How to Start a Real Estate Business That’ll Make Real Money
The real estate industry is still a very good career move for anyone, especially if you’re planning to start with getting your name out there. How to start a real estate business isn’t as tough as some people may make it out to seem, however, there’s a lot of competition from numerous established and new players.
When entering the business, you’ll have to expect competition from everywhere. The 2012 Economic Census reported that the United States had around 86,000 real estate brokerage firms.
The market, in general, for both individual entrepreneurs and real estate firms in America is quite vast, comprising of floor space measuring 87 billion square feet and 5.5 million commercial buildings. There are also over two million active real estate licenses in the region.
Nonetheless, you shouldn’t let all this competition intimidate you. At the start of any real estate business endeavor, most of the concentration should be on good planning first. The foundation is often the initial phase for most businesses and real estate is no different. If your business has a solid foundation, it’ll be to manage the tough market environment and succeed later on.
Remember, the real estate industry isn’t about instant success, it’s rather a long game situation that needs a lot of patience from you. Let’s look at how you can start your very own business.
Planning How to Start a Real Estate Business
Whether you intend on starting a coffee shop, real estate firm or a rocket parts manufacturing company, writing a business plan is always a good idea. Having a business plan will make you much more successful, and this has been scientifically proven.
Like most other businesses, the real estate game is also a vast industry with several aspects to it. This means that you should really consider drafting a business plan if you want to get into the business and be successful.
Writing a business plan will help give you a clear map of how to go through the whole process. Planning will help award you the confidence to move forward in a strategic way. For instance, if you know the amount of capital you need to get the ball rolling, you’ll be able to plan your overall office building design, purchase equipment, office furniture and several other things accordingly.
It’ll also help you come up with realistic goals as well. There are plenty of online resources that can help you draft a real estate business plan. The purpose of business plans is to set objectives, goals and direction. More importantly, however, so that you can have documentation to show lenders or investors for financial assistance.
Extensive Market Research
Market research is vital if you want to find out whether the business idea you have will work or not. It’ll also let you know which real estate market niche will suit your vision. The research you gather will tell you how you can effectively position your business within the niche you choose. A few points you might want to strongly consider include:
- Ensure that you conduct market research early so you can save both time and money
- Use your market research data to figure out whether you possess the required skills
- You’ll get a bit of real world experience from the research
- As you research about your niche more and more, you might just find a good mentor to help guide you
All size businesses need branding. If you’ve got a one-of-a-kind brand that’s hard to forget, it’ll be very easy to attract customers, look much bigger than you actually are, build credibility and generally be the first company or individual people think of.
Good branding is all about creating certain perceptions in people’s minds about what you do and what the business is all about. If you want to start a real estate firm that people will consider a trustworthy brand, you’ll need a great ad campaign, logo designs, press releases as well as the use of several other marketing techniques.
Here are some good tips you can follow:
- Build relationships with potential clients
- Engage clients at a personal level and communicate with them as often as you can
- Set yourself apart from all the other competition
- Give value for money
One of the good things about starting a real estate business is that you don’t necessarily have to have access to a lot of cash on hand. Some even start it part-time while still holding down their 9-5 regular day jobs.
Getting money for a real estate business is not usually that hard because it doesn’t require a lot of money in the initial stages. Most of the entrepreneurs out there started their operations with less than one-thousand dollars. However, avoid making the common mistake of only calculating your startup costs.
When drafting your business plan, know what kind of lenders you’ll want to approach for loans. If you don’t have access to enough cash from your own individual sources, then you’ll need to find ways of how you can get investors on board.
Setting Up Shop
Find out the locations that will work best as a business premises. However, quite a large number of startup business entrepreneurs usually begin from home. During the initial stages, concentrate on finding a target market rather than focusing on the right storefront locations.
In fact, if you’ve got a budget that’s not as flexible as you’d like, find out how you can operate without having a physical location and employees.
Don’t be rigid and choosy when it comes to getting your first physical location. Having a flexible approach will allow for plan adjustments.
If you want to be more hands-on in the real estate game you can always look into buying an airbnb.
As you can see, the real estate business doesn’t require that much to be a part of. Hopefully, this article has helped show you how to start a real estate business and succeed while you’re at it. What has been highlighted in this piece are some of the most important things you need to consider when starting a business of this kind.
So, what are you waiting for? Get started. Remember to check out our blog for more important advice to help you get your business rolling.