How to Start a Real Estate Business

Real estate is one of the most lucrative businesses out there. Once you gain momentum, there’s no limit to the possibilities that lie ahead.

However, there are plenty of hurdles to conquer if you wish to make a sustainable and profitable business. 

In this article, we’ll outline the key steps to starting a successful real estate business, including researching the market, developing a business plan, obtaining necessary licenses and certifications, and marketing your services.

Read on to get the full scoop on how to start your own real estate business. 

What Is a Real Estate Business

First, let’s outline the components of a real estate business before exploring the details. 

A real estate enterprise encompasses purchasing, selling, leasing, and managing various types of properties — including residential, commercial, and industrial. 

Real estate businesses typically function as brokerages, where agents assist clients in buying or selling properties, or as property management firms that oversee rental properties. 

The real estate business has the potential to produce a generous income., but it’s also worth noting that it’s a competitive industry and can take years to fully establish yourself as a reputable agent. 

If you think you have what it takes and feel excited about the opportunity, let’s delve into the 8 essential steps to starting a real estate business. 

8 Steps to Start a Real Estate Business

While starting any business can be challenging, following a clear plan can help mitigate some of the risks involved. 

Below, we’ve outlined the key steps involved in starting a successful real estate business.

1. Develop a Business Plan and Strategy

Developing a solid business plan is essential to starting any successful business, including a real estate business. 

A well-written business plan will help you identify your target market, determine what services to offer, set clear goals, and develop a strategy to achieve those goals. 

Your plan should also include financial projections, marketing strategies, and an analysis of your competition. 

Developing a comprehensive business plan will help you stay focused and on track — increasing your chances of success in a notoriously competitive industry.

2. Conduct In-Depth Research

Before you dive headfirst into the real estate business, make sure to conduct thorough research to understand the current market trends, risks, and opportunities. 

This research should include an analysis of the competition, legal and regulatory issues, financial feasibility, and potential sources of funding. 

Understanding the market will help you identify the needs of your target audience, which will enable you to offer relevant services. 

Additionally, researching your competition will help you understand their strengths and weaknesses, which will help you differentiate your business from theirs. 

3. Organize Your Finances

One of the appeals of starting a real estate business is that you don’t have to pay expensive university fees to become a licensed real estate agent. 

Aside from marketing yourself, and investing in other resources, pursuing a real estate career can be an economic business venture. 

However, as you build your business, you will want to properly manage your finances to stay legally compliant with any tax implications. Therefore, hiring a professional to assist you is advisable. 

4. Obtain Necessary Licenses 

When it comes to becoming a legitimate real estate agent or broker, acquiring the necessary licenses is a mandatory requirement. 

Depending on your location and regulations, you may need to obtain multiple licenses — including a broker license, salesperson license, property management license, and real estate appraiser license (to name a few). 

Failure to obtain the required licenses can result in fines or even the suspension of your business. So it’s important to check with the local real estate boards to ensure that you have all the necessary licenses and certifications to operate in your area. 

By obtaining the proper licenses, you’ll demonstrate your professionalism and commitment to operating a legitimate real estate business.

5. Choose a Business Structure 

Next, you need to choose the right business structure that best suits the need of your company. This is crucial because it will affect your legal liability, tax obligations, and the management structure of your business. 

Below are the most common business structures to consider:

  • Sole Proprietorship: This is the simplest and most common business structure for small businesses. In this structure, the owner is personally responsible for all business obligations, and the business income is reported on the owner’s personal tax return.
  • Partnership: A partnership is similar to a sole proprietorship, but it involves two or more individuals sharing the responsibilities and profits of the business.
    Similar to a sole proprietorship, the partners are personally responsible for all business obligations.
  • Limited Liability Company (LLC): An LLC is a hybrid structure that combines the liability protection of a corporation with the tax benefits of a partnership/ sole proprietorship. In this structure, the business is a separate legal entity, and the owners are not personally responsible for the company’s debts or obligations.
  • Corporation: A corporation is a separate legal entity from its owners, and it provides the highest level of liability protection. However, this structure is more complex and has more extensive legal and tax requirements than the other options.

When choosing a business structure, it is important to weigh the pros and cons and the legal and tax implications of each option.

Learn more about the different types of business structures here.

6. Build Your Brand through Marketing

A successful real estate business runs on relationships and trust.
After all, you’re assisting someone in spending their hard-earned money on a home they want to commit to and feel comfortable in. 

So you’ll need to use a variety of marketing strategies to reach potential customers and increase visibility. This can include online marketing through social media platforms, content marketing through blog posts and articles, email marketing, and direct mail campaigns. 

Additionally, traditional advertising methods like brochures and newspaper ads can also be useful. Whichever method you use, make sure to take an as authentic and genuine approach as possible. No one wants to feel like they’re being sold. 

7. Grow Your Business

To grow your real estate business, you need to focus on broadening your network, expanding into new markets, and continually updating your skills and knowledge. 

You can network with other real estate professionals who can help you build relationships, gain referrals, and increase your knowledge of the industry. 

Prioritizing customer satisfaction is also essential — it can help cultivate the result in return business and favorable endorsements from clients. 

Furthermore, it’s crucial to investigate new markets and stay current with the latest trends and technological advancements in the real estate sector. 

8. How to Earn in Real Estate Business

Lastly, initiating a real estate business is one aspect, but generating a steady income from it is a separate challenge. As with any enterprise, success in real estate demands commitment and perseverance. 

