Last Updated on July 2, 2022 by Cooper Hayes
Starting up a Small Real Estate Business
If you’re thinking of starting up a small real estate business, there are a few things you should know.
Despite increasing interest rates (By the end of 2022, experts predict that the 30-year, fixed-mortgage rate will range from 5% to 7% across the USA), real estate is still one of the most excellent small business possibilities available. There are several sorts of enterprises in the real estate industry, each with its own set of interesting possibilities.
The first, and most common form of real estate business, is flipping houses. This involves purchasing a property, making repairs or renovations, and then selling it for a profit. The key to success with this model is to purchase properties at a discount and then sell them for market value or above.
To find good deals on properties in Texas, you can search our listings, attend foreclosure auctions (or check foreclosures for sale on our website), or work with a real estate agent who specializes in finding fixer-uppers. Once you’ve found a property that you think has potential, make sure to have it inspected by a professional before making an offer.
Once you own the property, it’s time to get to work. Depending on the condition of the property, you may need to do major renovations (like gutting the kitchen or bathroom) or simply cosmetic updates (like painting, new carpet, or landscaping). If you’re not experienced in home repair, it’s best to hire a professional contractor to do the work for you.
Once the repairs are completed, it’s time to put the property back on the market and find a buyer. You can use our website to list your property for sale, or work with a real estate agent to help you find the right buyer.
Another option for starting a small real estate business is to purchase rental properties. This involves finding properties that you can rent out to tenants, either long-term or short-term.
Short-term rental business
If you have the financial resources to acquire a property in a desirable location, short-term rental real estate might offer significant earnings. There are several short-term rental markets, and some of them turned out to be pandemic-proof.
Those who have the most success in the short-term rental market offer properties that are well maintained and provide a high level of customer service, which is similar to that offered by a concierge.
You don’t even have to live in the same state as the property, but you must be a very responsive landlord and have good ties with local maintenance and repair firms. You may use the resources and support of established platforms like Airbnb and Vrbo to promote your rental, or you may call on the assistance of other proprietary short-term rental management software.
At the same time, the short-term rental business is becoming more and more regulated, with certain areas or communities outright prohibiting them. So, if you’re considering this option, make sure to do your research first.
Long-term rental business
The long-term rental business is a more passive form of real estate investing that can offer a steadier stream of income. To be successful as a long-term landlord, you’ll need to purchase properties in areas with high demand for rental units and low vacancy rates.
You’ll also need to screen tenants carefully, as you’ll be relying on them for a significant portion of your income. Once you’ve found a tenant, it’s important to stay on top of repairs and maintenance to keep the property in good condition.
If you’re not interested in being a hands-on landlord, you can always hire a property management company to take care of the day-to-day tasks for you.
Wholesaling Real Estate
The last form of real estate business that we’ll discuss is wholesaling. Wholesaling is when you find a property that is undervalued and then sell it to another investor for a higher price.
To be successful at wholesaling, you need to have a good understanding of the local real estate market and be able to find properties that are being sold for less than they’re worth. You’ll also need to build a network of investors who are interested in buying properties from you.
Once you’ve found a property that you think has potential, you’ll need to make an offer to the seller. If they accept your offer, you’ll then find an investor to buy the property from you at a higher price.
The key to making money in wholesaling is to find properties that are being sold at a significant discount and to have a buyer lined up before you make an offer to the seller.
Starting a small real estate business can be a great way to make money and build wealth. There are several different options for starting a small real estate business, each with its own set of pros and cons.