How To Become a Real Estate Entrepreneur
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Real estate is an industry that involves buying and selling properties to make a profit. This industry has various career opportunities available to those with an interest in the field. One opportunity for people who want to invest in real estate is to become a real estate entrepreneur. In this article, we will discuss how to become a real estate entrepreneur and the outlook for this career path.
What is a real estate entrepreneur?
A real estate entrepreneur is an investor who purchases and/or sells properties as investment opportunities. Some investors are more active, financing the purchases and making modifications to the properties to prepare them to sell for profit. Other real estate entrepreneurs take a more passive approach to investment, working with real estate agents or firms to manage properties on their behalf. Some of the key reasons that people choose to invest in real estate include capital appreciation, leverage and tax benefits.
Capital appreciation refers to the value of a property increasing over time, although a real estate investor can increase the speed of the appreciation process by making enhancements and improvements to the property before selling it. Leverage refers to how much equity the investor holds in the property, or how much of the purchase was paid for in cash versus financed by a lender. Real estate investing comes with tax benefits, including the ability to deduct any interest paid and depreciation of the property on your taxes.
What does a real estate entrepreneur do?
Depending on whether an entrepreneur takes a more active or passive approach to real estate investing, this role generally involves buying and selling real estate. More active entrepreneurs may take a hands-on approach to renovating and updating the properties they purchase, while passive entrepreneurs often work closely with an agent who will make recommendations or lend money to those who want to purchase real estate. Other duties involved in this role include monitoring the local real estate markets to determine when to buy and sell, reviewing real estate listings and comparing property values.
Related: How To Start in Real Estate
How to become a real estate entrepreneur
Real estate entrepreneurs must have a tolerance for risk, a willingness to think creatively and self-motivation, as they will not work for anyone but themselves. If you have an interest in pursuing this career path, follow these steps to work toward your goal.
1. Seek out education
The first step in becoming a real estate entrepreneur is seeking out as much education as possible. You may choose to enroll in a formal education program at a college or university, although you may not find a program designed specifically for your chosen career path. If you do choose to earn a degree, consider enrolling in a program focused on business. You can also take courses focused on real estate, including those that outline the buying and selling process, identify key terms and definitions and provide insights into the flipping and reselling process.
Not all real estate entrepreneurs have college degrees, and formal education is not necessarily a requirement in this industry. However, you do need education in the real estate and investment industries to succeed. Online courses and classes taught by experienced real estate professionals and investors can provide extensive benefits. Some real estate entrepreneurs even take the courses and exams required to become licensed real estate agents in their areas.
2. Create a business plan
After you have gained more insights into investing in real estate, the next step is creating a business plan that outlines your goals and plans for success. A strong business plan should include the structure for how the business will operate, as well as identify the short-term and long-term goals, with a plan for how you will achieve those goals.
Related: What Is a Business Plan?
3. Form strong connections
Networking is important in real estate, so look for ways to form connections and interact with others in the field. You may look for real estate-focused groups to join online or in your community, or you could seek out a mentor who has experience in real estate investing. Forming connections can help you identify opportunities and build a team around you to help your business operate smoothly and succeed.
4. Find real estate investment opportunities
The next step in becoming a real estate entrepreneur is searching for investment opportunities that align with your professional goals and fit within your budgetary constraints. Many new entrepreneurs finance their first properties, so look for lenders that will provide you with the funds you need to invest. You can search online listings, work with real estate agents or even communicate with members of your network to find the right opportunity, whether it is a single-family home that needs renovations or a multi-family property that will generate passive income.
5. Make a purchase
When you have found the ideal property and secured any necessary funding, the final step is making a purchase. After you complete this step in the process, you can continue to refine your business goals and purchase additional properties to further your success and increase your revenue.
Skills for a real estate entrepreneur
As mentioned, a real estate entrepreneur must be able to tolerate risk, as investing always comes with some risk. Real estate investing tends to be one of the lower-risk areas, although it is not completely without risk. A successful entrepreneur should also have a commitment to their success and have strong people skills, as they must interact with others to build partnerships and network. Some of the best entrepreneurs also maintain consistency in their daily habits and have a willingness to put in the effort it takes to succeed.
Real estate investing is an involved process that often requires quite a bit of time. You must understand the industry and be familiar with the process of buying and selling properties. Strong communication skills are essential to success, as you will communicate with many different people throughout various transactions and interactions.
Real estate entrepreneur salary and job outlook
The real estate industry offers excellent opportunity for those who want to take some risk to potentially reap the rewards, especially in areas where the housing market is particularly hot. The U.S. Bureau of Labor Statistics includes real estate entrepreneurs and investors under its brokers and sales agents category, which shows an estimated 2% growth between 2019 and 2029. However, one of the key differences between investors and agents is the number of people already working in the field, so those who want to buy and sell properties may have more potential for growth and success.
The average salary is around $7,787 per month, although your salary depends on the number of properties you invest in and the returns you earn on each investment. Some of the most successful real estate investors have amassed significant fortunes on this career path.
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