Ownership of residential and commercial real estate are what most long-term goals are made of. People spend years in creating these assets where each transaction entails dealing in life savings for a lifetime of security.
In India, it is a $120 billion market with an expected rise to a trillion dollar by 2030, and this contributes upwards of 10% to India’s GDP.
While startups, the IT and ITeS, consulting, and e-Commerce sectors comprise the high demand customers in the commercial real estate space, looking to expand and meet their needs, the rise of India’s urban middle class is responsible for the boom in the residential space.
No longer is real estate a pipe dream for the young and the domain of nearly retiring folks.
The young and the restless these days don’t shy away from bold investments. Thus, real estate is enjoying its reign in the dream world and the real.
Up until a few years ago, getting into the real estate business used to be as transparent as a brick wall.
Virtually anyone with the intent could start a realty and given the nature of the business, it did attract a whole lot of corruption.
Khosla, the aam admi (not the party), had to keep his fingers crossed to find the right mix of competence and honesty in a realtor.
Else bye bye ghosla. But recent policies, initiated by the previous government and implemented by the current one, brought about changes like Real Estate Regulatory Authority (RERA) and the Security and Exchange Board of India approved Real Estate Investment Trust (REIT).
Thus, transparency in operation, through speedy redressal of disputes and healthy investments in the real estate market, has encouraged a cleaner image of the industry.
Since 2000, the real estate sector has received about $25 billion from Foreign Direct Investment and Private Equity, and Venture Capital, investments have been of the order of $5 billion in the recent past.
The realty business is now a professional venture, where developers have to be not only competent and transparent in their dealings, but they also have to adhere to the various policies through government (state wise) registration in the RERA system.
Besides, all agents or firms are now required to obtain the required licences and taxation paperwork for legitimacy in the business.
No more shady property dealings and making homeowners hang by fake promises.
What do real estate businesses entail?
Real estate businessmen, or realtors, are not limited to the occupation of buying and selling property – residential or commercial space, units, or land.
They include a collection of professionals whose domain lie in a range of activities that ultimately lead to the sale of property.
Material suppliers, architects, builders, civil engineers, and other specialised workmen to real estate agents who are the face of the dealings with customers.
Compensation depends a lot on the size of the firm, experience and speciality of the profession.
For instance, the average salary of civil engineers in India is about INR 3 lakhs per year, but there are healthy earnings to be made in profit sharing and bonus.
A successful civil engineer can make close to INR 10 lakhs per year. Senior construction management can make upwards of INR 10 lakhs per year whereas entry level real estate agents get an average of INR 3.2 lakhs per year.
How do you get into the real estate business?
The various specialities in the profession require a variety of qualifications. Architects, engineers, and other consultants may need the respective degrees in architecture, building/urban planning, or business degrees, whereas positions, such as a real estate agent, don’t require any particular qualification.
Here are some of the ways you can consider getting into the industry.
Understand the market
As a realty professional, you will need to understand the ground reality of property – land ownership, legalities, infrastructure development, area sales statistics, and a bunch of everything else that goes on behind the scenes.
To get into it, you should be able to judge the current market and the demand of its customers. Hence a thorough knowledge of customer behaviour is also a must.
You can either follow a self-learning path by shadowing a veteran in the field or you can attend various seminars organized by established realty firms.
With an overall knowledge at hand, you should be able to decide your specialization in the industry.
If your specialization is not obvious through your qualification background, you are probably seeking a generalist role in one of material supplies, as a real estate agent, etc.
Besides the role you will also need to decide whether you want to be involved in the residential or commercial realty sector. Each has its own set of rules.
If you are opening a firm, you will need to register your business as one of the following – Sole Proprietorship, Partnership (Limited and Limited Liability), etc. More details are available here in this article – How to start a startup in India.
As for taxes, you will need to register under RERA, a real estate license, and your firm should have its GST number for compliance with all services and goods taxation. RERA is a compulsory registration for all realty agents.
No agent can facilitate the purchase or sale of property without proper state wise RERA registration and license.
Under the RERA Act, you are required to be absolutely transparent about every project detail and any attempt to mislead the buyer may lead to your license getting revoked, you getting penalized, and worse, you seeing the insides of a jail cell for fraud.
Set up your business
To first set up your business, you will need the right space and visibility to get you started and hopefully expand in the future. Decide if you want to play locally or to a bigger market – different cities, etc. and what sector you want to stick to – residential, commercial, or land.
Set up an online website for the more tech savvy home buyer. Eventually it will become a go to place for advertising your finished projects, state licenses, awards, and your entire business.
If you have opened a realty firm, you will need the necessary stakeholders and connections, depending on your business focus.
For construction, planners, architects, apart from building contractors, supplies management, etc. should be part of your team.
Apart from the core team, you need a solid sales team, marketing managers, and advertisers, to market your product.
It is certainly also wise to have people with the legal knowledge to shoulder your daily paperwork – hence a vakalat team (Read Litigation careers in India).
Then, of course, brokers to help you sell your product to the right buyer.
Network and promote
There is, unfortunately, no formal qualification that trains you to be a realtor. The best way to handle the learning is to join an existing firm and learn the ifs and buts from the inside.
It also helps to build a network in the field where each connection has built his expertise through experience.
Keep the connections alive as with such a dynamic industry, there is always room to learn more, keeping yourself updated through their experiences.
Connections will also aid your business to grow through word of mouth. It is a highly unstructured industry and endorsements from veterans go a long way to promote your fairly new venture.
It takes years of planning, months in gathering the financing, and only days to lose the trust of homebuyers if you don’t adhere to good business principles.
Real estate is an attractive sector for its lucrative nature but it can also get easily shrouded in corrupt practices for illegal profits.
Keep your eyes open and make sure your business sticks to the highest ethical standards in the industry.