How to Start a Real Estate Business
Real Estate might be one of the industries where there is always going to be a need, and there can be good profits to be made. However, there is also tough competition and when times are tough, it can be really hard for your brand to survive. However, if you want to learn how to start a real estate business, we have the answers here for you.
Why Start a Real Estate Business?
There are numerous reasons why you might want to start a real estate business. For one, it isn’t a bad industry to be in. There is always going to be someone looking to invest in property, whether it is for commercial or private occupation. And there are also people looking to rent or lease.
And with the variety of clients and properties available, there is plenty of opportunity to find a niche and make it. Plus there are good returns. The average commission for a real estate sale is between 1 and 6% with the norm being about 5%. Therefore, the average house, priced at $428,700 offers estate agents a potential commission of $21,435. This can be a significant income and therefore a single estate agent can make just one sale per month.
And if you’re looking at the rental market, you can make $1,080 per home you rent per year.
Another reason is that it allows for flexible, home working. With most house listings now online, estate agents don’t need to work from a central location in a city center or commercial home. Instead, you can operate from home.
Therefore, your costs can be much lower. Therefore, profit margins can be much higher.
Statistics for Real Estate Industry
There are several statistics for the real estate industry that can help you to determine how to run and start your business. These are the statistics that you need to know.
- In 2022, home ownership in the US increased by 66%.
- Nearly 26% of all house purchases are from first-home buyers.
- 21% of those moving after retirement are doing so to be closer to friends and family.
- Nearly half (47%) of purchasers will look online before contacting an agent.
- Rent prices increased by more than 12% in 2022.
- It takes an average of 37 days to sell a home in the USA.
How to Start a Real Estate Business
So here are the instructions on how to start a real estate business. These are simple instructions that can be followed by anyone.
Step 1 - Choose Niche
Within real estate, there are plenty of niches. You can stick to a specific area, a specific type of home, a specific market (rental, buyers, commercial, personal), and other options. These niches become part of your brand’s identity and therefore part of your business plan.
Remember when it comes to getting clients, it is going to be harder for you to begin with. You will have no presence because no-one will know who you are and exposure to audiences is going to be much smaller.
However, by choosing a niche, you can focus your efforts to market to a specific type of customer.
Step 2 – Choose a Business Name
Now you need to choose a business name. There are several criteria that you might want to think about when choosing your business name. For instance, you want to have a memorable name, a name that is unique and something that reflects your value.
If you’re struggling to come up with a business name, then you can always use a real estate business name generator. Or you can ask friends and family.
Remember that part of the process is to check that your name is unique. This process should be done via Google, social media, business directories, and a business name search in your state.
Step 3 – Register Your Business
You should also look at registering your business. You will need to get permits in most states to run a real estate business. You will also need to register your business name. It is probably best to register your business as an LLC, it seems more formal and offers you protection.
There are costs to registering as an LLC, but you also get some significant benefits, like access to better financing, business bank accounts, protection for personal property and your business name is secure.
You should also register your domain name. Domain names cost about $10 for the year. They need to be renewed every year.
Step 4 – Build Website
Now you need to build your website. There are numerous platforms that you might want to use. However, some of the best include WordPress, Shopify, Wix and Squarespace. These have themes and addons that can help you run a real-estate business with ease.
A website might take a couple of weeks to build. On your website ensure that there is a way for your audience to contact you, a mailing list subscription form, and trust factors.
Step 5 – Meet People
Now it is the hardest part. You need to get out and get clients. You just need a few to get started. If you can bring on two or three per month, you will be in a good state within the first few months. You might want to print out some leaflets and go out to town centers to distribute them. Or you might want to go to local events/tours.
Try to find ways to get involved with other local businesses that can help you market. Many other small businesses are sympathetic and will help you market your business in the first few months. They want other local businesses to succeed because it keeps the money in the local area.
Final Word: How to Start a Real Estate Business
Above are the steps you need to learn on how to start a real estate business. They’re really simple and can help you build a successful business in no time. But there are going to be challenges ahead and it isn’t going to be easy. Hard work and perseverance are going to be needed for you to be successful.