If you are starting a real estate business it is essential that your investment earns you income. The real estate industry in Kenya has huge potential for growth in technology and infrastructural development, thus attracting new developers and investors into the real estate sector.
Starting a real estate business is not for the faint of heart, it takes planning to start and grow your startup company. It will take dedication, hard work, commitment and at times even failure before you succeed. The founder of Fanaka Real Estate, CEO Moses Muriithi advises entrepreneurs to be focused and be disciplined to attain success in the real estate industry.
It is important to avoid any mistakes that hijack your momentum as you grow in starting up your real estate business. The main challenges to a successful real estate business include greedy brokers, dubious regulatory government agencies, conspiring government officials and a web of complex cartels. It is key to find a trustworthy agent as the industry lacks proper structures with too many fraudsters and brokers. Bribing is another factor that has led some government employees to collude with brokers facilitating illegal transactions. This has resulted in agent conmanship. Although the Ministry of Lands has digitised all land purchases processes it is necessary to be aware of fraud in the real estate sector.
Here is a list of five strategies and tactics you can use in a real estate business to bring additional revenue. You can use this as a guideline for launching your startup company.
Legitimate business plan
A business plan needs to be the first thing in your list in order to be efficient and successful in the real estate sector. You require money to start and operate a new business, in addition a proper business plan gives you a significant advantage. Entrepreneurs who start companies with a completed business plan 64 percent grew their business, 36 percent obtained a loan and 39 percent received investment capital.
A business plan is the written description of your company’s future outlining the first 2 to 5 years of your business strategy.
You will need to secure appropriate funding to get yourself off the ground. All business plans contain a financial plan such as sale forecast, cash-flow statement, balance sheet, profit and loss statement. Research indicates that 82 percent of businesses fail due to cash-flow problems. Financial statements help determine how much funding you require to raise in order to get started. This will help you secure the appropriate funding you need to startup your real estate business, moreover contributing to your growth and success.Banks are less likely to give large amounts of funding to new companies with no assets or income to default on. The vast majority of business loans are for large companies that are already established as 24 percent of business loans go to small firms. Other sources of starting a real estate company include personal savings, trustworthy business partners, angel investors and venture capitalists. It is important to be careful not to give away a significant equity of your company before you get started.
Company structure and management
You will need help while launching your startup company in the real estate industry.
You will require a property manager and appropriate staff to help run your company. The property manager should be capable of handling all responsibilities and property management which will include maintenance, inspections, leasing, property owner communication, rental collection and fees. The staff members should be able to perform certain duties and roles. The vast majority of startup companies are small teams.
You will need to consult with an accountant, a lawyer and a financial advisor. They will help save your business from costly mistakes and any occurring risks. They will help you understand the legal requirements and tax obligations based on the structure of your business such as sole proprietorship, partnership, corporation and limited liability company. It is key that your real estate business is insured.
Location and networking
You need to buy or lease a property to operate your real estate business. Securing enough funding to buy property is worth the investment and will save you money in the long run. The location of your company is important as it will allow easy access for potential buyers or new investors. Furthermore it will help you keep track with the competitive real estate sector, thus helping you meet the needs and requirements of an interested client.
One way to widen your SOI is by going to networking events and interacting with other business owners in the community. The more you interact and engage, the more your name will stick in their minds. You definitely want that should they ever need you in the future. You also need to create a website. It is never too early to start promoting your business.
Marketing and building customer base
It is important to become a marketing expert for your startup to be successful. Learn to use digital marketing techniques like affiliate marketing, content marketing, email marketing, social media marketing (SMM), search engine optimization (SEO) and search engine marketing (SEM). You can also take advantage of some older and conventional methods such as radio advertisements, print advertising, billboards and television. You can hire a marketing director or even a marketing team in launching your real estate startup.
The customers’ needs should be your main priority. They are the lifelines of your business and they need to be treated accordingly. Once you establish a customer base you can use it to your advantage. Establishing, building and maintaining a customer base will help turn your real estate startup into success.
Launching a startup company is not easy, for an entrepreneur you need to determine if your idea is with turning into a business. To succeed in the real estate business you need to be persistent.