How to Grow a Real Estate Investment Company 2024

How to Start a Real Estate Investment Company

If you’ve already set up your investment company, you may want to skip ahead to the next section. But, if you’re just starting out as a real estate investor, the following is must-know information for getting properly established.

The initial setup of a real estate investment company is fairly straightforward thanks to the minimal regulatory requirements. It’s entirely possible to start out as a sole proprietor, and your company is up and running once you purchase your first property.

However, once that first property is in your portfolio, the playing field changes somewhat, and new regulatory requirements appear. Here are the key considerations for your new real estate investment company:

Define Your Investment Strategy

Do you plan on investing in properties over long-term periods, or will you aim to flip them quickly? Will you focus on commercial and retail spaces or residential properties, and will your portfolio comprise single or multi-unit properties?

Your strategy may, of course, change over time, but a clear initial investment plan will dictate your legal obligations so it’s important to define this early on.

Where is Your Financing Coming From?

Getting into real estate investment requires significant capital upfront, and reliable financing is often an early challenge for real estate investors. Even if you have the investment for your first property covered, it’s worth considering longer-term financing options such as loans and partnerships with fellow investors.

What Insurance Do You Need?

Insurance must be in place from day one — and it must be the right kind. Talk to a real estate attorney or an insurance agent to determine the coverage that real estate businesses like yours require. 

Should You Work with a Real Estate Agent?

If you don’t have experience in the real estate industry, working with a realtor can provide you with an invaluable source of knowledge and advice. Whether it’s understanding what investment properties are available or exploring your chosen region’s growth potential and getting support with contracts and other documentation, it can be worth building a relationship with a realtor you trust.

Once you’re up and running, it’s time to dig into how to grow a real estate investment company. Here are four surefire ways to expand on your initial investments in the real estate industry.

1. Research Your New Region

You’ll likely have made your first investment(s) in an area that you are already familiar with (your home city, for example). However, if you’re looking to branch out into new regions, it’s smart to conduct thorough research to understand their unique investment landscape. Here are some of the most effective ways for your real estate investment business to do this:

Visit the Region 

Many investors think that this research can be conducted online or that it isn’t necessary at all, but that is a mistake. The best place to conduct your research is on the ground, so head out to your target region and take a walk/drive around. By spending time in the region, you can see what your target audience is like and what properties are on offer.

Things to consider include whether the area is served by public transport and if the city’s center is easily accessible to residents. Are there the amenities that a potential renter or buyer would look for, such as schools and grocery stores? It’s also important to ensure that the area appeals to you, because if not, how can you be sure that it’ll appeal to others?  

If it really isn’t possible to visit the region yourself, resources like Best Places provide statistics for towns and cities throughout the U.S. and will give you valuable insight into the area(s) of interest.

Explore Market Sales and Rental Rates

If your investment strategy focuses on residential properties, take the time to understand the region’s typical rental rates to gain an idea of what your rental income could look like.

Likewise, understanding sales data on recently sold properties will provide insight into your potential ROI. If you’ve chosen to work with a realtor, they will be able to gather this local real estate market data for you. 

2. Consider Different Types of Properties

If expanding into new regions isn’t part of your real estate investment business growth plan, new property types can be an attractive alternative strategy. Diversification is a smart way of weathering changes in the real estate market — the following options are all potentially lucrative additions to a real estate investing business strategy:

• Single-family homes – with consistent demand for these types of properties, single-family homes are a solid investment choice 
• Condos – condos are typically more affordable than single-family homes and require less maintenance, which makes them attractive as investment rental properties
• Duplexes – this is a good option for sole proprietorships that are just starting out because you can live in one property while renting out the other to offset the mortgage costs
• Commercial properties – higher costs and different regulatory requirements can make commercial properties seem risky, but there’s potential for a much higher financial return

3. Leverage Local Showing Agents

As your investment portfolio grows and you expand into new regions, the need to show properties to potential tenants and buyers will increase. Putting reliable full-time agents on your payroll to show properties on your behalf is a costly pursuit, and cutting expenses by leaving the task to inexperienced agents can be an expensive mistake.

Showami’s showing service is the fastest, easiest, and most reliable way of showing properties to buyers and renters without needing to attend showings yourself. The service works by connecting investors with licensed real estate professionals who are based in your target region and willing to show your properties for a pre-agreed fee.

A major benefit of leveraging Showami’s on-demand agents for your investment company is that you can get potential buyers and renters in to see your properties quickly and at times that suit them. This helps speed up the buying process and ensure you’re not stuck with an empty property that isn’t making you any money.

4. Minimize the Team Members Needed for a New Region

During periods of growth, most real estate investors will aim to keep their business structures as lean as possible. Payroll can quickly eat into investment returns, and contracted employees are typically a commitment that business owners rightly shy away from when the needs of the company are in flux.

Building relationships with local showing agents via Showami is a smart way of remaining agile while ensuring that potential clients receive premium service at every stage of the buyer’s journey.

Here are some of the ways you can leverage showing agents to minimize the number of team members you need on your payroll:

Video Tours

A video tour is a great tool that should be part of every investor’s marketing plan, and publishing a video online is the quickest and easiest way of getting lots of eyes on your property. Not only does video open your property up to out-of-town buyers and renters, but it also allows potential clients in the local area to imagine themselves in the home. This can make them more inclined to take the next step of seeing it in person.

Whether you’re seeking a pre-recorded video walk-through to share on your social media or a live video walk-through for interested buyers, a local showing agent is ideally placed to conduct the video tour for you. And since Showami has a 97% acceptance rate for showing requests, you can be confident that your job will get picked up by an experienced professional with the skills to make your property stand out.

Condition Reports

A condition report is an independent assessment of the condition of a property. This report contains useful data for you as an investor because it’ll tell you whether the real estate properties you’ve got your eye on are right for you. It can also help you make a sale by demonstrating that your investment property is in a good state of repair. 

A condition report is carried out by a qualified surveyor, but someone from your team will need to be available to provide access to the property. Showami showing agents can do this on your behalf, saving you the time it would take to travel to your property and hang around until the report has been completed. 

Pre-listing Walk-throughs

A pre-listing walkthrough is carried out by a professional before you officially list your property for rent or sale. During this inspection, any potential issues or repairs are flagged so that they may be fixed before opening the property up to renters and buyers. This is essential for meeting your financial goals because you’ll have the opportunity to rectify anything that may drive down the property’s value.

You as the owner don’t need to be at the walk-through, but someone you trust should be. A Showami showing agent is an ideal solution — most requests on the platform are picked up in under three minutes, so you can schedule the walk-through at the inspector’s earliest convenience and get the property on the market ASAP.

How to Grow a Real Estate Investment Company

Growing a robust property portfolio requires hard work and smart real estate investing strategies, but when done correctly, the returns make the effort well worth it. Whether you’re just starting out or are looking to expand on existing property investment success, following the tips in this article will give you the practical know-how to reach your business goals and become a major player in the real estate industry.