The last economic crisis that hit the world caused the eviction of many people and also resulted in the closure of a large number of real estate companies. However, with the progressive recovery of the economy, the business of selling and renting flats is once again profitable in certain contexts.
Here we show you how to open a real estate, either as an individual agent or setting up your own company.
Previous Steps to Open a Real Estate
We are not going to lie to you. The business of renting and selling real estate has not gone through its best moment in recent years. People had other concerns than spending their savings on new homes. In fact, the bursting of the housing bubble was one of the causes of the last crisis.
However, at present, the situation has moderated, and it is already possible to start a new business in the real estate sector, especially in certain places. It is clear that it is preferable to do so in areas with high purchasing power, or in environments where you can start a business for renting flats in the summer, for example.
In short, you have to be very careful in this sector, therefore, before showing you how to open a real estate we remind you of some preliminary steps that you have to follow.
Define the Business Model
When opening a real estate company, you have several possibilities:
- Self-employed agent: it is the best option if your intention is to dedicate yourself to attracting and renting or selling houses for yourself. The ideal is to associate with a real estate agency that offers you good commissions and adequate working conditions.
- One-person agency: in this case you will work alone, or with some associated agents. The main problem with this business model is that it has higher risk and limited income. In addition, you will not only act as the owner of the company, but you will also have to develop the role of the agent.
- Real estate company: in this case, it would be a matter of setting up a larger real estate agency, with a greater number of agents and with which you can achieve higher levels of turnover.
In any case, before opting for any of these modalities, you will have to prepare a market study and a feasibility plan.
Carry Out a Market Study and Feasibility Plan
The market study for real estate is based on the analysis of the factors that can influence the establishment and development of the business:
- Geographical Context: what is the location of the real estate? Is it in a central location? Do you have good access? Is it easily visible from the street? Is it an area with high or low purchasing power?
- Socio-economic Context: as we have already told you, the real estate sector does not interest everyone, especially after the bursting of the real estate bubble. For the sale of houses or flats, an environment with high purchasing power is better, while for renting summer apartments (in sea or mountain areas) a place with an influx of tourists is ideal.
- Clients: what type of clients visit the area? What is your age or your purchasing power? Selling is not the same as renting, or to people with high incomes, as it is to tourists or students.
- Competition: are there many real estate agencies in the area? Is there a real possibility of competing with them in the portfolio of apartments or prices?
- Real Estate: bet on the sale or rental of flats? Apartments or houses with the land? Brand new or second-hand properties?
- Price: all the above variables influence the sale price. For example, you are not going to set high exit prices in an area where social housing has just been built.
On the other hand, there is the Viability Plan, which consists of preparing a business project to see if it can be profitable. When preparing a viability plan you must take into account the following variables:
- Structure: how is the real estate going to be organized? How many staff is needed in each department? For example, for a small real estate, you only need a few agents, but for a larger one, you will need more agents, and probably someone to coordinate them.
- Objectives: what goals do you want to achieve? You have to take into account the starting point and be realistic. You can’t think of being the king of the brick if you’ve just arrived in the sector.
- Brand Image / Marketing: what values do you want to convey? What strategies are you going to use to reach customers?
- Strengths and Weaknesses: thanks to the market study, you can find out what advantages your business model has and what threats it faces.
- Resources: everything you need to start your real estate. Basically a room, computer equipment, and staff.
- Cost Analysis: how much is it going to cost you to start the business? How long can you get a return on your investment?
How Much Does it Cost to Open a Real Estate?
The budget to open a real estate depends on the size of the company and factors such as the location or origin of the premises.
In this case, we are going to see how much it would cost to open a real estate with the following characteristics:
* The budget is approximate.
- Rented premises
- A manager
- Recruitment and sales assistant or agent.
The initial expenses would be:
- Incorporation of the company as a Limited Company: 500 dollars including notary fees.
