How to Start a Real Estate Business: Property Investment
Learning how to start a real estate business can yield significant returns. Property, the world over, is seen as one of the best long-term investments you can make, particularly in the long term.
Research shows that successful real estate investors in the United States make between $30,000 and $120,000 annually per property. Therefore, should you curate an enviable property portfolio and build your investments over time, you can undoubtedly become wealthy in this line of business.
However, as I illustrate in this article, there are many types of real estate businesses to consider. After deciding which type of business to set up, you then need to take the necessary steps to launch your firm.
So, read on to discover how to start a real estate business this year that will help you to profit from property investment.
Defining a real estate business: What can it include?
There are numerous types of real estate businesses that you should consider. The most common include:
Agents
This is the type of real estate business most people think of. An agent is someone who faciliates the buying and selling of properties. When they achieve this, they take a commission (often anywhere between 5% and 20% of the property’s value).
In many countries, you must have a real estate license to operate legally and a strong understanding of the market you’re operating in. As the requirements differ from place to place, ask Arvin about the licensing requirements for estate agents in your country.
| Main Pro | Main Con |
| ✅You don’t need much capital to get started as a real estate agent. | ❌You usually need a license, which can be difficult to obtain. |
Flippers
Property flipping is a brilliant way to get into real estate. The idea is that you identify old or dilapidated properties that you can buy, fix, and sell in a short space of time. If you do it well, you can often make a quick profit on your work. The process can be super fun, too.
Many property flippers supplement their income via YouTube channels and by monetizing their social media feeds, so there are plenty of opportunities for income generation. On the flip side, you need capital to start a flipping business, often $100,000 or more, depending on where you live. Also, you should have the skills required to successfully flip properties and knowledge of DIY to save on labor costs.
| Main Pro | Main Con |
| ✅You can make lots of profit quickly from just one or two flips. | ❌You need capital to get started – often $100,000 or more + lots of skills. |
Holders
Buying and holding is another real estate business model that can deliver long-term returns. You identify properties in underdeveloped or up-and-coming and buy when the price is low. A few renovations and updates might be required, but you can then put the property on the rental market to earn returns. Then, simply hold the property in your name for 10+ years and sell it at a profit.
The downside to holding is that your money is tied up for a long period of time. While flipping allows you to move from property to property, buying and holding restricts you, as your capital is tied up in the property that you’ve been holding for several years.
| Main Pro | Main Con |
| ✅This is a low-risk strategy as most properties increase in value over a 10+ year period. | ❌While the returns can be good, you need to be patient and may have to wait 10+ years to access your returns. |
Developers
Another type of real estate business is property development. This is the most lucrative all and can yield huge returns if you get it right. It involves buying land, obtaining the necessary permits, and developing houses or condos. Then, when the properties are finished, you can sell them for a profit.
There are many risks involved in property development, and you need a significant amount of capital to get such a business off the ground. Typically, most developers start in other types of real estate before moving into development, given the capital outlay required to begin.
| Main Pro | Main Con |
| ✅When done well, property development can return millions of dollars in profit. | ❌There are many risks involved in development, and a huge capital outlay is required. |
How to start a real estate business: 5 steps to launching your firm
Now that we’ve defined the scope of real estate business, let’s dive into the steps you must follow to get your business off the ground this year:
Step 1: Decide on your business & niche
The first step of how to start a real estate business is deciding which of the above businesses you want to launch. It’s perfectly fine to start as a flipper, for instance, before switching to development later in your career.
From the outset, defining your business approach and establishing a niche is extremely important. If you don’t, you will quickly find that “real estate” is an extremely broad term that can mean practically anything related to property.
A good starting point is to write a short business statement like this:
My real estate business will focus on flipping properties in and around Flint, Michigan.
This is clear, intentional, and concise. You can then begin writing your business plan. This should include financial projections, competitor and market research, and the steps you plan on taking to launch your business this year.
Step 2: Research your legal and tax obligations
Some real estate businesses require a license to operate. For instance, most US states require you to obtain a real estate license before managing properties. If you already have a license and are planning to develop a portfolio in another state, check which states offer real estate reciprocity.
Outside the US, every country has its own requirements for licensing, compliance, and tax relating to property ownership and management. At this early stage, I advise you to do the following:
- Company structure: Consider how to structure your real estate company. Will it be a limited company? Are you planning to operate as a sole trader? Then, take the necessary steps to register your company.
- License: Do you need a real estate license to buy and manage properties in your state or country? Research the specific requirements relevant to you and take the necessary steps to acquire a license. Don’t operate without one, or you risk hefty fines in future.
