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If You Decide to Open a Real Estate Agency, What Should You Keep in Mind?

Opening a real estate agency is not a trivial decision. The very complexity of the real estate brokerage activity requires that we have a series of variables analyzed and controlled prior to the opening of our agency. Here we tell you the most important requirements to open a real estate and that we should analyze before doing so.

Otherwise we will run some risks as they are; exercising the activity outside the regulatory framework and already at the level of development itself, a very high risk of having a “job” but not a business and, what is worse, a high probability of the disappearance of our company in the short or medium term.

I. Fiscal and legal requirements

  • Creation of society
  • Place where the activity will be carried out
  • Insurance
  • Normative compliance

II. Commercial, structural and service aspects.

  • The market
  • The competition
  • Business model
  • Economic and financial viability plan of the project
  • Venue and necessary structure
  • Services
  • Action plan

Legal and fiscal requirements for the opening and operation of a real estate.

Real estate brokerage activity is liberalized; therefore it is relatively easy to create a company to develop it.

We make a generic description of the requirements at the state level to open a real estate, which may happen that according to the competent administration of the CCAA in which said agency is located, some complementary and specific requirement of said territory has to be met.

The activity can be carried out directly as a natural person entrepreneur, but, in this case, we will focus on its development through a company, which we consider to be more convenient in commercial traffic.

Creation of society

Request for the name in the Real estate Registry.

The applicant must be a person who is going to be a partner of the same.

Opening of a bank account with the name of the company being incorporated.

  • Each of the partners must enter into said account the amount for which they will participate in the capital.
  • The partners can be both national and foreign.
  • The minimum capital requirement is 1,000 dollars, although a higher amount is recommended that covers a part of the initial investment as the necessary working capital

Request for a provisional tax identification number.

This procedure can be carried out by the notary when formalizing the deed.

Formalization of the public deed before a notary.

The corporate purpose that appears in it must correspond to the activity that we are going to develop.

Payment of the Tax on Documented Legal Acts

(purely formal requirement, does not imply financial outlay for being exempt).

Registration of the deed in the Real estate Registry of the province.

(purely formal requirement, does not imply financial outlay for being exempt).

Request for the final CIF and registration with IAE

(does not imply payment for being exempt up to $ 1M)

Local where the activity will be carried out.

Work license.

Opening license.

Opening license. It is an innocuous activity protected by law on free access to service activities and their exercise and therefore the responsible declaration of the representative of the company is sufficient to obtain it.

Occupational Risk Report.

For the opening of the work center a report of “Occupational Risks” carried out by an authorized company is mandatory.

Procedures in Social Security.

  • The administrator of the company must register in the Self-Employed Regime as a self-employed company.
  • Registration of the company and the workplace in Social Security.
  • Registration in Social Security of the personnel in labor regime. If there are self-employed workers who carry out their professional activity using the services of the office, it will be advisable to regularly check their registration with social security and their permanence in the system.


Hiring a professional Civil Liability and Employer Liability insurance.

In some communities, Surety insurance is also mandatory.

Normative compliance

Data Protection.

Compliance with the organic law on data protection. Training of personnel and procedures.


Money Laundering Prevention Law.

Real estate agencies are bound subjects of specific compliance with this law. They must comply with the following:

  • Appointment of a representative before the corresponding official body.
  • Preparation of a manual of procedures on the matter
  • Staff training.

II. Commercial, structural and service aspects.

As we have indicated, within this area we should highlight

  • The market
  • The competition
  • Business model
  • Economic and financial viability plan of the project
  • Venue and necessary structure
  • Services
  • Action plan

I must do a preliminary analysis of the market in which the activity of skymarketing will take place and learn the most about it.

His capacity: volume of transactions carried out annually and what percentage are new construction and what percentage are second-hand. This will allow me to measure the growth capacity of my team in the future.

Her CARACTERISTICS; if the most common type of transactions are for sale or rent, residential or commercial and if there is the possibility of being able to work in different market niches (residential, residential-luxury, commercial, etc.) Properties that are for sale and their average price that will allow me to calculate the average fees per sale or rental transaction that you carry out. Socioeconomic level of its inhabitants, services and communications that it offers are some of the aspects to consider before entering the market.