- Two months deposit for the rental of the premises: 1000 dollars
- Renovation of the premises: 15,000 dollars
- Furniture: 2,500 dollars
However, this would only be the initial investment. Other expenses would have to be calculated for the first year of the real estate’s life:
- Manager’s salary: 20,000 dollars/ year
- Assistant’s salary: 18,000 dollars
- Self-employed manager + Social Security fee: 12,000 dollars
- Hardware and software: 6,000 dollars
- Marketing and advertising: 6,000 dollars
- Management and advice: 2,000 dollars
- Cleaning and maintenance: 2,000 dollars
- Insurance: 600 dollars
- Electricity, water, heating, and telephone: 6,000 dollars
- Office supplies: 1,000 dollars
In total, if we add the initial investment with these expenses.
Now, imagine that you have sold 20 homes during this first year, for an average value of 200,000 dollars/home. The commission you get is 3%:
- 200,000 x 20 = 4,000,000 dollars of turnover
- 3% of 4,000,000 = 120,000 dollars of income before amortization.
Obviously, during the first year, the margins are not very comfortable. But keep in mind that there are investment expenses that you will not have to do again, such as renovating the premises or the furniture.
Also, be optimistic and think that in future years you will be able to sell more homes.
Read Also:
- 6 Home Improvements Real Estate Agents Recommend for Maximum Roi
- Homeowners Versus Real Estate Investors: Who Benefits More?
- Real Estate Marketing Strategies: Staying Visible in a Busy World
- How Do You Avoid Real Estate Marketing Scams?
- Things to Avoid When Investing in Real Estate
- 8 Best Real Estate Tips for Buyers in 2021
Choose the Legal Form
The most common thing to do when setting up a real estate agency is to establish yourself as a self-employed person or form a company.
On the other hand, you can always open a real estate agency as a franchisee, or become an associate agent of a franchise. Some of the best-known real estate franchises are sapphire Lahore.
Other Profitable Business Ideas
- How to create a gym
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- How to set up a laundry
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- How to start an NGO
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- Open a dog groomer
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The Brand Image of Your Real Estate
The branding or brand image of your real estate is essential. Determine how others perceive your company. Among the fundamental aspects of branding are the name and the logo.
Name or Naming
There is a lot of competition in the real estate business, so the name is an important differentiating factor. The name of a real estate company must be:
- Simple
- Easy to remember
- With hook
- Descriptive, that the client recognizes the type of business in question
- Unique, that there is no real estate with the same name.
- Do not have a web domain with the same name either.
Choosing the name of your real estate is not easy, but you can count on the help of naming agencies that will help you find the perfect name:
- Naming agencies: Sky marketing
In any case, we leave you some ideas with names for your real estate, to see if inspiration comes to you:
- Mipisito
- Happy house
- FurnitureIn
- Planet house
- Home Star
- To live here
- Kuadrado Metro
- Vital space
- Real estate “your name”
- Oferpisos
- Home Apart
Logo
Some of the tips that you should follow to create your real estate logo are:
- Use logos that are a combination of text and image. They are more effective.
- Don’t use too many colors, three at the most.
- The same with fonts, it is not recommended to use more than two different
- Choose a design that the user can easily identify with a real estate agency
- Take into account the type of real estate: one that sells luxury apartments needs a classy and distinguished logo, but one that rents summer apartments can have a more youthful and carefree image.
- Pick a design that works in different colors and sizes and is attractive in any medium of representation.
To design a logo, you have two possibilities: Do it yourself or hire a design agency. If you want a professional result, then there are many design companies that can help you.
Creation and Dissemination of Brand Image
In addition to the name and logo, the brand image is created based on the use of colors, fonts, and, in general, a particular style.
To spread the brand image, it is necessary that this style be present in every corner of the real estate:
- The exterior of the premises
- Interior decoration
- Signs and posters
- Brochures and business cards
- Web page
- Social networks
- Emails
- Ads and commercial campaigns
- Etc.
Requirements to Set Up a Real Estate
To open a real estate no special requirements are needed, as is the case for example with the hospitality business. However, it is essential to comply with municipal obligations, which may vary in each municipality:
- Opening license: to open the premises.
- Operating license: if you are going to establish yourself in a newly opened premises
- Works permit: to carry out conditioning works of the premises
- Change of ownership: if the real estate is already working, but you will be the new owner.
- Real estate property registration: if you have bought a property with the intention of setting up the real estate in it.
- Registration of industrial property: if you are going to found your own brand.
