4 Major Components to Starting a Real Estate Biz

Despite its well-publicized stumble in the late 2000s, real estate has always been an exciting and profitable industry. For the right personality with the right work ethic, there is a veritable fortune to be made selling real estate. It is also a very versatile field, encompassing residential sales and rentals, commercial sales and leasing, and even time shares. To achieve success in a new real estate business, it is imperative to ensure the following four components are in place.

Licensing

All 50 states require licensing of one kind or another to be eligible to open a real estate business. In some states, a newly licensed agent who has just passed his real estate exam may open his own business, while in others he must work as a sub-agent of an established broker for a set amount of time before going into business for himself. It is wise to check the licensing requirements in one’s state before beginning the process of starting a real estate business.

Location

It is the biggest cliché in real estate, but it is true: Location, location, location. A real estate office’s location can mean the difference between success and failure. To ensure the right spot is chosen to launch a real estate business, one should first conduct exhaustive market research covering population, average sale price, price trends, demographics, and the level and type of competition in the area. If one were to look at real estate offices which have failed, he would find that close to 100% of them did inadequate market research on their locations before going into business.

Customers

No business can survive without customers, regardless of the industry. Before starting a real estate business, one must have a plan for obtaining customers. This could be through a strong natural market consisting of family, friends, or former coworkers; marketing methods such as direct mail or billboards; purchasing third-party Internet leads; or any combination of these methods and others. Like with location, it is important to conduct market research, which can help you accurately and realistically predict your return on investment for any cost-bearing method of lead generation.

Agents

The agents are the driving force of any real estate business. It is imperative for a real estate company to have the right people on its team. However, it can be difficult to ensure that one is hiring the best agents possible. This is why many successful companies turn to a real estate staffing company. A good staffing agency can pre-test and pre-screen real estate agents, ensuring they have the requisite knowledge, drive, and personality to be successful, along with a clean background, E&O insurance, and other necessities.

Real estate is a great industry in which to build a business. But for it to be successful, it must be built on the right foundation. The four components above make up that foundation, and if it is laid correctly, the sky is the limit!