Real estate is one of the fastest growing sectors in India. Rapid urbanisation all across India has called for a high demand in real estate businesses in the main sub-sectors of housing, commercial, retail and hospitality. Metro cities are the major centres of fertile real estate growth. It is predicted that the Indian real estate sector will grow into a 65k Crore industry in the next twenty years. Office spaces, consultancies and manufacturing units are one of the major drivers of this real estate boom, with increasing requirement of Grade-A office spaces all across metro cities there is increase in investment towards leasing spaces. Followed by office spaces the next contenders for demand in real estate come from warehousing and residential housing requirements. Housing plot sales were at an all time high in 2019. Major investments are further fueling developments in this sector, construction development and related activities are reaping in immense flows of FDI ( Foreign Direct Investment). Furthermore, the government is setting up SEZs (Special Economic Zones) all across the nation in economically active regions. The best opportunity for real estate companies to thrive is in the involvement of construction of smart cities. The government plans to build 100 smart cities under The Smart City Project, this has opened up grounds for the emergence of several real estate businesses. Thus, the real estate industry is rewarding and lucrative. Starting a real estate business can be a daunting task, it involves a lot of research and expertise. It is not advised to start a real estate business without any prior experience, usually working for a firm or under a field expert is the best way to get to know the real estate market and how to navigate through it. Read on to find out the basic steps one must follow to successfully take off a real estate business and grow it.
Step 1: Business Plan, Market Research and Speciality
- Making a business plan along with fixing yearly goals will help you keep track of your priorities. Firstly, you must decide if you want to operate on your own or if you want to be associated with a company. Talking to industry veterans and people who are currently operating in the industry is a good place to start.
- After deciding which region or area you want to work in, you must gather extensive knowledge about the kind of real estate that is in demand there, the kind of customers and how much they are willing to spend.
- Choose which niche you want to concentrate on, some of the many sub-specialities of real estate are commercial, residential, land brokerage etc. This plays a pivotal role in building your brand and what your brand will stand for. The many sub-specialities of real estate are commercial, residential, land brokerage etc.
Step 2: Operation and Brand Building
- A newly established real estate business does not require a lot of employees. Hire experienced staff who will be able to build the business up from scratch. Provide on-board training to new staff to make them competent. It is wise to hire people you have worked with previously in different capacities, people who understand the real estate market very well and can acclimatise to the ever changing access market demands of real estate. Keep in mind that the real estate market is highly evolving and in the starting years there will be a lot of highs and lows, the dynamic of the core working team should be dedicated enough to weather any odds.
- Setting up a physical office in a commercial space is required upto some capacity. However, at the beginner stage it is not financially feasible. You can start off by starting a well curated website with detailed information about your brand and add in several reviews of satisfied clients. An authentic website will attract many clients. Eventually, the office may operate from co-working spaces or virtual offices. In a virtual office, an office space may be rented for a few days a month for necessary operations and this space might also be used as the physical address for the real estate firm. The rest of the work can be carried out from a residential space.
- Building a brand which speaks to your clients is an essential part of the journey. The brand logo, motto and basic principles must be established. This might take some planning and market research. Be clear about what you plan to offer and how many options you are willing to provide.
Step 3: Marketing
- In this day and age social media marketing is the most affordable and effective medium. Your website must be easy to navigate, to further increase client interest make sure to include informative blogs and articles about the changing trends in the real estate market. The website contents must be SEO (Search Engine) optimised so that it appears on the first page on google search.
- To increase reach, opt for setting up ads in social media sites and making pages on Facebook, Instagram and Twitter. Many social media handles will enable you to reach out to a large client base. There are many real estate online property market places where you can advertise your products and gain a client base.
- Traditional marketing mediums aren't as cheap as social media but those garner results too. These involve banners, posters, pamphlets, word of mouth etc. There are many real estate fairs and conventions held where different firms advertise their services.
Step 4: License and Registration
- Initially, the real estate industry in India was not well organised, now several legal refinements and real estate industry laws have been instrumental in making this industry transparent and accountable. It is mandatory to register real estate businesses under the Real Estate Act. To get through the legalities a consultation firm may be hired. The real estate business may be registered as a private property dealer’s firm or as a company.
- The registration requires the following formalities; company name, registered company trademark, MOA (Memorandum of Association), AOA (Articles of Association), filling forms and fees with the Registrar of Companies (RoC).
- Certificate of Incorporation will be issued once the documents are verified. The General Deputy Commissioner of a district issues the property dealer license (fees 25K) or company and society fees (50 K). Service taxes have to be filed as individuals, companies have to apply with a GST number.
Running a real estate business has become a very structured process, it takes two to three years to get fully established in the market. Despite the difficulties the real estate market is ever flourishing and once you have established your firm it will attract many investors. It is customary to take out loans before starting a real estate business, it must be kept in mind that it will take at least three years to repay the loans. Real estate businesses have huge profit margins for well established businesses. It might take a while to figure out which niche works for your business but keeping an updated portfolio, accurate market analysis and competitive pricing will guarantee successful sales. Season offers and various payment options will attract a wide clientele. As your real estate business grows you can expand into other categories once you have enough investment.
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