Challenges of starting a real estate business

Starting a business, let alone managing one, is a tedious task. However, a real estate business is one that not only requires a great deal of your time and effort but also comes with its own share of prerequisites.

Undoubtedly, it also has a great deal of benefits tied to it. After all, nothing great comes without certain challenges and obstacles and the same can be said about starting a real estate business as well.

The challenges that one might face are a little diverse but nothing that a little persistence and determination cannot handle.


Choosing just the right place that is located amidst the properties and target population is a very critical task. It needs to be spacious, comfortable and highly professional.


The hardest thing to evaluate and manage is financing this program on a large-scale. Now, finance is a very widespread term. It has a lot of subdivisions to it and hence needs to be explained in detail:

Startup cost

Even though it is highly preferable to pay for it yourself, it’s very unlikely that newly emerging entrepreneurs possess such a high amount. The second best option is to opt for a bank-loan.

Many people do not qualify for a bank loan and without a proper business plan it’s incredibly hard to generate an income and payback statement for loans from other sources.

So, to invest in a start-up capital, one can always form a partnership, an investing partner is a plus point in starting up a real estate business.


Registration of the company and licenses take a lot of time and it could get very costly. Small amount from the capital should be kept aside for the registration of the licenses.


With a low budget plan, you need to be wary of the place that you are going to get. Most people, in the beginning, can only afford to rent a place. This adds to the overall costs and reduces the profits generated, a proportion of which is then used to pay rent.

If the entrepreneur starts a business with intelligence the business will be profitable from the beginning, and the company will flourish at an early stage and rent will be bearable.

Utility bills

With a lot of heavy office equipment, computers, printers, fax machines, air-conditioners and whatnot, the electric bill will not exactly be easily payable. Hence, electric bills and phone bills, etc. will be a serious concern.


Even if you start with just a couple of employees for fieldwork and surveying, it’s an added burden in your monthly income.

Business partner

It is incredibly important to find a business partner you are compatible with. You need to find someone your interests and ideas match with. Understanding is also very important, in case you face setbacks need someone who supports you.

The easiest solution in forming a partnership is to form a partnership with someone you already know, to avoid any fraudulent acts in the future.


real estate business
Photo: Fizkes, Bigstock

When you’ve just become a part of the entrepreneurial world, it’s hard to find ways to manage everything all at once.

This may include managing and maintaining your office, keeping abreast of the latest technological advancements in your field, keeping an eye on your competitors, managing all the properties and keeping a track of all your dealers, contractors, etc.

There are various ways to ease this for you and one of them is by using a software for property management, talking to real estate businessmen who’ve become successful, keeping your business up-to-date, and etc. Forming a team can also help in managing a business.


Initially you may not be able to afford the services of a professional web-designer and it would actually be smarter to work on your own to keep a cap on expenses. Working under such strenuous conditions may require you to get affordable assistance to create a simple website.

And because it is a crucial part of your growth, it needs to be excellently made. When people search online for properties, they should come across something presentable and welcoming with details about your services clearly mentioned.

Advertising plays a major role in spreading word about your newly emerged company. Without it you cannot create a positive image amongst your target population.

You need to spend just the right amount of money. Most people consider spending an extra sum of money just on making their business more presentable.

They hold charity events and whatnot, and it’s not always easy to compete with such marketing strategies. Initially if the company is on a low budget then it should not spend on costly advertisements.


As the real estate business has become increasingly popular, there has been a steady rise in the number of people acquiring this as their first line of business.

This has led to more and more competition, and it may not necessarily be a healthy one. It is difficult to come up with unique ideas and strategies that allow your business to stand out and to create your own image in this area.

Finding a quality attorney

Having someone reliable on whom you can count on to support your decisions is mandatory. Most of the lawyers are incompetent and take a large amount of money. Thus, you have to find someone who is both well equipped with knowledge and does not expect an unusually large pay.


Executing the plan in accordance with the picture you’ve painted and what your business plan is can be very demanding. Most companies have a good start-off but eventually fail to execute it professionally and lose their standard. Constant growth and variations in business is necessary to keep it running in a competitive world.

Therefore, you need to lookout for everything that could result in even the slightest setback. You should, however, not let them get to you. Determination is important and a lot of hard work is necessary to assure quality at the end of the day.

It is not realistic to start expecting large sums of money right at the beginning of your business; but if you have set a goal, you will eventually get there.

Be extremely friendly with your clients and develop strong contacts, as this will help you build a good business reputation in the society.  With constant growth, the profitability of the business can both boost and flourish.

Mike Smith
Mike Smith
Executive Editor at Best in Australia. Mike has spent over a decade covering news related to business leaders and entrepreneurs around Australia and across the world. You can contact Mike here.
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