So how to start a real estate business in India. I will share a complete proven formula step by step to become super successful in the world of real estate business.
Read the article carefully if you are super serious on how to start a real estate business in India. We will start with the basics. First, we will discuss the mindset, how a successful investor thinks, how he finds the best deal possible, and how you can do the same.
How to Start a Real Estate Business in India
First, we will try to find out:
- How to create a good business plan?
- How to identify a property that is the best fit for us (class C property).
- How to analyze it to find out if this is a good investment or not?
- Is this going to be profitable?
We will also talk about Taxes, Financing, Disputes, Protection, licensing, and a lot more. And in the end, we will learn about sales and marketing techniques.
In the real estate business, always remember:
- The best way to find a good opportunity is to find a good problem.
Find a real problem and solve it. Do not become like everybody, who runs away from a problem, only to save themselves from failure. Remember, only 10% will become ultra-rich. You must see the glass is half full, not half empty. Your mindset is everything in this business. Train it to see the opposite side of the coin.
Always think in terms of abundance and know:
- An opportunity is found by the mind, not by the eyes.
Be ready to do the things you are avoiding for a long time, do whatever it takes to make your dream a reality, sacrifice your comfort and give your best shot. Now come on, come on, do the work.
Table of Contents
The Best Strategy for Your Real Estate Business
Before starting a real estate business in India, first, prepare a great strategy and business plan. To do this, follow these six steps.
1. Imagine Your Future
Imagine where you want to be in the long future and write it down. Because when you write it down, your mind takes it very seriously and releases a creative power that works via the law of attraction which attracts the things you have imagined in your life. Just like a magnet. So imagine, just imagine.
2. Set Financial Goal
Set your financial goals. For example, in between 5 years, I shall convert my $100k into $1M with a $10k cash flow every year. Select the exact amount. That way, you will know what amount of money you need to achieve that goal.
3. Check Your Current Wealth
Check your current wealth. Find it out where you are right now financially. To achieve your goal, how much more money do you need. It will make things more clear for you after setting the financial goals.
4. Select Your Vision, Mission, and Values
Know your real motive behind this business. An example of this:
- My Vision is to have complete financial freedom.
- Having the time and resources to do what I want when I want. The Mission is to become financially free via investing in highly appreciating single-family houses and
- The Values would be caring for people, learning new things every day, respecting people, and knowing that there is plenty of property for me to invest in, a world of total abundance.
5. Choose A Good Niche
Choose a niche. You will never become successful in real estate if you struggle to choose a good Niche early. Become a pro at something, in anything but become a pro. Maybe you invest in retail units or commercial buildings, or you buy raw land, or you develop luxury properties. Choose a Niche.
6. Select Your Criteria
Choose your criteria carefully. You will only invest if your criteria match the way you want it. If it doesn’t, you will not invest no matter what. You must have self-discipline. An example of Criteria is:
- Min appreciation must be 10%.
- Min rate of return is 50%.
- The price range must be below $100,000.
- Minimum time commitment 1 hour per month.
- The location of investment must be eastern India or western India.
Choose your Criteria carefully and know what exactly you need to do to get there.
How to Identify a Great Investment Property
Now choose a great property according to your plan. There are four types of property available in the market, they are:
- Class A: a property that is ten years old.
- Class B: a property that is 10 – 20 years old.
- Class C: a property that is 20 – 30 years old.
- Class D: more than 30 years old.
For a small real estate business in India, Class C property is the best. Class C properties are old with full of problems. For example, the waterline is not working, electrical wiring needs a replacement, the paint is faded away, or the floor needs improvement.
Most real estate investors will avoid problem deals leaving you with an opportunity to invest. By investing there, you can earn a good amount of profit. You can fix the property by changing the color, doing some furniture work, clearing the parking lot, and replacing the waterline.
When you make the property look new, the market price will skyrocket, and you will gain a terrific profit. So, find the class C property, a problem deal.
- But, don’t go big at the very beginning. Avoid fighting with the big giants. Go slow and choose the lonely path. They will not disturb you, and you will stay alive in the market for a long time.
Class A and Class B are not suitable for beginners because there is a lot of competition, and competition kills the profit. Keep that in mind.
How to Analyze the Investment Property
Now move on to the analysis. The best part of this real estate business in India. The creative process.
In real estate, a good location outperforms everything. There is no value in the property without a Good Location. That is the difference between a good deal and a bad deal. To identify a great location to invest you need to answer these questions:
- What are the demographics of the area?
- What is the salary level of this neighborhood?
- Where are the major employment centers?
- Are new businesses and employment being generated in the area?
- Is there a college population looking for more off-campus housing?
- What can I build, and how much rent can I charge?
- Will I enjoy managing the community?
Answer these questions carefully. Only then you shall be able to see through them. The best investors always ask some quality questions. That’s how they find the best deal, according to their criteria. Location analysis must be your priority.
If you can find a property near your home, that will be even better. Because you know a lot more about that area and the market condition than anyone else. So, you can analyze that property better.
How to Build A Good Real Estate Team
Develop an investor mindset if you want to become successful in the real estate business in India, create a strategy, choose the right property, analyze it, and invest in it. But you do need a good team. Without a team, you will face serious troubles. Because:
- Real estate business is a team game. Without a good team, you may lose a good opportunity.
Have a team that will save you from any legal property disputes. In a real estate team, you must have a lawyer, an accountant, a broker, and an advisor. Without these guys, a team is incomplete.
