8 Tips To Plan, Start and Grow Real Estate Business
Working as a real estate agent offers numerous benefits. You get to meet and work with a diverse range of people, be your own boss, and have the satisfaction of assisting buyers and sellers through one of life’s most significant milestones. Real estate is also a lucrative business — the median compensation for a real estate agent is $48,770 per year. That price rises to $62,010 for real estate brokers.
If you’re considering real estate as a career option, follow these eight simple tips to plan, start, and grow your business.
Research the Market
Doing industry research is the first step to starting a real estate business. First, identify your niche, market area, and competitors. There are several exit strategies you can consider. Many first-time real estate professionals decide on wholesaling. However, rehabbing can also be a great option depending on your goals. You should then choose a market area best suited to your niche. Researching the current state will help you make more informed decisions once you develop your business plan. Learn the median home values and rental prices, look at neighborhood amenities and look outside your current location.
Write Your Business Plan
Having a well-defined business plan will help you laser-focus your strategy, define success, and detail your growth plan. It’s also essential for securing financing when the time comes. A traditional plan usually includes an executive summary, business goals, funding and initial capital details, and financial projections. If it sounds complicated, you can resort to using business plan software. These solutions have appealing, pre-made templates for every industry, so you can be sure you’ll include all essential details.
Get a CRM
A Customer Relationship Management system is invaluable for a real estate business. The home buying process is lengthy and involves a lot of steps. The best CRM system will help simplify your communication with potential customers and stay proactive. Also, it allows you to streamline the business administration and ensure nothing falls through the cracks. You can organize the contacts and get some actionable insights so you can walk leads through nurture campaigns based on the lead source. Finally, the system lets you direct specific conversation topics to the proper category, such as listing a home and finding an agent.
Organize Your Finances
When you approach a lender, they will ask for information on your financial history. You should think ahead and organize your finances. Request a copy of your credit report and review any existing investments. Depending on your investment strategy, you should consider a few financing options. Financial institutions or government loan mortgages are some traditional options that could work. Alternatively, you can opt for business partnerships or crowdfunding. Investigating your options early in the process will help you make more informed decisions.
Get a License
You’ll need to get a real estate license before working as an official realtor. In most states, these licenses allow you to sell residential real estate. If you want to sell business real estate, you’ll have to get separate certifications. To obtain the license, you need to take a pre-licensing course, pass the exam, and submit your real estate application to your state’s real estate board. After 2-4 years of working as a realtor, you’ll be eligible for a real estate broker license. In addition to having the experience, you’ll also have to complete the pre-licensing course, pass the exam, and apply for the license.
Build Your Brand
The next step is to choose a business name that showcases your brand and core values. Don’t overcomplicate naming your business — make sure it’s impactful and easy to remember. Do a Patent and Trademark search to verify the desired name is unique. Creating a logo is just as important as choosing a name. It should be recognizable and communicate what your business is all about. Lastly, come up with a memorable tagline. Sum your real estate business in a few words and make them count.
Register Your Business
There are different business entities, and each has its advantages and disadvantages. For example, you can start a real estate business as a sole trader, meaning your business and personal income and expenses remain in your personal tax return. In this case, your assets aren’t protected, and you’ll be held personally responsible if anything happens. A partnership is another business structure where business responsibility is shared among at least two owners. Arguably the best option is LLC — a hybrid structure that offers liability protection.
Plan Your Marketing Strategy
Having an effective marketing strategy is crucial for a real estate business. Start with finding your distinct selling points to potential customers. It’s a great starting point that will drive your marketing. Next, build a robust, SEO-focused website that lets you integrate the listings and guide the leads right into your CRM. From there, you can start building your blogging, email, and social media strategies to generate more leads. Business cards, flyers, emails, and brochures are also a must in your marketing toolkit.
As your real estate business grows, you’re going to have to hire some staff to help handle the growing number and volume of tasks. The people you hire are a reflection of your brand and will impact the culture of your company. It’s important to do proper background checks including pre-employment drug testing to ensure you’re hiring people who will be a good fit.
The most common hires to start are an accountant, social media manager and personal assistant.
Keeping these tips in mind will help you plan, start, and grow your real estate business. Every start is overwhelming, but being consistent with your business plan and succeeding in getting the prospects’ attention will set you on the path to success.