What should I know about my competition. Some of the important points would be

  • Who they are and where they are located
  • What services do they offer
  • What they do well and what they do wrong. Strengths and weaknesses
  • If they work exclusively or on a custom note
  • What fees they charge their buyers and sellers.
  • What image do they have
  • What tools do they use
  • What added value do they offer the user

Among the many factors that we have to take into account, for the success of our business is knowing our competitors well. This will help us define the most effective strategies and tactics , as well as the most compelling value proposition for our internal customer, the agent, and for our external customer, buyer and seller.

Constantly monitoring the activity of our competitors will serve as a permanent learning and evaluation tool for our own company.

Do you want to work as a real estate agent, do you want to have a small one-man agency and hire a small team of agents or do you want to have a “real estate industry?

The answer you give to the previous questions will help you “choose” the business model that best suits you:

  1. If you want to dedicate yourself to “attracting and selling houses”, by yourself, the best option, perhaps not to create your own company but to associate, as a freelance agent , with one that offers you a high level of management independence and a system of remuneration with high commissions and good services to develop your work as an agent. In this way you can reduce your business risk and work for yourself, but not alone.  
  2. If what you want is to have a one-man agency in which you are going to work ” in your business ” doing the functions of agent (recruitment and sale) and manager at the same time (management and services to a small team of employed agents) , you must assume that your office will have a high dependence on your own work as an agent, a limited billing ceiling due to its small structure and a low growth capacity due to the role that you are going to play and because all the business risk falls solely on you. You will be “the boss of your office” but, in most cases, you will still have a job, not a business.
  3. The third option, a ” real estate industry “. It implies developing a commercial structure with more agents that allow you to achieve high levels of turnover and great business stability.

If the  “business model”  you choose to create  is the traditional one, with employees, assuming all the  business risk (investment + expenses), you run the risk that your business growth speed is very slow and subject to the factors market externalities (increase or decrease in sales) or worse, that a heavy expense structure crushes you in the face of a negative change in the sales trend and you have to close your agency, something that we were able to verify with the market drop that occurred at starting in the second half of 2009, which  led to the closure of more than 70% of real estate agencies between 2010 and 2020 with a traditional spending structure.

Or you decide to adopt a “shared expense” model with your agents , in which all agents are freelancers and assume, at least, their personal expenses (freelancers, telephone, travel, marketing , etc …) and in return they receive a greater part of the fees they generate (from 40% to 72.8%) depending on the level of irrigation they are willing to assume.

This model will allow you to reduce your own business risk as an owner to the initial investment and monthly fixed office expenses and will facilitate the growth of your commercial team without increasing your fixed expenses independently of external changes that affect the market, reaching billings outside the scope of the small real estate agency.

To prepare an initial investment plan, you must make a detailed estimate of all the financial resources that you will need in the short term (opening of the real estate office) and in the medium term (those that you will need to start the project). In the case of a real estate agency, you must estimate two types of items:

  • Initial investment (franchise license + office fitting); 30,000-40,000 dollar
  • Working capital to meet the expenses of the first months of activity. In the case of a real estate agency, you should consider a working capital for the first year; 60,000-80,000 dollars depending on the level of expected monthly operating expenses.

Poor investment planning can shorten the time available to start the business properly and lack the time to do so successfully.

After the investment plan, you must make an estimate of income and expenses for at least the first year. This will allow you to set your objectives for recruiting agents and capturing properties necessary to achieve estimated sales and income.

The minimum requirements of your premises would be:

  • Local on the street level. Commercial area and with traffic of people . With an optimal surface between 100M-120M that allows to serve a team with a minimum of 20 agents.
  • A coordinator (employee) at reception and telephone service.
  • From 20-25 agents, hire a production “manager” to be able to give a good level of service to the agents.

When planning the services that are offered from your office, you should think not only about those that are aimed at the end customer, buyer or seller, but also about those that you are going to give to your internal clients; your agents.

  • Services that your office and you as a broker will offer to your agents (value proposition); education and training plan, marketing support and management technology, operations financing services, legal and documentary services, etc. At Rudn Enclave we offer you all these services from our training school and marketing department.
  • Services that your agents will offer to buyers and sellers; services in the acquisition phase (valuation, photographic report, etc.), marketing plan for the commercialization of the properties, legal, tax and financial advice, negotiation, after-sales service.

