Are you looking to get started with your own real estate business? Now that you are reading this article, we are here to help . One must remember that starting a real estate business is quite a herculean task. With a real estate business, there is not only a huge amount of risks that you will carry, but you also don’t get to make sales in a regular manner.
However, that shouldn’t stop you from making profits from time to time. . If you are thinking of starting a real estate business, we’re here to your rescue! No, we’re not going to give you any statistics and bore you! Let’s jump right into the article, where we shall talk about real estate business, its types and a few tips that can help you get started with your real estate business.
What is a Real Estate Business?
In order to understand the real estate business, we must start with defining what it is all about. In simple words, real estate refers to property that is in the form of land. Here, ‘land’ can refer to farm land, barren land, a plot with or without a building, an apartment, a shop or any other space that is owned by an individual or a group of individuals. This ‘land’ can also be natural or man-made.
Real estate business refers to the act of buying, selling, investing and producing property. However, real estate is different from owning personal property (objects) such as jewellery, furniture, plants and machinery is different from real estate property. Several realtors suggest that investment in real estate is easy as it brings a potential level of cash flow and leads to an appreciation of your investment to a great extent.
What are the Different Types of Real Estate?
Now that we have defined real estate for you in simple terms, let’s take a look at the different types of real estate. For your ease in understanding, we have classified real estate into four distinct categories, they are:
Residential Real Estate
Residential real estate property refers to the construction, renovation and resale of residential properties. In this context, residential property refers to homes such as single-family homes, high-value homes, vacation houses, farmhouses (for personal use), duplexes, quadruplexes and triple-deckers. It essentially refers to any kind of property that is held by individuals for the sole purpose of residing.
Commercial Real Estate
Commercial real estate refers to any kind of property that helps in generating income for the owner of the property. Commercial real estate is an umbrella term that includes properties such as shopping malls, hotels, restaurants, office buildings, commercial complexes, medical centres, hospitals, educational institutions and other buildings of commercial importance. One can also include apartments, high-rise buildings and luxury villas under the purview of commercial real estate since they are constructed with the sole purpose of generating income for one or a group of individuals.
Industrial Real Estate
Industrial real estate refers to any kind of property that is used for industrial purposes. The different types of property that can be termed industrial real estate refers to industrial complexes, manufacturing units, warehouses and other property that is used for manufacturing, research, storage and distribution of goods. Industrial property is often located in the outskirts of the city, to avoid any kind of discrepancies that can disturb the daily life of individuals in the city.
Lastly, we also include ‘land’ under the type of real estate. Here, the land simply refers to any piece of land that is not covered by water. We can include empty land, barren land, wasteland, ranches, farms or any other type of undeveloped land.
Is Real Estate Business Actually Profitable?
Coming down to the million-dollar question, Is the real estate business really profitable? The answer to that is YES, the real estate business is highly profitable. The whole idea behind every business is to generate profits, and this holds true for the real estate business as well. Though a real estate business helps to generate huge amounts of profits it comes with its own set of risks.
As the value of your property appreciates, you can make profits in a constant manner. Appreciation refers to the increase in the value of your asset, in this case, your property over a particular period of time. This appreciation effect is usually caused by an increase in the demand for land, followed by reduced supply. Hence, one can easily make profits in the real estate business by buying and selling long-term investments, short-term investments, redevelopment, mortgages, brokerages and even commissions.
How to Start Real Estate Business in India?
Time needed: 2 minutes.
Step by step guide for how to start with a real estate business?
- Identify your business goals
Before you start your real estate business it is important for you to set your business goals. The first step you must take in starting your real estate business is to establish your business goals. It can include your professional goals, personal goals and even your financial goals. While you chalk out your goals, it can help you to predict your future decisions and gather investments accordingly.
- Conduct market research
Research is a key to starting every business. It is important to ensure that your vision is aligned with the current research trends. Whether you are going to become a realtor, buyer, builder or going to start a real estate business, research must be your foundation. You must have ample knowledge about land, legal procedures, the market value of land, construction and product and the power to market the final product to the ultimate consumers. Unlike other businesses, a real estate business can lead to a heavy expense even if you make a small mistake. Therefore, researching and applying concepts of land, building, town planning, land development and commercial knowledge stay intact to your vision.
- Plan your finances
Out of several other businesses, the real estate business requires a huge amount of investments. Even if one wishes to buy a piece of land, they invest their life savings into making it their dream property. You can start your real estate business with your own finances, a mortgage or borrow loans from any financial or government loans. You can also start your real estate business either through a partnership agreement, joint venture or even offer a fixed percentage of your profits to a pool of private investors. Hence, there are several alternatives for you to gather your finances that are needed for your real estate business.
- Crafting your strategy
You must also plan your business’ strategy keeping in mind your goals and abilities. The different elements that must be included in your strategy, but are not limited to are landscaping, construction, planning, finances, marketing and so on. You must create short-term and long-term strategies that invest in you to run your real estate business in a smooth and efficient manner.
In conclusion, real estate business is a rewarding business option. It does come along with its own set of risks, if managed, planned and carried on well, your real estate business can become a highly profitable venture.