- Fee for garbage collection: depending on each municipality.
- Civil and employer liability insurance.
- Surety insurance (only in certain communities).
Procedures to Open a Real Estate
The procedures depend on the type of legal form you want to adopt:
If you are going to establish yourself as a freelance agent:
- Registration with the Real estate association
- Registration in the Economic Activities Tax
If you are going to create a Limited Company:
- Obtain a company name
- Open a bank account in the name of the company
- Write bylaws
- Sign public deed of incorporation
- Request provisional
- Registration in the Economic Activities Tax
- Declare VAT
- Registration in the real estate association
In Summary
“The branding or brand image of your real estate is essential. Determine how others perceive your company.”
Facilities and Necessary Equipment in a Real Estate
Real estate does not require special facilities. It can serve any local conditioned as an office or offices, in the same way as if you wanted to set up a consultancy or consultancy.
Premises, Furniture, and Equipment
The premises must be conditioned in such a way as to meet municipal requirements. It is the first essential step to obtain the opening license. It will be evaluated by an administration technician. We recommend you check the requirements in your town hall.
Regarding furniture and equipment, you will need:
- Entrance counter
- Wardrove
- Sofas
- Tables and chairs
- Shelves
- Shop window elements
- Safe
- Auxiliary furniture (lighting, coat racks, umbrella stand)
- Decoration elements (curtains, rugs, pictures, etc.)
- Computer and electronic equipment (computer, CRM software, printer, copier)
- Office supplies (folders, filing cabinets, notebooks, staplers, pens, calculator, etc.
Administer and Manage a Real Estate
You already have the business model; the viability plan and you have designed the brand image. You also have a place with all the permits in order. Now you can start your real estate business!
However, now new doubts will assail you: how to manage the real estate? Here we give you some keys.
Tax and Accounting Obligations
Fiscal obligations
If you are a freelance agent:
- Personal income tax
If you have created a Limited Company:
- Corporation tax
Accounting Obligations
If you are a freelance real estate agent:
- Book of issued invoices
- Sales and income record
- Received invoice book
- Investment property registry
- Record of purchases and expenses
If you have created a Limited Company:
- Inventory and annual accounts
- Income and expense book
- Minute book
- Partner records
- Register of registered shares
- Company registration book
- Book of issued invoices
- Received invoice book
- Investment property registry
- Register of intra-community operations
Without a doubt, this is one of the tricky parts of owning your own business. It is best to have the help of an accounting or tax advisor.
Training Necessary for Exercise
When opening a real estate, you can decide to work only as an owner or manager, in which case you would need training or knowledge in business administration and management.
To practice as a real estate agent, you must have knowledge related to real estate law, property law, urban law, real estate taxation, property appraisals, housing development, marketing and communication, mortgage law, and much more. Usually, someone with training as a lawyer, architect, or business is required.
On the other hand, keep in mind that there are some regions where special requirements are required. For example, to work as a real estate agent in Catalonia, you must be registered in the Real Estate Owner’s Registry of Agents.
Hiring Workers
Keep in mind that not everyone in real estate is selling flats or houses. There must also be assistants, customer service, promotion and marketing staff, tax or accounting consultants, cleaning staff, etc.
To register a worker in real estate you need:
- Name or company name of the real estate
- Real Estate Contribution Account Code
- Social Security Regime.
- Name and surname of the employee.
- Employee’s Social Security Number
- DNI of the new worker.
- Worker’s address
- Activity start date.
- Quotation group.
- Type of contract.
- Position to perform.
Data Protection
Real estate agencies have to comply with new data protection laws.
What obligations do these new regulations establish?
- Record all data processing activities
- Inform about the purpose of the treatment or the time that the information will remain in the files
- Identify those responsible for the treatment. Failing that, to those in charge or those legally responsible for them.
- Notify if the data is going to be transferred to third parties, for example, service providers.
- Obtain express consent to save and use personal data.
- Include in a visible place on the web and separate from the rest of the content, the legal notice, the privacy policy, and the cookie policy.
- Sign confidentiality agreements with employees.
- Communicate if there has been a security breach
- Indicate to the user how to exercise their ARCO rights (access, rectification, cancellation, and opposition).
