Essential things before starting a Real Estate Business

By | January 21, 2019

Realtors -Real Estate Business

Builders, building material suppliers, labors suppliers, architects, engineers, construction equipment providers, financiers, and realtors or brokers all come together to create a vibrant real estate business in India. Real Estate is a business entity that deals with the selling, buying, investment or management of real estate property, land building or any physical immovable property. Key amongst this group is the realtors or brokers who are the interface with the consumers in the transaction processes providing advice, information and help negotiate the deals.

Starting a real estate business, it isn’t so easy. Just like starting a business in any industry, entrepreneurs should conduct many kinds of research and craft your business plan before actually jumping into the business-like activity. Here’s a  look at how to start a real estate business:

Conduct thorough Research.

Design your business plan preceded by in-depth research on your industry, your specific niche, competitors and the market. What resources will you need while executing these plans? What will set you apart from other competitors?  Which thing will help you drive more profits? Clarify your goals, and prioritize your plans, both financially and personally.

Create a business plan and note down.

After in-depth research move forward to develop a business plan and write it down. This is where you carefully examine your business model, start-up costs, overhead, and the other fine details of running a business. While writing a business plan, there are some elements you need to consider:

•    Budget:

 Estimate your expenses and earnings. Break down expenses into categories, such as marketing, advertising, and operating costs. Insurance, rent, tech support, Web and phone service, taxes.

•    Business structure:

Determine what kind of company structure will be the best fit for your – sole proprietorship, LLP or Private limited company  Registration.

•    Internal structure:

Determine advertising expenses, referral fees, and commission structure.

Obtain all required licenses.

Most real estate’s operate their business as unregistered businesses – typically an unregistered partnership or a proprietorship. However, the real estate business is now becoming reformed and formalized. License from State Government is mandatory for the real estate agent, and they can become a member of NAR-India National Association of Realtors-India. It is a national level organization representing the interests of thousands of brokers/realtors.

Business Registration

Most real estates operate their business as unregistered. However, the real estate business is now becoming reformed, formalized and elevated to international standards to win over customer confidence and compete with large online real estate brokerage platforms. Therefore, it is essential for those starting a real estate brokerage business to establish their business as a Private Limited Company or Limited Liability Partnership (LLP) to improve customer confidence and bring about professionalism.

Service Tax Registration

The services provided by a Real Estate Agent or Consultant are taxable under the Service Tax Act. As per the Service Tax Act, “Real estate agent” means a person who is engaged in rendering any service concerning sale, purchase, leasing or renting, of real estate and includes a real estate consultant.  Service tax is a charge on any taxable service rendered by the real estate agent or a consultant for a consideration in money.  The amount charged by the service provider is payable at 14% under the service tax act. Therefore, those real estate agents or consultants having an annual taxable services billing of more than Rs.9 lakhs must obtain service tax registration.

Conclusion   

Your new real estate career — it could be the most brilliant move of your life. There isn’t a limit to how big of a business you can build. You can start your own brokerage and grow your team. Getting into real estate can ultimately be a lucrative decision, but a large number of new agents don’t make it past their first couple of years. The future of companies in this sector is most directly affected and tied to changes in global economic conditions. Plan accordingly.

Afleo.com is a leading website which helps start-ups save their time by providing legal services like GST Registrations, Business Registration, Trademark Registration, Private limited company Registration, LLP Registration, etc. Through these services, we help to deal you with legal red-taping and much other time- consuming processes.

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