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If you’re reading this blog, there’s a good chance that you’re planning to start something of your own in the New Year. While you might be considering several business prospects and arenas, real estate could be a good place to invest in. Both in terms of growth and profitability, real estate is a strong bet for many who are searching for passive investment methods, or to create a service that’s in high demand in several parts of the US.
According to a recent report from the IRS, (for the last five decades) of all the Americans who declared over one million dollars on their IT returns, almost 71 percent were engaged in real estate business. While the prospects seem good and the figures look promising, things aren’t always as simple or straightforward as they appear. There might be dozens of leads every day, but you may be able to close only four to five deals in your initial years (and that too if you’re lucky).
Simple steps to launch and grow your Real Estate Business
It’s a common saying that 9 out of 10 real estate agents fail to see any profit in the first five years of their business. However, for those who are up for the challenge and ready to work hard, running your own real estate business can give you your dream seven-figure salary. If you’re wondering how to start your real estate business and make it grow, this blog is for you.
- Think about your business goals
Whether you’re launching a real estate business, a bakery shop, a cafeteria or a company that manufactures automobile parts, planning is the first step toward any successful business. So, take time to assess and prioritize your future plans. This entails considering your personal, professional, and monetary goals – as these will decide how you start and grow your realty business. Start by asking yourself where you intend to be in the next two, five, and twenty years.
Now think about some immediate steps to help you with your journey. The planning process will help you in several ways. Firstly, it’ll prompt you to think about the vital things that’ll help you contest your competitors. Secondly, you’ll have an idea regarding the amount of money you’ll need to actually get started. Finally, it’ll help you validate your plans and get into a habit of setting milestones and achieving them.
As a novice in this field, it’s absolutely advisable to keep your goals small and achievable, at least for the first five years. Aim high but stay grounded to reality. Also, if you don’t have much idea or experience in the real estate industry, consider getting advice from an expert. A little help never hurts.
- Do in-depth market research
An effective business plan is almost always led by profound industry research, deciding on a niche category, business circle, and prospective contenders. There are many strategies your realty business can work on, with some of them more targeted towards beginners. While some may go for wholesaling to learn the ropes of the business, others will choose the rehabbing or buy-and-hold method depending on their experience.
You have a business plan, but how do you know that it will work? Have you really chosen a niche in the real estate market with a real audience? Do you know how to position yourself in this niche? The initial market research will hopefully help you find answers to these questions and many more like them.
Consider median property values and rental prices, explore neighborhood properties, and don’t forget to look outside your current locality. Google search, promotional events, and even seeking advice of a realty business expert can help with this process. Remember, the more groundwork you do now, the closer you’ll be to achieving your business goals.
With in-depth market research, you give yourself a clear idea of whether the niche market you’ve chosen is worthy enough to pursue. According to a realty business owner, he figured out his target market through the trial and error process. When he started out in the market, he wouldn’t turn away any business but once he realized my strong areas, he focused on them. Four years after he obtained his broker’s license, he started working on his own terms and achieved success.
So, the key is to understand your own strengths and weaknesses and then work accordingly. Instead of being the jack of all trades, focus on your areas of expertise. Conducting a SWOT analysis can help you with this.
- Sort out your finances
One of the best things about venturing in the real estate industry is that it isn’t always necessary to have a huge amount of cash on hand. It’s one such business that’ll let you work part-time while still holding down a daytime job (though you need to have the freedom and scope to occasionally take emergency phone calls).
However, that doesn’t mean you should not take note of your present financial status. Chances are, every time you approach a money lender, you’ll be asked about your financial record. It is crucial to stay prepared with all the necessary information and documents. For this, collect a copy of your credit history and evaluate any current accounts or investments that you may have. The good news is that, no matter what your financial standing, there are ways to start with real estate investing.
Based on your individual investment strategy, there are a few viable financing options for you. You can either choose a traditional method like a financial organization or government loan credit or go for other financing options like business partnerships, private cash lenders, and even crowdfunding. While there’s no need to decide on these financing methods immediately, it’s good to have a fair idea about them. That way, if you ever need to get some funding for your business, you know exactly where to go.
