The National Association of Realtors membership has increased by some thirty percent since 2012. Realtor numbers have grown to an extraordinary 1.3 million individuals. Data projections suggesting employment numbers will increase in firms with less than 2,500 employees’ year on year to 2026.
The demand for real estate agents in the United States has been growing – and continues to grow – at an exponential rate. The rate for start up Realtors has also increased as demand for land, houses, apartments and condos has placed pressure on demand. Starting a real estate business does not ensure success of the business in such a buoyant market, but it does tip the odds in favor.
Start up funding
Realtors looking to go it alone and form their own realty business will typically do so with a combination of funding. Capital provided by a single individual or a group of individuals acting as partners within the business without the need to source external business funding is the ideal model. However, the reality is that to start a realty business, outside funding is a substantial element of the business plan.
Sourcing business funding
There is a myriad source of funding for start up realty businesses. New types of funding arrangements known as micro loans are proving very popular. Microloans vary from lender to lender, but in the main fall between $10,000 and $35,000. The rate of interest on such loans is appropriate to mitigate the risk for lenders and allow affordable repayment plans for borrowers.
Real estate agent loans
Sourcing loans for realtors can be frustrating and time consuming. Banks, loan companies, private lenders and online lenders all play their part in keeping the wheels of the real estate industry turning smoothly. Conversely, there are loans available from the US Small Business Administration, although gaining access to such loans can be subject to certain criteria being met.
Those criteria range from employing a minimum number of people, locating in a particular area and other criteria which stimulate and/or improve a local economy. In the main, loans available from the SBA are for establish companies looking to expand, relocate or both. However, that is not to say a start up would be precluded from potential funding. Check out how, when and where loans are available on the SBA website to see if your real estate business qualifies.
Real estate agent grants
The SBA provides grants to start up businesses which vary depending upon the sector in which the business operates. Real estate agencies and land management companies are integral elements of a local economy, and as such would qualify for grant approval. Grants may be for a few hundred dollars to many thousands of dollars. Grants can be used for buying or leasing computer and tech hardware, helping with leasing or renting premises etc. The best thing about a grant is that it wont have to be paid back, providing the business adheres to the rules governing the award of a grant.
The funding options for Realtors, either as a start up or as an established business is wide and diverse. Loan facilitators, banks and private lenders will always want to invest in businesses which can offer a return on their invested capital.