But choose your team carefully because most experts are not real friends they are just opportunists. They are trying to find the answer, how can they make more money from you?
Avoid those people no matter how good they are in their respective fields. Choose those who want to help you and will be your best bet against all odds.
An important tip. Follow the Market Cycle Quadrant. If you are buying a property, then buy it in phase 1 and sell it in phase 2 and phase 3. You will make the maximum profit. Now let’s talk about the property taxes.
How to Reduce Your Property Taxes
Remember you have to pay the taxes. Otherwise, you may get arrested. But there are some loopholes by which you can reduce your property taxes, sometimes almost to zero.
In real estate, if you apply 1031 tax exchange, then you shall pay zero tax, according to the law. A 1031 tax exchange is a legal process where you have to hold the property for 1 – 2 years before you sell it.
In India, it’s called Tax Deffer System under section 54 of Income Tax, probably. In every democratic country, there is a law to differ the capital gain tax. All you have to do is to find that out.
But before you do anything, please consult with a tax expert. Never mess with the law, you may face serious troubles. Keep that in mind. Now move to the financing.
How to Finance the Property
While starting a real estate business in India, you need a lot of money. Without this, you may not climb the mountains. But the problem is, that most people don’t know how and where they can get the funds.
They think that banks are the only source of funds, but there is more to choose from. Those are as follows:
- Credit companies
- Life insurance companies
- Mortgage funds
- Hedge funds
- Real Estate Finance Corporation
- Mortgage Funds
- Industrial Banks
- Pension Funds
- Opportunity Funds
- Credit Unions
- Private Debt / Equity
- Offshore Investment Funds
- Angel Investors
- High Net Worth Investors
Yes, finance from a good bank is easy, but it’s pretty hard to get the same thing from an outsider investor (The above list). For that reason, you need to answer the following questions that they will surely ask:
- Why should I buy this?
- How much risk am I able to tolerate?
- What are the exit strategies?
Prepare the answer, convince them and get the funds.
How to Avoid Legal Property Disputes Completely
If your property got stuck in a dispute, what should you do? How are you going to recover it? Because a single legal dispute can make your investment a total waste. The development of the building may stay on hold for about 5 – 10 years. And no one will buy your property in that condition.
The best way to solve a dispute is to avoid it. Before you invest, look for the common problems and prepare your contract in a way that never faces those problems.
Make sure that nobody can sue you. Apply the Due Diligence process and invest with only your trusted brokers. Always remember:
- Real estate is a business, and it should run like a business.
How to Get A Real Estate License
If you are just a beginner, you do not need a license. But, a license always helps. In some countries, you must have it. Otherwise, you will face some legal problems.
There is a website in every state in India, where you can get your real estate license by applying online. I live in Kolkata, my site is Hira.wb.gov.in, yours might be different, but the process is the same.
License is a must thing in the real estate games. Get your license fast.
How to Sell A Property Faster
You need to know how to sell a product. Without selling skills, you will never become successful in real estate. You need to know:
- How to negotiate properly?
- What are the tips and tricks that successful salespeople usees?
- How to close a deal?
- Best way to overcome an objection?
- How to provide a possible solution for them?
Answer these questions and find out what you can improve to make the deal possible.
Use These Real Estate Marketing Ideas
Marketing a real estate business in India is no different from traditional marketing. The property is your product. The same thing, find the probable purchasers, influence them, take them to the negotiation table and make the transaction successful. Nothing new.
But there are some ideas you can apply in this digital world:
- Sign up for google my business.
- Offer free property valuation.
- Send direct mails to the prospects.
- Use door hangers and t-shirts.
- Local seminars and exhibitions can help you out.
- Google ads, Facebook ads.
There are a lot more. It depends on your creativity. Apply the right plan, and you will gain quality leads.
Some Points to Remember
The knowledge on this topic how to start a real estate business in India is nothing. If your attitude is not aggressive as required in this field, you will miss the maximum opportunities because the opportunity is seen by the mind, not by the eyes.
So first, change your mindset put some positivity there, be brave, and start doing those things that maximum people avoid. Become a problem solver, not a runner.
Here is the Summary
So how to start a real estate business in India? Follow these points.
- Create a strategy, a complete plan.
- Analyze the property and apply due diligence.
- Find a property near home.
- Build the best team.
- Be aware of taxes.
- Collect the finance.
- Keep a safe distance from disputes.
- Protect your investment.
- Treat it like a business.
- Choose your niche and
- Get the license.
I hope you liked it and it gave you the answer on how to start a real estate business in India. Good luck. Take care and be safe. Thank you.
Frequently Asked Questions (FAQ)
How to find a good real estate investment?
Find a property that is 10 to 20 years old, not in a good constitution, and in a neighborhood where people want to live.
How to sell a property faster?
Try to solve problems not just sell them anything. It is a reputation that does not happen in one year. Build your reputation and the properties will sell faster.
How to build a good real estate team?
You must have a lawyer, an accountant, a broker, and an advisor in your real estate team Without these guys, a real estate team is incomplete.
How to get a real estate license in India?
Just search online ‘real estate license official site’. There is a website in every Indian state, where you can get your real estate license online.
How to analyze a real estate investment?
By analyzing the demographics of the area, major employment centers, and the salary level of this neighborhood, you will know if is it a good investment or not.