- Choose your legal business structure
Different business entities have different legal structures, depending on their business type, size, investment and a few other factors. For beginners starting a real estate business, deciding the best legal structure can be difficult. This is partly because the real estate sector has some exclusive business provisions to consider.
A majority of the real estate agents work as self-employed business proprietors allied with a certified real estate brokerage firm. Here, the real estate agents or licensees run their own businesses but under a qualified managing broker’s surveillance.
Starting your brokerage firm involves some similar features but with more focus. What’s more, most states require their real estate brokerage firms to have a particular type of license. In both the above instances, you are initiating a real estate business.
Entrepreneurs considering brokerage usually choose one of these four legal business structures: partnership, sole proprietorship, a corporation or limited liability company (LLC). Here’s a brief overview of each:
- Partnership – a business partnership is a legal written agreement between two or more entities that confirms shared proprietorship and operation of a business.
- Sole proprietorship – the most common business entity, a sole proprietorship denotes that the owner is solely accountable for a business’ earnings and debts.
- Limited Liability Company (LLC) – a formal partnership agreement wherein the business partners, owners or shareholders can limit their personal accountability but still receive the tax and flexibility advantages of a partnership.
- Corporation – A corporation is a legal entity that’s separate and distinct from its proprietors. It has many of the same rights and responsibilities as individuals, such as entering contracts, taking loans and borrowing money, hiring employees, owning assets, paying taxes and even filing suits.
Most real estate agents, who work independently under a real estate brokerage firm, run their business as sole proprietors. What’s more, solo-owner real estate brokerage agencies also work under sole proprietorships. Even if you start a real estate business independently and choose not to join others or form an LLC, you are a sole proprietor by default.
Consider your long term business goals and choose a legal structure that’ll match your real estate business’ growth and objectives. Once you choose your most appropriate legal business structure, make it a point to register with the IRS and the government (usually your state and sometimes, even your municipality).
- Make branding a priority
As wind is to the windmill, so is branding to any business. When you build a strong and memorable brand identity, it becomes easier to build customer credibility and loyalty, and leave a lasting impression in the minds of the audience. Effective branding doesn’t always take loads of money, but a lot of creativity and research.
In the words of Jeff Bezos, the founder and CEO of the e-commerce company Amazon, “A brand is literally what people say about your business when you’re not in the room”. The biggest reason behind the success of famous real estate brands is the culmination of creative designs and on-point messaging into a strong identity. Here’s how you can go about branding in the real estate business.
- Design a memorable logo
A logo is a small symbol or wordmark used by an organization or entity to differentiate itself from others in the industry. By using this icon on all correspondence materials, advertising collateral, business cards, official website and emails, you give others constant exposure to your brand. The more people become familiar with your logo, the more synonymous it becomes with your brand name and identity. Hence, it’s important to have a unique and memorable logo design that clients can easily associate with the image of your brand and its objective.
We live in an age where the audience is constantly bombarded with advertisements from different brands in the same industry. Whether you’re starting a real estate business or a bakery store, create a unique visual identity that will captivate your target audience and draw them to you. Houses, roofs, towers, and windows are some of the most common symbols used in realtor logos.
If you do a quick Google search for “real estate logos,” you’ll be flooded with similar logo designs. While there’s nothing wrong with these common design trends, being too generic and indistinguishable won’t do any good for your brand promotion. The trick lies in using these regular symbols in the logo with an innovative twist.
Only a seasoned and award-winning design agency like DesignBro can create a unique real estate logo that’ll help boost your brand’s success. They know how to strike the right balance between logo trends and practicality.
- Improve your online presence
If the pandemic didn’t yet make you realize the importance of digital marketing, business isn’t for you. As the coronavirus still continues to wreak havoc in different parts of the world, more and more people are leveraging the online platform to meet their every day requirements. From buying clothes and gadgets to investing in real estate properties, most people prefer doing all transactions online.
