REAL ESTATE BUSINESS

A real estate business is a business entity that lets one deal with the buying, selling, investing, and management of real estate properties.

Introduction:

' Real estate' Is defined as property, land, buildings, and natural resources like minerals, water, etc.

To start a real estate business, one must have a Real estate license. Which is issued by the State government, and it is mandatory to be a member of the National Association of Realtors.

An individual needs to pay Rs. 25,000 to issue the license, while the company must pay Rs. 50,000 for the same. The renewal amount of the license is Rs. 5,000 and Rs. 10,000, respectively, to an individual and company.

There is a real property law which is related to real estate. It describes the real estate business governors the using, buying & selling of the land. This law generally deals with how one can acquire property and what one can do with the property.

8 FUNDAMENTALS OF REAL ESTATE BUSINESS

1. THE MARKET, NOT THE EMOTIONS

Beginners in the real estate business tend to focus on their emotions as they are overwhelmed with doing something new in their life, which can distract them and ruin the real estate deal or can, say the asset. Overwhelmed emotions not only cost the loss of money but also the loss of time, and most important, it may lead to the loss of investors. The constant mind finds what they seek, so don't get emotional when making the deal.

2. EXPERIENCE IS MORE FOR HIGHER RETURNS

On finalizing the first deal, thinking for profit is not more important than getting the experience. Experience makes the best deal out of the best deals. It is something that enables one to play with others' minds. Playing mind games is not like fooling the other person, but it means gaining more profits through the Acquisition and renovations of the asset.

3. LOW WORKING CAPITAL

Working capital is the short-term financial position that shows how much is used quickly to meet the organisation'sorganization's or the company's basic needs. Working capital can be calculated by subtracting the current liabilities from the current assets.

Many beginners in the real estate business tend to meet many major expenses and losses. To avoid the situation, maintaining the working capital is what is more relevant to the situation. Working capital reserves can help one to meet the losses and can help one to be protected from stress and burden at the same time.

4. STICK TO THE BUDGET

What happens is that a beginner gets over-excited for the first deal. They may acquire the asset by going out of budget, affecting the long-term deposits for acquiring the asset or the real estate. This is what we call discipline.

5. MISLEADING CALCULATIONS

Beginners tend to calculate profits. Cash, cash returns, capitalization rates and rate of returns on the investment properties. These calculations can make one bear huge losses at the time of finalization of the deal.

6. PARTNER OR MENTOR

Mentors guide us while buying or selling the asset; the partner will get you too far.

It is one most common statement that, "If you want to go fast, go alone and if you want to go far, choose a partner".

7. PLANNING NOT PLANS

There are many impactful factors at the time of acquiring an asset. While trying to keep everything going smoothly, creating a Pro-forma is most needed.

Pro-forma is the profit and loss statement to determine the impact and timing of the decisions.

8. DETAILS ARE IN THR CONTACT

Beginners tend to believe the person through their personality. I know that particular person, and they are genuine. So the contract is something that is needed for making a fair deal. The contract also ensures that your investment is a fair deal in terms of risk, rewards, debt, equity and the position of the title.

Conclusion:

Many need to be settled down in the mind while going for the Acquisition of an asset or making the deal to sell the asset. Not getting overwhelmed and not excited about the first deal is more important for not getting any loss, or it can protect you from spending more money when investing.

A partner or mentor is needed to go fast or far away. At the time of Acquisition, working capital reserves are also needed to maintain the reserves for the future.