Wednesday, November 22, 2017

Open Up! Starting A Real Estate Business

Business ideas come and go, and the more you do business, the more you realize that it’s the fundamentals that mean the most to people. You can pick a quirky product or something that’s outside the box, but really what people need are the fundamentals in life. Housing is one of those things, which is why you can't really go wrong with setting up a real estate business, and while we’ve all thought about real estate as a way to earn an extra bit of cash on the side. The whole house flipping trend seems to be in rude health right now, but running a business in real estate is taking it that one step further. What do you need, and what's the most solid foundation and structure you can acquire?

The first step is to decide on the type of brokerage you will be best suited to. Each type will have various results, so for a residential brokerage you will be dealing with the general public, and if you deal in commercial real estate or international real estate, they will come with completely different challenges. Of course, starting a business means choosing a niche to carve out for yourself so you might be better to pick one type of brokerage rather than go for the one size fits all approach. It’s always tempting to begin with a broad canvas, especially when you're trying to get the right people in place, and it’s the hallmark of the entrepreneur to jump into new and unchartered territories. But you are still better off analyzing the market to meet the demand. Which leads onto the next point…
Location is everything. Look at where you want to place your business, and how much of a catchment area you will need. Where are you in the world? Is there a specific type of demand for housing? Or are you hoping to take advantage of an up and coming location that is being touted as an area for new enterprise? Is there a lot of competition already in your desired area? If so, is it really worth putting yourself there too? You could easily go the way of so many startups and fold within a year. And look at how you plan to project growth, and while it is going to be difficult to determine and plan ahead, the area is integral to how you anticipate your business accomplishments over the next twelve months and beyond.
Your business plan should cover all of this, and if you operate under the entrepreneurial banner and are dipping your toe into real estate for the first time, it’s the legal ramifications that provide the biggest headaches of all. Are you going to be a C and S corporation, sole trader, or an LLC? These need to be ironed out. And accomplishing sales will be a huge part of the business plan, so make sure you identify your marketing strategies beforehand. Marketing real estate can be a tricky thing to do, and if you look at the most common real estate marketing mistakes, the usual suspects are things like not owning your website, and how your marketing relates to your long-term goals. These are things to nail down before the business plan is finalized.  
The biggest stress in trying your hand at real estate is how to finance the company. If you're a seasoned entrepreneur, you may have some tricks up your sleeve, or you may have enough capital to finance the business yourself. Startup and working capital are completely different things, and if you think about your staff and expertise, it’s not like you can pay them peanuts. After all, if you pay peanuts, you get monkeys, and this is not an option in real estate. Real estate requires years of study and qualifications so you will have to analyze your finances and look at how many staff members you can feasibly take on that are the complete package.   

If you have ever made a stab at starting a business, you know the importance of having the appropriate tools in place, not just the correct staff members. Technology is the crutch that we rely on a lot now, and it pays to have the most sophisticated systems in place before opening up for business. So, once you have got the basics in place, and it's time to start trading as a proper company, the one thing that will help your real estate company develop is the relationships you have across the business. This includes not just relationships with your landlords, but also the relationships with the tenants, especially as you will be dealing with them predominantly. The modern approach to running a real estate business means you are liaising with the tenants more than you are the landlords. But it's beneficial to keep the landlords on side, and it can be very difficult to keep both parties happy, especially as you, the real estate business, is essentially the middleman, liaising back and forth between the two.

Therefore, it can be very difficult to keep both parties happy, but this is where the skill of decent customer service comes into play. While you may not have considered this at the outset, now is the best time to start implementing and reiterating the importance of excellent customer service. The problem in running a real estate business now is that people, especially customers, are far savvier than ever before, and this is because of the internet. People know exactly what they want, and what to ask for, so this is where are knowledgeable staff members coming to play. But also, for helping your landlords, and guiding them in the right direction can be a very difficult task. And there are tools you can use to help them as well as help yourself, there are guides on the accounting basics for property managers that you can use to help make for a more cohesive relationship between your business and the landlord. Organization is paramount in keeping your landlord on the same page as you. Much like cowboy builders, there can be cowboy landlords who don't adhere to strict rules and regulations, which make your job far more difficult.

And it's in managing clients where you will get the biggest returns. The basic language of business regardless of the type of company you’re running is all about maintaining adequate relationships with everyone to ensure that the business is ticking over. And the more landlords you get on side, the more you are able to build up your business, but this is something that takes quite a bit of time. The real estate business is all about the long game. And going into running any type of company with this mindset will be the best way to help you cope with changes in running this type of company.

The real estate business may sound like an obvious option to get behind, but as common landlords have found, it’s a myriad of complexities. And yes, every business comes with its own set of issues, but the importance of a service that pleases customers and is profitable is hard to come by, especially when you're trying to get people to trust you in the first instance. They’d much rather go for a reputable seller than you. But people are always looking for bargains so this can be the secret option to getting yourself a slice of real estate. It is certainly a long road, but in starting a real estate business, this will prove that the market in going for a home is always going to be in rude health, which is why it makes complete sense.

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