Carrying out a schedule of specific activities for the opening and start-up of your project will be a part of its management, being necessary to review it periodically simultaneously with the execution of those activities in order to identify the necessary changes to make.

An action plan placed on the calendar will give you an overview of the status of your project at all times and will allow you to make decisions objectively.

Is a real estate company profitable?

Real estate companies are, deep down, like any other business. They are there to generate income and be a profitable way of earning a living – while providing a useful and valuable service.

A real estate agency generates income from the sale of homes; takes the house of an individual interested in selling and is in charge of managing that sale. That implies several services:

  • Promote the home to find buyers
  • Advise the owner on the sale price
  • Receive visits and persuade a potential customer to buy
  • Manage the paperwork of the sale

All these services have a series of expenses: staff salaries, the cost of the office or the marketing budget, among others.

So as long as your income is greater than your expenses, you will have a profitable business. In other words, a business that makes money every month and stays afloat.

And how do I calculate profitability?

There are many ways to know how easy it will be to achieve profitability in your real estate, but the easiest is to start with the expenses.

If you can estimate how much it costs to keep your real estate running day by day, you can have a clear idea of ​​how many houses you need to sell.

The expenses of a real estate

A real estate is comparable to any other physical business. In most cases, you will have to hire a team and open an office – although it is also possible to open a real estate 100% online .

We are going to take a look at each of your fixed expenses, which you will have to cover to make ends meet and keep your business afloat.

Taxes and riding society

The first expense you will have is the freelance fee. To be able to practice any profession on your own, it will be necessary for you to become self-employed in the eyes of the Treasury. This includes the real estate sector.

You can start selling houses in two ways: being self-employed or through a company:

As a freelancer, you will act on your own behalf and respond with your person. The advantage of being self-employed is that it is a simpler way to be self-employed, and there are fewer associated costs. Managing a freelancer is also easier.

As a company, you can have a company with your own name and become just another employee. This has the advantage that the company is a separate legal entity from you, and it has some advantages at the tax level. The problem is that keeping the accounts of a company is much more complicated than with a freelancer, and there are also more expenses. For example, the freelance fee can be up to 75 dollars more expensive.

To open a real estate, my recommendation is to start with the practical: be autonomous and have the least amount of expenses possible to be profitable as soon as possible.

Tax expenses: 640 dollars almost

  •  380 dollars self-employed
  • 100 dollars social security
  • 160 dollars agency (labor, tax and accounting)

The office

You will also need to have a place to receive your clients. In most cases, that means renting a space and setting up a real estate office.

To do this you will have to buy office supplies: tables, chairs, wiring, computers … the initial cost is high, but from then on your biggest expense will be rent.

It is essential to have an office well located, to be able to be seen by everyone and that people are interested in your showcase. In these cases the rent can be quite expensive: in a small city, a medium-sized premises can be worth around 1200 dollars per month.

In any case, remember that the office is optional.

Instead of submitting to monthly expenses from the beginning, you can have a more secluded place. For example, an office in a business center.

The office is only necessary if you want to set up something in a big way and with a very face-to-face team. But today it is perfectly possible to work online, and sell flats over the Internet . Logically, you will not have the comforts of an office in the heart of your city, but you can have a profitable business with much less risk.

Monthly office expenses: $ 2000 almost

  • 1200 $ for rent
  • $ 200 of water and electricity
  • $ 300 insurance
  • $ 100 cleaning
  • $ 100 of office supplies
  • $ 100 of various maintenance

Work tools

Whether you have an office or not, you will need work tools. That means that you will have to buy a computer – laptop or desktop – and also software tools for day to day.

Software tools are essential for your productivity as a realtor. Here is a short list of the most useful for a real estate agent:

Vendomia, as a real estate CRM : necessary to keep track of your clients, manage your property portfolio, and publish to real estate portals.

Dropbox, to save your files : it allows you to have all your files in the cloud, both to share them and to safeguard them. If your computer breaks, you will need a backup.

Microsoft Office, to manage documents : since you will have to work with documents and spreadsheets, it is essential that you use an office suite.

Adobe Photoshop, to retouch photos : if you don’t take good photos, people will not be interested in your floors, it’s that simple.

Google Suite, for a professional email: email is one of the most important elements of your business, so make sure you have a quality platform.

