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Making Money From Real Estate Business < Business Articles By Mast Business Directory

Before starting to make money from the real estate business we have to know the basics of the real estate business. Real estate has been derived from the word “real property” and it refers to any piece of land, including the air above it and the ground below it, and any buildings or structures on it. It can include business and/or residential properties. It includes land and fixtures together. I.e. Land and any improvements on land such as buildings, houses, fences, trees which is immovable. Real estate businesses generate profit from the selling, renting, and development of properties, home, and buildings.

How to make money from real estate business

Real estate business is very lucrative. Over the past many years real estate has witnessed a very high boom in every city. Property values keep on increasing. People are buying and selling properties at amazing rates and making huge amount of money. As many fortunes can be made in real estate industry, if anyone wants to start a business in real estate industry , mostly people think about becoming a real estate broker while there are many other options also available which can promise high returns in the real estate industry. One can enter in real estate business as real estate broker, real estate appraiser, real estate inspector or a real estate flipper.

Real estate broker: generally a broker’s work is to make the parties meet and enter in to a contract and get commission over it. A broker can represent seller or a buyer or he can represent both. Now the question arises how much commission a broker will get from the deal. It depends on the status of the broker whether a broker is a listed agent or not. If they are listed agents they will get half of the commission of the deal regardless whether they have made the sale or not. But if the agent selling the house is not a listed agent, then they receive only half of the commission along with the residual half after paying to the listed agent. Generally an agent gets 7% commission on dealing price.

As a real estate broker you need to have full market knowledge he should be continuously be updated with the current market scenario like what is the buyers requirements, what’s his likes dislikes, what are the options available for financing, what are the legal requirements to be filled, who are your competitors, how you can target clients. For all this information you need to continuously updating knowledge to keep acquainted with the market.

But if you are not good in selling and selling is not your cup of tea, you would like to go in construction business as real estate appraiser. It requires less time commitment but still in high demand. Basically the appraiser’s work is to determine property’s fair market value. An appraiser makes an evaluation of the property including the main area, any structures attached to it, location and current market scenario like boom or depression. He must also be aware of the construction so as to know in what shape a house or building is in relation to overall market. An appraiser can charge $300 to $ 400 per consultation provided with respect to a particular property.

Real estate inspector: The next position you can opt for entering real estate business is real estate inspector. A real estate inspector’s job is to look for shortcoming. A property has fee leaky roof, improper venting, insufficient lighting and many more like this. Inspector is an expert in construction and building regulations. They have a standard checklist on the basis of which they inspect the entire property. After the inspection is over, real estate inspector prepares a report that shows is there any areas of concern or any area which needs to get repaired before initialising entire selling process. Real estate inspector also charges $ 250 - $350 per consultation.

Real estate flippers: - That is quite a new trend in real estate business. It involves purchasing property which have been abandoned, closed, left or require repair at a low price, fixing repair issues and selling at higher price and making large profits out of deal fee. A flipper purchases a house at $ 250000 and spends $50000 at its repair and sells at $ 400000. Thus he earns a profit of $ 100000 in one deal. It might seem that being flipper is quite an easy way to earn larger amount of profits, there are many issues that needs to be considered before entering that profession. Firstly you require a large financial capital for purchasing the property and make improvements. And you also need to have money in reserves in case cost of repairing goes up or you r not able to sell the home at required price. And the tax that a flipper pays on the earned profits comes under the head of profit from capital gains and that’s why it is taxed at higher rates. So it is advisable to start business with a partner to share financial burden during the first few flips. Keep all these facts in mind while entering into real estate profession.

After choosing from these four options available, you need to do a lot of homework before actually entering into this business. Some of the suggestion for becoming an efficient real estate professional are:

Try to read as many books as you can to upgrade your knowledge on this field. There are many good books available on this subject.

Make a game strategy: Real estate business goes on a risk reward pattern. The more you will be willing to bear risk, the more rewards you are likely to have. And you also have to determine the particular strength areas that you possess that will let you decide in which particular area you want to opt in real estate business.

Market research: It is necessary to learn and have entire knowledge of the market. You will need to have entire geographical knowledge of the particular area in which you are working.

Location of the property holds a prime importance for being successful in the real estate business.

Deriving ways to add value to your acquisitions: Adding values means eliminating the factors which are leading to depress the value of property and upgrading the property you acquire to make it like a hot cake in market.

Positive attitude is the basic of being a real estate professional. A pessimistic person can never be a successful real estate professional. A person should be optimistic that whatever hurdle will arise he is capable of facing it. As real estate business is synonyms with gambling.

Liquidity is other aspect that a real estate professional must have so that he can adopt flexible approach whenever the need arise.

Contacts with bankers financial institutions and with the government itself is a key of success in the real estate business. A real estate profession should have a good reputation in the market.

Goodwill: Reputation matter a lot in the real estate market. If you have a poor reputation in this market you will not be able to succeed in this business.

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