to be the question of the century. Yes! A real estate business is absolutely profitable. In fact the whole point of business is to make profit. And real estate business is one of the most profitable businesses out there although it comes with its own quantity of risk.
One of the ways to constantly increase your profit in the real estate business is by appreciation. Appreciation is the increase in the value of an asset over time. Assets here can be undeveloped land, house, or commercial properties. And an increase in value is usually caused by an increase in demand with a decrease in supply.
So, when your assets appreciate over time, you can decide to sell them and make a profit, or rent it out and receive annual payments for your property.
Whichever strategy you decide to employ, the end result still leaves you with enough profit from the business.
Having answered your most important question about the profitability of a real estate business, let’s go over five major things you need to do before you start a real estate business.
Before You Start a Real Estate Business
Before you start a real estate business, there are certain things you must do. Below is a list of the most important things to do in real estate.
- Get a real estate mentor
- Obtain your real estate license
- Pay tax
- Find a brokerage
- Know who your target market is
- Build your personal brand.
- Conduct a good market research
Do all this and you are one step closer to starting a real estate business.
How to Start a Real Estate Business With no Money
If you really want to start a real estate business, then you must know that it’s not an easy task. A real estate business has a lot of risks associated with it and your success depends on how deep your market research is as well as your business strategies.
So here are proven ways to start a real estate business and be successful in it.
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1. Develop your idea
Real Estate is a really large field. So, before you want to venture into it, you will need to develop your business idea. Consider your strengths, weaknesses, and areas of interest.
Additionally, think about where you want to set up your real estate business. Knowing the area you want to establish your business in will help you give better descriptions and referrals to those you’ll help to buy properties.
Study your competitors. Discover how they’ve set up their business and in what location. Find out why they chose that location and how they are doing in the industry. In studying them, you’ll pick up a few things you can employ to make your real estate business a success.
Next, find a niche for your business. In my opening statement, I told you that the real estate business is a really large business. So you would want to narrow your intentions to something you have the time and funds for.
Maybe you want to focus on rental property management, buying and selling condos, short sales, or even listing agents. The competition is really high. So, stand out using a single specialty.
2. Write a Business Plan
Now that you know just what you want your real estate business to be like, it’s time to craft a workable business plan.
A business plan is a document that outlines the operational and financial goals of your business. It’s like a blueprint that guides you in the right direction. It constantly asks the questions why and how? so that you can come up with realistic steps on how to achieve your business goal.
Your business plan doesn’t have to be very long. The idea is that as you sit down to either craft or customize a business plan, you already have ideas on how to get your business running.
The best part is there are some resources that can help give you a business plan with all the information you need concerning your business.
Our team of business management experts has come up with cutting-edge business plans written specifically for your kind of business. Click on the button to easily access and get a workable business plan with no stress. We love to see your business succeed, so we make every process easy.
3. Develop a Marketing Plan
For your real estate business to be successful, it also depends on your marketing strategy. How do you intend to tell the world that you run a real estate business and you want them to patronize you? A very big question for thought.
Answers to this question will help you position your business in the limelight and force you to brand your business well. This means that you’d have to come up with a business name, logo, business card, website and even social media handle.
Having all this will help you brand your business and get you ready for marketing.
Some common marketing campaigns that convert easily include:
- Direct Mail: A lot of real estate business owners still use handwritten letters, postcards, and mail letters to reach out to their customers. And guess what, they are consistent.
- Social Media Ads: Whether you like it or not, social media is a powerful tool that can be used to advertise your business. Post on Instagram, Facebook, Twitter, and LinkedIn. With time you can use paid ads to generate more customers.
- Email Marketing: Use several emailing software to send out emails to both buyer and seller.
- Networking: The main marketing strategy for the real estate business is networking. In most cases, it’s about who you know. So, start by attending conferences that expose you to meet other real estate business owners and build relationships.
4. Set up a CRM
A CRM is a Customer Relationship Management System helps your organize your contacts and come up with actionable insights on how to interact with your clients.
This is incredibly useful in real estate business since it thrives on relationships. So you have lots of contacts of multiple agents and homeowners whom you need to convince to patronize your business.
READ THIS POST ON CUSTOMER RELATIONSHIP MANAGEMENT (CRM): Definition, Tools, and Importance to get a better understanding.
5. Organize your Finances
It’s very possible to start a real estate business without money. But you’d want to organize your finances when you require investment. There’s a high probability of investors requesting your financial history before putting their money into your business.
So, request information from your bank on your financial information. Check your credit card report and find out if there are any errors before your investor asks you of it. Doing this half way prevents you from getting a rejection when you need investment.
6. Decide your business legal structure
There are different types of legal structures that real estate businesses can take up. For a beginner, choosing the right legal structure for your business can be overwhelming.
Most real estate agents operate as self-employed business owners affiliated with a licensed real estate brokerage. Generally, they select one of the four different types of business structure; Sole proprietorship, partnership, limited liability company (LLC), or a corporation.
- Sole Proprietorship: This means that you are responsible for your business profits and debts. It is the most basic business structure.
- Corporation: This is entirely different from the owners. corporations can own properties and are held accountable to pay taxes.
- Partnership: A partnership is a shared responsibility between two or more people who are liable for a business
- Limited Liability Company(LLC): This structure allows owners to limit personal liability. However, they still get to pay taxes and enjoy other benefits.
So, when choosing, consider your future goals for your business. Ensure you choose a structure that can accommodate the growth and expansion of your real estate business.
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7. Set up a business accounting and bookkeeping system
In order to manage your finances properly, you’d need to set up a business account and bookkeeping system. Through this, you can understand your business’s cash flow for the sake of tax filing.
According to Crowdspring, Business accounting is how your business records, organizes, interprets, and presents its financial information. Accountants analyze the financial condition of a business to help the business owner make better decisions.
Bookkeeping is the recording, organization, storage, and retrieval of financial information related to your business.
Accounting and bookkeeping do overlap. The main difference between the two is that bookkeeping is how you record and categorize financial information, whereas accounting puts the information to use through analysis, strategy, and tax planning.
8. Get Insurance
The best way to protect your business is to get an insurance. As a provider of real estate services, you would want to get a business insurance that covers property damage, theft, lawsuits, and other case scenarios.
This is very important because real estate business involves transactions of large amounts of money. So, you want to be sure you are protected at all cost.
9. Get a Website
Nobody has the time to walk through the streets of New York to check out empty apartments. 60% of all the searches are done online.
Irrespective of your local marketing campaigns, you still need to get an online presence. So, get a domain name same as your business name, and host your website. It may be expensive, but it sure will bring clients over time.
Also, make sure to employ the best SEO practices to rank on search engines like Google. Once this is done, you can start uploading pictures/ videos of the properties that are up for sale on your website and social media handles.
Remember, the aim is to gain as much online presence as possible.
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10. Start running your business
Congratulations! You are now qualified to start running your real estate business. There’s no need to have all the properties in New York registered under your business name. You just need the most important of things.
Make sure to give your real estate business all the time it needs for it to grow.
However, if you want to deflect to other areas, there are some real estate business ideas you can try. We’ll go over them shortly.
Real Estate Business Ideas
If you’ll like to venture into other businesses in the real estate industry, here are 10 potential business ideas you can try.
- Become a real estate agent
- Become a real estate broker or investor
- Start a landscaping business
- Start a moving company
- Become a property manager
- Become a landlord
- Start a real estate marketing agency
- Start a property flipping business
- Become a real estate developer
- Become a real estate photographer.
With this article, you have a step-by-step guide on everything you need to start a successful real estate business.
Let me know if there’s anything I missed in the comment box below.
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