How to Start a Real Estate Business

Is now the time to start your own real estate company?

Between COVID-19, Federal Reserve rate adjustments, and shifting market demand nationwide, the real estate industry has seen its fair share of volatility in recent years. Still, market conditions have started to show signs of recovery, and the general sentiment expressed in Emerging Trends in Real Estate 2025 suggests this should continue—albeit at a gradual pace. 

Drawing from 1,600 survey responses and 450 interviews with real estate industry market leaders, the report highlights a few notable trends for this year. 

• Encouraging market sentiment: 65% of survey respondents expect “good” or “excellent” profits in 2025, a considerable increase from 41% in the previous year.
• Lower interest rates expected: 80% of survey respondents predict lower commercial mortgage rates in 2025, and 75% expect further decreases over the next five years. 
• Property types to watch: Data centers, industrial real estate, and housing developments show strong demand, while the office sector ranks lowest for both investment and development prospects. 
• Booming geographic markets: Areas with growing populations—including Dallas, Miami, Houston, Tampa/St. Petersburg, and Nashville—are some of the most active markets to watch this year. 

Although the report’s findings are encouraging, keep in mind there will always be risks in real estate. Above all, take time to understand your specific real estate market, look for a niche, and learn the fundamentals before you scale.  

Starting a real estate business in 10 steps

The exact process to start a real estate business varies across the U.S., but it’s fair to budget several months (if not years) to get fully up and running. Each state has different real estate licensing and certification requirements, so be sure to factor in your state’s rules during the planning phase. 

With this in mind, here’s where to begin. 

Step 1: Conduct market research

Before you start buying or selling any properties, you want to learn everything you can about your target market, including the following: 

• Demand and trends. Start with the basics—what types of properties are selling well? Look at sales prices, how long properties typically stay on the market, and which neighborhoods or commercial spaces are growing. Websites like Zillow are good starting points, not to mention keeping up with local news and property listings. 
• Potential competition. Get familiar with the main real estate companies already operating in your area. Who do they sell to? What kinds of properties do they focus on? (and not focus on?). 
• Local population and growth. Think about the long-term future of your market. To begin, you might use U.S. Census data to learn about population growth, average incomes, and age groups within your area.
• Surrounding area and amenities. Different properties attract different buyers and tenants. Pay attention to the needs of residential and commercial clients (e.g., good schools vs. busy foot traffic) to spot promising investment areas in your market. 

Then, make it a habit to stay informed about the latest developments and trends in your market. For instance, the report discussed earlier—Emerging Trends in Real Estate—is one of the most reputable in the industry. If you haven’t already, set aside time to read the complete report (and for future editions, too). 

Step 2: Identify your focus

Given all the different fields in real estate, you should try to narrow your focus and determine what kind of business you want to offer, such as: 

• Residential real estate. Help clients buy, sell, or rent homes, condos, or apartments (including single-family homes and multi-unit properties). 
• Commercial real estate. Focus on business properties—whether retail spaces, office buildings, supply chain warehouses, or mixed-use developments.
• Land and new developments. Specialize in vacant land sales, including untouched land and new areas ready for construction. 
• Property flipping. Purchase undervalued properties, renovate them, and resell them for profit. 
• Investment properties. Manage income-generating properties, such as multi-family units or vacation rentals. 

Although you can always change your specialty (and sometimes should if you find better opportunities), starting with a specific direction early on can help you create a more targeted strategy for the next step. 

Step 3: Write a business plan

In most cases, the path to starting your own business begins with getting licensed and working for an established brokerage as a real estate agent. This is because states typically require real estate agents to gain experience and complete additional certifications before they can become brokers. 

As a real estate broker, you can then buy, sell, and manage properties without oversight (hence, start your own business). In the meantime, it helps to put together a preliminary plan to break into your target market and chosen niche. For instance, your entry point might be: 

• Working as an agent for an existing real estate brokerage while gaining experience 
• Starting in property management to study the market and learn business fundamentals
• Focusing on real estate investments and building a portfolio, which may not require a license (but will require plenty of capital) 

In your real estate business plan, you might include your market research findings, specific client segments you’ll target, and your growth benchmarks for the next few years. You might also research potential brokerages you’d want to work with, noting their job requirements for new hires (if available) and particular market focuses. 

Step 4: Obtain your real estate license

A real estate license opens up the widest range of opportunities in the industry. While there are ways to work in real estate without one—such as investing in properties or managing your own rentals—you’ll need a license to list, sell, or lease property for others. 

