- Research and evaluate
Like in any other profession, to be able to enjoy a satisfactory stint in the real estate business, you need to research on the subject. You could begin by seeking the inputs of industry veterans. Unless you come across as a competitor, they would be glad to share their overview and journey with you. Nothing’s better than hearing it from the horse’s mouth and people who have been in the industry can show you both – the bright side and challenges of starting a venture in the real estate industry.
- Pick and choose a speciality
As shared above, there are options aplenty in the real estate business. You could either get into commercial brokerage, residential brokerage, or land investments. Depending on your preference and the available options (domain knowledge, budget, etc.) you could go ahead with either. To begin, it would be ideal to focus on one area and as you grow along the way, you could dabble in the rest.
- Obtain the required licenses and registration
Although this was easily passed off earlier, with legal refinements and several real estate industry laws now in place, licenses and registration is now very important. Besides keeping your paper work clean, these make you come across as a serious professional and add to your customers’ confidence as well. From registering your firm (as a Private Limited or Limited Liability Partnership) to obtaining service tax registration, real estate agent license, and GST registration – all are crucial and mandatory. You will rarely find a real estate agent these days who lacks wouldn’t have any of these. So, prepare yourself to get these before you embark on the journey.
- Chalk out a business plan
Now that you have the required registration and licenses in place, don’t miss to create a detailed business plan. Put all of your know-how into building this plan and ensure that the challenges, which you have identified, are duly addressed and you have mentioned a scope for improvement. Your business structure, budget, funds, and team hiring strategy should all be mentioned in this blueprint. Certainly you can improvise on each area; but a business plan will provide a direction to begin with and hold your hand as you tread the path.
Being a landlord isn’t for everyone. Also, thanks to a recent tax clampdown and the introduction of a 3 percent surcharge in stamp duty, the buy-to-let market has cooled down in recent years. The number of buy-to-let mortgages decreased by 36 percent between 2015 and 2017. Despite this, due to falling house prices, it’s still a good time to pick up a deal, which is great news for newbies.
If you want to be a property developer, you need to embrace a slightly different mindset than if you were buying to rent. For starters, location is paramount here. As is finding the right seller—so keep them in mind when you’re sourcing potential properties. The aim is to make your money when you buy not when you sell. And, if you’re a cash house buyer, you can move more quickly to secure a deal or pick up a bargain at an auction.
- Put together a brilliant team
This step is very important as you’d not be able to do everything as a real estate business owner. Actually, there’s no need for it as well. You can manage everything from the peak but you should have members to do the work for you. Don’t go lavish while hiring people but make sure that you hire the best. Be it the sales people or the business managers or the people to market your brand – build a team of professionals who do justice to the role you have chosen for them. You can keep a mix of experienced and semi-experienced team members but remember to train the latter while on-boarding them so you are all on the same page.
- Invest with others
No rule says you have to fly solo. Paying for a deposit or buying a property outright by yourself can both daunting and risky. Why not shoulder the responsibility with others and embark on a joint venture with other investors?
With more investors, someone else can help manage the portfolios and shoulder the financial responsibility. Also, by combining your resources, you can make your money go further and maximise profits.
- Go online
Besides your offline presence, your online image too is important. Gone are the days when customers relied on the neighbourhood grocery shop owner while they were looking for properties. Today, customers look up the different websites much before they actually visit a real site. This helps them save time and effort and also helps them to gauge the different properties from several perspectives. Therefore, put up a nice, comprehensive, and easy-to-navigate-through website and communicate your messages effectively. You can also use the website to display discounts and special offers! (Nobody hates a discount.) So your business is now pretty-much set. All you have to do now is convert the queries into real deals and get your real estate business to flourish. However, remember to keep your customers happy as they are the ones who will recommend you to their friends and thereby help grow your business.
- Don’t forget to have an exit strategy
And when you’re no longer an active investor, depending on whether you own your properties outright or have mortgage —this will impact on your tax responsibilities. Also, you can hold onto your portfolio, sell it, split it or restructure it. But, it’s always best to check with an adviser.
- Revisit step #1 and follow the steps to expand
Once you have become a ‘pro’ at your job, it’s now time to expand. You could choose a different speciality this time or expand in your own line of business. In either case, go back to the first step and walk this path again.