Starting a real estate business in India can be a highly rewarding venture given the country’s rapid economic growth and urbanization. With an increasing demand for housing and commercial properties, the real estate sector presents numerous opportunities for aspiring entrepreneurs.
Conduct Thorough Research
Follow Industry Leaders
Gain insights from seasoned professionals in the real estate sector. Learning from their experiences can provide valuable knowledge and help avoid common pitfalls.
Understand the Indian Real Estate Market
Analyze key factors such as demographics, GDP growth, housing trends, and local regulations. A thorough understanding of these elements will aid in making informed decisions.
Research Current Market Conditions and Trends
Investigate local demand and supply figures, government policies, and market dynamics. This research will help you identify lucrative opportunities and potential challenges.
Pick a Specialty
Commercial Brokerage
Consider focusing on commercial properties, which can offer higher returns but may require more significant investment and expertise.
Residential Brokerage
Specializing in residential properties can be more accessible for beginners and has a vast market, especially in urban areas.
Land Investments
Investing in land can be profitable, but it requires a deep understanding of legal and regulatory aspects.
Identify Popular Areas and Properties
Use online tools and databases to find high-demand areas and properties that sell quickly. This information will help you make strategic investment decisions.
Register Your Business
Business Name Registration
Register your business name with the Registrar of Companies (RoC) to establish your legal entity.
Obtain Necessary Licenses
Acquire a license from the Home Ministry to operate as an agent or broker. This step is crucial for legal compliance.
File Taxes and Paperwork
Ensure all tax filings and regulatory paperwork are in order with the Income Tax Department to avoid legal issues.
Obtain a License
State Government Real Estate License
Obtain a real estate agent license from the respective state government. This license is increasingly necessary due to the professionalization of the industry.
Develop a Business Plan
Identify Your Target Audience
Define your target market and develop marketing strategies tailored to their needs.
Marketing Campaigns
Create compelling marketing campaigns, invest in online advertising, and develop lead magnets to attract potential clients.
Understand Costs and Fees
Be aware of the various costs associated with real estate transactions, including mortgage rates, registration fees, and advertising expenses.
Expand Your Network
Build Relationships with Suppliers and Clients
Networking is essential in real estate. Establish strong connections with suppliers, clients, and other industry professionals.
Attend Industry Events
Participate in real estate events and conferences to expand your professional network and stay updated on industry trends.
Build an Online Presence
Professional Website
Create a professional website showcasing your properties and services. A well-designed website can attract and engage potential clients.
Utilize Social Media
Leverage social media platforms to reach a broader audience and engage with potential clients. Regular updates and interactive content can boost your online presence.
Provide Excellent Service
Prioritize Customer Satisfaction
Ensure prompt responses to inquiries and provide transparent information to build trust with clients.
Stay Updated on Market Trends
Continuously update your knowledge of market conditions and regulations to offer the best advice and services to your clients.
Real Estate Business – Realtors
Building material suppliers, builders, building labour suppliers, architects, engineers, construction equipment providers, financiers and realtors or brokers all come together to create the vibrant real estate business in India. Key amongst this group are the realtors or brokers who are the interface with the consumers in the transaction processes providing advice, information and help negotiate the deals. In this article we mainly look at how to start a real estate brokerage business.
Business Registration
Most real estate agents operate as unregistered businesses – typically a proprietorship or unregistered partnership. However, the real estate brokerage 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 important 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 Real Estate 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 in relation to sale, purchase, leasing or renting, of real estate and includes a real estate consultant. “Real estate consultant” means a person who renders in any manner, either directly or indirectly, advice, consultancy or technical assistants, in relation to evaluation, conception, design, development, construction, implementation, supervision, maintenance, marketing, acquisition or management of real estate.
Service tax is chargeable on any taxable service rendered by the real estate agent or real estate consultant for a consideration in money. The gross amount charged by the service provider is taxable at 14% under the service tax act. Therefore, those real estate agents or real estate consultants having an annual taxable services billing of more than Rs.9 lakhs must obtain service tax registration and collect service tax from client when annual taxable services billing exceeds more than Rs.10 lakhs per year.
Real Estate Agent License
The real estate business is becoming more organized and Haryana State is among one of the first state in the country to establish licenses for real estate agents. In Haryana, individual real estate agents have to pay a license fee of Rs.25,000 while a company would have to pay Rs. 50,000 for the licence. Real estate agent license from Haryana State would be valid for five years and can thereafter be renewed for a fee of Rs.5000 for individuals and Rs.10,000 for companies.
In addition to real estate agent license from State Governments that are mandatory, real estate agents can also become a member of National Association of Realtors – India (NAR-India). NAR-INDIA is a national level umbrella organization representing the interests of thousands of realtors/brokers operating all over the country. NAR-India aims to elevate the standards of practice of the real estate brokerage business to a global level where ethics, transparency, accountability, rule of law and good governance prevail.
The main benefits of NAR-India Membership for Realtors include:
- Beneficiary of a credible image of the realtor profession in India.
- National and international level business networking opportunities.
- Consumer recognition in local as well as global markets.
- International visibility of local business thru’ global niche listing.
- Platform for lobbying with governments for benefit of the profession.
- Opportunity for skill upgradation thru’ various education programmers, conferences and conventions on a continuing basis.
- Access to accepted standard procedures, practices and products.
- Platform for grievance redressal and conflict resolution.
- Access to the globally recognized REALTOR logo, subject to conditions.
FAQs
What are the key steps to starting a real estate business in India?
To start a real estate business in India, you need to:
- Choose a business structure (sole proprietorship, partnership, LLP, or private limited company).
- Register the business with the required authorities.
- Obtain licenses such as RERA (Real Estate Regulatory Authority) registration.
- Develop a business plan, including financial projections.
- Build a network of contacts (builders, agents, etc.).
- Invest in marketing and branding.
Is it necessary to register with RERA to start a real estate business?
Yes, as per the Real Estate (Regulation and Development) Act, 2016, all real estate agents and developers need to register with RERA for operating legally. It brings transparency to the industry and protects home buyers’ interests.