To begin, you should research your state’s licensing and certification requirements, which generally include these steps: 

• Complete required pre-licensing courses (hours vary by state)
• Pass your state’s real estate exam
• Receive and maintain your license 

Keep in mind that this is just the first step if you plan to eventually open your own real estate business or brokerage. You’ll also need to pass a separate broker’s exam and meet your state’s requirements before you can operate independently. 

Step 5: Choose a business model

When you’re ready to launch your real estate company, you’ll first need to decide which business structure suits your needs. Most real estate professionals opt for structures that offer liability protection, such as limited liability companies (LLCs) or corporations. 

This is particularly important in real estate, where large transactions and property management responsibilities can pose significant liability risks. Sole proprietorships, in comparison, are easier to set up but don’t offer the same personal asset protection (more on this later).

Step 6: Secure funding

Regardless of what kind of real estate business you want to operate, there’s a good chance you’ll need to raise capital to get up and running. This is especially true for focuses like wholesaling, property flipping, investing, or any operation where you’ll purchase real estate yourself. 

Here are some methods to secure funding: 

• Apply for traditional bank loans or Small Business Administration (SBA) loans 
• Use personal savings or borrow from friends and family 
• Seek outside real estate investors or partners who can provide capital in exchange for ownership stakes in your business

While sometimes necessary, keep in mind that taking on debt and giving up equity comes with significant responsibilities. Make sure you understand the terms, interest rates, and repayment obligations before agreeing to any funding. 

Step 7: Build a strong brand

In the early stages, start to think about how you want your business and brand to appear to clients, including the following: 

• Real estate business name. Choose a memorable and professional name that reflects your services. You might use local terms if you’re focusing on a specific market, but ensure it’s scalable if you plan to expand. 
• Visual identity. Develop a professional logo, color scheme, and consistent design elements.
• Client materials. Create business cards, letterheads, property flyers, presentation templates, and similar materials to share with clients. 
• Website. Create a professional website to showcase your services, current listings, recent closings, and client testimonials. 
• Social media. Set up profiles on platforms your clients use—such as LinkedIn, Instagram, Facebook, or Nextdoor. 

While you can invest in more extensive branding efforts, it makes sense to start small and gradually increase your marketing spend as your business grows. 

Step 8: Focus on lead generation

Once you’re officially operating, your main focus will be generating new leads. Here are some key places where you can connect with potential buyers and sellers: 

• National Association of Realtors (NAR). Register for a membership to access valuable resources and market data. This also allows you to use the Realtor designation and add your name to their registry. 
• Real estate platforms. List your properties and services on sites where buyers might start their search, such as Zillow, Realtor.com, and Trulia. 
• Traditional outreach. Local newspaper ads, direct mail campaigns, and community outreach can help you find clients who aren’t as active online. 

Lead generation will naturally become easier as you gain experience and build a reputation. Satisfied clients are often your best source of referrals, so always focus on providing the best customer service for everyone you work with. 

Step 9: Develop marketing strategies and connections

When you feel ready to expand your marketing efforts, you might try out the following strategies to reach more clients: 

• Search engine optimization (SEO) to improve your website’s visibility
• Paid advertising for your listings through Google ads and social media
• Email campaigns to find new leads and stay connected with past clients
• Local billboards in high-traffic areas
• Video marketing of property tours and market updates

Likewise, take advantage of your industry connections through organizations like NAR, your LinkedIn network, or other real estate associations available in your area.  

Step 10: Launch and grow your business

Finally, you’ll complete any outstanding tasks to launch your business and make it all official. Here are some common needs for real estate businesses: 

• Launch your business. Register your business with your Secretary of State’s (SOS) office.
• Get a federal tax ID. Obtain an employer identification number (EIN) from the IRS if you plan to hire employees, file federal taxes, or open business bank accounts. LegalZoom can help you get an EIN and stay compliant in a few simple steps.
• Prepare for finances. Set up systems for payroll, taxes, and business insurance.
• Protect your business. Apply for a federal trademark to protect your brand name and assets.

From here, your main focus is to scale your business and deliver the best customer service possible. Keep an eye on key performance indicators like conversion rates, sales prices, and marketing returns to see where you can improve, and always look for opportunities to serve unmet needs in your market. 

How much does it cost to start a real estate business?