According to an authentic source, 63% of shopping processes start online. With such a huge shift in customers’ buying behavior, this is the ideal time to strengthen your business’s online exposure. This way, it’ll be easy for your prospective clients to locate your real estate business online when searching for a particular property in a particular location. It is also important for building your agency’s reputation, boosting client responsiveness, and improving visibility for your services where clients are searching for related keywords. Here’s how you can work on your online presence.
- Optimize your website
When a potential client looks for a particular product or service that your brand offers, it’s important to appear in the first page of the Google search results. For this, you need to use appropriate keywords on your website pages, and follow Google’s recommendations for the use of sitemaps and other tools that help optimize your site’s presence, content and its recent updates on the internet. With search engine algorithms altering frequently, organic search engine optimization (SEO) is the most effective way to increase your online exposure.
- Provide useful information about your business
Though shocking, many brands disregard the importance of making their business information public. This includes company name, location (including city and state, contact details (phone number and email address), social media links, overview of your products and services, and operating hours. Also take the time and effort to create attractive and relevant content. Consider writing and publishing informative articles on your website, particularly on topics that’ll grab your readers’ attention and divert them to your products or services.
This has two main reasons:
Firstly, it attracts users who aren’t perhaps looking to purchase your product or service at that particular time. Even though these people may never really purchase from you, it has a huge advantage – the more visitors your website has and the more time they spend here, the better your ranking and visibility gets on the Search Engine Results Page (SERP). Secondly, it upholds and promotes your expertise in your particular field.
- Build an email list
One of the easiest and most effective ways to improve your online exposure is to create and manage an email list. This’ll help you in connecting with your existing and prospective consumers on a daily, weekly, monthly, or quarterly basis.
- Get your brand enlisted on local directories
Listing your local business on all popular online directories helps with its SEO and makes it visible in as many online search results as possible. What’s more, when you create a business listing with the same details on a range of local listing websites, search engines will show your profile more often for searches using keywords related to your product or service. For example, when someone searches for a residential property in a particular neighborhood, he/she is more likely to make use of Google My Business to search and evaluate their options, more so because it’s faster and easier than browsing individual websites.
- Work on your social media content
Building a strong online connection with your audience is also about promoting your brand on popular social media platforms like Facebook, Instagram, Twitter, LinkedIn, YouTube, Pinterest, Etsy, Poshmark, Amazon, Goodreads etc. While it may not be possible to promote yourself on all of these platforms, you’d definitely want to use some of the most popular ones. Once you research and finalize the platforms where your target audience is most active on, start creating and promoting content that’s best-suited for those websites. For example, create useful videos for your YouTube channel and proper images with attractive taglines and trending hashtags for Instagram.
- Use online ads
If you want to further improve your web presence, online advertising is an excellent option. Advertisements on online platforms like Facebook, Google and YouTube can help boost brand awareness, social media followers, website traffic, and business revenue in a short time span. One of the biggest benefits of online advertising is that it’s more affordable in comparison to traditional advertising methods like television, billboards and direct mail.
According to Google, for every $1 that you spend on your Google Ads, you’ll expectedly earn back $2 as profit. That 200% ROI estimation is quite impressive. What’s more, traditional media like flyers, billboards and placards offer no way to tap on your target audience. You spend your money reaching out to a large audience, hoping that a few will see your advertisement and make a purchase. Online ads give you much more control. Social media platforms like Facebook and Twitter can tell you who to focus on, based on their profile and search propensity. This’ll help you target key phrases or words exclusively for those who are most likely to act.
Final thoughts on starting your real estate business
A real estate business can be a lucrative venture, if done in a prudent way. Just like any other sector, the realty sector is also vulnerable, thanks to the pandemic and its financial fallout. The good news is, the situation is getting better and people are once again investing in real estate properties. However, the competition is fiercer than before and you need to be smart enough to excel at what you do. If you’re planning to start your real estate business, make sure that you engage in these above organizational and branding practices to reach your optimal business goal.
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Business Development Manager with a demonstrated history of working in the Media and Digital marketing sector, Passionate about innovation and bringing the future into new business solutions.
All our subscribers stay ahead of the game with exclusive content and updates. Join the community!