Did you know that 88% of buyers and 77% of sellers use a realtor to buy or sell a property? People are buying, selling, and renting homes more frequently than ever, giving birth to myriad opportunities for real estate agents.
Hence, starting a real estate business is one of the most lucrative business ideas. But with over 100,000 real estate firms operating in the US alone, setting yourself apart as a real estate agent can be challenging.
Here’s a comprehensive guide to planning, starting, and growing a real estate business.
Develop a Winning Real Estate Business Plan
Creating a business plan is the first step in starting any business regardless of its size and type, and real estate is no different. Here are some essential questions to answer when planning your real estate business.
1. Identify What Type of Real Estate Agent You Are
First things first, understand who you are or rather what type of real estate agent you want to be. Do you want to be a solo agent or have a team of agents and brokers? Do you want to focus primarily on sellers, buyers, or both?
These questions might seem basic, but answering them will lay the foundation of your real estate business.
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2. Examine Your Target Market and Ideal Customers
Determine who you want to do business with. Do you want to target new couples looking for their dream home? Or, do you want to target working professionals moving to a new city? Are you targeting people looking to buy a home? Or, are you targeting people looking to rent a property?
Are your customers end-users looking for luxury apartments and villas? Or, are your customers average home buyers looking for a fair deal? Getting answers to these questions will help you identify your target consumers and make your approach more strategic and streamlined.
3. Analyze Your Competition
Analyzing your competition is another essential step in planning your real estate business. Identify other real estate businesses in your area and follow them closely. Examine their target audience, business strategies, customer engagement methods, and other components that you can learn and seek inspiration from.
A good way to monitor your competitors is by following them on social media. Most real estate agents engage with their consumers on social media. By following them on social media, you’ll be able to get helpful insights into how your competitors operate.
4. Determine the Services You’ll Provide
Yes, you offer real estate services. But which ones? Some services provided by real estate agents include:
- Property staging
- Buying and selling real estate
- New property construction
- Rental and investment properties
Now, can you provide all these services? Yes, you can. But when you’re just starting out, it’s better to start small so that you can manage things easily.
The services you provide should depend on two factors:
- The resources you have
- Demand in the market
New property construction or investing in rentals requires significant investment, whereas buying and selling properties isn’t as expensive. Depending on your budget and available resources, you can decide which services to offer.
Considering market demand is equally important. If you live in a metro city where working professionals move in for work, investing in a rental property can be a lucrative idea. Most people who move to a new city are looking to rent a property.
5. Identify the Available and Needed Resources
The final step in planning a real estate business is to analyze the resources you have and the resources you’ll need. Begin with identifying your starting and ongoing financial needs. How much money will you need to start a real estate business?
For example, in most developed countries, brokers need to obtain licensing. In the US, the licensing fee is $150. Other costs to consider include broker fees, membership dues, business expenses, and marketing costs.
Marketing is an essential cost to consider, as 31% of realtors end up spending over $1,000 per year on marketing. Also, if you want to take your business online, you’ll need to set up a real estate website and CRM system to collect and nurture leads.
6. Set Realistic Goals
The final step in real estate business planning is to set a realistic revenue goal. How much money are you expecting to make in the next six months or one year? More importantly, how do you plan to achieve that goal? Decide on a revenue model and ensure that it’s sustainable.
Start a Real Estate Business
Once you have your business plan ready, revisit it to ensure that it’s realistic and sustainable. Once you’re satisfied with your business plan, you take the first steps towards starting your real estate business. Here are a few steps to take when starting out.
1. Get a Real Estate License
As discussed, obtaining a real estate license is paramount before starting a real estate business in most countries. So, the first thing to do when starting a real estate business is to get a broker’s license.
2. Form an LLC
Once you have the license, you can start a limited liability company (LLC) to put your business on paper and protect business costs from affecting your personal finances. Here are a few tips to keep in mind when forming an LLC.
- Check the regulations in your state or country
- Apply for a tax identification number
- Create an operating agreement
- Choose a unique name for your business
After completing these steps, you’ll have a registered real estate business. Now, you can begin your real estate operations by meeting new clients and buying and selling properties.
3. Build a Website and Implement a CRM
According to the National Association of Realtors, 93% of homebuyers check out real estate websites when searching for homes. Therefore, having a website for your business is an essential step in setting your real estate business up for success.
A website will allow you to list properties, providing a platform for buyers to check out properties and contact you in case they’re interested in buying. You can also allow other realtors to list their properties on your website, thereby expanding your scope for generating revenue.
Most people who’ll come to your website won’t take action. It’s essential to keep following up with them and build meaningful relationships. Here’s where a real estate CRM solution comes into play. These tools allow you to follow up with your leads and convert them into high-paying customers.
Once you have your website up and running, you can start listing properties on it.
4. Devise and Execute a Marketing Strategy
Now that your website is live with properties listed on it, it’s time to find customers. There’s no right or wrong way to market your real estate business, and you should stick to what works the best for you.
However, here are some real estate marketing tips you can follow to kickstart your business.
- Run paid ads
- Create real estate videos
- Leverage social media and optimize your accounts
- Make virtual tours of listings
- Ensure high-quality photography
- Start a blog about real estate
- Claim and fill online real estate websites
- Make your website mobile-friendly
Grow Real Estate Business
So, you have taken the first few steps and established yourself as a real estate agent. But it’s just the beginning. Here’s how you can grow the real estate business and take it to the next level.
1. Prioritize Networking
Networking is an essential aspect of growth in any business, and real estate is no different. If you want to achieve exponential growth, focus on meeting and networking with individuals who can help you reach your business goals. They could be fellow real estate agents, brokerage firms, etc.
2. Delegate Tasks
You might’ve started your business alone and found it easy to manage it. But as your business grows, the administrative burden will increase, and handling everything by yourself will become more difficult. It’s essential to delegate some or all of your administrative tasks so that you can have more free time and focus on work that matters.
3. Keep Communicating with Your Customers
Customer retention is the cornerstone of business success in every industry. Data from NAR shows that only 12% of real estate buyers and 27% of real estate sellers used the same real estate agent again. This clearly indicates that realtors have a hard time retaining customers.
You can increase customer retention by regularly communicating with your customers. Sending emails is a great way to build meaningful relationships and drive customer retention.
4. Keep Expanding
Don’t limit your services as a real estate provider. If you started as a real estate buyer/seller, expand to rental investment and property construction. The more services you offer, the more revenue opportunities you generate.
Wrapping Up
Starting a real estate business has been one of the most popular business ideas for decades. It’s a low-investment business that, if executed correctly, can generate massive returns in a short time. However, the real estate industry is more competitive than ever, and aspiring realtors need to enter the market with proper strategy and planning.
What, according to you, is the biggest challenge when starting as a real estate agent?
A digital marketing and content curator at SoftwareSuggest, a software recommendation platform. I am passionate about Digital Marketing, and all things digital. Also interested in technology and innovation. In my spare time, enjoy playing cricket, and Badminton.