How to Boost Your Real Estate
You already know how to open a real estate. Now what you want is to be successful as Lahore smart city. And for this, as a famous monologue said, you will need three things: promotion, promotion, and promotion.
Digital Transformation
In today’s digital age, it is unthinkable for a real estate company to succeed if it does not have an online presence. The basic thing is to have a website and a presence in the main social networks, but there are many more strategies to grow thanks to the internet.
Web Page
No one would think of opening a real estate without having a website. It fulfills the same function as the physical premises, but on the internet. It is the gateway to your company for internet users.
Information such as:
- Who you are?
- Where is your company located?
- Property portfolio
- Apartments on offer
- Seeker
- System to raise floors for sale
- Contact
- Blog
To set up your real estate website you only need:
- Server and domain: you can find them at a good price in very reliable hosting services.
- CMS: editing programs for the web: The best known and easiest to use is WordPress.
- Business Email – Included with hosting.
Social Networks
Nor can you ignore the power of convocation that social networks have. It is essential to have a profile in which you announce news, apartments or houses on sale, discounts on summer rentals, etc.
- Facebook, Twitter, Instagram, Pinterest, Foursquare.
Search Engine Optimization – SEO
Good search engine positioning is also essential for real estate companies, especially at the local level. For example, if you sell apartments in Valladolid, you will be interested in users finding you when they Google “apartments for sale in Valladolid”.
To obtain good SEO positioning, it is essential to offer relevant content to the user. But, in addition, other techniques are required such as interlinking or getting external links. For this, it is best to go to an SEO agency:
Real Estate Portals
The Internet is saturated with web pages in which users search for the home of their dreams. It is essential to be registered in them, especially in the most important ones.
Other Online Marketing Techniques
In addition, the internet and new technologies offer many other possibilities to promote your real estate, for example, search engine advertising, email marketing, or instant messaging applications such as WhatsApp.
Offline Promotion
Offline marketing is still very important for the promotion of real estate. What options are there to publicize your agency?
- Design an attractive showcase on the premises, where the available apartments and their prices can be consulted without entering.
- Distribution of brochures, posters, or serigraphs.
- Presence in other related businesses, such as tourist offices or similar.
- Organize initiatives that help the community and make your agency known.
- Sponsor events, sports clubs in the city, etc.
- Advertising in traditional media: newspapers, magazines, radio, etc.
- Go to real estate fairs.
- Resorting to the mailbox technique, but without abusing it.
- Telemarketing over the phone (for example, if someone has been viewing a flat on your website).
Brilliant Ideas to Inspire You
- Video Marketing: make videos of the properties in which you appear (you or any other agent) explaining their characteristics or data of interest. Personalizing the content helps the user to identify with the brand and have more confidence in the real estate.
- 3D Infographics: thanks to it the user can see the “before and after” of a home in 360º images.
- Use of Drones: ideal if you want to show the exterior of a home. The drone videos are spectacular but also very useful, especially to show the surroundings of the house.
- Augmented Reality: can you imagine being able to offer the client a guided tour of the apartment without physically going to see it? These types of technologies require investment, but they are the ones that make the difference.
- Hire Influencers: find out who are the most influential people in the sector and get in touch with them. Logically, you have to take into account its cache, but you could establish a remuneration per apartment sold.
Applications to Manage Your Real Estate
Finally, we show you some programs that will be very helpful in managing your real estate:
- Inmovilla: software with more than 15 years of experience in the market. It is a program used by more than 3,000 real estate companies and that manages more than 5 million properties.
- Inmoweb: one of its great advantages is that you can have your own website and also do not pay to have your properties in the main real estate portals.
- Movilia: Real estate CRM with unified customer management, process automation, adapted to computers and mobiles, with its own web design or statistics in real-time.
- HabitatSoft: A platform that offers tools adapted to real estate agents, agencies, or MLS (Multiple Listing Service of Real Estate collaboration system).
We hope you already know how to open a real estate. It is evident that things are always left in the pipeline, therefore, if you have any doubts, we invite you to contact us. At Asesorias.com we have the best professional advisors, ready to solve any question for you.