At the very least, you should expect to pay around $400 to $2,700 or more in initial startup costs to launch a real estate business. This includes an approximate cost to register your business (minimum $35), obtain your real estate license (minimum $300), and acquire liability insurance (minimum $40 for the first month).

That said, you’ll need more funds to lease an office space and work on your marketing efforts, among other startup costs that pertain to your business. Here’s a breakdown of some of the standard costs to prepare for during the early stages.

Business registration

You can expect these costs when you go to register your business. 

• Filing fees: Varies by state and business entity. For reference, LLC filing fees range from $35 to $500 in the U.S.
• General business licenses: State, county, and municipal operating licenses may cost between $15 and $200 (not to be confused with real estate professional licenses).
• Registered agent services: Typically $100 to $400 annually if you opt for a professional service. 

While this isn’t an exhaustive list, you should at least budget for your state’s filing fee and any required business licenses or permits to legally operate in your area. 

Professional licenses and associations

You might pay $300 to $1,500 or more to get your real estate license, including the following: 

• Pre-licensing education courses (hours vary by state)
• License application fees
• Exam fees
• Miscellaneous requirements (e.g., background checks or license issuance) 

Your total costs will vary based on your state’s requirements and your chosen education program—some courses cost significantly more than others but may offer better preparation or convenience. 

In addition, you might pay for ongoing professional development costs. For instance, the National Association of Realtors charges $156 in dues per member (as of this writing). You may also pay for periodic training, continuing education, and recertification programs to maintain your real estate license.

Insurance

Liability insurance typically ranges from $40 to $200 or more per month. That said, your specific business insurance needs and corresponding rates depend on your business risk, coverage limits, and location, among other factors. As a general rule, higher-risk operations or businesses with more employees typically pay more in insurance premiums. 

Website creation and maintenance

You’ll first pay to register a domain name, which may cost $10 to $30 annually for standard URLs, while high-demand domains can cost substantially more. Then, you can build your website through a platform like Wix for free or pay a monthly fee for premium features. 

Alternatively, you can hire a professional web designer and pay anywhere from a few hundred bucks to several thousand dollars for a custom-built site. 

With either method, you’ll want to budget for ongoing expenses to maintain your site. For instance, you may pay for website hosting, security certificates, and regular maintenance and updates. 

Lead generation and marketing

Marketing and lead generation costs can be scaled according to your business growth and revenue. As a rule of thumb, real estate businesses might allocate 5% to 10% of their gross income toward marketing efforts. Still, you should adjust your marketing spend based on what strategies prove most effective for your market and target audience. 

How to decide which business structure is right for you

Your business structure affects everything from daily operations to taxes and liability protection. For real estate businesses, it generally makes the most sense to set up a business structure that offers personal liability protection, such as the three options: 

• Partnerships. You share responsibilities, resources, profits, and losses with one or more partners. 
• Limited liability company (LLC). You operate as a separate entity from your personal assets, with options to be taxed as a sole proprietorship or corporation.
• Corporation. You establish a separate entity owned by shareholders, managed by directors, and run by officers. 
• Doing business as (DBA). Although not technically a business entity, you can register a DBA to operate under a different name and promote your brand.

When you’re ready to make your real estate business official, LegalZoom will be here to help you make it happen. Our business formation services can take care of essentially everything you need to get up and running, and then our Compliance Filings can help you stay in good standing after the fact.

FAQs

How do beginners start in real estate?

Most beginners start by joining an established brokerage firm as an agent. This gives you experience, resources, and mentorship without the immediate pressure of running your own business. After gaining experience and building a client base, you might acquire your broker license, become a business owner, and offer your own services.

What are the risks of starting a real estate business?

Real estate businesses face numerous risks, including market volatility, high capital requirements, and property depreciation. Economic downturns can take years to recover from, and newer businesses may not have enough resources or opportunities to compete with established firms. 

Which real estate business is the most profitable?

The most successful real estate business ultimately depends on the region and what’s in demand. That said, commercial real estate can generate consistent profits since businesses often agree to long-term leases in premium locations. Similarly, residential rental properties generally have consistent demand. 

How long does it take to start a real estate company?

If you’re just starting out, it can take at least 2–3 years to establish a new real estate business. This includes obtaining your license, gaining experience, and then eventually branching out to start a company. Most states require you to become a broker before you can operate independently, so you may not be able to start your own real estate business right away.