The real estate industry has long drawn in entrepreneurial-minded people. It's also an excellent industry for people who prefer a flexible schedule and are excited by the potential for high earnings. Also, there are a significant number of career options in real estate. Whether you're passionate about helping others find their dream homes, investing in properties, or developing commercial spaces, starting a real estate business can be incredibly rewarding. This guide will walk you through everything you need to start a real estate business.
Before we discuss the benefits of starting a real estate business, you must understand how the industry operates in Arizona.
Arizona real estate agents must have a real estate license. The licensing process takes a few months and costs between $900 and $1,500.
As part of the licensing process, you must find a sponsoring broker who will oversee your transactions and contracts. Even though you will become an agent for the brokerage, you will still, in essence, run your own real estate business.
Related Article: How to Become a Real Estate Agent in Arizona
Agents who wish to own a brokerage must have a broker license. Before you go through the broker licensing process, you must have at least three years of experience as a licensed agent. Brokers have more independence than real estate agents and can oversee their own transactions.
This article will focus on the steps required to get started in the Arizona real estate industry.
Surround yourself with encouraging people as you start your real estate business. Succeeding in real estate will require a lot of work and long hours, but it's worth it! Here are some of the benefits of starting a real estate business.
Related Article: Is Being A Real Estate Agent Worth it Nowadays?
Before diving into your real estate business, it's essential to understand Arizona's market. The real estate market is vast and segmented into various categories, such as residential, commercial, industrial, and agricultural real estate. Each market segment has unique characteristics, buyer demographics, and investment opportunities.
For example, residential real estate involves single-family homes, condominiums, and townhouses, while commercial real estate includes office buildings, retail spaces, and warehouses. Many real estate agents choose a niche on which to focus their efforts.
Arizona's real estate market is strong. Staying informed on trends will help you make strategic decisions for your real estate business in the state. Here are some of the current trends in Arizona.
In short, it’s a great time to start a real estate business in Arizona. Here are the first steps.
Starting a real estate career requires careful planning and goal-setting. Here’s how to create a business plan for someone new to the industry.
Understanding your local market is critical to starting a successful real estate career. Begin by researching the real estate trends in your area.
This information will help you know where to focus your efforts.
Also, look at the competition in your area. Ask yourself, "How can I stand out from this crowd of agents? This will help you develop a unique value proposition that appeals to your potential clients and separates you from the competition.
Your business plan starts with identifying your goals.
If you're starting out, it's a good idea to focus on one niche, like helping first-time homebuyers or working with rental properties. Defining these goals early on will give you direction and help guide your decisions on growing your brand.
Of course, your goals and focus might change as you gain experience, but starting with a vision will help you build a strategy for your first few years in real estate.
As a new agent, clearly understanding your financial needs is essential. This includes understanding startup costs like getting licensed and marketing expenses. Estimating how much income you can expect in your first few years is also necessary, as building a steady stream of clients may take time.
Having a budget will also help you plan for personal expenses, especially if you’re transitioning into real estate from another career. Many agents start part-time to manage financial needs until their business takes off.
Entering real estate comes with risks, like market shifts, slow periods, or challenges in finding clients. Identify potential risks and think about how you can manage them. For instance, how will you handle slow months? What will you do if a deal falls through? Having backup plans can help you stay calm and focused when faced with challenges.
By starting with a solid business plan, you'll set yourself up for long-term success in real estate.
You must complete the real estate licensing process for Arizona to work as an agent. Read How to Get Your Real Estate License in Arizona for a detailed explanation.
The licensing steps include:
You must complete continuing education to stay licensed.
As a new agent, you’ll need to decide on the legal structure for your real estate business. According to the IRS website, most real estate agents operate under a sole proprietorship, which is the simplest option.
Each structure has tax implications, so you must consult an accountant or tax attorney to choose the right one.
Once you’re licensed, it’s crucial to understand the laws and regulations that apply to your work. Of course, you will learn these laws during real estate school. They include the following:
Staying compliant with both local and federal regulations will protect your business and help you build a trustworthy reputation in the industry.
As you begin your real estate career, it’s essential to establish a strong business foundation. Here’s how to set up your business structure as a new agent.
Your business name is essential to your identity and is required when registering your business. It should reflect the services you offer and resonate with potential clients. Choose a name that is unique, professional, and easy to remember. Ensure it’s not already in use by checking with your state’s business registry and doing an online search. Your name will become a crucial part of your brand, so take the time to select something meaningful.
It’s important to separate your personal and business finances from the start. Opening a business bank account will help you manage your income and expenses more efficiently and make tax filing simpler.
Understanding and paying taxes is a critical responsibility for new real estate agents starting their own businesses. As an independent contractor or small business owner, you’ll be responsible for paying self-employment taxes, which cover Social Security and Medicare, as well as income taxes. Setting aside a portion of your income for quarterly estimated tax payments is essential to avoid penalties at tax time. Keeping detailed records of your expenses, such as marketing costs, office supplies, and vehicle mileage, will help you take advantage of tax deductions that can lower your taxable income.
Many agents also work with a tax professional to ensure compliance and maximize any tax benefits available to real estate professionals.
Managing your finances is critical, especially when starting in the industry. Some real estate schools, including the Arizona School of Real Estate & Business, allow you to finance your education. Create a budget that includes startup costs, ongoing expenses, and expected income. Track your cash flow regularly and adjust your budget as your business grows. This will help you stay financially healthy and avoid surprises down the road.
You'll need to market yourself effectively to build a successful real estate career. Here are some things to consider as you start your real estate business.
Your brand is how clients perceive you, so creating a strong, consistent identity is essential. This includes your logo, website, business cards, and online presentation. A well-thought-out brand helps you stand out in a competitive market, so ensure it aligns with your target audience and the type of real estate services you offer.
Related Article: Mastering Real Estate Branding: Strategies for Building a Strong & Memorable Brand
As a new agent, your online presence is crucial for attracting clients. Invest in a professional website, optimize it for search engines (SEO), and use social media platforms like Instagram, Facebook, and LinkedIn to showcase your work. Digital marketing strategies like email campaigns and content marketing can also help you build relationships with potential clients.
Social media is one of the most effective tools for new agents. Post property listings, client testimonials, and valuable real estate tips regularly to engage with your audience and build your reputation. Consistency is key, so set a schedule and interact with your followers to maintain an active and visible presence.
Success in real estate often depends on who you know. Start building your network by attending local real estate events, joining professional organizations, and collaborating with other industry professionals, such as mortgage brokers, contractors, and attorneys. Networking can lead to referrals, partnerships, and long-term success.
Here are answers to more frequently asked questions about starting a real estate business in Arizona.
It costs between $900 and $1,500 to get licensed in Arizona. Once licensed and sponsored by a broker, you can start working as a real estate agent.
You can finance your pre-licensing education to get started with your real estate business. Also, partner with a brokerage that offers training, resources, and marketing tools.
Are you excited to get your real estate business off the ground? Start by signing up for pre-licensing real estate courses with the Arizona School of Real Estate & Business. We have a long history of educating real estate agents and brokers in Arizona and will help you pass your licensing exam and start your business.
Contact a member of our team today to learn more!