- Tax: The tax landscape in your state or country makes a huge difference to the profitability of your real estate business. So, educate yourself about the tax ramifications of property ownership before starting. Property taxes are often different to simple income taxes, so understand how it all works before buying your first property. Consult an accountant if you’re unsure.
Step 3: Finance your real estate business
Unless you’re planning to operate as a real estate agent, you probably need at least $100,000 to launch your real estate business. Therefore, the most crucial step in learning how to start a real estate business is getting your finances in order. There are several potential ways to fund your first investment:
- A bank loan or mortgage: Most property investors use a bank loan or mortgage to finance real estate properties. This is the most accessible type of finance, but it’s expensive, and you have to consider interest rates and early repayment penalties. It’s not the best type of finance for flipping, but it can work if you’re keen to buy and hold property.
- Savings: Using your savings to launch your real estate business is risky, but you don’t need to worry about interest. If you’re planning to flip properties, this is your best bet. Use your savings to buy and redevelop the property. Then, when you flip it for a profit, you can add the money back to your savings before moving to your next project.
- Home equity: Depending on your circumstances, you might be able to finance your property business with equity from your home. This gives you access to a lot of capital upfront. But be careful; if you fail to pay it back, you could lose your home. Consult a legal expert before opting for this type of financing to fully understand how it works.
- Syndication: If you’re launching a real estate development business, acquiring money from a syndicate of investors is a good option. You will have to give them a share of the future returns and pay them interest, but it’s a great way to access a large pool of funding upfront.
Step 4: Launch your real estate business brand
With all your ducks now in a row, it’s time to create your real estate business brand. There are numerous components to this, which I introduce below:
Company name
Your first objective is to settle on a name for your real estate company. This can be as complex or as straightforward as you make it. I recommend something related to the area that you’re working in or go for a play on your name or initials if you’re struggling.
Failing that, read our guide that explains how to come up with a business name, which will perfectly represent your real estate brand.
Company logo
Next, you need to create a company logo. Historically, you would need to employ an expensive graphic designer to do this on your behalf. Today, you can use our free AI logo maker to generate a pro logo in seconds.
Prompt our logo maker to create a mockup of the company logo you want to create. Enter the name of the company, details of the industry, and any design features you would like to see. Then, download your logo for free for instant, professional online and offline branding.
Website, blog, & social media channels
The final stage of branding is to create a website, blog, and social media accounts. I recommend WordPress for your website and blog. There are many free and inexpensive themes available. You can then host your website and blog on Bluehost to get underway.
As for social media, consider the best avenues to reach your potential audience. TikTok is great for younger audience, while Facebook is ideal for reaching the broadest possible client base.
Read this brilliant recent blog from my colleague Tehreem, which explains how to launch a brilliant online brand marketing strategy for expert tips and insights.
Step 5: Acquire your first property
With everything in place, it’s time to acquire your first property (unless you’re an agent). There’s no right way to do this. But generally, you must profit from your first purchase, or it will cause significant issues for your cash flow going forward.
So, begin with market research and target areas that have lower-than-average purchase prices for your region. If you’re going to flip the property, it’s best to look for a project house that has a discounted purchase price due to the work required.
Depending on where you live, you might need to instruct a solicitor to buy the property on your behalf. This will affect the purchase price and reduce your profit, but it’s a legal requirement in some countries.
Once you complete your first property, you can start building and promoting your real estate company online and offline.
The verdict: How to start a real estate business
As you can see, learning how to start a real estate business isn’t as difficult as it may seem. The key is deciding which type of real estate company to launch. Then, you can get things underway by following the steps listed above.
As I’ve shown throughout, you can harness the latest in AI technology to help you with much of the registration process. This includes performing crucial research, creating a free logo, and launching your brand online.
Using AI efficiently is a great way to launch your real estate business in 2025, so follow my tips above to get ahead of the competition.
How to start a real estate business FAQ
How do beginners start real estate?
The best option for beginners is the buy-and-hold strategy. It involves the least amount of risk and expertise. However, if you have the necessary skills, you may also consider flipping properties, which is easier to get into than agency or property development.
How much money do you need to start a real estate business?
This depends on so many factors. But realistically, you probably need at least $100,000 if you plan to buy a property outright. You might need even more than this if you plan to flip a property, depending on where it’s located.
Which real estate business is most profitable?
Real estate development is the most profitable of all the property-based businesses. However, it’s also the most expensive to get into, and the business presents the biggest risks of all those introduced here. You should weigh up risk and reward before investing in this type of business.
