The real estate industry is a challenging one to enter, but it can be a rewarding career choice for the right individual. There are many ways to make a living in real estate. Depending on how much time and money you’re willing to invest, you can choose from several career choices or eventually combine a few into a successful business.
Here are five popular real estate business options.
1. Real Estate Agent or Broker
Becoming a real estate agent is one of the most common ways to join the real estate industry. It can also be a challenging career to begin. In most states you’ll need to meet certain requirements to become licensed, often including completing specific coursework and passing an exam. As real estate agents don’t get paid until a property closes, you will also need to be able to support yourself financially until your first commission comes. That means any business startup costs and marketing expenses will need to be paid out of pocket.
Real estate brokers do many of the same things as real estate agents, but there is additional education required to become a broker. This is usually the next step after becoming an agent, as brokers either work independently or start their own brokerages and hire real estate agents to work for them.
Being a landlord is another way to start your career in the real estate agent. Unlike a real estate agent or broker, there are no education requirements to becoming a landlord. All you really need to get started is to own a property that can be rented to someone else. This can be a private residence (single-family home, condo, apartment building, etc.) or a commercial property that you lease to businesses.
Working as a landlord can provide good cash flow that can be used to pay down the mortgage, reinvested into the property, or used to purchase more rental locations. Many landlords work full time, especially if they own multiple properties. However, you can hire a property management company to help you manage your rental portfolio.
3. Property Management
If you like the idea of being a landlord but don’t own any properties, then property management might be a good fit. Property managers oversee other rental properties owned by someone else. They typically handle many of the day-to-day activities, including collecting rents, organizing repairs, communicating with existing tenants, and screening potential renters.
A good professional network can help make managing properties easier. Knowing reliable tradespeople and contractors who can quickly conduct repairs for a reasonable price helps keep both the property owner and tenants happy. It can also be useful to know good real estate agents to help fill rental vacancies and a real estate attorney to assist with larger complaints or issues.
4. Real Estate Investment
Investing in real estate can be a gamble. But if you know what you’re doing, it can also be a great way to build a successful career in the real estate industry. Real estate investment is often the next step for other real estate professionals who are ready to put the money they’ve saved into buying their own properties.
Real estate investment includes different types of activities, such as buying a rental property. You can also buy tracts of land, with the goal of selling them for a profit sometime in the future. Another popular option is flipping homes—buying rundown properties, renovating them, and reselling them at a profit.
5. Land and Property Development
Land and property development is similar to flipping homes, but typically on a larger scale. There are two main ways of working in this area of real estate: either buying raw land and building on it or redeveloping old buildings for new use.
The key strategy behind land and property development is to create value from an undervalued or underutilized asset. You will need to be on top of population and movement trends, to help you decide where to purchase. Land and property development also involves a lot of negotiating with local governments over local planning and zoning.
Protect your business with Errors & Omissions insurance
No matter what are of real estate you build your career in, you’ll want to protect the success you are building. Errors & Omissions insurance for real estate professionals can help shield your business from many types of liability claims.
Errors & Omissions (E&O) insurance, otherwise known as Professional Liability insurance, protects your business against claims of negligence, misrepresentation or mistake, as well as document or paperwork errors. This includes:
- Breach of contract
- Undelivered services
- Missed deadlines
Errors & Omissions for real estate professionals pays attorney’s fees and other court costs, including settlements and judgements, resulting from relevant claims. It also shields you against claims without merit, which can still be expensive to clear up.
If you’re ready to find the right E&O insurance policy for your real estate business, visit the BizInsure website for more information.