In this section, we will explore various tactics to help you generate revenue from your real estate endeavor and cultivate a thriving operation.

Price Appreciation

Real estate investments often generate income through two main methods:
rental income/sales and appreciation.

When you own a property, its value can increase over time due to a variety of factors, including neighborhood improvements, inflation, and supply and demand.

This appreciation can lead to a higher resale price and allow you to make a profit on the property. Price appreciation is especially important for real estate investors who intend to hold the property for a longer time to maximize their return.

It should be noted, that price appreciation is not guaranteed, and market fluctuations can cause the value of a property to decline.

Income from Sales or Rentals

When it comes to selling, real estate investors can buy a property, hold it for some time, and then sell it for a profit. 

The profit from the sale is the difference between the purchase price and the sale price minus any associated costs.

To increase the chances of making a profit on the sale, investors must identify undervalued or distressed properties, and make improvements to increase the value of the property before selling.

Rental income, on the other hand, involves purchasing a property and renting it out to tenants. 

The rental income received can cover the property’s expenses, including mortgage payments, property taxes, insurance, and maintenance costs — providing a steady stream of passive income. 

To increase rental income, investors may need to conduct regular maintenance and upgrades to the property to attract and retain tenants.

Both sales and rental income can be lucrative sources of income in a real estate business, but they require careful analysis of the market and the property’s potential to generate revenue.

Benefits of a Real Estate Business

In addition to the eight steps above, the following sections will cover some tips and benefits of a real estate business and how they can help investors build a successful enterprise. 

Here are some of the major benefits of a real estate business:

  • Potential High ROI: Real estate investments can provide a high return on investment, especially when the property is purchased at a low price and sold for a higher price or rented out for a steady income.
  • Steady Income: Real estate investments can generate a steady income stream through rental income. This can provide investors with a passive income that can supplement their primary income source.
  • Flexibility: Real estate investing offers a high degree of flexibility. Investors can choose to purchase and manage properties themselves or hire property managers to handle the day-to-day operations. This flexibility allows investors to manage their time and resources in a way that works best for them.
  • Tangible Asset: Real estate investments provide investors with a tangible asset that they can see and touch. This can provide a sense of security and stability that other investments, such as stocks or bonds, may not offer.
  • Tax Benefits: Real estate investments offer numerous tax benefits, such as deductions for mortgage interest, property taxes, and depreciation. These benefits can help investors reduce their overall tax burden.
  • Diversification: Investing in real estate can provide diversification to an investor’s portfolio. This can help reduce overall risk and provide a stable investment option in an unpredictable market.

Overall, a real estate business can offer numerous benefits to investors willing to invest time and effort to succeed. From potentially high ROI and steady income to tax benefits and diversification — a real estate business can be a profitable and rewarding investment opportunity.

Tips for Doing Real Estate

In this section, we’ll discuss some additional key tips for doing real estate, including developing a niche, focusing on client satisfaction, and keeping up with market trends. 

Essential tips for pursuing a real estate career:

  • Find a Real Estate Brokerage: Joining a reputable real estate brokerage can provide you with the support, resources, and mentorship needed to succeed in the industry. A good brokerage can help you gain access to exclusive listings, provide training and development opportunities, and offer guidance on navigating the complexities of the market.
  • Prospect and Nurture Leads: Real estate is a relationship-based business, so it’s essential to consistently prospect and nurture your leads. This involves identifying potential clients, building a relationship with them, and following up regularly to maintain the connection. By prospecting and nurturing leads, you can increase your chances of securing new clients and growing your business.
  • Pay Your Dues: Like any profession, success in real estate takes time and effort. You’ll need to pay your dues, put in the hard work, and be patient. It may take several months or even years before you start seeing significant results, but staying focused and committed will help you achieve your goals.
  • Join Networking Events: Networking is critical in real estate, and joining organizations such as the National Association of Realtors (NAR) can help you connect with other professionals, stay up to date with industry trends, and gain access to exclusive resources and training opportunities.
  • Build an Online Presence: In today’s digital age, having a strong online presence is essential for any real estate professional. This involves creating a professional website, establishing a social media presence, and using online marketing strategies to reach potential clients. A strong online presence can help you build your brand, increase your visibility, and generate leads.

Building a Thriving Real Estate Business

Whether you’re interested in investing in properties or pursuing a career as a real estate professional — there are several things to keep in mind if you want to succeed in the industry. 

From developing a business plan to building a strong online presence, every step you take can contribute to the growth of your business.

Stay ahead of the curve by keeping your finances in order and up to date. Check out doula’s bookkeeping services where our team of professionals can help you manage your income and expenses while staying organized and legally compliant.


Is real estate a good business?

Real estate can be a rewarding and lucrative business if done correctly and with the right strategies in place.

How much does it cost to start a real estate business?

The cost of starting a real estate business can depend on several factors, including location, services offered, and marketing budget. In general, they can range from a few thousand dollars to tens of thousands of dollars.

What is the easiest way to start in real estate?

One of the easiest ways to start in real estate is by working with an established brokerage and gaining experience and knowledge through training and mentorship.

Is real estate good for beginners?

Real estate can be a good industry for beginners, but it requires effort, dedication, and a willingness to learn and adapt to market trends. Working with an established brokerage or mentor can help beginners gain valuable experience and knowledge.

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