How to Start a Property Business

Updated on 14 April 2023

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Starting a property business is appealing to many entrepreneurs. There’s a lot of money to be made in property, and property has always been regarded as a reliable investment option.

The good news is that there are also many different paths you can take if you want to start a property business. While developing and investing in property is where the big business lies, you can always get a foot in the door through other approaches.

To help you get started, here’s a quick guide on what you need to know about starting a property business.

Establish What Type Of Property Business You Want to Start

First of all, you need to establish what type of property business you will run. Many business opportunities exist involving property.

Some of the most popular options include:

  • Property development
  • Renting out property as a landlord (commercial or residential)
  • Flipping properties
  • Managing properties
  • Bird dogging properties
  • Selling properties as a real estate agent
  • Offering property-related services (law, real estate photography, accounting services, etc)

Of course, if you’re looking to start a property business, you’re probably thinking of investing in property. However, if this is not financially viable, there are still other ways to enter the property business.

How to Invest in a Property Portfolio

The biggest challenge to starting a property business is finding the capital to invest in your property portfolio. While this may seem daunting, there are various options available to those looking to invest in property.

Apply for a Home Loan

The most common strategy for purchasing property is through a home loan. This is when the bank finds the property, which you pay back through instalments. Ideally, you’ll be able to put down a large enough deposit to gain a better interest rate and lower monthly instalments.

Other People’s Money (OPM)

Using other people’s money to invest in property is a strategy that many property investors use. To do this, you’ll need to partner with other investors to purchase a property. These kinds of partnerships need to be mutually beneficial, where each partner plays on their strengths.

Other People’s Property (OPP)

Taking an OPP approach is when the seller funds the purchase of the property by themself under the agreement that you will pay them the value of the property over time.

Purchasing Shares

If you’re not ready to invest in direct property ownership, you can invest in property shares. This could be done via a broker or on the stock market.

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Look for Property That Will Generate a Profit

If you’re investing in property as a business, you’ll want to look for an affordable property that will be able to generate a profit from the start. One of the best ways to do this as a beginner is to buy a property to let.

This is when you purchase a property to rent it out and you use the rental income to cover the property purchase. To do this successfully, you’ll need to find a property and area where you can consistently generate a rental income.

Ideally, you’ll also want to try to find a property that will significantly increase in value over time. It’s important that you weigh up the price, yield, and risk factors associated with the property to help you find the best possible property for your business.

Steps to Start a Property Business

Once you have established what type of property business you want to start, you’ll need to take the right steps to set your business up.

No matter what kind of property business you’re going to establish, here are the general steps you’ll need to take to do it:

  • Develop a business plan outlining your property business’s scope, goals, and strategy
  • Conduct in-depth market research to understand your target audience, competition, and industry trends. Of course, you’ll also need to understand the state of the property market
  • Secure financing or investment for the business, if necessary
  • Register your business with the CIPC and obtain any necessary licenses and permits
  • Develop a marketing strategy to promote your business and attract customers
  • Hire staff or contractors, if needed, and establish an operational plan for the business
  • Launch the business and continually evaluate and adjust your strategies based on your business performance and market changes

These are the basic considerations you need to make when starting a property business. Although, each property business is unique, and will have its own specific requirements. This is why it’s so important to thoroughly understand your particular business model and its requirements when you get your business off the ground.

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