In addition to that, you will need to have a monthly budget to buy tools and technology that you need. Some of these include:

  • A good camera
  • A laptop or PC
  • USB flash drives
  • Chargers and batteries
  • Mobile phones
  • Adapters

The best thing for this is to allocate a small monthly amount for these types of expenses.

Tool costs: $ 220

  • Real estate CRM: $ 70
  • Technology: $ 100
  • Software licenses: $ 50

Employees and collaborators

Even if you decide to start your real estate agency alone, it will be essential to have at least one assistant.

In the real estate business there is a lot of paperwork to do: you have to keep accounts up to date, respond to clients, make arrangements, send emails, and much more. All of that is pretty straightforward, but time-consuming and will prevent you from dedicating yourself to selling houses.

Therefore, you will need at least one person to take care of saving you time – an administrative assistant. Having an employee can cost you around $ 1,400, if you include social security expenses and taxes associated with hiring them.

Employee expenses: $ 1,400

  • $ 1000 net salary
  • $ 400 tax and quotation

The real estate portals

To get potential clients, an easy way is to hire services in the main real estate portals. Depending on the type of apartments you want to sell, it is very likely that one portal or another will be more useful to you.

For example, if you focus on foreign audiences, a good option may be Kyero. It is a portal in English and it offers a lot of visibility outside of .

Real estate portals should be one more expense in your real estate accounts. The amount to invest is variable, but in many cases you can pay $ 500 or even $ 1000 per month. It all depends on the volume of your property portfolio and how many sales you generate per month.

What you should keep in mind is the optimization of your ads on real estate portals . Analyze at all times the money invested and the results you get, to know which portal works best.

Expenses in real estate portals: $ 300

The real estate website

If you have a real estate, you need to have a website. Although paying real estate portals and receiving clients in return sounds good, relying too much on them can become a problem. It is something that is beyond your control and exposes you.

Therefore, having your own real estate website is important . Here you have all the control you need, and it is also advisable to invest in it to generate traffic and visits organically. It is not an easy task, but in the long term a good real estate branding strategy can bring you more income than the portals themselves.

A web page can be made at many prices, but at least you should think about spending around $ 1000. That, unless you use a real estate CRM like in Blue World City, which already includes it at no additional cost.

In any case, the important thing is that you can easily publish your portfolio of properties, and dedicate yourself above all to the sale.

Website costs: $ 1000 (or $ 0 with a CRM)

Real estate marketing

Finally, you must implement a real estate marketing strategy. Real estate marketing is what will help you generate long-term sales – for that, you can use many sales channels:

  • Real estate portals
  • Web page
  • Billboards
  • Brochures
  • Social networks

You will need to dedicate time and effort to your strategy, in addition to setting a monthly budget to spend on advertising. The portals already represent a part of your expenses, so your real estate marketing may be focused on other means.

For example, you can start a real estate blog and position your website on Google. Or you can hire a billboard at a strategic point. Be that as it may, you should always think about how to sell houses faster .

Spending on real estate marketing: $ 500

The total costs of setting up a real estate

As a business, these are the vast majority of costs that you will have to face month by month. In total, about $ 5,000 excluding taxes.

To this, you have to add your own salary. As the real estate is yours, it can be a very flexible figure, but the normal thing is to enter at least $ 1,200 per month.

That means that you need at least $ 6,200 per month. Or about $ 74,400 a year.

Now that you know what it costs you to keep the real estate open, you can make several estimates of what you would have to sell to be profitable.

The idea is to try different scenarios and see the possibilities you have to stay afloat.

We are going to try with an easy goal, an intermediate one, and a higher one.

How many houses can you sell?

This simulation depends on the city you live in. Logically, a house is not worth the same in Madrid as in Albacete, so you will have to make your own numbers.

We are going to test with houses with an average of 200,000 dollars, and taking into account a commission of 3% (and minimums of  3,500 dollars, although this figure is easily exceeded). That means an average of $ 6,000 commission per house. Your income would be:

  • 10 houses per year:  60,000 dollars
  • 20 houses per year:  120,000 dollars
  • 30 houses per year: $ 180,000 dollars

As you can see, to stay afloat you should sell at least 13 houses a year . 

Do you see it possible?

Surely there are more aspects or variables to take into account when deciding to open a real estate agency, but if we at least have the above controlled, we will reduce, to a large extent, the risk of making poor decisions.